Bestowed with a vast territory, land-locked position, dispersed population, and a wide variety of natural resources, Kazakhstan is looking to develop its transport network to tie its economy into the global market. According to World Bank indicators, Kazakhstan had 96,846 kilometers of roadways, 88% of which were paved, in 2009, and 14,205 kilometers of rail lines. Although the country’s transportation network is on the improve, major investments in infrastructure would realize the country’s full potential as a major transit corridor for all modes of transport.
To this end, the Kazakhstani government has designed the Transport Sector Development Strategy leading up to 2015, with intentions to ensure the progressive development of the transport and communications systems and integrate the country into a wider and more global travel network. The strategy covers railways, roads, urban passenger transit, and air and water corridors. The overarching motive of the strategy is to facilitate the growth of trade ties between East and West through reliable transit routes. “The arrangements developed by the government will enable Kazakhstan to become a major transit hub in Central Asia,” Vasily Ni, CEO of Europe-Asia-Transit LLP, told TBY in an interview. “The geopolitical position of Kazakhstan as a bridge between Europe and Asia, the formation of the Customs Union with common customs legislation, and the construction of infrastructure facilities, as well as the favorable investment climate, determine the basic trends in transit.”
Located at the Chinese end of the Western Europe-Western China highway, the Khorgos
International Cross Border Cooperation Center is one of the largest projects carried out between Kazakhstan and China. Set to become a logistics hub that facilitates trade, the center is located 361 kilometers from Almaty, in the Panfilovsky district of the Almaty region. The Chinese portion of the center is in the Ili-Kazakh Autonomous Prefecture, which is located in the Xinjiang-Uyghur Autonomous Region of China.
The center is laid out across 185 hectares, and includes facilities such as the International Business Cooperation Center, an entertainment and exhibition building, a hospitality area, a sports and recreational complex, an ethnographic park, and an international tourist resort. However, the most important feature of the center is the trans-loading terminal complex, built over an area of 91,000 sqm. It will consist of 22 terminals, including warehouses, processing units, special temperature adjustment units, and a test center.
The budget allocated for the project is more than $500 million, while private sources of investment are expected to quadruple this amount. The first phase of the project will be completed in 2012. The development of the center is not limited to construction on the Chinese border—it also involves the improvement of Kazakhstan’s transport infrastructure along the Europe-China transport corridor. In May 2012, the World Bank also approved a $1 billion loan for the construction of roads in the Almaty oblast to increase the efficiency of the city’s transport corridor.
The Kazakhstani government increased its budget to $37 billion with a focus on renewing the country’s railways. National rail company Kazakhstan Temir Zholy has plans to procure approximately 19,000 freight wagons and 300 locomotives within the next three years. The company has also initiated a project to repair and modernize more than 2,000 kilometers of railway.
The procurement of locomotives and rolling stock will be gradually transferred to local manufacturers. Kazakhstan aspires to increase the value of its domestic production of rolling stock, including locomotives and railroad, to $2 billion by 2015.
The majority of this development will be spearheaded by joint initiatives signed with international companies. Alstom, General Electric (GE), and Talgo are currently operating in the country and carrying out various activities at multimillion-dollar production sites in Astana’s industrial zone. Established in Kazakhstan in 2010, General Electric has plans to produce 94 locomotives in 2012, up from 34 in the factory’s first year of operation.
Although the majority of production caters to the domestic market, these companies have highlighted opportunities to export production to other CIS countries. In December 2011, the joint-stock company Tulpar Talgo, an initiative between Spain’s Patentes Talgo and Temir Zholy, was launched in Kazakhstan. The $80 million investment is the largest project in this sphere.
“Our neighbors are the source of greatest potential, as well as Iran, Azerbaijan, and Georgia,” Stanislav M. Podavets, General Director of Tulpar Talgo, told TBY. “Representatives from these countries joined the opening ceremony of our factory and have expressed an interest in the project. There is great potential in the CIS area for new supply projects and some neighboring countries have shown great interest in Talgo trains, but no concrete projects have been defined as yet.”
A third initiative was signed between the French company, Alstom, and the Russian enterprise, Transmashholding, to build a factory that produces electric locomotives and boasts an annual capacity of 50 units. Although the components will initially be supplied by Alstom’s factory in Belfort, the production components will be gradually transferred to Kazakhstan.
Local producers are benefiting from the momentum the domestic rail industry has gained in the recent years. To meet the growing demand for transport options, a carriage plant is being constructed in Ekibastuz with the capacity to produce 3,000 units, and a car-casting production line is also being set up in Karaganda. Other plans include producing wheels and axels in Ekibastuz, and railroad track in Pavlodar. These local initiatives, combined with international interest in the form of partnerships, are set to carry Kazakhstan through its long-term strategies and connect the country in new ways.
© The Business Year