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The company’s plans to service the passengers “from door to door” and the conditions the company has to satisfy before going public were spoken about by Ulf Wokurka, an Independent Director and Member of the Board of Directors of national railway operator Kazakhstan, and Temir Zholy (KTZ) in an exclusive interview with The Astana Times.
The Samruk Kazyna Sovereign Wealth Fund is the sole shareholder of KTZ (est.1997), a national transport and logistics holding, the largest operator of Kazakhstan’s railway network and one of 15 largest railway companies in the world (223 billion tonne-kilometers in 2021).
Over 110,000 citizens are provided with jobs by KTZ.
According to Ulf Wokurka, KTZ has recently adopted a five-year passenger transportation development concept, developed jointly by KTZ and a German consultancy company with the aim to improve the passenger transportation experience.
The passenger train services’ timetables are going to be adjusted according to adjacent transportation service providers (e.g. airlines and bus services) over the next five years.
Both the relevant airline and KTZ are interested in the resulting increased customer satisfaction as it will increase passenger numbers.
A new mobile application of KTZ for passengers will make the new services for traveling “from door to door” ready for booking.
Cooperation with leading taxi service providers, with Air Astana, and with large inter-city bus transportation providers will also be necessary.
The negotiations of a respective agreement with Air Astana, Kazakhstan’s flagship air carrier have already been started.
The construction of several transport hubs around major cities and regional centers is planned and rail tracks and rail stations are going to be modernized, as well as new tracks are going to be constructed.
A second track will be added to the road between the Chinese border and the north of Balkhash Lake.
Alternative sources of financing are necessary for KTZ to reduce its dependence on foreign borrowing. For example, the National Fund (a sovereign wealth fund that is operated by the National Bank of Kazakhstan) can be an important source for these long-term investments into the future.
One of those factors that have so far prevented the company from seeking a public listing has been the significant debt burden of KTZ.
Several companies are comprised in JSC NC KTZ. It is necessary to decide which of them should go public. Profitable segments, such as the provider of freight transportation services, are currently cross-subsidizing less profitable or even loss-making companies within the KTZ group.
The impact of such plans on the company’s future debt service capacity is another implication to be duly considered within any decision making on a possible partial privatization or going-public.
Prior to aiming for an IPO, it is necessary to define the future terms and conditions under which KTZ and other railroad companies will compete for their share in the market for freight transportation services on both domestic and cross-border transportation routes.
The stability of freight transportation passing through Russia has been questioned as a result of the ongoing military operations in Ukraine, consequently, the volume of goods across the territory of Russia has fallen.
Steps to minimize the impact of the military conflict on its operations have been taken by both sides. For instance, external borrowings have been optimized and funding sources have been diversified to mitigate the currency risks. Measures are taken by KTZ to reduce its operational costs, as well as to resume negotiations with suppliers and other business partners in order to prevent unexpected price hikes for purchased equipment, spare parts and services.
One of these measures is developing alternative transportation routes (e.g. Trans-Caspian international transportation route (TITR) which runs through Kazakhstan, the Caspian Sea, Azerbaijan, Georgia and on to Europe and unites around 20 transportation companies, owners of the infrastructure, and carriers from Azerbaijan, China, Georgia, Kazakhstan, Romania, Turkey, and Ukraine). KTZ has been its regular member since 2017 and can provide an alternative to the Russian route for the transit of goods from China to Europe or export from Kazakhstan.

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Uzbekistan and China organized a “business workshop” with the participation of representatives of the authorities and business circles of Karakalpakstan, Namangan region and the Chinese province of Hebei in order to use the potential of the regions and to increase further development of trade-economic and investment cooperation between the two countries.
Thematic presentations were made during the event by representatives of Uzpharmagency, Uzkimyosanoat and Uztuqimachiliksanoat.
The main sectors of the regional economy, their potentials for further development of trade and investment exchange were presented during the meeting, and presentations of projects for joint implementation were made.
A joint work plan with the definition of specific areas of cooperation and activities and preparation of bilateral documents for signing were agreed on by the parties following the event in order to create a legal framework for cooperation. Additional bilateral negotiations between companies in the regions are going to be conducted to discuss in detail the projects proposed during the presentation in such industries, like textiles, chemicals, agriculture, building materials and others.

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According to Kazakh Agriculture Minister Yerbol Karashukeyev, Kazakhstan’s sugar imports will fall by 32% to increase the home-produced sugar supplies at the domestic markets from 7% to 43%.
He also told the Government meeting that annual sugar consumption in Kazakhstan stands at 532,000 tons. Irrigation water scarcity, sugar-beets labor-intensive growing methods, sugar-mills worn-out state, price dumping by Russian producers helped to fabricate 7% out of this amount in Kazakhstan.
The minister also added that an increase of sugar-beet gross yield is expected from 332,000 tons to 1.8 mln tons. Solving the problem of water supplies, an extension of cultivated areas from 14,500 ha to 38,000 ha, technical equipment, as well as launching the projects for updating and construction of a sugar mill with the infrastructure development of the industry will help to attain this result.
The target is to increase sugar production sevenfold up to 254,000 tons, and to reduce sugar imports by 32%.

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Georgian external trade turnover reached $3.8 billion in January-March 2022 (up 37.9 percent).
According to the National Statistics Office of Georgia, the top trading partners of Georgia in its total external trade turnover in January-March 2022 were Turkey ($562.4 million), China ($461.9 million) and Russia ($383.3 million).
In the reported period Georgia’s exported the most to China ($220 million), Azerbaijan ($125.4 million) and Russia ($109.8 million), and imported the most from Turkey ($463.2 million), Russia ($273.5 million) and China ($241.9 million).
Copper ores and concentrates – $271 million (+71), ferro-alloys – $160 million (+91.3) and motor cars – $94.8 million (+9.6%) were the top export items.
Petroleum and petroleum oils – $244 million (+71.6), copper ores and concentrates – $222 million (+52.6%) and motor cars – $211 million (+7.1%) were the three top import commodities.
Georgian external trade turnover reached $3.8 billion in Q1 2022 (an increase of 37.9 percent).
The rise of the value of exports amounted to 43.3 percent and reached $1.1 billion in the reported period, while imports also showed an increase by 35.7 percent, reaching $2.6 billion.
A measure of the negative balance of trade in which imports exceed exports (trade deficit) amounted to $1.5 billion, while the share of trade turnover reached 39.4 percent.

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According to Akorda press service, the meeting focused on the issues of mutually beneficial cooperation between Kazakh regions and the Omsk Region in trade, mechanical engineering, transport, agriculture, was held. President Tokayev said that productive interregional cooperation had a positive influence on mutual trade indicators. According to the President, great attention is paid to the development of interregional cooperation with the Omsk Region. As a result, trade turnover between the Omsk Region and Kazakhstan exceeded $380mln. Kazakhstan is its most important trade partner. A significant fact is that Kazakhs reside in this border region. the Kazakh diaspora in the Omsk land was called by the Head of State a connecting link and, thanks to Alexander Burkov’s special attention and all-round support to it, it preserves a spiritual link with the historic Homeland. The President also thanked the administration and residents of the Omsk Region for perpetuating the memory of the great sons of the Kazakh people Shokan Valikhanov and Saken Seifullin. The Governor Alexander Burkov told in his turn that the region is ready to cooperate with Kazakh companies in the agro-industrial complex, food production, petrochemistry, and construction.

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The Chamber of Commerce and Industry informs that the main categories of products that can be exported to the Iranian market (corn, flower seeds sunflower oil, sunflower oil, dried fruit) were identified after a meeting between CCI head Sergiu Harea and Ambassador of the Islamic Republic of Iran to Moldova Manouchehr Moradi.
According to the Iranian Ambassador, the Qazvin Chamber of Commerce, Industry and Mining in Iran is interested in a meeting with CCI representatives in order to familiarize them with the economic and investment potential of the Republic of Moldova. They decided to organize a business meeting between the representatives of the chamber institutions of both states.
According to Harea, the economic potential between the two countries has not been fully exploited. He said that the involvement of the Embassy of the Islamic Republic of Iran in the Republic of Moldova and the desire of the business environment to explore new markets made Moldovan-Iranian trade relations grow recently. The CCI head added that both states had sufficient capabilities and their cooperation could be even better.
A Memorandum of Understanding with the Chamber of Commerce, Industry, Mining and Agriculture of Isfahan, Islamic Republic of Iran was signed by the Chamber of Commerce and Industry of the Republic of Moldova on January 30, 2018.

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The criteria related to the business reputation, financial condition and professional competence of the operator of international passenger and freight transport by road, and the requirements on the level of training of the operator’s drivers are set out by the rules. The maintaining record of operators by the Land Transport Agency of Azerbaijan under the Ministry of Digital Development and Transport is also regulated by them.
The rules set out that legal entities or individuals wishing to be registered as an operator must be registered for tax purposes, have vehicles registered with the state on the right of ownership, use or lease, and meet certain criteria related to business reputation, financial standing and professional competence.
The new rules will increase the competitiveness of national road carriers by improving drivers’ knowledge and skills and management development, leading to an increase in their share of the bilateral and third country transport market, as well as their share of the West–East and North–South international transport corridors.
The application of the requirements of the Quality Charter of International Transport Forum (ITF) (the leading regulatory mechanism in the field of road transport) is one of the objectives of introducing the rules for admission of Azerbaijani road carriers to international passenger and freight transport by road. Relevant requirements for the institution, business reputation, financial stability and professional competence are set out and entities that meet these requirements to transport are admitted by the Quality Charter. This makes organization of road transport operations efficient, the development of the industry sustainable and investment attractiveness increased.
The process of entering into force of the resolution of the Cabinet of Ministers on the “Rules for admission to international passenger and freight transport by road” will take one year after its publication. Appropriate preparations to maintain records of operators will be made by the Land Transport Agency of Azerbaijan during the year. The service Guide for Carriers will organize meetings with carriers and will provide them with necessary explanations and methodological support.

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The presidential decree promises subsidies to exporters to compensate for expenses, including up to 70% of transportation costs. Young entrepreneurs will get loans.
According to the presidential decree “On additional measures to support participants in foreign trade activities” measures to support and stimulate the export activities of domestic business entities will be strengthened.
For example, from April 1, 2022 until April 1, 2023, subsidies to compensate for transportation costs in the amount of up to 70% are provided to domestic enterprises (their authorized representatives), when exporting high value-added products to the countries of the European Union.
Also from April 1:
ꞏ subsidies are provided to compensate for transportation costs in the amount of up to 50% when exporting high value-added products to neighboring countries;
ꞏ the Export Promotion Agency reimburses expenses related to the accreditation of conformity assessment bodies by an accreditation body that is a member of international organizations ILAC/IAF;
ꞏ 50% reduction of the amount of prepayment required when business entities export goods (except for special types of goods), works and services on the basis of invoices without concluding an agreement is announced.
The Unified Exporter Support Portal will regularly publish an approved list of high value-added products, the export of which will be provided with subsidies to compensate for transportation costs.
They will also cancel the procedure for prohibiting the use of benefits on customs payments during customs clearance of goods that are in the customs warehouse regime for a period of more than six months.
The Young Entrepreneurs Support Fund based on decisions of the Government Commission will allocate loans up to $500,000 in order to support youth entrepreneurship, including stimulating activities for the production of export-oriented products and the provision of services based on innovative technologies.
The Export Support Fund will allocate $10 million to Uztrade and Uzsanoatexport JSCs in order to provide foreign trade companies with working capital.

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According to Finprom.kz, trade turnover between Kazakhstan and China reached $1.4 billion as of January (53.4% up compared to the previous year).
The Bureau of National Statistics of the Agency for Strategic Planning and Reforms reports that China’s share is 16.1 percent of the country’s foreign trade turnover.
In the first month of this year exports to China exceeded imports (77.9 % up over the year) and reached $771.7 million. China’s share of total exports from Kazakhstan reached 12.7%.
Imports reached $648.5 million (31.8 % up). It is 23.8 % of the total volume of imports to Kazakhstan.
The National Bank’s statistics informs that the obligations of Kazakh residents to Chinese investors as of Oct. 1, 2021 reached $13.5 billion (0.4 percent growth compared to a year earlier). After a two-year decline this indicator rose slightly.
The majority of finance ($2.8 billion) was allocated to the manufacturing industry in Kazakhstan by investors from China by October 2021. They also made investments in the sphere of transport and warehousing ($2.6 billion), trade and car repair ($2.1 billion).
In January – September 2021 the gross inflow of Chinese direct investments amounted to $1.5 billion. It is 2.9 times more than a year earlier ($521.8 million in January – September 2020).
1,500 companies with Chinese capital operate in the country as of March 1 (increase 17.4% compared to the previous year).
The wholesale, retail trade, car repair, construction and mining industries are the spheres most of these companies are engaged in.

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According to the Minister of Industry and Infrastructure Development of Kazakhstan Kairbek Uskenbayev, export and transit cargos from Kazakhstan will be redirected to the Trans-Caspian International Transport Route (TMTM) crossing Azerbaijan, Georgia and Turkey.
According to the Russian news agency TASS, Uskenbayev said that Kazakhstan had reached an agreement with Azerbaijan, Georgia and Turkey to create a joint venture on the route as an integrated transport and logistics company.
The Kazakh official said that a container hub on the basis of the free economic zone seaport of Aktau is to be created in order to develop cargo transportation via TMTM.
Kazakhstan has begun working on alternate routes for the transportation of export and transit cargos, along with the authorities’ decision to redirect the freight to Latvian ports due to the war in Ukraine and sanctions imposed against Russia.
The aim of the TMTM, established in October 2016, is to attract transit and foreign trade cargo, as well as develop integrated logistics products via the Trans-Caspian International Transport Route, which runs through China, Kazakhstan, Azerbaijan, Georgia and further to European countries.

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