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 KAZAKHSTAN International Business Magazine №4, 2013
 The Transport Complex: Focus on Reconstruction

The Transport Complex: Focus on Reconstruction

Interview of the Vice-Minister of Transport and Communications of the Republic of Kazakhstan, Mr. Roman Sklyar

Mr. Sklyar, what are the current indicators for the domestic Transport and Communication complex?

It is difficult to overestimate the forming part of the Transport complex in the economy of such a huge and under populated country like ours. Especially since high rate of Kazakhstan, economic growth constantly increases the need in local and cross-border transportation. At the moment the industry accounts for 7.4% of the total GDP of the Republic.

Regarding the results of the first half of 2013, the gross value added in Transport amounted to 1,041.3 billion tenge: it is 21.3% more than in January–June period of the last year. Therewith the physical volume index reached 107.2%. During this period the cargoes transportations volume by all the means of transport amounted to 1,702,005.5 thousand tons, and human transportations to 11,196,509.7 thousand passengers. In the meantime the cargo turnover rolled over to 200,178.8 million ton-kilometers and the passenger turnover reached 130,166.1 million passenger-kilometers.

It should be noted that presently the Government invests heavily in the transport infrastructure. Particularly there were allocated 206.6 billion tenge from the budget this year to reconstruct and repair 3,486 km of the national important highways. There were directed over 73.4 billion tenge (including 36.9 billion tenge as transfers from the Republican and 36.5 billion tenge – from the local budget) for the development of the regional and district important roads. These facilities provided the further reconstruction, and structural and medium roads repairs. So, for the project "Western Europe – Western China", they are engaged in activities 29 areas with the total length of 1433 km in four regions of the country at once. They are Aktobe, Kyzylorda, Zhambyl and South Kazakhstan regions.

As a part of improving the quality of the railway infrastructure it continues the construction of the railway lines Zhezkazgan – Beineu and Arkalyk – Shubarkol with the total length of 1,200 km. In addition, in August there were opened three new high-speed routes with the traffic Almaty – Atyrau, Astana – Atyrau, and Astana – Semey. It is held a systematic updating and improving the technical status of rolling equipment: currently they are purchased 45 locomotives, 467 goods wagons, and 139 passenger carriages.

The project on repair the airfield elements of the Taldykorgan airdrome started in the air transport area in 2013, as well as the project on the reconstruction of the artificial landing strip at the Taraz airport.

Airline network with foreign countries is constantly expanding. Thus, since the beginning of the year there were opened nine new scheduled international flights: Almaty-Ho Chi Minh City, Almaty-Kiev, Astana-Kiev, Astana-Orenburg, Astana-Bishkek, Atyrau-Moscow, Aktau-Simferopol, Ust-Kamenogorsk-Moscow, and Aktau-Volgograd. As a result, the total number of international flights reached 73.

It is continuing the work on aircraft fleet renovation: SCAT Airline Company has purchased one Boeing-737 airplane; BEK AIR – one Fokker-100 and CRJ-100; Air Astana – one Airbus-320; Comlux-KZ – one Challenger-850, and Invest Avia – one CRJ-100.

As it is known, an important marine transport infrastructure object is the ice-free international Aktau commercial seaport on the Caspian Sea, which is located at the intersection of international TRACECA and North-South corridors. In order to increase the capacity it is implementing step-by-step this northward expanding project. The 11th oil terminal is constructing in the port. After commissioning it, its capacity will amount to 1.5 million tons per year. It was also planned the 12th terminal reconstruction with the calculated capacity of 0.5 million tons of dry cargo per year. 

Implementation of Ust-Kamenogorsk and Bukhtarma penstocks reconstruction and modernization projects is held now as a part of inland transport infrastructure development. 

How is transport represented in the New Industrialization Program? What projects are implementing within its frameworks currently?

One of the main directions of the State Forced Industrial and Innovative Development Program is providing the new economy with transport infrastructure. Within its frames was set a task to develop transport and communication complex, which is able to meet fully the needs in transport services of the economy and population.

The most significant project of the State Program in the road sector is the reconstruction of the international transit corridor Western Europe – Western China with a total length of 2,787 km, among which 2,452 km need to be reconstructed. If we examine the Project realization on an annual basis then in 2011 there were put in commission 215 km of roads in Aktobe region. In 2012 the work was held on the roads with a total length of 1,621 km, thereby, it was completed the construction and was opened the transportation along 700 km of a new road. In 2013, as I mentioned above, it is held the work on 1,472 km of highways, among which 806 km need to be put into operation before the end of the year. In addition, in September it will start the reconstruction of the Almaty – Khorgos highway. The reconstruction of the Tashkent – Shymkent section is planned for the next year (now competition procedures are being conducted upon this project).

The work continues on the major international corridors: Astana – Petropavlovsk; the Russian Federation border – Uralsk – Aktobe; Omsk – Pavlodar – Maikapshagai; Astrakhan – Atyrau – Aktau – Turkmenbashi; Astana – Kostanay – Chelyabinsk.

However, as a part of the "Kazakhstan-2050" Strategy and the orders made by the Head of State at an expanded Government meeting on January 23 this year, the highways construction was commenced in the following directions: Centre – South, Center – East, and Center – West.

So, in Centre – South direction the route will run from Astana to Almaty with the parameters of the first technical category. Its approximate length is 1,060 km and the duration of the project is from 2013 to 2017. At this point Astana – Temirtau and Almaty – Kapshagaj sections are being constructed, and on Temirtau – Balkhash section planning and surveying work are conducted.

In Centre-East direction the route will be laid from Astana to Ust-Kamenogorsk through Pavlodar, Semey, and Kalbatau. Thus the section Astana – Pavlodar is planned to be converted into the first category with four-lane traffic, while the other sections into the second category with a carriageway width of 9 m. Its approximate length of the route will account 1.003 km and the duration – from 2013 to 2019. Now the work on this project is located from the border of Pavlodar region till Ust-Kamenogorsk. In July the constructions of the Pavlodar bypass and the bridge across the Irtysh River were started. The other sections of Astana – Pavlodar highway are under planning and surveying work.

In Centre-West direction the route will run from Astana to Aktau through Arkalyk, Torgai, Irgiz, and Beineu towns. The road will be built mainly on the parameters of the second technical category, and its approximate length will account 1,820 km, among which 1,527 km will be reconstructed. Currently, the Beineu – Shetpe section is under work. In addition, before the end of the year it is planned to start working at the Shetpe – Aktau section. Funding for the construction of other sections is foreseen since 2017. Feasibility Studies, design and estimate documentation should be developed up to that time. Full completion is planned by 2020.

Summing up the brief description of the major projects of the State Forced Industrial and Innovative Development Program in the road infrastructure area, I would like to note that on the 1st of December of the last year the fares collection system at Astana – Shchuchinsk autobahn was started in the test mode. Starting from the 1st of July of this year it works in the test mode, with a subsequent conversion into industrial mode.

With regard to rail transport, as a part of the program, the construction of railway lines Uzen – state border with Turkmenistan and Zhetygen – Korgas with a total length of 439 km has been already completed. The railway lines Zhezkazgan – Beyneu (988 km) and Arkalyk – Shubarkol (214 km) are being constructed since last July. The train services opening on these railways are scheduled for 2015.

As I’ve mentioned above, the project on the Aktau Sea port expansion to the North continues in the water transport area. Protective hydro technical constructions are put into service, construction parameters for dry cargo terminals are defined, and soon dredging works in the expanded port water area will begin. At the end of the project the annual capacity of the Aktau port will increase by 2.5 million tons, and reach a level of 16.5 million tons of cargo per year.

In general, the implementation of these and other projects within the State Forced Industrial and Innovative Development Program allowed reaching the following target indicators according the results of 2012:

· for two years there were reconstructed 2,664 km and repaired 3,282 km of roads with republican significance, reconstructed and repaired 8,367 roads with local significance;

·  there were built 439 km of new railways;

·  there was implemented a payment system at the Astana – Shchuchinsk road;

· the number of international air flights reached 64;

· transit traffic increased by 1.6 million tons (or by 10.1% compared to 2009);

· reconstruction and modernization of the Ust-Kamenogorsk and Shulbinsk penstocks are completed at 49.4%.

What is the current situation with the development of transport infrastructure projects through public-private partnerships?

Let's start with the already implemented projects with the use of PPPs.

In the civil aviation field. In December 2007 the international airport Aktau was transferred in trust management for a 28 years period to the ATM Group Company that made a concession agreement with the Mangistau Region Administration (Akimat) for construction and operation of a new international passenger terminal for a period of 30 years. The terminal was already built and put into operation in 2009. The total cost of the project is 4.6 billion tenge, and the concession period is 2007–2037. The terminal capacity is 450 passengers per hour, and the total area (including VIP and CIP halls) is 13,400 m2. The terminal is equipped by all means of modern facilities and necessary equipment. Its opening led to a rise in the volume of Aktau airport passenger traffic on 20%. Last year it was completed here the reconstruction of the landing strip (LS), platform, and taxiways, and also renewed the signal system. As a result the new LS now allow receiving all the types of aircrafts without restrictions.

Aktau Airport serves domestic and foreign airlines that have 8 domestic and 16 international flights. It ranks the third in Kazakhstan in terms of passenger traffic after the airports of Almaty and Astana.

In the field of railway transport they are implemented 2 projects of the State Committee of the State of Emergency. In 2008, the new railway line Shar – Ust-Kamenogorsk was built with the length of 151 km and at the cost of 24.4 billion tenge. The concessionaire was Doszhan temir zholy JSC. The concession duration is 23 years (from 2005 to 2028). The project allowed to form a transit route from China to Russia through the territory of the East Kazakhstan region, to reduce the transportation range at 311 km, to avoid the need to travel through the Russian Federation territory and to pass through double customs control as well as to reduce the goods and passengers delivery time for 10–12 hours.

The second project is the concession agreement concluded in 2007 between the Ministry of Transport and Communication and Astana-Distributing Power Supply Network Company of Akmola for the construction and operation of the railway line Eraliyevo – Kuryk. The cost of the project amounted to 7.5 billion tenge, the line length is 14.4 km, and the concession period is from 2008 to 2030. The economic component of the project is earning income from freightage during the construction and subsequent operation of the Kuryk port’s objects, whose construction is associated with the development of the second phase of the Kashagan field.

Now, I will talk about our plans for public-private partnership.

In the roads area of Almaty suburbs, namely in the Karasai, Ili and Talgar districts of Almaty region, it is planned to construct the Big Almaty Ring Road (BARR). Its length will reach 65.5 km, and the cost according to the Design Estimate Documentation will be of 79 billion tenge. The road refers to the first technical category with 6 and 4 lane traffic. It is expected that the forecast intensity will be 38,628 cars per day. On May 20 in Almaty it was organized a conference for the participants of the tender, where international financial institutions and companies with international experience on concession projects were invited. The competition summation and the signing of the concession contract are scheduled to be held in the fourth quarter of 2013.

In addition, the plans of the Transport and Communication Ministry are to develop the roadside service. At the present, promising projects are the Astana – Pavlodar and Astana – Temirtau sections. They include the construction of the roadside service objects as a part of roads reconstruction/construction which will be carried out at the expense of the investor. The service objects will be leased out to the private sector with their future purchase. The economic attractiveness of the projects lays in the fact that while constructing these roads they will be created modern rest areas with relevant communications. The Administrations (Akimats) will allocate the funds as a part of Business Road Map 2020 Program. 

As it is known, in 2015 it is planned to complete the reconstruction of the road corridor Western Europe – Western China. In order to ensure the maintenance of the roads in the first category sections, the Ministry plans to introduce a paid fare. The corresponding planning and surveying works are planned for 2014. In 2015 the charging system will be started at the section with a total length of 630 km. Also, in 2016 it is planned to introduce payment throughout the all road corridor.

In motor transport area it is planned to build three bus stations using State Committee on the State of Emergency mechanisms:

  • The Astana bus station at the intersection of Tlendiyev Avenue and Beisekova Street. The period of the project realization is from 2014 till 2015, and the cost is 2 billion tenge. Technical and economical assessment is currently realizing.
  • The Astana bus station at the intersection of Abylai Khan Avenue and 14th Street. The period of the project realization is from 2014 till 2015, and the cost is 2 billion tenge. Technical and economical assessment is currently realizing.
  • A bus station in Aktau. The period of realization is from 2014 till 2015, and the cost is 1.5 billion tenge. Competitive documentation is currently developing.

Local authorities are the customers in these projects, and the total investment volume will amount to 5.5 billion tenge.

Additionally, within the frameworks of the State program of Kazakhstan infrastructure development till 2020 on the basis of the State Committee on the State of Emergency mechanism it is planned to build two additional bus stations in Taldykorgan and Kyzylorda, as well as 58 bus stations in regional centers. The estimated cost of the projects will amount to 7.6 billion tenge.

The Ministry intends to realize the project on the basis of the State Committee on the State of Emergency and within water transport. This means the construction of three dry cargo terminals in the Aktau seaport – one for grains and two generic. The cost of the project is 23 billion tenge, and the construction time is from 2014 till 2015.

What is needed to be done to strengthen the incorporation of the State Committee on the State of Emergency mechanism?

The experience of many countries shows that the transport infrastructure is the best candidate for implementing the State Committee on the State of Emergency mechanisms among other sectors of the economy. Calculations on all the planned projects show that they will have high economic rates of income and therefore will be attractive to the private sector.

The structure of the State Committee on the State of Emergency in Kazakhstan is just forming. The rules of the game in this area are established by the relevant laws; and the realization monitoring of few projects is making the Center of the State Committee to be on the State of Emergency.

Currently the need to use the State Committee on the State of Emergency mechanisms in the transport infrastructure is not in doubt. Therefore, we, together with the interested public authorities and investors, need to continue the work on the implementation of the started projects and, in the case of various legal disputes, to resolve them in time.

What are the objectives and target indicators of the new program on transport infrastructure development?

The project of the State program on Kazakhstan transport system infrastructure development till 2020 was developed by our Ministry, and it is currently conforming in the Office of the Prime Minister.

The goal of the program is to create a modern transport infrastructure, as well as to fulfill the needs of the economy and the population in high-quality transport services and to realize transit potential.

The main indicators laid down in the draft of the program are:
  • doubling the volume of transit goods through Kazakhstan up to 35.5 million tons by 2020;
  • improvement of Kazakhstan's position in the logistics performance index (LPI) of the World Bank, from the 86th position to the 40th one.

In addition, the draft program foresees the construction of 10 new bus terminals in regional centers, in Astana and Almaty, of 50 new bus stations in cities and regional centers, 216 servicing points for passengers in villages (auls), as well as of 1090 taxi ranks in cities. By 2017, as a part of the program, 305 train stations need to be repaired and 6 new high-speed communications need to be opened. In the air transport field it is planned to open 46 new international flights and to reconstruct 11 airports.

Generally speaking, one of the key objectives of the new program is to create on the Kazakhstan territory modern transport and logistics system, providing efficient transportation connectivity within the country, to increase freight traffic on the territory of the Republic and the work coordination of all the types of land, sea and air transport. In addition, it should be solved the problem of integrated support to villages and towns with quality transport service, of local infrastructure development and creation of “the infrastructure centers” in the regions.

The mentioned projects on the Centre-South, Center-West and Centre-East roads construction were not included in the previous programmed documents. Another new project is the development of regional airlines (RA). On the basis of Administrations’ (Akimats’) proposals we identified 16 regional centers, where the construction of 11 RA airfields with unpaved runways is planned, as well as the reconstruction of 5 RA airfields with artificial runways.

What changes in the governance structure and management of the road sector are planned for the near future? What makes them necessary?

Our work on reforming the road industry is conducted within the frameworks of the Head of State’s orders execution. Its basis was the need to modify the outdated and inefficient management system, to provide conditions for the State budget reducing in the part of national roads maintenance costs reducing, to introduce a new approach to construction and/or reconstruction of public roads.

Daily monitoring of construction and repair works, supplies of construction materials, the current roads condition do not allow us to concentrate on core functions, which should be handled by the Executive authority. Namely, on strategic planning, automobile industry development and its regulatory, legal and technical-scientific support.

In this regard, the Law on Amendments and Additions to Some Legislative Acts of the Republic of Kazakhstan on the Reform of Road Industry as of July 2, 2013 introduced the concept, established the legal status and the object of activity of the new industry subject – the National Operator on the Roadways Management.

As the Head of State has noted in his Address to the Nation, private “business anywhere operates more efficiently than the State”. Therefore, the transfer of economic functions and the ones that are extrinsic to the State administration agencies to the specifically established National operator in the face of KazAvtoZhol JSC will allow to increase the implementation efficiency of the projects of roads construction and reconstruction, as well as their current maintenance, and will also allow to solve coming problems more quickly.

In addition, in the frameworks of the road industry reform territorial authorities (public institutions) of the Motor roads Committee of International Transport Committee will be abolished; and some released employees will be transferred to the National operator stuff. Whereas the National operator will be assigned to the following functions: 1) organization of work on the construction, reconstruction, repair and maintenance of the motor roads of international and national importance; 2) ensuring the required quality in the construction, reconstruction, repair and maintenance of the motor roads; 3) the roadside service development.

Funds received from fee payments on toll roads will be sent by the National operator for the maintenance and repair, and eventually (in the case of sufficiency) for construction and/or reconstruction of new roads. Thus, this measure will make it possible to reduce the costs of the State.

The Ministry of Transport and Communications reserves the implementation of the State policy, planning of roads development at the national and local level, normative and legal acts development, conducting scientific researches, the implementation of new technologies, as well as monitoring the quality of road works as an authorized State body.

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Red Code for Akims  Editorial 
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· 2015 №1  №2  №3  №4  №5  №6
· 2014 №1  №2  №3  №4  №5  №6
· 2013 №1  №2  №3  №4  №5  №6
· 2012 №1  №2  №3  №4  №5  №6
· 2011 №1  №2  №3  №4  №5  №6
· 2010 №1  №2  №3  №4  №5/6
· 2009 №1  №2  №3  №4  №5  №6
· 2008 №1  №2  №3  №4  №5/6
· 2007 №1  №2  №3  №4
· 2006 №1  №2  №3  №4
· 2005 №1  №2  №3  №4
· 2004 №1  №2  №3  №4
· 2003 №1  №2  №3  №4
· 2002 №1  №2  №3  №4
· 2001 №1/2  №3/4  №5/6
· 2000 №1  №2  №3

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