Uzbek Institute Proposes New Public Transport Funding Model

Tashkent, Uzbekistan (UzDaily.uz) — The Institute for Reducing the Shadow Economy, Improving Tax and Customs Administration, and Fiscal Analysis under Uzbekistan's Ministry of Economy and Finance has proposed changing the approach to financing public transport by placing greater emphasis on operator performance and the development of transport infrastructure in the regions. The initiative was presented at a fiscal dialogue on 30 July.

According to the presentation, the institute proposes broader use of gross contracts, under which payments to transport operators would depend on achieving established key performance indicators (KPIs). It also suggests allocating part of the budget to expanding public transport services beyond the capital.

The institute said annual budget spending on public transport financed through gross contracts amounts to 1.9 trillion soums, of which 1.3 trillion soums is allocated to Tashkent.

The presentation identified several key challenges, including a significant gap in the quality of public transport services between the capital and the regions, insufficient transparency in assessing the effectiveness of budget subsidies, and a disproportionate increase in the fiscal burden as passenger numbers grow.

According to the presentation, public transport subsidies increased from 1 trillion soums in 2024 to 1.2 trillion soums in 2025 and 1.385 trillion soums in 2026, representing a 38.5% increase over two years. It added that about 65.1% of public transport operating costs are covered by government subsidies.

The institute proposed optimising routes with low passenger demand, bringing fares to economically justified levels, expanding public transport networks in the regions, maintaining targeted support for eligible social groups, and linking payments to transport operators to service quality indicators.

According to the authors of the initiative, shifting to a targeted support system would allow part of the funding currently used to subsidise public transport in Tashkent to be redirected toward developing transport infrastructure in other regions of the country.