BAKU, Azerbaijan, July 13. In an era where the global geopolitical situation is constantly changing, the significance of the transport sector has never been more important. Recognizing this, Kazakhstan stands determined to address and alleviate the challenges faced within its own transportation infrastructure.
According to the semi-annual review, prepared by Trend, in the first half of this year, Kazakhstan demonstrated a strong commitment to developing its transport sector.
Road transport
Kazakhstan began this year with the adoption of a 10-year development strategy of KazAutoZhol (national highway operator). The strategy includes a number of steps expected to improve the condition of roads, in addition to unlocking the country’s transit potential. An additional benefit would be the construction of electric vehicle charging stations, which would allow for more use of environmentally friendly vehicles.
Furthermore, it was revealed in January, that in 2023 Kazakhstan is going to build/reconstruct 10,500 kilometers of roads. In particular, the building/reconstruction of 7,300 kilometers of major roads will be completed. Additionally, 3,200 kilometers of roads incorporated into the local network will be built and modernized.
In a further effort to modernize road infrastructure, it was revealed that around 11.8 billion Kazakh tenge ($25.62 million) will be allocated for the reconstruction of the roads in Zhambyl region. The funds will be used for the maintenance and repair of 557.4 kilometers of roads. Upon the completion of the work, the share of the roads in good condition will reach 98 percent in the region.
Additionally, Kazakhstan also works on implementation of projects, which will include international participants, from 2024 through 2030. The projects include construction of the 513-kilometer-long Zhezkazgan-Karagandy road, Astana-Kostanay-Russian border road with a length of 830 kilometers, Beyneu-Shalkar road that stretches 515 kilometers, as well as Kyzylorda-Aktobe and Aktobe-Uralsk roads with a length of 1,101 and 628 kilometers respectively.
Moreover, it was revealed during the first half-year, that Kazakhstan and China reached an agreement to restart the operations of the “Khorgos” checkpoint, which was closed in 2019 due to the outbreak of COVID-19 in China.
Also, to develop its international transport routes and connectivity, Kazakhstan signed an agreement with China on the provision of a territory equaling eight hectares for the construction of a terminal located in the dry port of Xi'an city of China.
One of the most important events in Kazakhstan's road transport was the launch of Big Almaty Ring Road (BAKAD). Spanning 66 kilometers, BAKAD consists of four-lane sections (9 kilometers) and six-lane sections (57 kilometers), along with bridges, interchanges, and necessary infrastructure. The BAKAD project, with a total cost exceeding $743 million, marked a groundbreaking milestone as Central Asia's inaugural international public-private initiative. The projected volume of cargo transported in the BAKAD zone is expected to increase by 87 percent over the next 15 years, reaching 35.9 million tons.
From January through June 2023, there was an increase in transportation of goods by road transport by 14.3 percent compared to the same period last year. The transportation of passengers and passenger turnover also increased by 9.9 percent and 2.4 percent, respectively.
Railroad transport
In addition to the development of road infrastructure, Kazakhstan also carried out huge projects to upgrade its railroad transport.
For instance, in January, Kazakhstan expanded its geographical connectivity by receiving the first train from Vietnam through China. The train departed from Pingxiang Railway Station in Guangxi, in southern China, and reached the Xi’an dry port, in the east of the country. The train was then sent to Kazakhstan via the China-Europe Express. The train was carrying various electronic spare parts manufactured in Vietnam.
Furthermore, it was announced during the reporting period that Kazakhstan Temir Zholy (KTZ) national railway company will launch the tests of OneWeb satellite terminals on the railway of Kazakhstan. The intended launch comes as a part of a Memorandum of Understanding signed between the KTZ and OneWeb - «Network Access Associates Ltd.», an international company specializing in the field of satellite communications. This cooperation will provide high-speed satellite connection to cargo and passenger trains operating in Kazakhstan.
Moreover, Kazakhstan's national railway operator also signed credit deals with a syndicate of banks comprised of Société Générale and Natixis for the purchase of electric locomotives. The funds provided will enable the railway operator to procure 100 electric locomotives produced in Kazakhstan. The locomotives will be supplied from 2023 through 2029. KTZ expects that the new locomotives will enable the company to offer a higher quality of service to its customers.
The first half-year also marked the initiation of the second track of the railway between Jinghe and Alashankou, which later extends into the territory of Kazakhstan by China. The construction of the second track is expected to positively impact the transit capacity of the route as well as to streamline the connection between China and Kazakhstan.
In an effort to further strengthen transport cooperation with China, Kazakhstan's KTZ Express JSC jointly with Russia's RZD Logistics JSC organized the dispatch of the first refrigerated container train in direct rail traffic on the Moscow-Xi'an (China) route. The refrigerated container train was used to deliver agricultural products to China.
In line with the goal to develop the railway infrastructure, Kazakhstan Railways announced that is currently undertaking its most extensive railway track repairs in years. From March through June of this year, a total of 591 km of track have undergone various types of repairs across the KTZ network. The planned volume of work is being executed according to schedule. This year, KTZ plans to carry out over 1,100 km of track repairs, the largest volume in recent years.
Cooperation with Uzbekistan also signifies Kazakhstan's effort to improve connectivity throughout the regions, as the sides plan to construct a new "Darbaza – Maktaaral" railway line. The construction of the new railway line with a total length of 106 kilometers will provide transport additional 10 million tons of cargo per year between the countries. The construction project will require more than $347 million.
In the first half-year of 2023, the railway transport of Kazakhstan transported 202.2 million tons of goods, which is 1.9 percent lower year-over-year. The freight turnover for this period amounted to 163 billion ton-kilometers, representing a 5.9-percent increase.
Air transport
During the first half of this year, Kazakhstan significantly expanded the geography of its flights.
Kazakhstan began 2023 by extending its “open sky” policy until the end of 2027. This regime provides for the removal of all restrictions on the number of flights and the provision of the fifth “freedom of the air” to foreign airlines on routes where Kazakh airlines do not operate. The fifth “freedom of the air” allows flights of foreign airlines through the cities of Kazakhstan to the cities of third countries. This makes it possible to increase the transit potential of the country and increase the transit passenger traffic through Kazakh airports.
Furthermore, it was announced that Air Astana will modify the flight schedule from July 15 through August 8 due to the planned runway repair at the Nursultan Nazarbayev International Airport. The company said that travel dates on the existing tickets can be modified. The clients can also claim a penalty-free full refund.
In terms of new routes and destinations, FlyArystan, Kazakh's first low-cost air carrier, has launched direct passenger flights on the Astana-Ankara route. Starting from May 23, the flights between Astana and Ankara operate twice a week, specifically on Tuesdays and Sundays.
FlyArystan has also conducted the first flight from Almaty to Georgia's Kutaisi. Starting from June 4, 2023, Airbus A320 airliners began flying on the Almaty-Kutaisi-Almaty route. Flights lasting about 4.5 hours are carried out twice a week, on Wednesdays and Sundays.
Another route opened by FlyArystan during the first half of this year was the Baku-Astana route. The opening of the first flight on this route was on June 3, 2023.
Moreover, FlyArystan low-coster also carried out the first flight between Astana and Uzbekistan's Tashkent. The flights between Astana and Tashkent operate twice a week, on Mondays and Wednesdays. Having launched this flight, FlyArystan has become Kazakhstan's first low-cost air carrier to connect the capitals of Kazakhstan and Uzbekistan.
Furthermore, Kazakhstan's other company, SCAT Airlines, launched direct passenger flights to Pakistan's Lahore. The direct regular passenger flights between Almaty and Lahore commenced on July 8. The flights will operate twice a week on Wednesdays and Saturdays.
Kazakhstan's biggest airline company, Air Astana has announced the commencement of direct flights between Almaty and Jeddah, Saudi Arabia, starting from October 1, 2023. The airline has already begun ticket sales for this new route, which will initially operate twice a week, with an additional frequency added in December.
In addition, Oman’s Salam Air launched its first flight from Muscat to Almaty route on July 1, 2023. The flights operate twice a week (on Thursday and Sunday). The flights are expected to boost trade-economic, tourist and cultural cooperation between the two countries.
Another important event in Kazakhstan's air transport sector was the signing of a memorandum between Kazakhstan and Luxembourg on the increase of regular air communication. The flights from Luxembourg used to be operated seven times a week, based on the signed memorandum, their frequency will increase to 21 times.
During the first six months of 2023, air transport of Kazakhstan carried 5.9 million passengers, which is 27.8 percent more year-over-year.
Maritime transport
Kazakhstan, located on the shore of the Caspian Sea, also pays close attention to its maritime transport.
For instance, in partnership with UAE, Kazakhstan launched the operations of the Caspian Integrated Maritime Solutions (CIMS) transport company. CIMS was registered on February 13, 2023 in the “Astana” International Finance Center. The company was created jointly between Kazmortransflot and the Abu Dhabi Ports Group.
Furthermore, a ceremony took place on July 4 in Galati, Romania, marking the acceptance of two new oil tankers, Taraz and Liwa, which have joined the Kazakh maritime fleet. The tankers, with a deadweight tonnage of 8,000 tons, are owned by Caspian Integrated Maritime Solutions joint venture.
In the reporting period, Kazakhstan's maritime transport carried 633,200 tons of goods, showing a 13.5-percent increase compared to the same period of the previous year. The freight turnover amounted to 381.8 million ton-kilometers, reflecting a 0.6 percent increase year-over-year.
Cooperation with international partners
Kazakhstan maintains strong connections with international partners and financial institutions to develop its transport sector.
One such partnership established is the one with Stadler. Stadler, the Swiss manufacturer of railway rolling stock, has confirmed purchasing the Tulpar factory in Kazakhstan. At the beginning of the year, Stadler signed a long-term contract with Federal Railways of Kazakhstan (KTZ) for the supply of 537 cars, including a 20-year full-service contract. The contract also includes the transfer of technology from Switzerland to Kazakhstan and the acquisition of a local production facility in Astana.
Furthermore, Kazakhstan also cooperates with the European Bank for Reconstruction and Development (EBRD). As such, in the first half-year, the bank approved the allocation of 12.5 million euros to support LLP Atasu Group of Companies, one of the intermodal logistics operators in Kazakhstan. EBRD statement notes that the total cost of the project is 18.45 million euros.
In addition, the bank is rolling out its 'Green Cities' program in Kazakhstan by financing street lighting improvements in the city of Ust-Kamenogorsk. This will allow the upgrade street lighting in Ust-Kamenogorsk to be completed and an additional 6,000 energy-efficient LED street lights along 150 city streets to be installed.