News analysis


EERING from the window of a plane, Kazakhstan’s vast western plains lie in stark contrast with the country’s new capital city. Isolated but increasingly prominent, Astana appears as a welcome oasis of lights and flashy buildings in a white windswept wildnerness. Until around 20 years ago


the city, which is now home to an estimated 700,000 people, was no more than a few houses on a grassy plain, a distant Soviet outpost. Tselinograd as it was once known, which translates


Playing the long game P


Alstom and its Russian partner Transmashholding inaugurated a new locomotive manufacturing plant in Kazakhstan on December 4, joining fellow western suppliers Talgo and GE, whose products are already being manufactured in the CIS. However, they face significant challenges to reap the rewards from substantial upcoming investments in railway infrastructure and rolling stock in the region, as Kevin Smith discovers in Astana.


as Virgin Lands City, was renamed Astana, or capital, in 1997, affirming its new status in the new Kazakhstan. The city has since gone through a transformation akin to Dubai or Abu Dhabi. While not as extreme in its architectural statements as the UAE’s new cities, it retains a similar feeling; it is a new metropolis built on the wealth of the region’s oil reserves that is keen to make a statement about the country’s status and future direction. Inevitably such an


expression of material wealth and ambition has not gone


unnoticed by western businesses. There is clearly money to be made, particularly as Kazakhstan strives to industrialise and add diversity to its commodity export driven economy. President Nursultan Nazarbayev, a former leader of the Soviet Party of Kazakhstan, and the independent country’s first, and only president, is credited as the driving force behind this capitalist revolution and its apparent upward trajectory.


Kazakhstan is consequently considered a lot more stable than its Commonwealth of Independent States (CIS) neighbours Tajikistan, Uzbekistan and Kyrgyzstan, and for many is increasingly worth the considerable effort to invest.


At the heart of its economic strategy is localisation of industry and this was


emphasised during President


Nazarbayev’s speech at the inauguration of a new


locomotive plant in Astana on December 4. “Kazakhstan creates unique


conditions for investors, through offering tax incentives and the provision of land,” he said. “We are encouraging opportunities for large investments because we want to develop our own industry.” Alstom is a 25% partner


in the ƒ50m plant built in just a year, along with its CIS strategic partner Transmashholding (TMH) which holds an equal size stake, and Kazakhstan Railways (KTZ) which holds a 50% share. The facility has capacity to produce 100 sections, or 50 locomotives per year, initially fulfilling the requirements of a $US 1.3bn contract the JV secured from KTZ for 295 locomotives in 2010.


Taking the lead


While Alstom is embracing Kazakhstan, some western businesses across various sectors have reportedly decided not to follow through with their initial enquiries to invest. Rail though appears to be different. Alstom, Talgo, which is building passenger coaches, and Kurastyru Zauyty Locomotive (LKZ) which is producing diesel- electric Evolution Series locomotives under license from GE, have established a railway manufacturing business park on the outskirts of Astana.


LKZ is 50% held by


Transmashholding and has capacity to produce 150 units per year. Since 2009 it has manufactured locomotives and shunters for the domestic market as well as for export to Mongolia, Tajikistan and Kyrgyzstan. Tuplar Talgo, a consortium between KTZ and the Spanish rolling stock manufacturer, secured an


IRJ January 2013


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