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 KAZAKHSTAN  №4, 2014
 For Future Transit

For Future Transit

The leading idea of the IX International Transport Conference TransEurasia - 2014, held in Astana, was making Kazakhstan as a main element of the Great Silk Road revival project. Some experts assure that our country has all the prospects to become a systematically important transit hub, in the future even at the intercontinental level.

About 300 delegates participated in the Conference, including representatives of profile departments of the Eurasian countries, international and regional organizations, financial and design institutes, as well as the major domestic and foreign transport companies. 

While opening the plenary meeting, Zhenis Kassymbek, Minister of Transport and Communications of Kazakhstan, stressed that integration into global transport system is a main direction of transport and communication development of the Republic.  He reminded that the well-developed network of transit routes was created in our country for today and five international transport corridors cross its territory. By using them, the Government intends to reorient an essential part of cargo traffic between China and Europe, bringing the share of Kazakhstan in the total volume of such shipments to 5% by 2020 and to 10% by 2030. “These indicators will be achieved through the development of infrastructure and creation of favourable conditions for transit”.

In order to achieve this target, 1700 km of new railways were already built in Kazakhstan, 19 000 km of highways were renovated; and also 9 airports were reconstructed. In general, 20.3 billion USD were invested in the development of the transport sector over the last five years, herewith 5.4 billion USD funded by the loans of international financial institutions.  As a result, transport and communication industry demonstrates the stable growth: presently its share in country’s GDP amounted to 7.5%, the cargo turn-over with use of all types of transport and the volume of transported cargo increased by 70%; and the annual growth of passenger traffic reached 11% for the air transport.  

At the same time, according to Mr.Kassymbek, this success cannot be consider as a local achievements of a single country, since creating the multiple transport routes between Europe and Asia complies with the interests of all the States of the Eurasian continent. Due to its location, Kazakhstan is the most perspective transport hub of the region. “The revival of the Great Silk Road transport corridor gets more and more important, as a result of development of the international economic relations in the Eurasian continent and increase of cargo traffic between Eastern Asia and Europe in recent years. Creation of integrated Eurasian transcontinental bridge is at stake. 

Therefore, the Government Program of  Development and Integration of the Transport System Infrastructure in Kazakhstan until 2020 was accepted by decree of the Head of the State in January of the current year. At present, about 200 projects are implemented within its frameworks, which relates to modernization of the transport infrastructure. The construction of terminals and the launch of container block trains are planed for China - Europe - China route. The construction of Western Europe - Western China transcontinental road corridor is under completion, with its major part already in operation. The implementation of last project will provide the shortest route from China to Europe, and the delivery term will be shortened from 45 (by sea) to 10 days.  According to the project initiators, the new autobahn will already increase the transit cargo traffic by the next year; and this figure will double by 2020.

Kazakhstan intends to service the created infrastructure to the best international standards.  Alliances are created with the world leading company as DP World, Swissport International, Zurich Airport and Lufthansa Consulting. These players will interact with the domestic multi-modal logistics company KTZ Express, established on the basis of the NC Kazakhstan Temir Zholy in the last year.  Consolidation of all the national logistic assets is covered by its task. Even now the Aktau sea port and 6 airports are assigned under its trust management. Moreover, the company is an operator of the Khorgos - Eastern Gates FEZ Project. After purchasing two dry-cargo ships, it obtained a status of shipping company.

Mr.Kassymbek considers the creation of transport engineering, a new sector of economy, as a major achievement of Kazakhstan.  Factories for the realise of diesel and electric locomotives, freight and passenger cars were built together with the world's leading manufacturers of railway products such as Alstom, GE and Talgo in the period from 2009 to 2012. The volume of their production exceeded $1.1 billion only in the last year. Moreover, it is already supplies to Tajikistan, Ukraine, Estonia and Kyrgyzstan apart from satisfaction of domestic requirements. 

With regard to the most recent projects in this sphere, the construction of a plant for the production of rail and products started in 2013, using technology Siemens, and the creation of the enterprise for the production of diesel GEVO engines capacity of 300 units per year should be completed by the end of the current year.

At the same time, our country intend to develop its aviation potential. Therefore, 75 new international air routes will be open by 2020 and their total number will amount to 128.  In this regard, Minister of Transport and Communications reminded us that restrictions on expansion of the frequency and geography of flights to EU countries are withdrawn from the national airline Air Astana in 2014. This barrier was planned to remove for all the major air carriers of Kazakhstan until the end of current year.

As to the airport infrastructure, 13 runways and 9 terminals are being under reconstruction in the country at the moment. In total, there are 18 airports in Kazakhstan, 12 of them have ICAO category.

And also the Government does not forget about development of marine potential, and on the international sea port Aktau accounts 24% of the total turnover in the Caspian Sea at that moment. "Now the port expansion project in the northern direction is gradually implemented together with IPD company (Singapore). It is planned that after upgrading the capacity of all maritime ports of Kazakhstan will be increased from 16.8 to 20.5 million tons", - Mr. Kasymbek resumed his speech.


Transport integration

In his turn, Danial Akhmetov, Minister of Energy and Infrastructure of the Eurasian Economic Commission, noted out that ensuring a coordinated transport policy would be the key element in development of the EEU infrastructure. One of the main priorities is creating a common market of transport services, which implies a liberalization, establishment of common approaches to the development of competition and the prevention of unfair competition, the formation of a uniform tariff policy, as well as the elimination of non-physical barriers. "The procedures, terms and conditions and liberalization stages will be determined by a separate international agreements within the Union, with consideration of the industrial characteristics. For example, by January 1, 2016,  the EEU members will accept a program of gradual liberalization of cabotage transportation in the development of road transport within the period from 2016 until 2025”.

The creation of the Integrated Transport and Logistics Company (ITLC) of Kazakhstan, Russia and Belarus ensures the great opportunities for the railway transport". As a result, the share of railway transit from China to the EU through the territory of the EEU by rail will increase more than in 10 times and the volumes will amount to 7% as whole". According to Mr.Akhmetov, the revenues from the UTLC infrastructure operation will exceed $1.5 billion, resulting in creating 43 thousand of new work places and the total cargo turnover will reach 4 million containers.

Kazakhstan, Belarus and Russia intend to implement another joint project in the aviation. "We realise no country shall be locked in a single common space, therefore, we develop the "Single Eurasian Air Space" Program, because there is no alternative for the integration process. This project will contribute to the transformation of the EEU airspace into a highly demanded transit bridge between Europe and South East Asia, as well as between the other continents. 

As explained by Mr.Akhmetov, the project stipulates the creation of common market of aviation services and the single zone of air transportation. At the same time, the stage by stage implementation is planned. “We should keep in mind that the present day aviation, let’s say, those of Kazakhstan and Belarus, is not competitive with the Russian aviation yet.   Therefore, the program will stipulate the stages and creation of specific conditions for its implementation. But we need to move forward on this way”.

We would like to remind that Kazakhstan’s airline companies has previously declared the economical uselessness of the air space liberalization within the EEU, whereas it carries the risks of unequal competition and it might damage the national aviation.  As a result, the norm of the “Single Eurasian Airspace” was excluded from the EEU Establishment Agreement.  Azat Bekturov, Vice Minister of Transport and Communications, commenting this decision, explained that at first, the member states should harmonize their legislation and standards in the aviation industry in their respective countries. "As to transfer to "Single Eurasian Airspace" (meaning the same term, as in the Europe), we disagree and we defended it in the current project of the Agreement. It was critically important for us”. 

Despite this fact, Danial Akhmetov remains optimistic, believing that in the future, Astana might become a major transit hub for the passenger traffic in Kazakhstan, Southern Urals and Western Siberia. He also added that the formation of Kazakhstan’s airports as international hubs will affect the development of other international traffic routes, passing through our territory. "The conditions for the formation of the network will allow to create a new high-speed railway along Minsk - Moscow - Astana - Almaty route. For example, Kazan and Astana may become the new aviation hubs, capable to provide an international transport communication”.


Beyond Eurasia

Alexey Tsydenov, the Deputy Minister of Transport of the Russian Federation, described more great prospects for Kazakhstan, he believes that our country can become a core element not only on the continental level, but also on intercontinental. So, he gives an important role to Kazakhstan for the N.E.W. transport corridor project implementation. This route will take place from China through Kazakhstan, then in Russia and through Murmansk Commercial Seaport (which will be the point of transshipment of containers from the railway station to the ships) to the East coast of the USA.

In order to deliver a cargo from Western China to the US Eastern coast, it shall be first sent to the ports of South-Eastern China, then via the Pacific Ocean to San Francisco and after that it shall  be in transit through the whole American continent, to the Eastern coast. "It is a long and expensive process. The infrastructure, that we create today, allow to make it faster and cheaper. The integration of Russia and Kazakhstan allows making it at higher and positive level.”

According to the Mr.Tsydenov, N.E.W. corridor reduces the distance of the cargo transportation from Western China to the USA more than three times, ensuring not only shortest delivery terms, but also making a serious price competition to any alternative ways. 

The representatives of private business estimate the transit future of Kazakhstan as very optimistic one. Therefore, Eduard Kaplan, Chairman of the Board ENRC Logistics believes that the common customs space facilitates greatly the procedure of cargo delivery and the prospects of the corridor from China to Europe are becoming more real after the simplification of customs procedures. "With creation of the Customs Union and the Eurasian Economic Union, we have more opportunities to initiate the provision of certain discounts for the goods, not simply to get more profits for the traders or shippers, but to increase the volume of traffic along some routes. We think that the economy of Kazakhstan, shippers and exporters are the beneficiaries for this project and it will allow them to develop more successfully”. However, Mr. Kaplan noted out that the national regulator requires to continue the development of the legal framework and human capacity of the logistics industry in Kazakhstan.


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