Transport and Communications
Economic and geographic features of Kazakhstan (its vast territory, land-locked position, uneven spatial distribution of population clusters and of natural resources) make the transport component of the economy one of the most sizeable in the world and determine high dependence of the economy on the transport networks.
Being sandwiched between Europe and Asia, Kazakhstan boasts of a great transit potential, as there is no alternatives for Asian states to link to Russia and Europe. Relatively diverse landscape and availability of natural stone reserves allow unrestricted development of railways and automobile routes.
Automobile and railways routes account for a major share of the total above-ground transport routes (about 88.4 и 14 thousand km respectively). Total length of navigable waterways makes up 3.9 thousand km, and the total of air routes makes up 61 thousand km. Density per every 1000 km 2 stands at 5,1 km for railways, at 32,4 km for automobile routes with hard surface, and at 1,5 km for in-land navigable waterways.
At the current stage, there is a problem of poor condition of the transport sector fixed assets, obsolete infrastructure and technology. The share of transportation costs in the final cost of the goods makes up 8% and 11% for in-land railways and automobile traffic respectively, while in industrialized countries these indicators normally make up 4-4,5%. As a result, the transport burden on the economy exceeds that on the major industrialized nations twice on average. By cargo intensity index Kazakhstan’s economy is about five times less efficient, as transport component of every 1 USD of GDP makes no less than 9 ton-km, while in EU cargo intensity is less than 1 ton-km/dollar of GDP.
4 international transport corridors cross the territory of Kazakhstan and are formed on the basis of transport infrastructure existing in the country. They are:
Northern Corridor of Trans-Asian Railway Main (TARM): Western Europe – China, Korean Peninsula and Japan via Russian and Kazakhstan (section Dostyk – Aktogai - Sayak – Mointy – Astana – Petropavlovsk (Presnogorkovskaya)).
Southern Corridor of TARM: South-Eastern Europe – China and South-Eastern Asia via Turkey, Iran, Central Asian states and Kazakhstan (section Dostyk – Aktogai – Almaty – Shu – Arys – Saryagash).
TRACECA: Eastern Europe – Central Asia via the Black Sea, Caucasus and the Caspian Sea (section Dostyk – Almaty – Aktau).
North-South: Northern Europe – Gulf States via Russia and Iran, with Kazakhstan’s participation in the following sections: sea port Aktau – Ural regions of Russia and Aktau – Atyrau.
Besides routes included in the transcontinental mains, Central Corridor of TARM should also be mentioned, as it is of great significance for regional transit in the direction Saryagash – Arys – Kandagach – Ozinki.
Corridors help significantly decrease distances in East-West connection, as well as cut down time of cargo delivery. Robust growth of China’s economy, in particularly of its western regions, boosts the demand for deliveries of a large specter of goods to global markets even today. At the same time, according to experts, current transit in Kazakhstan doesn’t fully employ the potential of the sector and that of the republic in general.Taking into account their geographical location, Kazakhstan, Russia and other CIS countries are considering the possibilities to attract significant part of all cargo transit between the EU and Asia which is worth more than $ 600 bln. (according to IMF).
Strategy of Transport Sector Development
Having attracted a critical mass of investment in a variety of sectors, Kazakhstan's infrastructure will continue to develop at a rapid pace. Therefore Kazakhstan Government has elaborated and approved Strategy of Transport Sector Development of up to 2015; the amount of investments required for construction of respective infrastructure within the 10 years will make up USD 26 billion. Ultimate goal of the Transport Strategy is to ensure progressive development of transport and communications complex in line with economic strategy of the state. The Strategy covers 2006-2015 and is supposed to be implemented in two stages: 1st stage – 2006-2011, 2nd stage – 2011-2015.
The Strategy implementation is expected to ensure bringing of the national transport system to a higher level, and forming of an optimum transport network. Financing of the infrastructure on the self-sufficiency principles will allow accommodating resources for its further sustainable development and maintenance at a high technical level.
Kazakhstan’s transport sector is bound to smoothly integrate into the global transport system. Transport infrastructure is supposed to be brought in compliance with the worldwide standards. All this will enable to sufficiently increase the share of transit traffic, the core of which will be container traffic. Transit traffic will ensure substantial revenues for the central budget and transport companies.
The Strategy covers railways, automobile, in-city passenger, air and water carriage, efficient performance of which to a great extent depends on respective policy pursued by the Government. The Strategy is intended to facilitate growth of trade ties between the West and the East by means of reliable and accessible transit routes. The Strategy provides for implementation of a customized model of meridian and latitude arrangement of the main routes and connecting legs.
The Strategy provides for modernization of already operating and construction of new "rectifying” routes and infrastructure facilities, with all transport fleets being renewed. Development of pipelines with due consideration of the O&G sector specificity is being effected within the framework of the State-run Program of Development of the Kazakh Sector of the Caspian Sea and within the Concept of Gas Sector Development up to 2015.
The transportation sector and telecommunications will need to grow in order to accommodate the needs of other industries. Growth here is likely to attract further investment in other sectors as these infrastructure changes improve the overall business climate. Although Kazakhstan has a basic transportation network and skilled labour force, much investment will be required in the years ahead. Infrastructural investment requirements through 2030 are expected to total more than $25 billion - and of this, 40% will be needed for railway transportation, 23 % for highways and motor transport, 25 % for telecommunications, and 12 % for the air and water transport systems.
Railway services play significant role in the transport-communication network. It provides up to 70% of cargo and 50% of passenger turnover in the overall transport operations in Kazakhstan. Total mileage of the railways in Kazakhstan exceeds 14 thousands km connecting all regions of Kazakhstan and suitable for international transit transportation. Kazakhstan, located in the centre of Eurasia, possesses the great transit potential with the possibility to increase transit capacity via its infrastructure through 5 international railway transport corridors. The principal among them is Trans Kazakhstan Route project from China to Europe through Kazakhstan, Turkmenistan, Iran and Turkey. One of the advantages of this route is that the width of railroad track will be in line with the international standards that will make unnecessary to change railroad wheels on borders. The length of the Kazakh part of the Route is 3070 km. The realisation of this $ 4 bln. project will allow to deliver cargo from the ports of China to the port of Rotterdam within 18 days resulting in significant cost savings for cargo transportation from Asia Pacific Region to the Western Europe. The two stage project with 15 years of implementation period is set to convey up to 110 mln tons of cargo a year through Kazakhstan.
New and existing railway lines will strengthen the transit potential of the country. For example, a new route Chromtau-Altynsarino, 402 km, which was finished by the end of 2004 will twice shorten the existing route through the Russian territory for cargo shipments from the West and East Siberia, the Ural region of Russia to the Aktau Seaport and further to Iran and through the North-South transport corridor to the ports of the Indian Ocean. This route will cut the length of the freight transportation route by 2000 km saving 48 hours of shipment time and up to US$ 18 per ton of cargo. Since the opening of Chromtau-Altynsarino almost 15 mln tons of cargo were transferred with the possibility to increase the volume of transit by 25 mln. tons a year after realisation of the second stage of the project.
Kazakhstan possesses a motor roads network with total length of more than 88,9 thousand km and 13 thousand km of the network have international significance linking the Asian and European motorways. For the last years a great attention was paid to major repair and reconstruction of existing and construction of new roads. Particularly 14,4 thousand km of roads were repaired.
In the past decade, Kazakhstan has become an active participant in world integration processes. An important element of economic integration is a good transport infrastructure, which provides domestic and transit transportation cargo and passengers, with a high level of service. Current requirements for the quality of roads and roadside service levels set for the road sector with new challenges. Road sector will face new challenges due to the contemporary requirements set for the road and roadside service.
The state Program on development of motor roads for 2006-2012 was approved by the Government of the Republic of Kazakhstan, which was developed on the basis of the Strategic Development Plan for the Republic of Kazakhstan till 2010.
The program is based on the outcomes of the previous state road sector development program for 2001-2005 and the results of the analysis of the current state of the road network of the country. It aims at further development and deepening of technological and economic reforms in the road sector to improve the network of public roads in order to maximize the needs of the population and economy in road transport. The total amount of financial resources for the implementation of the Program is US$ 8.5 billion.
International transit corridors received their further development. 579 km of highways of national importance (81 km on the highway Astana-Chelyabinsk, 64 km of Taskesken-Bakhty highway, 114 km of Chundzha-Kolzhat highway, 65 km of boarder-Uralsk-Aktobe highway, 16.7 km of Astana South Bypass and 238.8 km of Dossor-Kulsary lands, Opornoye-Beineu and Atyrau-Beineu highways) were launched into in the next expired year. The traffic in all 6 roads on 215 km of Astana-Schuchinsk was opened on October, 2008. Full completion of the project is expected in 2009.
Construction of the new transport corridor West Europe-West China will increase deliveries by trucks almost four times. Deliveries along this corridor are expected to grow from the current 900 thousand tons to 3.5 million tons. The Government supported the idea of financing of the feasibility study for the corridor. Apart from freights from China and Europe, the project will enable to attract transport flows from Central Asia. “The project calls for large investments, its implementation will be financed out of the budget and through external borrowing. The total project cost is 2.500.0 US$ millions. The Government invited the World Bank, ADB/JICA, EBRD, and IDB, to co-finance in parallel separate sections of the "West Europe-West China" corridor. In order to formalize this collaboration, a Memorandum of Understanding (MOU) was signed by the MOTC and all participating IFIs. The loan is 2,125.0 US$ millions.
The corridor running through Aktobe, Kzylorda and Shymkent will enable to cover not only Russia and China, but also South Asia countries via Uzbekistan and Kyrgyzstan.
Considerable success has been achieved in water transport sector. After rails and roads, water transportation is the third most important element in the Kazakhstan’s transportation complex, with both state and private companies operating in this field. The Irtysh River and the Caspian Sea present excellent opportunities in this area.
Kazakhstan is the cargo generating State in the Caspian basin and the main exported cargoes are oil, metal, wheat and etc.
The main transit flow passes via reconstructed Aktau International Sea Commercial Port, which has a capacity for oil shipments up to 8 mln. tons, general and bulk cargo – 1,5 mln. tons, 24 thousand containers per year. The Aktau Port is considered as a strategic junction of one of the routes of TRASEKA corridor (Transport Corridor Europe-Caucasus-Asia) and International Transport Corridor North-South which connects the North Europe with the South Asia and India.
Native shipping fleet represented by the shipping company JSC “NMSC “KazMorTransFlot”. The fleet of JSC “NMSC “KazMorTransFlot” consists of 16 ships, including 3 oil tankers with the capacity 12.000 tons, 8 launching barges with the capacity 3.600 tons and 5 tugs.
River navigation is carried out in the basin of Irtysh, Ural, Ily rivers and on Balkhash Lake. In 2004 the construction of Shulba sluice in Eastern Kazakhstan was completed and resulted in reopening of navigation on Irtish river between China, Kazakhstan and Russian with up to 3 mln. tons cargo transportation capacity.
Air transit corridors of Kazakhstan are attractive for the flights of foreign airlines between Europe and the South-East Asia which allows shorten significantly the flight path. The development of regions, considerably resulted in the increase of needs in regional transportation, as well as the rise of population’s income promote growth of necessity in flights to near and far destinations. The extent of air routes of Kazakhstan is 54 thousand km, including international routes – 49 thousand km. There are 22 airports in Kazakhstan for air services including the Astana and Almaty international airports and 14 airports provide services to international transportation on a short-term basis. Recently two new international terminals in Astana and Almaty were put into operation.
Modernization of radio and air-navigation equipment enabled to increase the number of international air corridors up to 72. Transit traffic via the airspace of Kazakhstan is carried out by 18 countries of Europe, Russia, South-East and Central Asia. 66 airlines operate in Kazakhstan, including Lufthansa, KLM, British Airways, Turkish Airlines and others. Kazakhstan itself is very convenient for international flight connections between West and East. 729 aircrafts (620 aircrafts and 109 helicopters) were registered in the State register of civil aircraft of the Republic of Kazakhstan.
During the past years Kazakhstan intensifies its activity in airspace. The creation of high technological industries in airspace in cooperation with Russia resulted in realisation of joint space programs and projects which were specified as a top priority of the Strategy on Industrial and Innovation Development of Kazakhstan until 2015. The agreement on development of cooperation on effective use of “Baikonur” space centre and creation of “Baiterek” rocket-space complex was signed with Russia. Great importance was given to construction of the first Kazakhstan’s geostationary communication satellite.
Telecommunications is a leading sector and continues to be one of the most promising areas for foreign investment. An upgrade to the Honeycomb communication service (AMPS standard) is under way in 10 regional centres; trunk communications are developed; personal pager services are expanding in 12 cities and towns; and Internet and telefax are available. In 2001 and 2002, Kazakhstan opened two Internet Data Centres (IDC) in Astana and Pavlodar for 10,000 users each. The IDCs are a cooperative venture between Kazakhtelecom and Lockheed Martin Telecommunications - and the first of their kind in the former Soviet Union.
At present, Kazakhtelekom, a National Joint Stock Company, provides local and international telecommunications services. As the national operator and owner of a network of general-use telecommunications facilities, it offers a range of communications and includes all oblast and urban telecommunication enterprises, as well as 12 large enterprises, such as the National Telegraph, Almaty Broadcasting Station, the National Trunk Line, and others.
Under the implementation of the development of the telecommunications industry of Kazakhstan for 2006-2008, activities for the development of the telecommunications industry led to reach following results: the density of fixed telephone lines - 20.8 per 100 citizens, the density of cellular subscribers – 87 per 100 citizens, internet users – 11 per 100 citizens.
The transportation infrastructure in Kazakhstan consists of an ever-expanding web of pipelines, railways, aerial routes, water transport routes, highways, and mail routes, rapidly crossing Central Asia for the betterment of citizens, business partners, and travelers alike.
The dispersion of natural resources and centers of economic activity make the transport sector a most important one for the well being of the national economy, particularly in order to spur investment in Kazakhstan's promising agricultural sector and regional markets. In an effort to create favorable conditions for foreign and domestic investors, goal-oriented and consistent investment policies are pursued within the transport sector with strong incentives for the attraction of direct investment in all areas of infrastructure and communication complex.
The Government is providing strong incentives for the attraction of direct investment in all areas of infrastructure, as infrastructure has become a top priority. A competitive environment exists today, is being fostered further, and with some exceptions, monopolies are restricted in order to encourage an open and efficient transportation and communication services market.