Berik Kamaliyev, Minister of Transport and Communications, comments on the development of transportation in independent Kazakhstan and the prospects for PPP projects.
Over the course of the past 20 years the transport infrastructure of Kazakhstan has undergone significant change. Not only have there been structural changes in transport infrastructure, certain measures have also been implemented concerning the modernization and optimization of the structure and management of transportation processes and the financial recovery of the industry. Economic liberalization and structural reforms in the transport sector have led to the development of a free market for transport services and their integration into Kazakhstan’s developing market economy, changing the regulatory framework and transport management systems. Domestic competition is increasing between the road and air transport sectors, while inter-industry competition is seen primarily between road and rail, and rail and water transport. Additionally, competition with foreign carriers for the development of transport service markets is also increasing. Furthermore, a government resolution approved a new state transport policy. The main priorities stated in the resolution are the formation and development of a modern national transportation infrastructure, and the development of transportation infrastructure in western Kazakhstan, accelerating the integration of Kazakhstan’s transport sector into the international transport system, developing the transit potential of the country, improving state regulations, and developing a competitive environment. Kazakhstan’s transport complex is represented by rail, road, air, and water transport.
Currently, rail transport is characterized by high capacity in the transportation of goods and passengers over long distances. The republican state enterprise Kazakhstan Temir Zholy at the moment consists of nine subsidiaries. Since 1991 the structure of freight transported by rail has changed. Traditionally, the main products have been coal, various ores, grain, oil, and so on. The proportion of fuel and energy goods since 2000 has been increasing, and the key financial indicators for rail transport have been improving. The dynamic development of foreign trade increased cargo flows between Europe and Asia, leading to the formation of the Northern Corridor, Trans-Asian Railway, and the Central Transport Corridor Europe-Caucasus-Asia (TRACECA). In this concept, the modernization of the main railway stations and the reconstruction of production facilities for the repair of rolling stock has continued. In order to maintain the transition to modern transport technology and to modernize the railways, up-to-date management information systems and an automated information network will be introduced. Following rail, road transport is an important part of the industrial infrastructure of the country. Road transport, as well as other forms of transport, has undergone organizational and structural changes in the period of economic reforms, which initially reduced its economic activity. In the late 1990s, the industry was subject to extensive privatization, which led to an increase in traffic volumes. The development of new businesses created the opportunity to acquire vehicles for individuals as private property and obtain licenses for commercial traffic. Serious structural changes in civil aviation were adequately reflected in the state of air transport. Based on international practice, a classical model of air transport was established, composed of three independent structures: air carriers, airports, and single service organizations (providers) and air traffic control.
2000-2010
In this period, one of the most important factors in economic growth was the rapid development and improvement of transport infrastructure. Since 2000, work has been ongoing to maintain positive trends in the implementation of transportation sector reforms. A competitive environment was created to accelerate the integration of Kazakhstan’s transport sector into the international transport system and to develop the country’s transit potential. The strategic role of transport has significantly increased and mutual ties between the task of its development and socio-economic transformation priorities strengthened. In general, transport grew to meet the growing demand for passenger and freight transport. Between 2000 and 2009 the transport sector experienced a 1.5 fold increase in the transport of passengers and a 2.1 fold increase in freight. Cargo and passenger turnover increased by 2.5 and 2 times respectively. A legal basis for the transport industry answering to the new socio-economic conditions was created. The functions of government and business were separated and market conditions for the adequate state regulation of transport activity were created. Since 2006 the aim has been the rapid development of transport and communication complexes that are capable of fully meeting the transportation needs of the economy and population. Furthermore, industry programs in the road sector, civil aviation, and water transport sector were accepted, and a number of regulations aimed at developing transport and communications complexes were also made.
CONCRETE STEPS
President Nazarbayev has set the task of achieving sustainable economic growth through rapid industrialization and infrastructure development. Kazakhstan’s 2020 development plan defines the main directions of transport development, such as increasing the efficiency and integration of the four basic components of transport infrastructure: rail, road, air, and water. In pursuit of this aim, in 2010 a sectoral development program for transport infrastructure was adopted for the 2010-2014 period. The program has commenced and will implement 58 infrastructure projects totaling KZT2.8 trillion, KZT1.1 trillion of which has been allocated from the state budget. The main objective of the program is to achieve growth in gross value-added for transport by 63%, from KZT1,334.5 billion in 2009 to KZT2,175.2 billion.
PPP
The involvement of private capital (international or Kazakhstani) in the financing and development of transport infrastructure is due to the need to reduce the financial burden on the state budget. The implementation of concession projects improves the investment climate and prospects for external borrowing in Kazakhstan in general. Concession projects are widely used in both developed and developing countries to improve economic growth, car ownership, and hence the intensity on the roads and the interest of the private sector, including multinational companies.
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