A rail network that spans across Central Asia is gradually taking shape, spurred on by interest in bypassing such geopolitical hot spots as Russia and the Red Sea.

China, Uzbekistan and Kyrgyzstan signed an agreement last month on a railway project connecting the three countries, with construction slated to begin in October.

The new railway will be “a landmark project of Belt and Road cooperation among the three countries,” Chinese President Xi Jinping said at the signing ceremony.

The railway will cover approximately 500 kilometers at a cost of more than $5 billion. The line will cross southern Kyrgyzstan to link the city of Kashgar in China’s northwestern Xinjiang region to eastern Uzbekistan. From there, the line will connect with transport routes bound for Europe through other railways running through Turkmenistan and Turkey. A plan to extend the link to South Asia is being considered.

A separate project to expand rail transport capacity between Kazakhstan and Uzbekistan is slated for completion in 2025.

The rail network connecting China and Europe through Central Asia and the Caucasus region has been dubbed the Middle Corridor. Heads of state railways in the region met in June and agreed to cooperate on developing the network.

Freight volume along the Middle Corridor via the Caspian Sea jumped 90% or so on the year to roughly 2.8 million tonnes in 2023. It will balloon to 11 million tonnes by 2030, according to a World Bank projection.

Geopolitical risk factors have complicated competing routes. Sea routes connecting China and Europe are more cost-effective, but Houthi rebels in Yemen have kept up their attacks on ships traveling through the Red Sea. Some ports in Asia and the Mediterranean Sea are even severely congested with container ships unwilling to take the Red Sea voyage.

The Northern Corridor, the rail network traversing Russia, has long been used to ferry freight between China with Europe. But following Russia’s invasion of Ukraine, the European Union imposed sanctions on Russian railways. U.S. financial sanctions have also impeded trade.

Not only is the rail network underdeveloped in the Middle Corridor, but existing railways are also aging and suffering from a shortage of freight cars. This has left a bottleneck in capacity. To capture more transport demand, Middle Corridor countries are moving to develop the network.

In May, a project to expand capacity was completed for the Baku-Tbilisi-Kars railway going through Azerbaijan, Georgia and Turkey.

Obstacles remain, including the tangle of customs procedures and the need to unload and reload cargo along the rail lines.

This has caused delays along the Middle Corridor. Although the route is 3,000 km shorter than Russia’s Northern Corridor, a trip through the Middle Corridor can sometimes take three to four times as long. Many have called for streamlined procedures and lower transport costs to spur use.

Both Europe and China have approached Middle Corridor countries under the outlook that transport demand will rise in the long term. The EU has announced 10 billion euros ($10.8 billion) in investments toward rail and port development in Central Asia and the Caucasus.

On July 1, Kazakh President Kassym-Jomart Tokayev signed an agreement with China on expanded use of the Middle Corridor and cooperation on transportation infrastructure.

Georgia said in late May that it was awarding a Chinese-led consortium a contract to build a deep-water port in the Black Sea town of Anaklia. A member, China Communications Construction, is on a U.S. blacklist over its involvement in the buildup of Chinese military outposts in the South China Sea.

Russia has a history of opposition to developing the rival Middle Corridor. But it has apparently shifted to tacit approval now that it is more dependent on trade with China since the war in Ukraine began.