Logistics and Transport Competitiveness

in Kazakhstan
 ECONOMIC COMMISSION FOR EUROPE

LOGISTICS AND TRANSPORT

COMPETITIVENESS IN
KAZAKHSTAN

UNITED NATIONS
Geneva, 2019
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United Nations publication issued by the United Nations Economic

Commission for Europe

ECE/TRANS/286

ISBN: 978-92-1-117205-8
eISBN: 978-92-1-004218-5
Sales no.: E.19.II.E.25
 ACKNOWLEDGEMENTS

ACKNOWLEDGEMENTS
This publication has been prepared by Professor Anatoli Molokovitch, Associate
Professor of the School of Business and Management of Technology of the Belarus
State University.
The author worked under the guidance of, and benefited from significant author
contributions from Francesco Dionori, Chief of Transport Networks and Logistics
Section, Sustainable Transport Division, UNECE.
The author would like to thank the Ministry of Industry and Infrastructural
Development of the Republic of Kazakhstan and all those who provided significant
input and data for the preparation of this publication.
Information is current to December 2018.

iii
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

UNITED NATIONS ECONOMIC COMMISSION FOR EUROPE (UNECE)

The United Nations Economic Commission for Europe (UNECE) is one of the five
United Nations regional commissions, administered by the Economic and Social
Council (ECOSOC). It was established in 1947 with the mandate to help rebuild post-
war Europe, develop economic activity and strengthen economic relations among
European countries, and between Europe and the rest of the world. During the Cold
War, UNECE served as a unique forum for economic dialogue and cooperation
between East and West. Despite the complexity of this period, significant
achievements were made, with consensus reached on numerous harmonization and
standardization agreements.
In the post-Cold War era, UNECE acquired not only many new member States, but
also new functions. Since the early 1990s the organization has focused on analyses
of the transition process, using its harmonization experience to facilitate the
integration of Central and Eastern European countries into the global markets.
UNECE is the forum where the countries of Western, Central and Eastern Europe,
Central Asia and North America – 56 countries in all – come together to forge the
tools of their economic cooperation. That cooperation concerns economics,
statistics, environment, transport, trade, sustainable energy, timber and habitat.
The Commission offers a regional framework for the elaboration and harmonization
of conventions, norms and standards. The Commission's experts provide technical
assistance to the countries of South-East Europe and the Commonwealth of
Independent States. This assistance takes the form of advisory services, training
seminars and workshops where countries can share their experiences and best
practices.

iv
 TRANSPORT IN UNECE

TRANSPORT IN UNECE
The UNECE Inland Transport Committee (ITC) facilitates the international movement
of persons and goods by inland transport modes. It aims to improve competitiveness,
safety, energy efficiency and security in the transport sector. At the same time it
focuses on reducing the adverse effects of transport activities on the environment
and contributing effectively to sustainable development. The ITC is a:
x Centre for multilateral transport standards and agreements in Europe and
beyond, e.g. regulations for dangerous goods transport and road vehicle
construction at the global level
x Gateway for technical assistance and exchange of best practices
x Promoter of multi-country investment planning
x Substantive partner for transport and trade facilitation initiatives
x Historic centre for transport statistics.
For more than six decades, ITC has provided a platform for intergovernmental
cooperation to facilitate and develop international transport while improving its
safety and environmental performance. The main results of this persevering and
important work are reflected in more than 50 international agreements and
conventions which provide an international legal framework and technical
regulations for the development of international road, rail, inland water and
intermodal transport, as well as dangerous goods transport and vehicle construction.
Considering the needs of transport sector and its regulators, UNECE offers a balanced
approach to and treatment of facilitation and security issues alike.

v
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

CONTENTS
Executive Summary...................................................................... xiii
1. Brief Analysis of the Economic Situation in Kazakhstan ...................... 1
1.1. Main indicators of the social and economic situation .................... 1
1.2 Transport in Kazakhstan ...................................................... 6
2. Road Transport in Kazakhstan .................................................... 13
2.1 Analysis of the road sector ................................................... 13
2.1.1 General information about roads ....................................... 13
2.1.2 Characteristics of the road network ................................... 15
2.1.3 International road network.............................................. 25
2.1.4 Main highways of national importance and their upgrading ........ 32
2.2 Analysis of the state and development of road transport ............... 41
2.2.1 General characteristics of road transport ............................. 41
2.2.2 Road traffic accidents.................................................... 44
2.2.3 Transport of goods by road .............................................. 45
2.2.4 Transport of goods in international traffic............................ 51
2.3 SWOT analysis of the road sector and road transport .................... 58
2.4 Recommendations for the development of the road sector and
road transport .................................................................. 60
2.4.1 For the road sector ....................................................... 60
2.4.2 For road transport ........................................................ 61
3. Rail Transport in Kazakhstan ..................................................... 63
3.1 History of the development of rail transport in Kazakhstan............. 63
3.2 Characteristics of the infrastructure and volumes of transport by rail 66
3.3 International rail transport ................................................... 71
3.4 Railway cooperation with international organisations ................... 86
3.5 SWOT analysis of the railway sector ........................................ 87
3.6 Recommendations for the development of rail transport ............... 89
4. Water Transport in Kazakhstan................................................... 91
4.1 Inland water transport ........................................................ 91
4.2 Sea Transport................................................................... 101
4.3 SWOT analysis for water transport .......................................... 106
4.4 Recommendations for the development of water transport ............ 108

5. Civil Aviation in Kazakhstan ...................................................... 109

5.1 Civil aviation regulation ...................................................... 109

vi
 CONTENTS

5.2 Civil aviation assets............................................................ 109

5.3 Main airlines .................................................................... 110
5.4 Transport of passengers and cargo by air .................................. 113
5.5 SWOT analysis of the state of civil aviation................................ 117
5.6 Recommendations for the development of civil aviation ................ 118
6. Logistics in Kazakhstan ............................................................ 121
6.1 SWOT analysis of the logistics sector ....................................... 133
6.2 Recommendations for the development of logistics...................... 134
7. Legislation in the Transport Sector .............................................. 137
7.1 The regulatory and legal framework in the field of transport .......... 137
7.2 Proposals for harmonization of the legislative framework in the field
of international freight transport ........................................... 139
7.3 Recommendations for legislation............................................ 141
8. Prospects for the Development of Transit and Transport Logistics
in Kazakhstan ....................................................................... 145
8.1 Development of transit and logistics in Euro-Asian transport ........... 145
8.2 Kazakhstan perspective of the development of transit and logistics .. 148
9. Conclusions .......................................................................... 151
Annex ...................................................................................... 155
References ................................................................................ 165

vii
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

LIST OF FIGURES
Figure 1.1: Administrative and territorial structure of Kazakhstan
Figure 1.2: Structure of exports by main product groups in 2017
Figure 1.3: Structure of imports by main product groups in 2017
Figure 2.1: Road projects in the “Nurly Zhol” programme
Figure 2.2: International road corridors in Kazakhstan
Figure 2.3: Kazakhstan section of the transcontinental corridor “Western Europe –
Western China”
Figure 2.4: Kokshetau – Petropavlovsk - border of the Russian Federation section
of international road corridor III
Figure 2.5: Astrakhan - Atyrau - Aktau - border of Turkmenistan section of
international road corridor IV
Figure 2.6: Omsk –Pavlodar – Semey – Maykapchegai section of international road
corridor V
Figure 2.7: Astana – Kostanay – Chelyabinsk – Ekaterinburg section of
international road corridor VI
Figure 2.8: Construction and reconstruction of roads in the centre-west, centre-
east and centre-south directions
Figure 2.9: Construction and reconstruction of the Aktobe - Atyrau road
Figure 2.10: Reconstruction of the Almaty – Ust-Kamenogorsk road
Figure 2.11: Reconstruction of the Uralsk - Kamenka road
Figure 2.12: Reconstruction of the Kostanay - Denisovka road
Figure 2.13: Reconstruction of the Schuchinsk - Zerenda road
Figure 2.14: Reconstruction of the Zhetybai - Zhanaozen road
Figure 2.15: Reconstruction of the Usharal - Dostyk road
Figure 2.16: Reconstruction of the Taskesken - Bakhty road
Figure 2.17: Reconstruction of the south-west bypass of Astana
Figure 2.18: Reconstruction of the road bypassing the village of Kordai
Figure 2.19: Construction of the Greater Almaty Ring Road
Figure 2.20: Growth in the number trucks in Kazakhstan
Figure 2.21: Number of fatalities in road traffic accidents by number of vehicles
Figure 2.22: Transport of goods by road in a breakdown by regions, thousands of
tonnes
Figure 2.23: Number of trucks in a breakdown by region
Figure 2.24: Structure of the cost of freight transport in European Union countries
Figure 2.25: Structure of the cost of freight transport in Kazakhstan
Figure 2.26: Structure of the cost of freight transport in the Russian Federation
Figure 2.27: Structure of the cost of freight transport in Belarus
Figure 3.1: History of the establishment of the railway network of Kazakhstan
Figure 3.2: Development of the railways of Kazakhstan
Figure 3.3: Cargo transport speed along CAREC corridors
Figure 3.4: Average distance of transit cargo transport
Figure 3.5: Trans-Caspian International Transport Route
Figure 3.6: OSJD International Transport Corridor 1
Figure 3.7: OSJD International Transport Corridor 2
Figure 3.8: Branch a of the OSJD International Transport Corridor 2
Figure 3.9: Volume of Russian exports cargoes to Kazakhstan, through railway
border points, in percentage

viii
 LIST OF FIGURES

Figure 3.10: Volume of the Kazakhstani exports to the Russian Federation, through
railway border points, in percentage
Figure 3.11: OSJD International Transport Corridor 5
Figure 3.12: Branch j of the OSJD International Transport Corridor 5
Figure 3.13: International OSJD Transport Corridor 8
Figure 3.14: Branch b of the OSJD International Transport Corridor 8
Figure 3.15: OSJD International Transport Corridor 10
Figure 3.16: Railways of Kazakhstan as of 1 January 2016
Figure 4.1: Water basins of Kazakhstan
Figure 4.2: Key performance indicators of inland waterway transport in
Kazakhstan
Figure 4.3: Average distance of carriage of goods by inland waterways in
Kazakhstan
Figure 4.4: The basin of the River Irtysh
Figure 4.5: The basin of the Ural River
Figure 4.6: Balkhash-Ili basin
Figure 5.1: Air Astana route network
Figure 5.2: QAZAQ AIR’s route network
Figure 5.3: Revenues of air transport enterprises from cargo and passenger
transport
Figure 6.1: Strategic location of the Khorgos - Eastern Gate free economic zone
Figure 6.2: Map of the Khorgos - Eastern Gate free economic zone
Figure 6.3: Intermodal capability of the KTZE - Khorgos Gateway dry port
Figure 6.4: Transport and logistics centre in Shymkent

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

LIST OF TABLES
Table 1.1: Main macroeconomic indicators of Kazakhstan
Table 1.2: Nominal value and structure of GDP in 2017
Table 1.3: GDP of Kazakhstan compared to neighbouring countries
Table 1.4: GDP per capita in Kazakhstan compared to neighbouring countries
Table 1.5: Transport development in Kazakhstan
Table 1.6: Freight and cargo turnover by modes of transport in 2017, percentage
Table 1.7: Transport of cargoes and passengers by all modes of transport and by
region in 2017
Table 1.8: Fixed assets of transport enterprises at the end of the year in millions
of tenge
Table 1.9: Degree of depreciation of fixed assets of transport enterprises,
percentage
Table 1.10: Investments in fixed assets by mode of transport, millions of tenge
Table 1.11: Number of employees of transport enterprises, thousands
Table 2.1: Road categories
Table 2.2: Length of public roads, km
Table 2.3: Territory and population density at the beginning of 2018
Table 2.4: Length of paved public roads, km
Table 2.5: Percentage of public roads paved for their total length
Table 2.6: Length of public roads by categories in 2016, km
Table 2.7: Length of roads of national importance, km
Table 2.8: Length of paved national roads, km
Table 2.9: State of the network of roads of national importance as of
1 January 2018
Table 2.10: Length of roads of regional importance, km
Table 2.11: Length of paved roads of regional importance, km
Table 2.12: State of the regional and local roads network as of 1 January 2017
Table 2.13: “Quality of roads” in the global index of competitiveness of the World
Economic Forum for 2006-2017
Table 2.14: Length of roads of local importance, km
Table 2.15: Length of paved roads of local importance, km
Table 2.16: Target indicators for the development of roads in Kazakhstan
Table 2.17: Target indicators for the development of roads in Kazakhstan, km
Table 2.18: Number of trucks by ownership
Table 2.19: Characteristics of vehicle use in Kazakhstan
Table 2.20: Capital investments in road transport in millions of tenge
Table 2.21: Production and imports of goods vehicles in Kazakhstan
Table 2.22: Number of traffic accidents
Table 2.23: Number of companies by forms of ownership, size and type of activity
as of 1 January 2017
Table 2.24: Development of transport enterprises
Table 2.25: Volumes of goods and freight turnover in road transport
Table 2.26: Volumes of carriage of goods by road in the regions, millions of tonnes
Table 2.27: Turnover of road transport in the different regions, millions of tonnes
Table 2.28: Density of traffic by region
Table 2.29: Average transport distance of 1 tonne of freight by regions
Table 2.30: Volume of road transport of goods by type of journey

x
 LIST OF TABLES

Table 2.31: Goods transported by road, by type

Table 2.32: Tariffs for cargo transport as an index
Table 2.33: SWOT analysis of the road sector and road transport in Kazakhstan
Table 3.1: Length of railways, km
Table 3.2: Density of railway lines, km per 1,000 km2 of territory
Table 3.3: Characteristics of locomotives and wagons in Kazakhstan
Table 3.4: Age structure of the rolling stock of public railways at the end of the
year, percentage
Table 3.5: Freight transport by rail in Kazakhstan
Table 3.6: Key performance indicators of rail freight transport
Table 3.7: SWOT analysis of the railway sector in Kazakhstan
Table 4.1: Volumes of freight and cargo turnover in inland water transport
Table 4.2: Length and density of inland waterways
Table 4.3: Number of vessels operating in inland water transport
Table 4.4: Age of vessels in inland water transport, percentage
Table 4.5: Key performance indicators of inland water transport
Table 4.6: Number of berths in ports and wharves
Table 4.7: Characteristics of gateways on the Irtysh River
Table 4.8: Maritime transport fleet
Table 4.9: Volumes of cargo turnover of maritime transport
Table 4.10: Key performance indicators in maritime and coastal transport by type
of message
Table 4.11: Transport of goods by water transport by types of cargo, thousands of
tonnes
Table 4.12: SWOT analysis of water transport in Kazakhstan
Table 5.1: Number of civil aircraft
Table 5.2: Airports in Kazakhstan
Table 5.3: Basic performance indicators for air transport
Table 5.4: Cargo and luggage carried by air transport, tonnes
Table 5.5: Cargo turnover in air transport, thousand tkm
Table 5.6: Basic performance indicators by type of air transport
Table 5.7: SWOT analysis of the state of civil aviation in Kazakhstan
Table 6.1: Logistics performance index in Kazakhstan
Table 6.2: SWOT analysis of Kazakhstan's logistics sector

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

ABBREVIATIONS
ADB Asian Development Bank
ALTID Asian Land Transport Infrastructure Development
ADR European Agreement concerning the International Carriage of
Dangerous Goods by Road
CAREC Asian Land Transport Infrastructure Development
Central Asia Regional Economic Cooperation Program
CIS Commonwealth of Independent States
CU Customs Union
DBK Development Bank of Kazakhstan
EATL Euro-Asian Transport Links
EBRD European Bank for Reconstruction and Development
ECE Economic Commission for Europe
ECO Economic Cooperation Organization
EEC Eurasian Economic Community
EEU Eurasian Economic Union
ESCAP Economic and Social Commission for Asia and the Pacific
IAEA International Atomic Energy Agency
IBRD International Bank for Reconstruction and Development
IDB Islamic Development Bank
IMF International Monetary Fund
GARR Greater Almaty Ring Road
GDP Gross Domestic Product
LPI Logistics Performance Index
NF National Foundation
NMSC National Maritime Shipping Company
OCST Organization of the Collective Security Treaty
OIC Organization of Islamic Cooperation
OSCE Organization for Security and Co-operation in Europe
OSJD Organization for Cooperation of Railways
RB RB Partners Group
SCO Shanghai Cooperation Organization
SES Single Economic Space
SPO State Production Association
SWOT Strengths, Weaknesses, Opportunities,Threats
TCTC Trans-Caspian Transport Corridor
TEU Twenty foot equivalent unit
TIR Transports International Routiers
Tkm Tonne Kilometre
TRACECA Transport Corridor Europe-Caucasus-Asia
TSR TRANS-Siberian Railway
WTO World Trade Organization
UNECE United Nations Economic Commission for Europe
UTLC United Transport and Logistics Company

xii
 EXECUTIVE SUMMARY

EXECUTIVE SUMMARY
This study has been commissioned by UNECE to review transport competitiveness
and logistics in Kazakhstan. The aim of the project is to identify key transport
related infrastructure and trends and review how transport in Kazakhstan can help
it to develop its strategic position at the junction of Europe and Asia.
In this regard, the study reviews the current state and prospects for the development
of transport and logistics in Kazakhstan, along with the transport regulatory
framework of the country. The study also identifies actions for the further
development based on current trends in development, risks and challenges for the
sector. Data and information has been updated to September 2018.
The transport sector of Kazakhstan includes rail, road, inland water, aviation and
pipeline transport. Roads, railways and navigable waterways play an important role
in the implementation of intergovernmental and interstate relations. Investments in
fixed capital of transport and storage accounted for 1.2% of GDP in 2017. Transport
plays an essential role in the implementation of interstate relations, especially
within the Central Asian region. This is driven by: geographical proximity and
historically established trade links; a comparable level of cultural development;
similarity of the peoples of these States; the use of Russian as a commonly
understood language; and the interdependence of national economies that has
developed over many decades.
Road transport is the largest freight transport sector thanks to the extensive network
of highways. The Government of Kazakhstan attaches great importance to the
development of this type of transport and to the development of roads that enable
communication between all its regions as well as neighbouring countries. By 2021 it
is planned to build and reconstruct 5,703 km of roads of republican significance and
1,124 km of roads of regional and district significance, and also to increase to 48%
the share of highways I and II of the technical category of the total length of
highways of republican importance. 1 This is foreseen to have a significant impact on
the quality and competitiveness of the road sector. A thriving road transport market
has been created due to the presence of a large number of transport companies and
individual entrepreneurs.
Rail transport is also of significant importance for both domestic traffic as well as
for exports/imports and transit freight traffic. In Kazakhstan, as in countries in the
region, rail transport occupies a monopoly position in the transport certain goods.
Significant investment is needed and is ongoing to improve the competitiveness of
rail transport and to increase the efficiency of domestic routes. For this, substantial
focus is placed on the construction of railways connecting the centre with
strategically important regions in the country and international rail lines. By 2021,
it is planned to build 1,302 km of railway sections, electrify 522 km of railway lines
and modernize 6,925 km of the upper track structure, which will further increase
the importance of Kazakhstan’s railways in the region. 2

1
State programme for the development and integration of the infrastructure of the transport
system of Kazakhstan until 2020.
2
State programme for the development and integration of the infrastructure of the transport
system of Kazakhstan until 2020.

xiii
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Aviation has a key place in the transport sector considering the large territory of the
country and the availability of 23 airfields. Kazakhstan is improving the level of
service and competitiveness of its air transport companies. By 2021, 18 airfields will
comply with ICAO requirements.
Over 4,000 km of inland waterways and access to the Caspian Sea is important for
the country's economy. By 2021, it is planned to increase the capacity of the seaports
of Kazakhstan to 20.5 million tons and to increase the share of Kazakhstan in the sea
transportation of goods in the Caspian Sea to 70%, as well as to increase the volume
of cargo transportation by inland waterways to 2.5 million tons and to increase the
volume of transit cargo by water transport to 1.5 million tons. 3
The creation of a highly efficient logistic system and ensuring its integration into the
international logistic system is important for Kazakhstan. In this regard, it is planned
to occupy the fourtieth position in the logistics efficiency index.
Given its location, Kazakhstan has the potential to be a significant transit country.
Currently, this potential has not been fully exploited. Kazakhstan stands in a good
position to capitalize on cargo flows between Europe and Asia. At present, Chinese
transit through Kazakhstan is small, since the bulk of imports from China to the
European Union follow the southern sea route. Calculations show that only 1% of
cargo from China to Europe uses the land route (about US$ 7 billion out of a total of
some US$ 697 billion).
To attract further transit cargo flows, Kazakhstan needs to create modern transport
infrastructure.
Currently, specialists in Kazakhstan highlight the following challenges for the
transport sector: limited international transport, restricted technological
development, underdeveloped intermodal transport, a low level of transport and
logistics services, insufficient number of vehicles and an outdated fleet. In addition,
logistics, which contributes significantly to GDP in developed countries, is still in its
infancy in Kazakhstan.
To address these challenges the Government is focusing on the future development
of transport networks in Kazakhstan. This is confirmed by the implementation of
state programmes for the development of transport. These transport related
challenges can be further addressed with additional accession to UN inland transport
Conventions and Legal Agreements and with participation in projects such as the
UNECE Euro-Asian Transport Links.
The remainder of this study goes into more detail on each of these areas.

3
State programme for the development and integration of the infrastructure of the transport
system of Kazakhstan until 2020.

xiv
 BRIEF ANALYSIS OF THE ECONOMIC SITUATION IN KAZAKHSTAN

1. BRIEF ANALYSIS OF THE ECONOMIC SITUATION IN KAZAKHSTAN

1.1. MAIN INDICATORS OF THE SOCIAL AND ECONOMIC SITUATION
Kazakhstan is situated at the junction of Europe and Asia. It extends from the Volga
in the west to the Altai mountains in the east and from the Siberian plain in the
north to the Central Asian Tian Shan mountains in the south. The predominant part
of the territory is occupied by plains. The Tian Shan, Dzungarian Alatau and Altay
are mountain ranges in the south and the southeast. There are large underpopulated
and uninhabited deserts and semi-deserts in the plains.
The territory of Kazakhstan covers 2,724.9 thousand square km. The country has the
nineth largest land area in the world after the Russian Federation, China, United
States, Argentina, Brazil, Canada, India and Australia; it has the second largest
territory among the CIS countries. The total length of the state border is 13,394 km,
including 600 km along the coast of the Caspian Sea. Kazakhstan does not have direct
access to the ocean.
Kazakhstan is composed of 14 regions, 2 cities of national significance,
177 administrative districts, 87 cities, 30 villages and 6,668 rural settlements.
Figure 1.1: Administrative and territorial structure of Kazakhstan

Source: http://tr-kazakhstan.kz/wp-includes/2015/11/15.jpg.
The population of Kazakhstan in 2018 was 18.2 million, of which 57.4% live in an
urban environment and the rest is rural. The population increased by 1.3% from the
previous year.
The main macroeconomic indicators of Kazakhstan in recent years have shown
positive trend. GDP was US$ 160 billion in 2017. In comparison with 2016 it grew by
4%. Manufacturing production increased by 5.7%, production of services increased
by 2.7% and taxes on products increased by 5.9%. The trend of GDP in the national
currency (the tenge) is also positive, it increased by 2.5 times in 2017 when
compared with 2010. However, in US$ this growth was only 106.8%. The reason for
this difference is a sharp decline in the value of the national currency since 2014
which has decreased by 1.82 times. Annual inflation in 2017 was 7.1% compared to
8.5% in December 2016. Food prices have increased by 6.5%, non-food products
prices by 8.9% and commercial services by 5.9%.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

The National Bank of Kazakhstan has gradually reduced the base interest rate from
17% in February 2016 to 10.25% in August 2017. In January 2018, the rate was further
reduced to 9.75%.
The volume of investment in equity has increased by 5.5%. The growth is due to the
implementation of innovative industrial and infrastructure projects in the
framework of the State Programme “Nurly Zhol” and the Strategy of industrial and
innovative development of Kazakhstan for 2003-2015. Table 1.1 below summarises
this information.
Table 1.1: Main macroeconomic indicators of Kazakhstan

Indicator 2010 2011 2012 2013 2014 2015 2016 2017

GDP, mln. US$ 148 052.4 192 627.6 208 002.1 236 633.3 221 417.7 184 387.0 137 278.3 158 180.3

As a percentage of
the previous year 107.3 107.4 104.8 106.0 104.2 101.2 101.1 104.0

GDP per capita, US$ 9 071.0 11 634.5 12 387.4 13 890.8 12 806.7 10 509.9 7 714.8 8 769.5

Population, mln.
people 16 203.0 16 440.1 16 673.1 16 909.8 17 160.8 17 417.7 17 670.6 18 157.1

The number of
permanent residents,
as a percentage of
the previous year 101.4 101.5 101.4 101.4 101.5 101.5 101.5 101.3

Average nominal
monetary incomes,
US$ 264.8 313.2 347.8 371.1 347.5 303.6 223.8 246.1

Volume of industrial
output, bln. tenge 12 105.5 15 929.0 16 851.8 17 834.0 18 529.2 14 903.19 19 026.81 22 659.0

The agricultural
products, bln, tenge 1 822.1 2 720.4 2 393.6 2 949.5 3 143.7 3 307.0 3 684.4 4 097.4

Capital Investment ,
mln. US$ 31 581.5 34 171.5 36 953.3 33 293.2 36 784.9 31 681.4 22 686.2 26 838.4

Food price index 110.1 109.1 105.3 103.3 108.0 110.9 109.7 106.5

Price index for non-

food products 105.5 105.3 103.5 103.3 107.8 122.6 109.5 108.9

Foreign trade
turnover, mln. US$,
including 91 397.5 121 241.7 132 807.2 133 506.0 120 755.3 76 523.5 62 113.6 78 102.9

export, mln. US$ 60 270.8 84 335.9 86 448.8 84 700.4 79 459.8 45 955.8 36 736.9 48 503.3

import, mln. US$ 31 126.7 36 905.8 46 358.4 48 805.6 41 295.5 30 567.7 25 376.7 29 599.6

Source: World Bank. http://databank.worldbank.org/data.

Kazakhstan in 2017. Statistical collection. Astana 2018. http://stat.gov.kz.

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 BRIEF ANALYSIS OF THE ECONOMIC SITUATION IN KAZAKHSTAN

Manufacturing accounted for 36.5% of GDP in 2017 while the share of services was
57% (table 1.2).
Table 1.2: Nominal value and structure of GDP in 2017
As a percentage of the previous year

Structure, % Volume index deflator

Gross domestic product 100.0 104.0 105.6

Goods production 36.5 105.7 103.6
Agriculture, forestry, fishery 4.4 102.9 103.8
Industry 26.5 107.1 103.9
Construction 5.6 101.9 102.5
Service production 57.0 102.7 105.3
Gross value added 93.5 103.9 104.6
Taxes on goods 6.5 105.9 120.9

Source: The results of the social and economic situation in Kazakhstan in 2017.
www.pharm.reviews/analitika/item/2844-itogi-sotsialno-ekonomicheskogo-razvitiya-
respubliki-kazakhstan-za-2017-god.
In 2017 there was positive growth, when compared to 2016, in industry by 7.1%,
communications 3.3%, trade 3.2%, agriculture 2.9% and construction 1.9%.
The volume of transport services increased by 4.8% and the volume of cargo
transport increased by 5.2%. There was also an increase in the volume of passenger
transport (1.7%), communication services (3.3%) and retail and wholesale (3.2%).
New loans in 2017 were mainly directed to trade (38.6%), industry (14%),
construction (3.8%), transport (3.5%) and agriculture (1.6%).
The state budget deficit in 2017 was 2.8% of GDP.
At the start of 2018, the national debt of Kazakhstan amounted to US$ 40.6 billion
or 26.2% of GDP in 2017. Domestic debt was 10.9% of GDP. External debt was 8.9%
of GDP. At the start of 2018, the national debt was 18.9% higher than at the
beginning of 2017.
Table 1.3 compares the GDP and GDP per capita of partner countries with those of
Kazakhstan.
Table 1.3: GDP of Kazakhstan compared to neighbouring countries
Country 1990 2000 2010 2017

China 13.40 66.22 41.21 73.53

Russia 19.19 14.20 10.30 9.20
Uzbekistan 0.50 0.75 0.27 0.46
Turkmenistan 0.12 0.16 0.15 0.24
Kyrgyzstan 0.10 0.08 0.03 0.04
Kazakhstan 1.0 1.0 1.0 1.0

Source: World Bank.

Note: values indicated for each country are multipliers of Kazakh value.

3
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Analysis shows that in terms of GDP, Kazakhstan is the third largest after China and
the Russian Federation, and the gap with China increased by 5.5 times during the
period under review. The gap with the Russian Federation, on the contrary, halved.
For the other neighbouring countries the following can be noted: the GDP of
Kazakhstan and Uzbekistan grew at approximately the same pace while the GDP of
Turkmenistan increased at a faster pace, and the GDP of Kyrgyzstan, on the
contrary, slowed.
Analysis of GDP per capita shows that in China, the Russian Federation and
Turkmenistan this indicator has leveled off over the past 27 years, while the gap in
GDP per capita of Uzbekistan and Kyrgyzstan in comparison with Kazakhstan
increased by 1.5 and 2.6 times respectively (table 1.4).
Table 1.4: GDP per capita in Kazakhstan compared to neighbouring countries
Country 1990 2000 2010 2017

China 0.19 0.78 0.50 1.19

Russia 2.11 1.44 1.18 1.17
Uzbekistan 0.40 0.45 0.15 0.26
Turkmenistan 0.52 0.52 0.49 0.92
Kyrgyzstan 0.37 0.23 0.10 0.14
Kazakhstan 1.0 1.0 1.0 1.0

Source: World Bank.

Note: values indicated for each country are multipliers of Kazakh value.
In recent years, Kazakhstan has experienced steady population growth with annual
growth of 1.3-1.5%. 4
Kazakhstan is a member of more than 120 international organizations, including the
United Nations, OSCE, ECO, the Organization of Islamic Cooperation, WTO, IMF,
IBRD, EBRD, Islamic Development Bank, Asian Development Bank, IAEA, CIS,
EurAsEC, Customs Union, EEU, CSTO, SCO, etc. Kazakhstan plays a special role in
the CIS, the EEU and the SCO. The most active regional cooperation is carried out
within the framework of the EEU. All tariff and quantitative restrictions have been
abolished in mutual trade agreements between the EEU member countries and there
is free movement of individuals and legal entities. Trade operations with almost all
SCO member countries are also carried out within a free trade regime. Trade
operations with China are carried out within the framework of WTO.
Kazakhstan's membership in the WTO creates stable and liberal conditions for access
to the markets of WTO member countries in the form of most-favoured-nation
treatment and the national regime for the export of goods.
The strict international standards in force in the European Union and Kazakhstan’s
non-compliance with those standards is a barrier to the development of trade with
those countries.

4
Kazakhstan in figures. Brochure. Astana: Ministry of National Economy. Committee on Statistics,
2017.

4
 BRIEF ANALYSIS OF THE ECONOMIC SITUATION IN KAZAKHSTAN

Kazakhstan actively uses the potential of the Economic Cooperation Organization,

which includes its trading partners: Turkey, Pakistan, Afghanistan, Iran, Kyrgyzstan,
Uzbekistan, Tajikistan and Turkmenistan to increase the volume of foreign trade
with those countries.
Kazakhstan's foreign trade turnover amounted to US$ 77.6 billion and increased by
25% in 2017 compared with the corresponding period of 2016. The countries of the
EEU accounted for 22.2% of the total trade turnover of Kazakhstan: 10.7% of exports
and 38.9% of imports.
The structure of foreign trade significantly changed in 2017. There was an increase
in the share of non-primary products (22.1%). The amount of Kazakhstan’s non-raw
material exports was more than US$ 14 billion (32.7% of total exports).
The trade surplus in 2017 was US$ 19,037.4 million (in 2015 US$ 15,388.1 million).
Kazakhstan exported to 102 countries of the world in 2017 and imported from
124 countries. The main buyers of Kazakhstan products were Italy (17.9% of total
exports), China (12%) and the Netherlands (9.8%). The main importers of Kazakhstan
products were the Russian Federation (39.6%), China (15.9%) and Germany (5%). 5
The main trading partner of Kazakhstan is the Russian Federation (9.6% of
Kazakhstan's exports and 39.6% of imports in mutual trade). The volume of mutual
trade with the Russian Federation increased by 27.6%, including exports, which
increased by 34.6%, and imports which increased by 26.3%.
The high external gross demand for Kazakhstan goods generated favourable terms
of trade for Kazakhstan with third countries. The demand for Kazakhstan goods
exceeded the demand of Kazakhstan for goods of third countries by 7.7%.
The Structure of exports and imports by main product groups in 2017 of Kazakhstan
are presented in figures 1.2 and 1.3.
Figure 1.2: Structure of exports by main product groups in 2017

13.40%
Mineral products

Metals and metal handicrafts

18.10%

Others
68.50%

Source: Foreign Trade of Kazakhstan 2013-2017. Statistical collection. Astana, 2018.

http://stat.gov.kz.

5
Kazakhstan in 2017. Statistical Collection. Astana, 2018. http://stat.gov.kz.

5
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Figure 1.3: Structure of imports by main product groups in 2017

Machinery, equipment, vehicles, etc.

37.80%
Chemical and related industries (including
50.50% rubber and plastics)
Others

11.70%

Source: Foreign Trade of Kazakhstan 2013-2017. Statistical collection. Astana, 2018.

http://stat.gov.kz.
Mineral products account for the largest share of exports (68.5%). The share of
metals amounts to 18.1% and others products is 13.4%.
Analysis of the range of exports to the Russian Federation, Kazakhstan's main trading
partner, shows that they are composed of general, liquid and bulk cargoes. Exports
of ferrous metals, ores, etc. account for about half of Kazakhstan's total exports.
Imports from the Russian Federation include a wide range of small volume goods.
The largest volumes of imports are mineral fuels, oil, bituminous substances and
mineral waxes. Liquids and cargoes suitable for shipment in containers are the main
cargo category.

1.2 TRANSPORT IN KAZAKHSTAN

All transport types are present in Kazakhstan: rail, road, pipeline (oil and gas
pipelines), as well as water (river and sea) and aviation. Accordingly, the transport
infrastructure of Kazakhstan includes a network of roads and railways, river shipping
routes, numerous transport infrastructure facilities such as railway stations,
airports, service enterprises and services that provide vehicle repairs, and services
for the transport workers and passengers.
Each type of transport in Kazakhstan has its own sphere of activity, depending on
what is transported and the distance travelled. This is set out in table 1.5 below.

6
 BRIEF ANALYSIS OF THE ECONOMIC SITUATION IN KAZAKHSTAN

Table 1.5: Transport development in Kazakhstan

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Freights carried,
mln. tonnes 2 124.2 2 188.7 2 103.3 2 439.4 2 974.9 3 231.8 3 508.0 3 749.8 3 733.8 3 729.2 3 916.2
including:
Railway 260.6 269.0 248.4 267.9 279.7 294.8 293.7 390.7 341.4 338.9 378.8
Road 1 667.4 1 721.0 1 687.5 1 971.8 2 475.5 2 718.4 2 983.4 3 129.1 3 174.0 3 180.7 3 300.8
Inland water 1.3 1.2 0.9 1.1 1.1 1.3 1.1 1.3 1.2 1.2 1.6
Maritime 1.1 1.7 3.6 4.6 4.6 4.0 4.0 3.6 2.5 2.6 2.1
Air, th. tonnes 25.7 22.7 22.0 28.9 31.6 21.9 23.9 19.1 17.2 18.0 22.4
pipeline 193.8 195.8 162.9 194.0 214.0 213.2 225.9 225.0 214.6 205.8 232.8
Cargo turnover,
bln. tkm 350.5 369.7 337.0 385.3 448.8 478.0 495.4 554.9 546.3 518.6 555.4
including:
Railway 200.8 214.9 197.5 213.2 223.6 235.9 231.3 280.7 267.4 239.0 262.1
Road 61.5 63.5 66.3 80.3 121.1 132.3 145.3 155.7 161.9 163.3 161.8
Inland water 0.05 0.06 0.06 0.08 0.08 0.06 0.03 0.03 0.03 0.02 0.03
Maritime 0.3 0.8 1.4 3.1 3.2 2.7 2.7 2.5 1.6 1.8 1.6
Air, million
tkm 88.1 69.4 67.6 90.1 92.6 59.5 63.1 49.3 42.7 42.9 53.3
Pipeline 87.8 90.3 71.7 88.6 100.7 106.9 116.0 116.0 115.4 114.5 129.8

Source: Transport in Kazakhstan 2007-2017. Statistical collection. Astana.

http://stat.gov.kz.
The volumes of cargo transport has changed cyclically in rail, sea, air and pipeline
transport: traffic volumes grew until 2014, and then began to decline. The volume
of road transport has been gradually increasing since the crisis of 2009. In inland
water transport almost the same cargo volumes were transported from 2007-2016.
In 2017, there was an increase in the volume of traffic by all modes of transport with
the exception of water transport.
Freight turnover correlates with the volume of cargo transport. Only in road
transport has freight turnover steadily increased over the entire period under
consideration. This suggests that this type of transport is of paramount importance
for the country's economy. Cargo turnover correlates with the volume of cargo
transport for the years under review.
As concerns cargo transport, it should be noted that rail is dominant for international
and domestic journeys, while road and inland waterway transport are used for short
distances in regional traffic (table 1.6).

7
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Table 1.6: Freight and cargo turnover by modes of transport in 2017, percentage
Freights carried, thousands of tonnes Cargo turnover, mln. tkm

international Interrepublican regional urbane international interrepublican regional urbane

All types of
transport 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
including:
Railway 49.4 69.3 - - 61.9 69.9 - -
Road 1.1 5.3 96.7 99.99 2.2 2.9 99.2 99.99
Air 0.003 0.004 - - 0.02 0.01 - -
Pipeline 48.8 25.4 - - 35.2 27.2 - -
Maritime 0.7 - - - 0.7 - - -
Inland
waterway - 0.03 3.3 0.01 - 0.08 0.01 -

Source: Transport in Kazakhstan 2013-2017. Statistical collection. Astana, 2018.

http://stat.gov.kz.
The largest amount of freight was transported in areas bordering the Russian
Federation and Kyrgyzstan in the West Kazakhstan and South Kazakhstan regions.
The lowest was in East Kazakhstan and North Kazakhstan (table 1.7).
Table 1.7: Transport of cargoes and passengers by all modes of transport and by
region in 2017
Freights carried, Cargo turnover, Passengers transported, Passenger turnover,
millons of tonnes mln. tkm millons mln. pskm

The Republic of Kazakhstan 3 946.085 563 958.6 22 744.698 273 193.4

Akmola 116.139 5 265.2 1 643.889 7 281.8
Aktobe 76.823 6 409.3 294.685 16 070.1
Almaty 181.082 7 887.7 872.969 14 372.0
Atyrau 154.222 54 949.7 x x
East Kazakhstan 39.265 3 100.1 451.517 8 531.0
Zhambyl 100.144 2 961.0 957.342 7 859.4
West Kazakhstan 795.518 10 843.1 x x
Karaganda 291.531 11 413.7 1 796.550 17 951.4
Kyzylorda 104.601 13 905.2 367.482 6 531.0
Kostanay 238.557 8 520.1 88.775 4 698.4
Mangistau x x 2 607.559 22 266.3
Pavlodar 133.132 35 118.5 1 225.047 26 693.2
North-Kazakhstan 51.363 3 712.2 501.649 3 924.4
South Kazakhstan 600.835 16 099.1 1 709.158 22 272.5
Astana city x x x x
Almaty city 256.002 29 506.6 5 097.170 37 506.4
Unallocated volumes by region 496.766 335 990.0 22.914 18 222.2

Source: Transport in Kazakhstan 2013-2017. Statistical collection. Astana, 2018.

http://stat.gov.kz.

8
 BRIEF ANALYSIS OF THE ECONOMIC SITUATION IN KAZAKHSTAN

Rail transport in Kazakhstan has the highest fixed asset value (apart from pipeline
transport) of the transport modes accounting for 15.5% of the total. Road and city
electric transport account for only 6.6% and urban passenger transport accounts for
only 15.5% of road transport. The fixed asset value of water transport is only
10,132.7 million tenge or 0.1% of the fixed asset value of transport and storage. The
fixed asset value of maritime transport is almost twice as high as the fixed asset
value of air transport (table 1.8). It should be noted that warehousing and auxiliary
transport activities also account for a large amount of this category.
Table 1.8: Fixed assets of transport enterprises at the end of the year in millions
of tenge
2013 2014 2015 2016 2017

Transport and storage 5 608 709.7 6 368 668.3 7 833 661.5 8 648 004.1 9 315 545.2
including:
Railway 1 046 816.7 1 115 271. 7 1 149 488.4 1 337 438.4 1 817 591.4
Road and city electric 213 672.0 394 128. 2 542 090.1 567 902.2 709 486.2
including:
Bus 51 889.1 57 371.3 76 700.4 84 565.2 86 907.1
Tram 1 580.4 1 716.3 2 097.0 2 099.5 2 357.1
Trolleybus 22 611.8 30 249.6 30 251.1 1 350.1 12 017.6
Pipeline transportation 2 167 161.9 2 349 132.9 3 482 115.3 3 861 294.3 4 174 973.3
Inland waterway 1 044.2 5 234.9 9 719.1 10 132.7 7 747.2
Maritime 72 747.0 78 244.5 48 769.2 133 868.7 142 260.2
Air 201 648.8 247 988.8 255 714.4 262 819.4 190 316.1
Warehousing and auxiliary
transport activities 1 905 619.1 2 178 667.3 2 345 718.8 2 474 548.4 2 273 170.8

Source: Transport in Kazakhstan 2013-2017. Statistical collection. Astana, 2018.

http://stat.gov.kz.
In assessing the degree of depreciation of fixed assets of transport enterprises, it
should be noted that fixed assets in the main types of transport have depreciated
by only a quarter. Consequently, they are in normal operating condition, with the
exception of urban passenger transport (table 1.9).

9
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Table 1.9: Degree of depreciation of fixed assets of transport enterprises,

percentage
2013 2014 2015 2016 2017

Transport and storage 27.2 24.2 24.4 23.6 24.2

including:
Railway 24.7 26.2 28.4 27.0 30.1
Road and city electric 36.9 26.8 24.9 27.4 30.5
including:
Bus 45.4 47.0 33.3 36.5 38.1
Tram 50.8 53.8 48.9 52.9 48.4
Trolleybus 21.6 14.0 24.7 63.1 10.3
Pipeline transportation 19.3 12.9 14.6 14.0 12.7
Inland waterway 41.7 44.9 35.2 34.3 45.6
Martime 18.2 16.5 34.6 16.4 22.8
Air 11.2 17.7 20.0 25.8 32.3
Warehousing and auxiliary transport
activities 38.6 35.9 37.3 35.7 37.8

Source: Transport in Kazakhstan 2013-2017. Statistical collection. Astana, 2018.

http://stat.gov.kz.
In terms of investment, pipeline and the warehousing and auxiliary transport
activities category also have the highest share. This is followed by rail and then the
other forms of transport.
Table 1.10: Investments in fixed assets by mode of transport, millions of tenge
2013 2014 2015 2016 2017

Transport and storage 1 101 028 783 101 682 760 557 231 648 949
including:
Railway 243 085 205 799 175 049 42 490 39 233
Road and city electric 29 875 27 778 46 531 31 913 63 341
Pipeline transport 635 956 385 459 320 491 309 588 374 051
Inland waterway 1 22 1 47 272
Maritime 2 965 4 719 1 482 8 925 -
Air 51 938 24 017 11 974 12 497 15 260
Warehousing and
auxiliary transport
activities 137 208 135 307 127 232 151 771 156 792

Source: Transport in Kazakhstan 2013-2017. Statistical collection. Astana, 2018.

http://stat.gov.kz.

10
 BRIEF ANALYSIS OF THE ECONOMIC SITUATION IN KAZAKHSTAN

The largest number of employees is in land transport and transport by pipeline, the
smallest number is in water transport. This could indicate the low level of
development of water transport in Kazakhstan and the insignificant share of this
type of transport in the total volume of cargo transported (table 1.11).
Table 1.11: Number of employees of transport enterprises, thousands
2013 2014 2015 2016 2017

Transport - total 206.3 212.2 197.9 201.1 212.1

including:
Land transportation and transportation through pipelines 93.9 100.7 95.8 104.6 115.1
Water transport 1.7 1.4 1.6 1.6 1.4
Air Transport 6.1 6.7 6.9 7.2 7.7
Warehousing and auxiliary transport activities 104.6 103.4 93.6 87.7 87.9

Source: Transport in Kazakhstan 2013-2017. Statistical collection. Astana, 2018.

http://stat.gov.kz.
Thus, estimating the overall state of transport in Kazakhstan, it should be noted that
rail transport is the most common form of transport. Kazakhstan railways provides
47.2% of freight turnover and 6.6% of the country's passenger traffic. However, road
transport is gradually increasing its potential and in 2017 already accounted for
29.1% of the total cargo turnover.
The main volumes of freight in international and domestic transport are carried by
rail. Road transport is used mainly for regional transport. The transport of goods by
sea and air has not been properly developed. The volumes of transit traffic cannot
be estimated because of a lack of information. There is also no information on
intermodal transport.
The main challenges for the development of the transport system of Kazakhstan for
the coming years are:
x Integration of the transport system into the Eurasian transport network;
x Further development of international rail and road transport of goods;
x Increasing the volume of cargo transport by inland waterways and sea;
x Increasing the volume of cargo and passenger transport by air;
x Development of intermodal transport;
x Development and improvement of the existing transport infrastructure.

11
 ROAD TRANSPORT IN KAZAKHSTAN

2. ROAD TRANSPORT IN KAZAKHSTAN

2.1 ANALYSIS OF THE ROAD SECTOR
2.1.1 General information about roads

It is extremely important to create modern transport infrastructure in Kazakhstan.

With the expansion of interstate economic relations, trade flows between countries
are developing dynamically. This has resulted in an increase in the volume of
domestic and international road transport of goods. Thus, requirements for the
condition of roads, the quality of transport services and logistics services are
increasing.
Cooperation with international institutions and programmes could contribute to
solving problems in the road sector. At the global level, Kazakhstan is a member of
UNECE and UNESCAP and cooperates with the European Union. On a regional level,
Kazakhstan cooperates with the countries of the CIS, ECO, SCO, TRACECA and other
organizations.
The high level of transport costs that landlocked countries have to bear hinders the
development of exports, limiting the range of potential export goods and markets in
which profitable trade is possible. High transport costs also lead to higher import
costs. Therefore, carriers of such countries cannot compete with carriers of
countries with seaports.
The geographical location of Kazakhstan at the intersection of East and West creates
significant potential for the country to use the existing land transport corridors to
increase both domestic and transit traffic.
International transport corridors provide practically the only way for the country to
access regional markets for goods and services, and play a significant role in
providing transport links between the main economic centres of the country.
The history of the development of road transport in Kazakhstan began in the 1920s.
In 1924, the first road from Orenburg to Uralsk was built and in 1925 the road from
Uralsk to Guriev was opened.
From the 1950s, the material and technical base of road transport was strengthened
and the reconstruction of roads began. Since the beginning of the 1970s, the pace
of road construction has increased dramatically. More than 30 thousand km of roads
have been built per year.
The following routes were established: Karagandy – Temirtau – Astana, Semey –
Pavlodar – Omsk, Guriev – Uralsk – Aktobe, Chimkent – Kyzylorda – Dzhusaly. Later
the following highways were built: Almaty – Frunze, Zhambyl – Chimkent – Tashkent,
Almaty – Taldy-Korgan – Ayaguz – Ust-Kamenogorsk with branches: Sary-Ozek –
Panfilov, Ayaguz – Bakhty, Zhangiztobe – Zaisan.
According to the Law of Kazakhstan on Roads No. 245-II dated 17 July 2001 (with
amendments and additions of 7 March 2017) the roads of Kazakhstan are divided into
public roads, peripheral roads and streets of settlements.
Public roads are divided by their importance into international, national, regional
and local roads.

13
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Roads of international importance include highways connecting the capitals of

neighbouring States, as well as those that are included in the international road
network in accordance with interstate agreements. Roads of national importance
include highways that provide transport links between major administrative, cultural
and economic centres and neighbouring States, as well as highways of defensive
significance. Roads of regional importance include highways connecting
administrative centres with regional and local centres, as well as regional centres
with roads of national importance. Roads of local importance include those
connecting local centres with rural settlements. Peripheral roads include those on
the territory of economic entities, serving industrial and economic transport, access
roads to them from public roads, inter-farm roads of agricultural organizations,
official, patrol and private roads. The streets of settlements are roads within
respective administrative and territorial units.
In addition, roads are divided into 5 categories (table 2.1).
Table 2.1: Road categories
Class of road

motorway expressway ordinary road (not highway)

Categories
Parameters of roadway
elements IA IB IC II III IV V

Total number of lanes 4 and more 4 and more 4 and more 4 or 2 2 2 1

Lane width, m 3.75 3.75 3.5-3.75 3.5-3.75 3.25-3.5 3.0-3.25 3.5-4.5
Curb width (not less
than), m 3.75 3.75 3.25-3.75 2.5-3.0 2.0-2.5 1.5-2.0 1.0-1.75
Width of separating
strip, m 6 5 5 - - - -
allowed at
same level
on roads at at
at different at different with traffic different different at same at same
Crossings with roads levels levels lights levels levels level level
at at
at different at different at different different different at same at same
Crossings with railways levels levels levels levels levels level level
Access to an adjacent
road at the same level not allowed not allowed not allowed allowed allowed allowed allowed
Estimated traffic density, more than more than more than more than 2 000 to 200 to up to
units/day 14 000 14 000 14 000 6 000 6 000 2 000 200

Source: http://avtotrans-consultant.ru/klassificatsiya-i-kategoriya-avtomobilnyx-dorog/.
Roads of national importance are categorised using a letter and a group of numbers
as follows:
x “M” - for highways providing the most important interstate transport links, the
mileage counting begins from the territory of the neighbouring State;
x “ƈ” – for highways that provide transport links between major administrative,
cultural and economic centres, as well as neighbouring States, including roads
of defensive significance;
x “Ƙ” – for other roads.

14
 ROAD TRANSPORT IN KAZAKHSTAN

2.1.2 Characteristics of the road network

The total length of roads in Kazakhstan is 138,700 km, of which 95,409 km are public
roads and 42,400 km are peripheral roads.
During 2012-2017, the length of the road network fell by 2.1% from a high of
97,418 km in 2012 (table 2.2).
Table 2.2: Length of public roads, km
2012 2013 2014 2015 2016 2017

The Republic of Kazakhstan 97 418 96 873 96 421 96 529 96 353 95 409

Akmola region 8 111 7 900 7 864 7 891 7 890 7 884
Aktobe region 6 091 6 595 6 595 6 553 6 958 6 553
Almata region 9 482 9 482 9 317 9 316 9 334 8 952
Atyrau region 3 915 3 052 3 052 3 051 3 052 3 052
West-Kazakhstan region 6 531 6 531 6 531 6 428 6 531 6 497
Jambyl Region 5 291 5 335 5 351 5 351 5 228 5 094
Karaganda Oblast 8 844 8 844 8 844 8 844 8 854 8 856
Kostanay region 9 517 9 516 9 290 9 290 9 290 9 290
Kyzylorda Region 3 360 3 359 3 352 3 354 3 376 3 446
Mangystau Oblast 2 586 2 586 2 586 2 586 2 692 2 708
Turkestan region 7 198 7 181 7 147 7 197 6 810 6 670
Pavlodar region 5 658 5 658 5 658 5 659 5 454 5 449
North-Kazakhstan region 8 998 8 998 8 998 8 998 8 998 8 998
East Kazakhstan region 11 836 11 836 11 836 12 011 11 886 11 961

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
The East Kazakhstan region has the most extensive network of public roads, despite
being only the third largest in terms of territory (283.2 km2), fourth in terms of gross
regional product (2,793.9 billion tenge), and ninth in terms of population density
(4.9 people per 1 km2). The second in terms of the length of roads is the Almaty
region. Although in terms of the area of the territory and the size of its gross regional
product, it is less significant than the East Kazakhstan region, it is much higher in
terms of population density. Comparison of the different regions of Kazakhstan by
the length of roads, the size of gross regional product, territory and population
density shows that it is quite difficult to establish a correlation between the length
of roads and the other indicators. Indicators such as climate, terrain, mineral
resources, water resources and other factors also have to be taken into account
(table 2.3).

15
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Table 2.3: Territory and population density at the beginning of 2018

Territory, thousand Density of population, Size of gross regional
km2 people per km2. product, billion tenge

The Republic of Kazakhstan 2 724.9 6.6 -

Akmola region 146.2 5.0 1 344.3
Aktobe region 300.6 2.8 2 071.1
Almata region 223.6 8.9 2 190.0
Atyrau region 118.6 5.1 5 200.7
West-Kazakhstan region 151.3 4.2 2 032.7
Jambyl region 144.3 7.7 1 182.8
Karaganda region 428.0 3.2 3 712.1
Kostanay region 196.0 4.5 1 522.3
Kyzylorda region 226.0 3.4 1 308.3
Mangystau region 165.6 3.9 2 463.4
Turkestan region 117.3 24.5 2 789.2
Pavlodar region 124.8 6.1 1 975.5
North-Kazakhstan region 98.0 5.7 918.2
East Kazakhstan region 283.2 4.9 2 793.9

Source: Regions of Kazakhstan. Brochure. Astana, 2017. http://stat.gov.kz.

The total length of paved public roads in 2017 was 81,814 km or 85.7% of all public
roads. Despite the fact that this indicator is quite high, the total length of such roads
compared to 2012 decreased by 5,326 km or 6.1% (table 2.4).
Table 2.4: Length of paved public roads, km
2012 2013 2014 2015 2016 2017
The Republic of Kazakhstan 87 140 86 581 86 419 86 244 87 029 81 814
Akmola region 7 937 7 855 7 819 7 854 7 853 7 798
Aktobe region 5 351 5 478 5 478 5 427 6 110 5 454
Almata region 9 336 9 336 9 172 9 176 9 194 8 897
Atyrau region 3 101 2 251 2 262 2 221 2 237 2 241
West-Kazakhstan region 4 700 4 718 4 719 4 631 4 734 3 291
Jambyl region 5 291 5 220 5 194 5 194 5 169 5 089
Karaganda region 8 722 8 722 8 722 8 722 8 732 8 393
Kostanay region 7 927 7 927 7 874 7 873 7 874 6 203
Kyzylorda region 2 790 2 813 2 785 2 804 2 826 2 867
Mangystau region 2 408 2 409 2 421 2 421 2 476 2 399
Turkestan region 6 487 6 803 6 891 6 821 6 697 6 454
Pavlodar region 4 910 4 870 4 869 4 870 4 859 4 799
North-Kazakhstan region 7 114 7 114 7 114 7 114 7 114 7 114
East Kazakhstan region 11 066 11 065 11 099 11 116 11 155 10 815

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
The number of unpaved public roads in 2017 was 14.2% of the entire network and
increased by 3.6 percentage points compared to 2012.

16
 ROAD TRANSPORT IN KAZAKHSTAN

There is a high share of paved public roads with the lowest number of such roads in
the Kostanay region (66.8%) and the highest number in the Akmola region (99.5%)
(table 2.5).
Table 2.5: Percentage of public roads paved for their total length
2012 2013 2014 2015 2016 2017

The Republic of Kazakhstan 89.4 89.4 89.6 89.3 90.3 85.7

Akmola region 97.8 99.4 99.4 99.5 99.5 99.5
Aktobe region 87.8 83.1 83.1 82.8 87.8 87.8
Almata region 98.5 98.5 98.4 98.5 98.5 98.5
Atyrau region 79.2 73.8 74.1 72.8 73.3 73.3
West-Kazakhstan region 72.0 72.2 72.3 72.0 72.5 72.5
Jambyl region 100.0 97.8 97.1 97.1 98.9 98.9
Karaganda region 98.6 98.6 98.6 98.6 98.6 94.8
Kostanay region 83.3 83.3 84.8 84.7 84.8 66.8
Kyzylorda region 83.0 83.7 83.1 83.6 83.7 83.2
Mangystau region 93.1 93.2 93.6 93.6 92.0 88.6
Turkestan region 90.1 94.7 96.4 94.8 98.3 96.8
Pavlodar region 86.8 86.1 86.1 86.1 89.1 88.1
North-Kazakhstan region 79.1 79.1 79.1 79.1 79.1 79.1
East Kazakhstan region 93.5 93.5 93.8 92.6 93.9 90.4

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
In the last five years, paved roads have been built primarily in the Aktobe region
(683 km) and West Kazakhstan region (103 km). In the same period, the length of
such roads decreased in the Turkestan region by 124 km and in the Zhambyl region
by 35 km.
In 2017, the density of public roads was 35 km per 1,000 km2 and 5.25 km per
1,000 inhabitants. The density of national roads is 8.8 km per 1,000 km2 of the
territory and 1.33 km per 1,000 inhabitants. This level of density is much lower than
in other countries and therefore it can be said that the public road network in
Kazakhstan is underdeveloped. Furthermore, the table below shows that onyla small
share of public roads are of category I and II which points to public roads being
generally of poor quality (table 2.6).

17
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Table 2.6: Length of public roads by categories in 2016, km

Total Category
length of
roads I II III IV V

The Republic of Kazakhstan 96 353 2 146 5 956 28 965 47 614 11 672

Akmola region 7 891 375 355 3 119 3 670 372
Aktobe region 6 958 42 457 1 419 3 945 1 095
Almata region 9 334 376 870 2 902 4 532 654
Atyrau region 3 052 7 0 1 323 663 1 059
West-Kazakhstan region 6 531 3 153 2 324 2 600 1 451
Jambyl region 5 228 295 1 127 1 218 2 064 524
Karaganda region 8 853 140 133 3 879 4 634 67
Kostanay region 9 290 47 213 3 811 4 044 1 175
Kyzylorda region 3 376 246 566 332 1 557 675
Mangystau region 2 692 6 240 1 036 1 313 97
Turkestan region 6 810 438 166 1 054 4 080 1 072
Pavlodar region 5 454 107 738 1 776 2 693 140
North-Kazakhstan region 8 998 55 379 2 141 4 048 2 375
East Kazakhstan region 11 886 9 559 2 631 7 771 916

Source: Transport in Kazakhstan 2012-2016. Statistical collection. Astana, 2017.

http://stat.gov.kz.
Public roads of category I make up only 2.2% of all roads in Kazakhstan, category II
6.2%, category III 30.3%, category IV 49.4% and category V 12.1%. The following
regions have the highest percentage of roads of categories I and II: Zhambyl 27.2%,
Kyzylorda 24.1% and Pavlodar 15.1%. The lowest percentage of categories I and II
are in the Atyrau region 0.23%, in the West Kazakhstan region 2.4%, in the Kostanay
region 2.7% and in the Karaganda region 3.1%.
The network of national roads in Kazakhstan is also underdeveloped. It is focused on
meeting industrial and population needs. The technical condition of these roads does
not meet the needs of the economy. Only 29.6% of the roads of national importance
correspond to the first and second categories. 70.0% correspond to the third and
fourth categories.
The total length of national roads in 2017 was 24,100 km or 25.3% of the public road
network as a whole. At the same time, the length of roads of categories I and II was
7.4 thousand km, or 31% of the roads of national importance, and only 4% were of
category I. By 2020, this figure should reach 50%.
However, the length of roads of national importance is growing continuously. In the
period 2012-2017, the length of national roads increased by 615 km. In 4 of the
14 regions it did not change during the period under review, in three areas it slightly
decreased, and in the rest it increased (table 2.7).

18
 ROAD TRANSPORT IN KAZAKHSTAN

Table 2.7: Length of roads of national importance, km

2012 2013 2014 2015 2016 2017

The Republic of Kazakhstan 23 485 23 657 23 680 23 699 23 910 24 100

Akmola region 2 245 2 278 2 242 2 261 2 264 2 267
Aktobe region 1 864 1 894 1 894 1 894 1 893 1 894
Almata region 2 529 2 529 2 529 2 529 2 546 2 813
Atyrau region 990 990 990 990 990 990
West-Kazakhstan region 1 287 1 287 1 287 1 287 1 393 1 393
Jambyl region 1 067 1 176 1 237 1 237 1 237 1 237
Karaganda region 2 773 2 773 2 773 2 773 2 783 2 785
Kostanay region 1 410 1 410 1 410 1 410 1 410 1 410
Kyzylorda region 1 109 1 109 1 107 1 107 1 107 1 107
Mangystau region 1 033 1 033 1 033 1 033 1 033 1 049
Turkestan region 786 786 786 786 848 766
Pavlodar region 1 510 1 510 1 510 1 510 1 524 1 507
North-Kazakhstan region 1 468 1 468 1 468 1 468 1 468 1 468
East Kazakhstan region 3 414 3 414 3 414 3 414 3 414 3 414

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
As of the end of 2017, 93.5% of the roads of national importance were paved. In
recent years, the length of paved national roads in the whole of the country has
increased by an average of 78 km, but in 2017 it decreased by 1,237 km (table 2.8).
Table 2.8: Length of paved national roads, km
2012 2013 2014 2015 2016 2017

The Republic of Kazakhstan 23 378 23 534 23 558 23 577 23 769 22 532

Akmola region 2 208 2 241 2 205 2 224 2 227 2 172
Aktobe region 1 864 1 894 1 894 1 894 1 893 1 792
Almata region 2 502 2 502 2 502 2 502 2 519 2 759
Atyrau region 989 973 974 974 973 971
West-Kazakhstan region 1 284 1 284 1 284 1 284 1 390 1 129
Jambyl region 1 067 1 176 1 237 1 237 1 237 1 237
Karaganda region 2 773 2 773 2 773 2 773 2 783 2 444
Kostanay region 1 410 1 410 1 410 1 410 1 410 1 318
Kyzylorda region 1 109 1 109 1 107 1 107 1 089 1 030
Mangystau region 1 004 1 004 1 004 1 004 1 004 926
Turkestan region 786 786 786 786 848 766
Pavlodar region 1 507 1 507 1 507 1 507 1 521 1 448
North-Kazakhstan region 1 468 1 468 1 468 1 468 1 468 1 468
East Kazakhstan region 3 407 3 407 3 407 3 407 3 407 3 072

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.

19
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Most of the roads were built in the Almaty region - 257 km. In a number of areas,
the length of roads of national importance has decreased. This has occurred in
10 regions. Despite the fact that 86% of highways of national importance are paved,
their quality is low (table 2.9).
Table 2.9: State of the network of roads of national importance as of
1 January 2018
State of roads, km

good satisfactory unsatisfactory

Length of the
network, km km % km % km %

The Republic of Kazakhstan 24 100 12 306 51.0 8 422 35.0 3 372 14.0
Akmola region 2 267 1 518 67.0 551 24.0 198 9.0
Aktobe region 1 894 862 45.5 448 34.0 584 31.0
Almata region 2 813 1 220 43.0 1 554 55.0 39 1.0
Atyrau region 990 329 33.0 366 37.0 295 30.0
West-Kazakhstan region 3 414 1 343 39.0 1 078 32.0 993 29.0
Jambyl region 1 237 836 67.0 180 14.5 221 18.0
Karaganda region 1 393 542 39.0 733 53.0 118 8.0
Kostanay region 2 785 1 528 55.0 735 26.0 522 19.0
Kyzylorda region 1 107 819 74.0 288 26.0 - -
Mangystau region 1 410 652 46.0 631 45.0 127 9.0
Turkestan region 1 049 604 58.0 395 38.0 50 5.0
Pavlodar region 1 507 806 53.5 675 45.0 26 2.0
North-Kazakhstan region 1 468 724 49.0 545 37.0 199 14.0
East Kazakhstan region 766 523 68.0 243 32.0 - -

Source: Transport in Kazakhstan 2013-2017. Statistical collection. Astana, 2018.

http://stat.gov.kz.
As of 1 January 2018, only 51% of the roads of national importance were in good
condition. 14% were in an unsatisfactory condition.
The length of regional roads in the country as a whole in 2016 was 33,507 km or
34.8%. Over the past three years, their length has decreased by 377 km. This has
happened mainly due to the transfer of some regional roads to national control.
Thus, in the Zhambyl region, the network of regional roads decreased by 276 km,
and in the Mangystau region it decreased by 70 km (table 2.10).

20
 ROAD TRANSPORT IN KAZAKHSTAN

Table 2.10: Length of roads of regional importance, km

2013 2014 2015 2016 2017

The Republic of Kazakhstan 30 365 33 961 33 884 33 507 32 743

Akmola region 2 657 2 657 2 665 2 661 2 661
Aktobe region 1 099 1 099 1 057 1 070 1 057
Almata region 3 364 6 788 6 787 6 788 6 139
Atyrau region 973 973 972 973 973
West-Kazakhstan region 1 861 1 861 1 758 1 758 1 724
Jambyl region 2 241 2 210 2 210 1 943 1 944
Karaganda region 3 549 3 549 3 549 3 549 3 549
Kostanay region 2 208 2 209 2 209 2 209 2 209
Kyzylorda region 274 476 477 472 472
Mangystau region 1 012 1 012 1 012 942 942
Turkestan region 4 330 4 330 4 331 4 330 4 261
Pavlodar region 1 184 1 184 1 184 1 139 1 139
North-Kazakhstan region 2 427 2 427 2 487 2 487 2 487
East Kazakhstan region 3 186 3 186 3 186 3 186 3 186

Source: Transport in Kazakhstan 2013-2017. Statistical collection. Astana, 2018.

http://stat.gov.kz.
The length of paved regional roads in 2016 was 32,242 km or more than 96%. The
length of such roads has fallen, and the reduction occurred in the same areas
mentioned previously (table 2.11).
Table 2.11: Length of paved roads of regional importance, km
2013 2014 2015 2016 2017

The Republic of Kazakhstan 29 133 32 694 32 620 32 242 31 995

Akmola region 2 649 2 649 2 665 2 661 2 661
Aktobe region 1 099 1 099 1 048 1 061 1 048
Almata region 3 321 6 670 6 674 6 675 6 138
Atyrau region 691 691 690 691 691
West-Kazakhstan region 1 580 1 581 1 493 1 493 1 931
Jambyl region 2 241 2 210 2 210 1 943 1 944
Karaganda region 3 458 3 458 3 458 3 458 3 458
Kostanay region 2 077 2 077 2 077 2 077 2 009
Kyzylorda region 268 470 471 466 466
Mangystau region 883 883 883 831 831
Turkestan region 4 291 4 330 4 315 4 291 4 222
Pavlodar region 1 173 1 173 1 173 1 133 1 133
North-Kazakhstan region 2 356 2 356 2 416 2 416 2 416
East Kazakhstan region 3 046 3 047 3 047 3 046 3 047

Source: Transport in Kazakhstan 2013-2017. Statistical collection. Astana, 2018.

http://stat.gov.kz.

21
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

As of 1 January 2017, only 21% of regional roads were in good condition. 35.5% were
in an unsatisfactory condition (table 2.12).
Table 2.12: State of the regional and local roads network as of 1 January 2017
State of roads, km

good satisfactory unsatisfactory

Length of the
Name of the region network, km km % km % km %
The Republic of Kazakhstan 72 443 15 187 21 31 555 43.5 25 701 35.5
Akmola region 5 626 1 120 19.9 2 627.3 46.7 1 879.1 33.4
Aktobe region 5 065 643 12.7 1 787.9 35.3 2 633.8 52.0
Almata region 6 788 1 582 23.3 3 699.5 54.5 1 506.9 22.2
Atyrau region 2 062 757 36.7 253.6 12.3 1 051.6 51.0
West-Kazakhstan region 5 138 570 11.1 847.8 16.5 3 719.9 72.4
Jambyl region 3 991 726 18.2 2 286.8 57.3 977.8 24.5
Karaganda region 6 071 1 864 30.7 2 683.4 44.2 1 523.8 25.1
Kostanay region 7 880 1 214 15.4 3 672.1 46.6 2 994.4 38.0
Kyzylorda region 2 269 858 37.8 562.7 24.8 848.6 37.4
Mangystau region 1 659 926 55.8 597.2 36.0 136.0 8.2
Turkestan region 5 962 1 031 17.3 2 784.3 46.7 2 146.3 36.0
Pavlodar region 3 930 1 002 25.5 2 024.0 51.5 903.9 23.0
North-Kazakhstan region 7 530 1 581 21.0 2 560.2 34.0 3 388.5 45.0
East Kazakhstan region 8 472 1 313 15.5 5 167.9 61.0 1 990.9 23.5

Source: Transport in Kazakhstan 2012-2016. Statistical collection. Astana, 2017.

http://stat.gov.kz.
The quality of roads is reflected in the international rankings of the country's
competitiveness. According to estimates of the World Economic Forum, during 2006-
2011 there was a negative trend in the road quality factor. However, in 2012, this
indicator improved by eight positions compared to 2011 (table 2.13).
Table 2.13: “Quality of roads” in the global index of competitiveness of the World
Economic Forum for 2006-2017
2006 2007 2008 2009 2010 2011 2012 2017

Rating, place 98 109 108 116 124 125 117 108

Change, +/– - 11 +1 -8 -8 -1 +8 +9

Source: https://nonews.co/directory/lists/countries/quality-roads.
In its report for 2016-2017 on the state of the world economy, the World Economic
Forum published a ranking of countries based on the quality of roads. Kazakhstan
was ranked the 108th. The quality of roads has deteriorated over a long period and
only last year managed to reach the 2008 level.
It should be noted that in order to maintain and retain the quality of its highways,
in 1995 the Government adopted resolution No. 557, which imposed weight
restrictions for vehicles. According to the resolution, a maximum load on a single
axle of 6 tonnes was established, and a gross vehicle weight of 30 tonnes was
defined. The passage of vehicles exceeding these indicators is possible only after
the payment of a fee. This resolution granted foreign carriers access to a limited
number of roads. Later, resolution No. 62 dated 19 January 2002 set the the weight
parameters at 10 and 44 tonnes respectively.

22
 ROAD TRANSPORT IN KAZAKHSTAN

On 23 January 2017, the Decree of the Minister for Investment and Development
No. 761 of 4 November 2016 entered into force. This legislative act amends the
permissible weight and dimensions of vehicles travelling on the roads of Kazakhstan.
The permissible maximum weight of vehicles is now differentiated for single
vehicles, trucks composed of tractor and semi-trailer, as well as trucks composed of
tractor and trailer. The maximum permissible weight may not exceed 44 tonnes for
a single vehicle with six or more axles. The permissible load on a single axis is
10 tonnes.
Despite the restrictions imposed, practice shows that charges for exceeding
permissible loads do not save roads from damage. The development of world trade
has led to a constant increase in traffic volumes, which, in turn, requires the use of
heavy vehicles to improve the efficiency of long-distance transport. At the same
time, restrictions on the passage of heavy vehicles, as well as charging for excess
weight, reduce both the transit attractiveness of Kazakhstan and the efficiency of
domestic traffic. In addition, the identification of overweight vehicles is ineffective
and creates opportunities for corruption.
Roadworks entail significant costs. The average cost of restoring 1 km of road in
Kazakhstan is estimated at around US$ 200 thousand. Major repairs are estimated at
around US$ 100 thousand, and average repairs at around US$ 20 thousand. In this
regard, the restoration of the roads in Kazakhstan requires a huge amount of
investment.
The existing network of roads of national and regional importance allows road
transport between all regional centres and access to the international highways of
neighbouring countries.
Roads of local importance provide the possibility of delivering goods and passengers
to rural areas. Their length in 2016 was 38,936 km or 40.4% of the entire road
network. The network of roads of local importance decreased by 3,807 km, or by
almost 9% over the period analysed. In 2018, 130 kilometers of local roads were built
or reconstructed. These roads have the largest share in the entire road network of
Kazakhstan. The largest number of these roads is in the Kostanay, East Kazakhstan
and North Kazakhstan regions (table 2.14).

23
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Table 2.14: Length of roads of local importance, km

2013 2014 2015 2016 2017

The Republic of Kazakhstan 42 851 38 780 38 946 38 936 38 567

Akmola region 2 965 2 965 2 965 2 965 2 956
Aktobe region 3 602 3 602 3 602 3 995 3 602
Almata region 3 589 - - - -
Atyrau region 1 089 1 089 1 089 1 089 1 089
West-Kazakhstan region 3 383 3 383 3 383 3 380 3 380
Jambyl region 1 918 1 904 1 904 2 048 1 913
Karaganda region 2 522 2 522 2 522 2 522 2 522
Kostanay region 5 898 5 671 5 671 5 671 5 671
Kyzylorda region 1 976 1 769 1 770 1 797 1 867
Mangystau region 541 541 541 717 717
Turkestan region 2 065 2 031 2 081 1 632 1 643
Pavlodar region 2 964 2 964 2 965 2 791 2 803
North-Kazakhstan region 5 103 5 103 5 043 5 043 5 043
East Kazakhstan region 5 236 5 236 5 411 5 286 5 361

Source: Transport in Kazakhstan 2013-2017. Statistical collection. Astana, 2018.

http://stat.gov.kz.
The length of paved roads of local importance in 2017 was 27,287 km or more than
70.8%. Overall, the length of paved roads decreased on 3,697 km in 2017. The largest
number of such roads is in the Kostanay, East Kazakhstan and North Kazakhstan
regions (table 2.15).
Table 2.15: Length of paved roads of local importance, km
2013 2014 2015 2016 2017

The Republic of Kazakhstan 33 914 30 167 30 047 30 984 27 287

Akmola region 2 965 2 965 2 965 2 965 2 965
Aktobe region 2 485 2 485 2 485 3 155 2 614
Almata region 3 513 - - - -
Atyrau region 587 597 557 557 579
West-Kazakhstan region 1 854 1 854 1 854 1 851 231
Jambyl region 1 803 1 747 1 747 1 989 1 908
Karaganda region 2 491 2 491 2 491 2 491 2 491
Kostanay region 4 440 4 387 4 386 4 387 2 876
Kyzylorda region 1 436 1 208 1 226 1 253 1 371
Mangystau region 522 534 534 641 642
Turkestan region 1 726 1 775 1 720 1 558 1 466
Pavlodar region 2 190 2 189 2 190 2 205 2 218
North-Kazakhstan region 3 290 3 290 3 230 3 230 3 230
East Kazakhstan region 4 612 4 645 4 662 4 702 4 696

Source: Transport in Kazakhstan 2013-2017. Statistical collection. Astana, 2018.

http://stat.gov.kz.

24
 ROAD TRANSPORT IN KAZAKHSTAN

In 2017, 175 billion tenge were allocated for the development of the local transport
infrastructure, 72% of which went to 18 priority growth points, according to the
regional development programme until 2020. Of this, 91.8 billion tenge were
allocated to four urban agglomerations; 33.9 billion tenge were allocated to
14 second level cities; and 50.6 billion tenge were allocated to Astana, as the
transport and logistics centre of the country. Furthermore, 13% of the total budget
of Astana is assigned to the development of transport infrastructure. In addition,
the roads in Karagandy have received 12% of the budget and those in
Ust-Kamenogorsk - 10%. 6

2.1.3 International road network

The “Nurly Zhol” programme envisages the creation of an extensive network of roads
for both transit and national traffic.
Figure 2.1: Road projects in the “Nurly Zhol” programme

Kostanay
Schuchinsk
Zerenda

Martuk

Karabutak Osinovsky pass

Aktobe Semey
Kalbatau
Southwest bypass
Maykapchagay

Astrachan Saptaev bypass

Makat Taskeaken Bachty
Atyrau

Usharal
Beyneu
Dostyk
Aktau Akzhigit
Kapchagay
Khorgos

Zhetybay
Kyzylorda
Zhanaozen
ALMATY

Shymkent Taraz

Source: www.kazautozhol.kz/index.php/en/roads/reconstruction.
The implementation of the programme will see the completion of a network of roads
connecting Kazakhstan with neighbouring countries, as well as a network connecting
the capital with the largest cities in Kazakhstan.
All international road corridors in Kazakhstan are included in the road network of
the Euro-Asian Transport Links (EATL) project. These road corridors provide access
to many States, major ports, transport hubs and terminals.

6
www.inform.kz/ru/skol-ko-stoilo-stroitel-stvo-dorogi-v-rk-v-2016-godu_a3029927.

25
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

The EATL project is part of a long-term collaborative effort to improve trade and
social and economic development on the continent. Kazakhstan supports the
project. Phase 3 of the EATL project has recently been completed.
The main task of the development of road infrastructure in the framework of the
“Nurly Zhol” program at the present stage is the completion of the reconstruction
of six major international transit road corridors:
1. Tashkent - Shymkent - Taraz - Almaty - Khorgos (1,122 km);
2. Shymkent - Kyzylorda - Aktobe - Uralsk - Samara (2,052 km);
3. Almaty - Karaganda - Astana - Petropavlovsk with access to Omsk (1,886 km);
4. Astrakhan - Atyrau - Aktau - the border of Turkmenistan (1,190 km);
5. Omsk – Pavlodar – Semey - Maykapchagay (1,159 km);
6. Astana - Kostanay - Chelyabinsk - Ekaterinburg (880 km).
Figure 2.2: International road corridors in Kazakhstan

China

Uzbekistan
Turkmenistan
Kyrgystan

Source: https://img.tourister.ru/files/4/5/2/6/2/5/7/original.jpg.
International Road Corridor I: Tashkent – Shymkent – Taraz – Almaty – Khorgos. This
corridor in the Shymkent - Almaty - Khorgos section coincides with the EATL road
corridor IV. This corridor connects Southeastern Europe with the ports of
Lianyungang and Shanghai, crossing Romania, Georgia, Azerbaijan, Kazakhstan,
Uzbekistan, Kyrgyzstan and the eastern regions of China. Route IV continues with
Pan-European Transport Corridors IV, V and IX. There are two ferries with trailer
loading and unloading on the route of this corridor (from Romania to Georgia and
from Azerbaijan to Kazakhstan) and eight border crossing points.

26
 ROAD TRANSPORT IN KAZAKHSTAN

On the Almaty - Syry-Ozek - Khorgos section, road corridor I coincides with road
corridor EATL route II, which runs parallel to the railway route EATL II. The length
of this corridor is more than 8,000 km. It starts from the eastern borders of the EU
with the Republic of Belarus and Ukraine, passes through Russia, Kazakhstan and
eastern China to the ports of Lianyungang and Shanghai. It continues the Pan-
European Transport Corridors II and IX and is almost entirely related to the Asian
Highway network.
The International Road Corridor I from the border with Uzbekistan (Zhybek - Zholy
crossing point) to Almaty runs along the A-2 highway, then from Almaty to Sheleg it
runs along the A-351, then to the border with China along the R-21. This Central
Asian highway of international importance passes through mountain, sand and desert
terrain across the territory of Uzbekistan and Kazakhstan. The road runs through the
territory of the Turkestan, Zhambyl and Almaty regions. The section of the road
from Almaty to Khorgos has been a toll road since December 2017.
Until the 1990s, the road passed through Kyrgyzstan on the Kordai - Kara-Balta
section. Then Kazakhstan paved the bypass road on its territory. Now transport can
proceed to Tashkent, circling the territory of Kyrgyzstan, saving time and money on
customs procedures when entering and leaving Kyrgyzstan. This corridor follows the
European road E-40.
Of the main Kazakhstan road corridors, Corridor I, which is part of Asian Highway
A-5, is internationally recognized. The corridor ensures the connection of East Asia
with the countries of the Near and Middle East, and is also the shortest route
between East to West. The route is approved as an international corridor as part of
the ALTID project. The remaining corridors in Kazakhstan under this project have
received “sub-regional” status and are not included in the network of major Eurasian
routes.
International Road Corridor II: Shymkent - Kyzylorda - Aktobe - Uralsk - Samara.
This corridor in the Uralsk - Aktobe - Karabutak - Kyzylorda - Shymkent section
coincides with the EATL road corridor III. This corridor begins on the eastern borders
of the EU with Ukraine and ends on the coast of China in the ports of Lianyungang
and Shanghai. It crosses the territory of Ukraine, Russia, Kazakhstan, Kyrgyzstan and
the eastern regions of China. Road route III continues the Pan-European Corridors II,
IV, V, VII and IX to the east and partly coincides with the Asian Highway network.
There are eight border crossing points on the route.
Length of the road from Shymkent to the border with the Russian Federation is
2,052 km. This route runs along the international road M-32. It originates at the
Syrym customs checkpoint on the border with the Russian Federation, 60 km north-
west of the city of Uralsk. On the section from Uralsk to Karabutak the road runs
parallel to the border with the Russian Federation. It then leads to the southeast,
through the steppe zone to the city of Aktobe. Between the cities of Aktobe and
.KURPWDXWKHURDGLVƽOanes. The road then passes along the northern side of the
Aral Sea, to the north of Ayteke-Bi village, through Baikonur, Kyzylorda to Turkestan.
On the section from Ayteke-Bi to Turkestan, the route runs parallel to the Syr Darya
River, crossing it in the area of Zhozaly and Kyzylorda. After Aralsk, desert territories
are replaced by irrigated lands. The M-32 road ends in Shymkent.

27
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

From the border of the Russian Federation to Kyzylorda, the road is of category II
(two lanes). From Kyzylorda to Shymkent it is of category I (four-lanes with
separation).
International road corridors I and II (Khorgos – Almaty – Taraz – Shymkent – Kyzylorda
– Aktobe – Uralsk - border of the Russian Federation) are part of the transcontinental
corridor “Western Europe - Western China”.
Figure 2.3: Kazakhstan section of the transcontinental corridor “Western Europe -
Western China”

Aktobe

Kyzylorda

Almaty

Taraz

Shymkent

Source: www.kazautozhol.kz/index.php/en/roads/reconstruction.
The total length of the corridor on the route St. Petersburg – Moscow – Nizhny
Novgorod – Kazan – Orenburg – Aktobe – Kyzylorda – Shymkent – Taraz – Almaty –
Khorgos – Urumqi – Lanzhou – Zhengzhou – Lianyungang is 8,445 km. 2,233 km pass
through the territory of the Russian Federation, 2,787 km pass through the territory
of Kazakhstan and 3,425 km pass through the territory of China.
In Kazakhstan, 2,452 km of the road have been reconstructed. Of these, category I
roads of 4-lane traffic account for 1,390 km (Kyzylorda – Turkestan – Shymkent –
Taraz – Almaty – Khorgos). The remaining sections with a length of 1,062 km
correspond to category II (border of the Russian Federation – Martuk – Aktobe –
Karabutak – Kyzylorda). The surface is paved in asphalt and concrete. The cost of
construction of the Kazakhstan portion was 825 billion tenge. Sources of financing
were loans from IBRD, EBRD, ADB, IDB and JICA. The implementation period was
2009-2017.
International Road Corridor III: Almaty - Karagandy - Astana - Petropavlovsk with
access to Omsk (Kurgan). This corridor coincides with the EATL road corridor II.
The road is part of the European road E-125, which runs from north to south through
the Russian Federation, Kazakhstan and Kyrgyzstan. The beginning of the E-125 is
Ishim (Russian Federation) and the end is Torugard (Kyrgyzstan). Its length is
2,600 km.

28
 ROAD TRANSPORT IN KAZAKHSTAN

The corridor runs along the following route: Almaty – Balkhash – Karagandy – Astana
– Kokshetau – Petropavlovsk – border with the Russian Federation (Karakog
checkpoint). The length of the road from Almaty to Petropavlovsk is 1,768 km, and
from Petropavlovsk to the border with the Russian Federation (Karakog checkpoint)
to Omsk is another 118 km. The road between Astana and Kokshetau is a first-class
motorway with three lanes in each direction. On the Astana – Schuchinsk section, a
length of 217 km is toll road. At the end of 2017, the Astana – Temirtau section, as
well as a 79 km long section of the A-3 highway also became toll roads.
The Kokshetau – Petropavlovsk – border with the Russian Federation section, 159 km
long, has an asphalt and concrete surface of category II. It was completed from
Kokshetau to Petropavlovsk (87 km) in 2016. The section Petropavlovsk – border of
the Russian Federation with access to Kurgan (61 km) will be completed in 2019.
Figure 2.4: Kokshetau – Petropavlovskovsk – border of the Russian Federation
section of international road corridor III

Source: Transit potential of the Republic of Belarus: assessment and development.

Minsk, 2017.
International Road Corridor IV: Astrakhan – Atyrau – Aktau – border of
Turkmenistan. This corridor on the Beineu – Aktau section coincides with the EATL
road corridor IV, which provides an alternative link between South-Eastern Europe
and the ports of Lianyungang and Shanghai. The corridor passes through Bulgaria,
Turkey, Iran, Uzbekistan and Kazakhstan. This route continues the Pan-European
corridors IV, VIII, IX and TRACECA to the Chinese coast.
In the Astrakhan region, the corridor coincides with international transport
corridor IX from Helsinki - Astrakhan, and in the south it leads to the seaport of
Aktau and further to the border with Turkmenistan.
The route runs from the border with the Russian Federation to Dosor along the
national road A-27, then turns to the southeast and passes through Kulsary – Beineu
– Say – Utes – Shetpe – Zhetybay to the port of Aktau along the national road. Near
Munaishi, the A-33 road flows into the R-114 road, which follows the border with
Turkmenistan.

29
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

The A-27 is considered the second main road in the west of Kazakhstan after the
M-32. The road traverses country that is flat with small deserts and steppe. The
peculiarity of the road is that it is 28 meters below sea level. Before the border
with the Russian Federation, the road runs through wetlands with sandbanks. On the
Russian side, the E-40 leads to the city of Astrakhan, which is 60 km from the border.
The length of the route from the border with the Russian Federation to the port of
Aktau is 1,190 km.
Figure 2.5: Astrakhan –Atyrau – Aktau – border of Turkmenistan section of
international road corridor IV

Makat

Kulsary

Beineu

Source: Transit potential of the Republic of Belarus: assessment and development.

Minsk, 2017.
Road corridors 1, 2, 3 and 4 coincide with the Central, Central Asian, North and West
railway corridors, respectively.
International Road Corridor V: Omsk – Pavlodar – Semey – Maykapchegai. This
corridor in the section Petropavlovskovsk - Omsk - Pavlodar - Semey - Taskesken -
Usharal - Dostyk coincides with branch IIb of the EATL road corridor II.
It provides the shortest route from the Pavlodar region and industrial regions of
Western Siberia to China.
This route coincides with the M-38 road. The road originates from the Russian-
Kazakhstan border near Zhelezinka and proceeds through the regional centres of
Pavlodar and Semey. It goes through the steppe to the South through Kalbatau and
then to the Maykapchagai customs post on the border with China. Maykapchagai is
connected with the Zimunai checkpoint, which is 0.5 km from the Chinese
checkpoint and 60 km from the city of Zaysan (Kazakhstan). The Zimunai checkpoint
is located in the Zimunai district of Altai region at a distance of 24 km from the
centre of Zimunai (China), 198 km from the city of Altai (China), and 650 km from
the city of Urumqi (China).

30
 ROAD TRANSPORT IN KAZAKHSTAN

Figure 2.6: Omsk – Pavlodar – Semey – Maykapchagai section of international road

corridor V

Semey

Maykapchagai

Source: Transit potential of the Republic of Belarus: assessment and development.

Minsk, 2017.
The Maykapchagai customs post is the closest customs point to the Russian
Federation. The capacity is 2,000 people and 350 vehicles per day. The length of the
route from the Russian border to Maykapchegai is 1,159 km. The road has four lanes
and traffic is not dense. In winter, the M-38 route is often closed due to difficult
weather conditions caused by strong winds and snowfalls.
International Road Corridor VI: Astana – Kostanay – Chelyabinsk – Ekaterinburg.
The corridor is part of the European route E-123 and the Asian route AN-7. The
AN-7 connects the Urals with the coast of the Indian Ocean. It starts in Ekaterinburg
and passes through the territory of seven States: the Russian Federation,
Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, Afghanistan and Pakistan. The final
destination is Karachi. The total length of the route is 5,868 km.
Figure 2.7: Astana – Kostanay – Chelyabinsk – Ekaterinburg section of international
road corridor VI

Kokshetau

Shchuchinsk

Source: Transit potential of the Republic of Belarus: assessment and development.

Minsk, 2017.

31
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

In Kazakhstan, the route begins on the border with the Russian Federation (at the
Kayrak checkpoint), then leads to Kostanay and Astana. The length of this section is
880 km.
By 2020, it is planned to complete the reconstruction of the six main corridors.
Corridors II, III and VI in the south are joined to the international Trans-Asian corridor
A-5, and in the north, they lead to the second Trans-European Corridor Berlin –
Warsaw – Minsk – Moscow – Nizhniy Novgorod – Ekaterinburg – Chelyabinsk. These
corridors provide links between Western and Eastern Europe and the Urals through
Kazakhstan to China, Turkey, Pakistan and the Indian Ocean coast.
The largest volume of cargo transport, both domestic and transit, is carried along
corridors I, III and VI.
By 2020, it is planned to introduce a charging system on 6,000 km of highways of
national importance to repair 30,000 km of roads, 46,600 km will be of satisfactory
quality. 7
International road corridors pass mainly from the north to the southeast, with the
exception of Corridor I. Highways of national importance connect the network of
international road corridors. There are 36 roads of category A and 54 roads of
category P. Their total length is 23,910 km.

2.1.4 Main highways of national importance and their upgrading

Roads of national importance connect international road corridors and provide

access to neighbouring States. The main roads of national importance are:
x Chelyabinsk – border of Kazakhstan (Zhanazhol customs post) – Petropavlovsk –
Karagoga customs post of the North Kazakhstan region – border of the Russian
Federation and further to Omsk and Novosibirsk. The length of the M-51 road
on the territory of Kazakhstan is 190 km;
x Almaty – Ust-Kamenogorsk. The length of the A-3 road is 1,083 km;
x Kyzylorda – Pavlovsk. The length of the A-17 road is 1,388 km;
x Kyzylorda – Petropavlovsk. The length of the A-16 road is 1,446 km;
x Atyrau – Uralsk. The length of the A-28 road is 487 km.
According to the World Bank, the current value of the national road network of
Kazakhstan is about US$ 109.7 billion or 69.3% of GDP in 2017.
The figure below illustrates the planned construction and renewal projects on public
roads according to the State Programme for Infrastructure Development of
Kazakhstan “Nurly Zhol” for 2015-2019.

7
https://strategy2050.kz/en/news/3616/.

32
 ROAD TRANSPORT IN KAZAKHSTAN

Figure 2.8: Construction and reconstruction of roads in the centre-west, centre-

east and centre-south directions

Center-East
Astana-Pavlodar-Kalbatau-Ust-Kamenogorsk
Building and reconstruction 932 km
Completion of work - 2020

Center-West
Astana-Zorkalzhyn-Torgai-Shalkar
Beyngue-Aktau
Construction and reconstruction of 1,820 km
Completion of work - 2020

Center-South
Astana-Karaganda-Balkhash-Kapchagai-
Almaty
Construction and reconstruction of 1,318 km
Completion of work - 2019

Source:Development of transport infrastructure of the Republic of Kazakhstan till 2020.

http://docplayer.ru/30130676-Razvitie-transportnoy-infrastruktury-respubliki-kazahstan-
do-2020-goda.html.
Direction Centre-South. The length of the route from Astana to Almaty is 1,282 km.
The whole route will have an asphalt and concrete surface of category I. The cost is
880 billion tenge. Sources of financing are NF, and loans from IBRD and EBRD. The
work should be completed by 2020.
The main areas of reconstruction include:
x Astana - Karagandy (185 km). The section Astana – Temirtau with a length of
171 km has been opened. Work is underway on the construction of a power-
generation plant and road-building and roadside services on the Astana –
Temirtau section. The reconstruction of the Temirtau – Karaganda section
(14 km) is was planned to be completed by the end of 2018. Construction and
reconstruction of the Northern and Eastern bypasses of Karaganda are
forthcoming.
x Karaganda – Balkhash (403 km) is due for reconstruction after 2020;
x Balkhash – Burylbaytal (297 km) is planned for reconstruction from 2018 with
IBRD loans;
x Burylbaytal – Kurt (228 km), reconstruction started in 2017 using EBRD and
IBRD loans. Completion of work is expected in 2020;
x Kurty – Kapshagai (67 km), reconstruction is planned after 2020;
x Kapshagai – Almaty (104 km) was completely reconstructed in 2016.
Direction Centre-East. The length of the road from Astana to Maykapshagai through
Pavlodar and Kalbatau is 914 km. The whole road will have an asphalt and concrete
surface. The length of the category I road section is 436 km; the length of the
category II section is 478 km. The cost is 390.5 billion tenge and funding is being
provided by NF. The work should be completed by 2020.

33
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Direction Centre-West. The length of the road from Astana to Aktau is 1 820 km.
The route passes through Korkalzhyk, Arkalyk, Torgai, Shalkar and Beineu. The work
should be completed by 2020.
The main areas of reconstruction include:
x Beineu – Aktau (470 km), the road will have an asphalt and concrete surface
of categories I and II with financing from ADB. The implementation period is
2010-2020;
x Beineu – Shetpe (300 km), reconstruction was completed in 2017;
x Shetpe – Aktau (170 km). The work should be completed by 2020.
Aktobe – Atyrau – Astrakhan. The length of the route from Aktobe to the border
with the Russian Federation is 758 km. The entire route will have an asphalt and
concrete surface. The categories of the road are I and II. The cost is 319 billion tenge
and funding is being provided by ADB, IDB and NF. The work should be completed by
2020.
Figure 2.9: Construction and reconstruction of the Aktobe - Atyrau road

Aktobe

Kandyagash

Atyrau

Kulsary

Astrakhan

Source: Transit potential of the Republic of Belarus: assessment and development.

Minsk, 2017.
The main areas of reconstruction include:
x Aktobe – Kandyagash (159 km). It is planned to reconstruct this section with
IDB loans. The work should be completed by 2020;
x Atyrau – Astrakhan (274 km). It is planned to reconstruct this section with IDB
loans. The work should be completed by 2020;
x Kandyagash – Makat (299 km). It is planned to reconstruct this section with
ADB loans. The work should be completed by 2020.
Almaty – Ust-Kamenogorsk. The length of the road from Almaty to Ust-Kamenogorsk
is 904 km. The whole route will have an asphalt and concrete surface (the category I
section is 141 km, and the category II is 763 km). The cost is 349 billion tenge and
financing will be provided by NF and EximBank. The work should be completed by
2020.

34
 ROAD TRANSPORT IN KAZAKHSTAN

Figure 2.10: Reconstruction of the Almaty – Ust-Kamenogorsk road

Zaisan
Urzhar
Aktogai

Chuguchak

Dostyk
Taldykorgan

Source: Transit potential of the Republic of Belarus: assessment and development.

Minsk, 2017.
The main areas of reconstruction include:
x Kapshagai – Taldykorgan (141 km). In 2017, reconstruction of 24 km was
completed;
x Taldykorgan – Ust - Kamenogorsk (763 km). It is planned to reconstruct this
section with financing from EximBank. The work should be completed by 2020.
Uralsk – Kamenka with access to Saratov (100 km). The route will have an asphalt
and concrete surface of category II. The cost is 24 billion tenge. Financing will be
provided by NF. The work should be completed by the end of 2018.
Figure 2.11: Reconstruction of the Uralsk – Kamenka road

Kamenka

Source: Transit potential of the Republic of Belarus: assessment and development.

Minsk, 2017.
Kostanay – Denisovka (114 km). The road will have an asphalt and concrete surface
of category II. The financing required is 45 billion tenge. The work is planned to
begin in 2018.

35
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Figure 2.12: Reconstruction of the Kostanay – Denisovka road

Tobolsk

Rudnyi

Source: Transit potential of the Republic of Belarus: assessment and development.

Minsk, 2017.
Shchuchinsk – Zerenda (80 km). The road will have an asphalt and concrete
surface of category III. The financing required is 15.5 billion tenge. The project
implementation period is 2017-2020.
Figure 2.13: Reconstruction of the Schuchinsk – Zerenda road

Shchuchinsk

Zerenda

Source: Transit potential of the Republic of Belarus: assessment and development.

Minsk, 2017.
Zhetybai - Zhanaozen (73 km). The road will have an asphalt and concrete surface
of categories I and II. The cost is 31 billion tenge with financing being provided by
ADB. The project implementation period is 2017-2019.
Figure 2.14: Reconstruction of the Zhetybai – Zhanaozen road

Source: Transit potential of the Republic of Belarus: assessment and development.

Minsk, 2017.

36
 ROAD TRANSPORT IN KAZAKHSTAN

Usharal – Dostyk (180 km). The road will have an asphalt and concrete surface of
category II. The cost is estimated at 58 billion tenge. The project implementation
period is 2017-2020.
Figure 2.15: Reconstruction of the Usharal – Dostyk road

Source: Transit potential of the Republic of Belarus: assessment and development.

Minsk, 2017.
Taskesken – Bakhty (20 km). The road will have an asphalt and concrete surface of
category II. The cost is 4.3 billion tenge. The project implementation period is 2017-
2019.
Figure 2.16: Reconstruction of the Taskesken – Bakhty road

Source: Transit potential of the Republic of Belarus: assessment and development.

Minsk, 2017.
Southwest bypass of Astana (33 km). The road will have an asphalt and concrete
surface of category I. The cost is 56 billion tenge with financing provided by
Eximbank. The project implementation period is 2017-2020.

37
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Figure 2.17: Reconstruction of the south-west bypass of Astana

Source: Transit potential of the Republic of Belarus: assessment and development.

Minsk, 2017.
Bypass of the village of Kordai (80 km). The road will have an asphalt and concrete
surface of category I. The cost is 20 billion tenge. The work should be completed by
2019.
Figure 2.18: Reconstruction of the road bypassing the village of Kordai

Source: Transit potential of the Republic of Belarus: assessment and development.

Minsk, 2017.
Beineu - Akzhigit (85 km). The road will have an asphalt and concrete surface of
category II. The project will be implemented in 2020.
Osinovsky Pass (32 km). The section of the pass will have an asphalt and concrete
surface of category II. The project should be completed by 2019.
In an address by the President of Kazakhstan to the people on 30 November 2015, it
was stressed that public private partnerships and other measures should be used to
encourage private investment in priority sectors of the economy, not only for the
construction of roads, gas pipelines, hospitals, schools and other facilities, but also
for their reconstruction and maintenance.
In this connection, a project for the construction of the Greater Almaty Ring Road
(GARR) has been developed. This project aims to create a toll road with a length of
66 km. The road will correspond to category IA with 9 km of four lane infrastructure
and 57 km of six lane infrastructure. The construction of the road is planned based
on a public private partnership on a concession basis for a period of 20 years. The
construction period is 2018-2021.

38
 ROAD TRANSPORT IN KAZAKHSTAN

The GARR project is defined as a pilot concession project and is classified as

particularly significant.
Figure 2.19: Construction of the Greater Almaty Ring Road

Source: Transit potential of the Republic of Belarus: assessment and development.

Minsk, 2017.
Implementation of the project “Creating the infrastructure for a vehicle checkpoint
on the Almaty – Khorgos road section (the transcontinental corridor “Western Europe
– Western China”)” will be divided into two parts: the construction period is 2017-
2018 and the operational period is 2018-2025.
The concession project “Construction and operation of high-speed highways in the
South Kazakhstan region” has a length of 254 km, is of category IB and will have four
lanes. Road construction includes a bypass of the city of Shymkent (48 km), a bypass
of the city of Saryagash (56 km) and the reconstruction of a section of the A-15
highway (42 km). The existing roads are the northern bypass of the city of Shymkent
(36 km) and the section of the road A-2 from Shymkent to Tashkent (72 km).
Studies of the road network of Kazakhstan show that the Government pays particular
attention to the construction and reconstruction of roads of both international and
national importance. The strategic development plan of Kazakhstan until 2020
provides targets for the road sector (tables 2.16 and 2.17).
Table 2.16: Target indicators for the development of roads in Kazakhstan
By the end of 2016 By the
2012 end of
Indicator Units (base) plan base 2020

Share of highways of national importance in good or satisfactory

technical condition, including: % 79 86 85 89
in good condition % 30 38 44 48
in satisfactory condition % 49 48 41 41
Share of highways of national or regional importance in good or
satisfactory technical condition, including: % 63 72 64.5 78
in good condition % 16 23 21 28
in satisfactory condition % 47 49 35.5 50
Share of toll roads in the total length of roads of national
importance of categories I and II % 4 10 51 55
Increase in the volume of transit cargo on the roads in Kazakhstan mln.t 1.46 2.3 - 3.5

Source: State program for the development and integration of the infrastructure of the
transport system of the Republic of Kazakhstan until 2020. www.miid.gov.kz.

39
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

The target indicators for national roads as of the end of 2016 have been almost
achieved. The indicator “share of national roads in good condition” was exceeded
by 6%, while the indicator for those in a satisfactory condition was not met.
Nevertheless, this shows significant progress as the length of road in good condition
has increased significantly in comparison with the plan. On roads of national and
regional importance, these targets have not been met both in general and in
particular quality categories. This indicates that the focus was on roads of national
importance, which are involved in transit and export/import operations (table 2.17).
Table 2.17: Target indicators for the development of roads in Kazakhstan, km
Index Unit By end of 2016 By end of 2020

Construction and reconstruction of highways of national importance km 2 932 5 703

Construction and reconstruction of highways of regional importance km 659 1 124

Increase in the percentage of roads of categories I and II in the total % 36 48

length of highways of national importance

Repair of highways of national importance km 4 170 10 195

Repair of roads of regional importance km 4 366 12 601

Level of defect-free maintenance of highways of national importance % 80 90

Length of roads operating on the principle of self-repayment for defect- km 841 6 186
free maintenance

Share of updated normative and technical documents % 66 78

Degree of coverage of road maintenance systems km 8 000 23 485

Provision of highways of national importance with roadside services % 25 76

Satisfaction of the population with the state of paved public roads % 58 70

Increase in the share of qualified personnel with engineering and technical% 17 40

specialization

Source: State program for the development and integration of the infrastructure of the
transport system of the Republic of Kazakhstan until 2020. www.miid.gov.kz.
Along with measures for the rehabilitation and reconstruction of the basic network
of highways, the equipping of long distance sections with service facilities is no less
important for carriers. A comparison of the availability of service facilities on
international corridors in Kazakhstan indicates the shortage of service stations
(especially for large-capacity vehicles) on certain routes, the saturation on
international roads of gas stations and the apparent lack of motels and camping
facilities for drivers and guarded parking facilities.
After completion of the planned construction and reconstruction of the road network
in Kazakhstan, the deadline for which is 2021, a modern transport network will have
been created in the country.

40
 ROAD TRANSPORT IN KAZAKHSTAN

2.2 ANALYSIS OF THE STATE AND DEVELOPMENT OF ROAD TRANSPORT

2.2.1 General characteristics of road transport

In recent years, road transport in Kazakhstan has taken over first place among modes
of transport in terms of the carriage of goods and passengers. A more developed
network of roads compared to the railway network has contributed to the
development of road transport. The density of roads is 35 km per 1,000 km2, which
is more than 6 times the density of the railways. In addition, a shortage of railway
wagons for the transport of goods has led to an increase in the competitiveness of
road transport, contributing to its development. Consequently, this may lead to road
transport developing more rapidly than other modes of transport in the future.
The vehicle fleet of Kazakhstan at the start of 2018 amounted to
440,600 trucks, 90,400 buses and 3,851,600 cars. In addition, there were
10,600 motorcycles and 68,000 car trailers.
The growth in the number of trucks in Kazakhstan in the period 2010-2017 is shown
in figure 2.20. During this period, the number of trucks grew by 10.8%. The average
annual growth rate was 1.5%.
Figure 2.20: Growth in the number of trucks in Kazakhstan
500000
450178 443161
414018 439167 440600
400000 428624 434665
397591
300000 240994 256626 266543 269100
250027 259636 275722
200000 220692
100000
Trucks, total Individual entrepreneurs
0
2010 2011 2012 2013 2014 2015 2016 2017

Source: Transport in Kazakhstan 2011-2015. Statistical collection. Astana, 2016.

http://stat.gov.kz. Transport in Kazakhstan 2013-2017. Statistical collection. Astana,
2018. http://stat.gov.kz.
The number of trucks in private ownership grew more rapidly than the total number
reflecting the attractiveness of this business for Kazakh citizens and
the development of the market in this sector (table 2.18).

41
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Table 2.18: Number of trucks by ownership

2010 2011 2012 2013 2014 2015 2016 2017

All trucks 397 591 414 018 428 624 450 178 434 665 443 161 439 167 440 600
Including in private
ownership 220 692 240 994 250 027 256 626 259 636 266 543 275 722 269 100
Proportion of trucks in
private ownership, % 55.5 58.2 58.3 57.0 59.7 60.1 62.8 61.1
Trucks of enterprises of all
industries 176 899 173 024 178 597 193 552 175 029 176 618 163 445 171 500
Including trucks of
transport enterprises - - 10 088 10 372 11 390 12 687 13 320 13 400

Source: Transport in Kazakhstan. 2010-2017. Statistical collection. Astana.

http://stat.gov.kz.
It should be noted that the increase in the number of vehicles in transport
enterprises reflects the increase in their competitiveness, however, the total
number has decreased slightly.
Table 2.19 provides information on the period of operation of cars in Kazakhstan.
The data show that the majority of cars have an operational lifespan of over
10 years.
Table 2.19: Characteristics of vehicle use in Kazakhstan
Period of operation

Type of Up to 3 From 3 to 7 From 7 to Over

vehicle Total years % years % 10 years % 10 years % Other %

Cars 3 845 301 616 545 16.0 400 696 10.4 344 786 9.0 2 270 931 59.1 212 343 5.5

Source: http://mid.gov.kz/images/stories/contents/gp_150520141656.pdf.
The main causes of fleet ageing are the lack of financial resources of companies and
individual entrepreneurs, high interest rates on lease payments and a new system of
customs payments, which has significantly increased the cost of vehicles. The new
customs regulations prohibit the importation of vehicles manufactured before 2007.
Investment in road transport remains at a low level, at between 28-47 billion tenge
per year, which has restricted the updating of the fleet (table 2.20).
Table 2.20: Capital investment in road transport in millions of tenge
2012 2013 2014 2015 2016 2017

Transport and warehousing 660 891 1 101 028 783 101 682 760 557 231 648 949
Including:
Road vehicles and urban electric
transport 27 687 29 875 27 778 46 531 31 913 63 341
Percentage of total investment, % 4.2 2.7 3.3 6.8 5.7 9.8

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.

42
 ROAD TRANSPORT IN KAZAKHSTAN

Between 2012 and 2017, road vehicles and urban electric transport received
between 4-10% of total fixed capital investment in transport and warehousing. The
total amount of financing in transport and warehousing in Kazakhstan in 2017
amounted to 1.3% of GDP. Similar countries invest between 4-7% of GDP in transport.
The small levels of investment in road vehicles can be explained by the large share
of the private sector in this area and its attractiveness for business and the belief
by the Government that it should be developed by the private sector. In addition,
the share of road transport and urban electric transport is only 7.6% of the value of
all the major means of transport and storage, while rail transport accounts for 19.5%,
and pipelines for 44.8%.
An increase in investment in the industry could contribute to stricter environmental
requirements for vehicles. Such measures could restrict imports of obsolete vehicles
and promote Kazakhstan’s car assembly companies. However, the introduction of
restrictions on imports of Euro-3 and Euro-4 vehicles has been deferred repeatedly.
The main deterrent is the slow modernization of refineries.
Another problem is associated with the reform of the industry, which has led to the
predominance of small-scale private carriers that do not have sufficient funds to
expand their businesses. The updating of the fleet is based on the acquisition of
imported foreign vehicles and domestic production. It should be noted that the
production of vehicles in Kazakhstan is not sufficient to replace the worn out vehicle
stock (table 2.21).
Table 2.21: Production and imports of goods vehicles in Kazakhstan
2012 2013 2014 2015 2016 2017

Production of vehicles - total, 21 132 40 684 38 985 14 043 7 355 19 078

Including goods vehicles 1 747 2 306 2 341 1 555 1 805 1 639
Imports of vehicles - total, 148 471 203 334 200 431 90 071 28 404 38 215
Including goods vehicles 20 952 28 222 20 216 10 722 3 979 7 697

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
At the beginning of 2017 there were 439,000 trucks and their standard duration of
operation was 10 years. The fleet is renewed annually with not less than
43,000 trucks. In 2017 only 9,336 vehicles came into operation. The main means of
updating the fleet is buying new foreign vehicles, even though the old ones are still
in operation. In fact, the vast number of carriers cannot afford to update their fleet.
Thus, the fleet will age and Kazakhstan carriers may gradually be squeezed out of
the Eurasian market for transport services.
The transport strategy of Kazakhstan up to 2015 included the target of reducing the
number of trucks aged more than 12 years from 63% to 35%. At the start of 2017, the
proportion of cars with more than 10 years of age amounted to 59%. Hence, despite
all the measures taken to promote the income growth of the population, the
replacement of old vehicles has not taken place, despite investment in the
replacement of the fleet of trucks, buses and agricultural machinery and a tightening
of requirements regarding the technical parameters of vehicles.

43
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

The problem of the ageing vehicle fleet lies not only in the automotive sphere, but
also in the petrochemical industry. The reconstruction of Kazakh oil refineries
for the production of high-quality fuel is required. One of the main goals is to meet
the fuel requirements of Euro-5 vehicles, which will help to reduce the
environmental impact of road transport in Kazakhstan.

2.2.2 Road traffic accidents

Road traffic accidents are a major concern for Kazakhstan as shown in the table
below (table 2.22).
Table 2.22: Number of traffic accidents

Number of accidents Number of fatalities Number of injured

2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017

Kazakhstan 20 378 18 890 17 974 17 019 2 585 2 453 2 390 2 086 25 942 24 055 23 389 22 256
Akmola region 642 512 510 579 155 99 114 135 899 764 796 889
Aktobe region 846 831 699 639 103 103 71 76 1 082 1 046 823 820
Almata region 1 834 1 694 2 086 1 934 468 463 505 394 2 158 2 300 2 820 2 632
Atyrau region 436 410 333 285 91 79 70 54 530 487 426 328
West-Kazakhstan
region 404 503 448 405 84 99 92 99 573 642 546 534
Zhambyl region 1 293 1 298 1 387 1 386 203 243 210 166 2 005 2 002 2 253 2 240
Karaganda region 927 871 797 730 210 173 145 139 1 133 1 112 945 921
Kostanay region 729 613 444 443 128 105 64 71 934 772 612 548
Kyzylorda region 367 381 378 374 83 89 92 88 463 466 445 454
Mangystau region 358 410 336 328 103 79 99 87 451 518 423 413
Turkestan region 3 370 2 251 2 076 1 961 432 390 431 343 4 565 3 053 2 836 2 785
Pavlodar region 1 057 1 032 880 872 86 92 76 57 1 398 1 359 1 217 1 189
North-Kazakhstan
region 310 255 227 189 56 45 44 39 426 314 284 233
East Kazakhstan
region 1 463 1 583 1 462 1 208 154 178 179 142 1 791 2 042 1 955 1 587
Astana 754 694 708 583 52 57 42 60 834 761 777 624
Almaty 5 588 5 552 5 203 5 103 198 159 156 136 6 558 6 559 6 231 6 059

Source: Transport in Kazakhstan 2013-2017. Statistical collection. Astana, 2018.

http://stat.gov.kz.
The number of accidents in the country as a whole and for each area has fallen.
Also, the number of deaths and injuries in accidents has fallen. This is despite the
growth in the number of cars in the country between 2012 and 2017 of 5.1%.

44
 ROAD TRANSPORT IN KAZAKHSTAN

Figure 2.21: Number of fatalities in road traffic accidents by number of vehicles

Source: Transport in Kazakhstan 2007-2016. Statistical collection. Astana.

http://stat.gov.kz.
The majority of accidents are between cars and pedestrians (43.4%) and accidents
between cars (31.4%). The overwhelming number of road accidents took place in
cities and towns (78.6%) and on international and national roads (12.7%). Of course,
one of the main factors in reducing the number of accidents is the improvement of
the quality of the roads.

2.2.3 Transport of goods by road

In Kazakhstan, nearly 98% of the companies working in the field of transport and
storage belong to the category of small enterprises employing less than 100 people.
Medium-sized enterprises employing from 101 to 250 people accounted for 1.4% of
the total and only 0.6% are large enterprises with over 250 employees. It should be
noted that the same ratio exists for other areas of the economy, where the number
of small businesses is 97.7%, medium 1.7%, and large 0.6% (table 2.23).

45
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Table 2.23: Number of companies by forms of ownership, size and type of activity
as of 1 January 2017
Including forms of ownership

of which

with the
participation of
the state (without joint ventures
private, foreign (with foreign
Total state total participation) participation) foreign

Kazakhstan 383 850 27 051 336 738 918 10 518 20 061

Small 374 912 22 684 332 578 706 10 216 19 650
Medium 6 502 3 355 2 906 110 177 241
Large 24 1 012 1 254 102 125 170
Transport and warehousing 14 740 56 13 847 49 404 837
Small 14 444 43 13 584 26 386 817
Medium 204 4 189 10 8 11
Large 92 9 74 13 10 9

Source: Kazakhstan in 2016. Statistical yearbook. Astana, 2017. http://stat.gov.kz.

Of the small enterprises in the transport and warehousing sector, 94% are in private
ownership and only 5.6% of them were created with foreign capital. Among large
enterprises the share of public companies is 9.8%. Over 90% of freight transport is
carried out by private entrepreneurs with 1-2 vehicles, and only 10% of vehicles
belong to transport companies (table 2.24).
Table 2.24: Development of transport enterprises
2012 2013 2014 2015 2016 2017

Number of transport enterprises 1 269 1 486 1 644 1 710 1 817 1 968

Among them:
Freight transport 759 833 1 077 1 036 1 125 1 240
Share of freight road transport enterprises in the total
number of transport enterprises 59.8 56.1 65.5 60.6 61.9 63.0

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
During the 2012-2017 period, the number of transport enterprises as a whole
increased by 55.1% while road transport specific enterprises increased by 63.4%.
An important challenge for road transport is increasing the size of road transport
companies to improve their competitiveness.
In 2016, 3,180.7 million tonnes of cargo were transported by road vehicles, with a
cargo turnover of 163.3 billion tonne-kilometers. Compared to 2015, the volume of
transport of goods increased by 0.2%, and turnover by 0.9%. Road transport accounts
for 99.6% of passenger transport. For many regions of Kazakhstan, road transport is
the only form of transport.
In 2017, 3,322.3 million tonnes of cargo were transported, which is 10.1% above the
level of 2016. In 2017, the share of road transport accounted for 84.2% of the total
volume of transported goods.

46
 ROAD TRANSPORT IN KAZAKHSTAN

Table 2.25: Volumes of goods and freight turnover in road transport

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Transported c
argo, luggage,
freight
millions of
tonnes 2 124.2 2 188.7 2 103.3 2 439.4 2 974.9 3 231.8 3 508.0 3 749.8 3 733.8 3 729.2 3 946.1
Including:
By road 1 667.4 1721.0 1 687.5 1 971.8 2 475.5 2 718.4 2 983.4 3 129.1 3 174.0 3 180.7 3 322.3
Turnover,
tkm. 350.5 369.7 337.0 385.3 448.8 478.0 495.4 554.9 546.3 518.6 564.0
Including:
By road 61.5 63.5 66.3 80.3 121.1 132.3 145.3 155.7 161.9 163.3 166.1

Source: Transport in Kazakhstan. 2007-2017. Statistical collection. Astana.

http://stat.gov.kz.
Over the past 10 years, carriage of goods by road has continued to grow. In 2017, it
increased in comparison to 2010 by almost 1.7 times. The growth of transport of
goods in the period under review took place due to the economic recovery of the
country, as well as the relevance and attractiveness of this mode of transport. An
extensive road network facilitated this growth.
In 2017, the turnover of road transport declined slightly compared to the previous
year (0.9%) and amounted to 166,146.1 million tkm. At the same time, compared
to 2010, it increased by more than two times. Over the previous seven years
(2003-2010) it also grew by two times. The average transport distance travelled in
2010 was 41 km, and in 2017 it amounted to 49 km showing that goods are
transported mainly small distances by road.
The largest volumes of transport of goods by road are in the Karaganda and East
Kazakhstan regions (table 2.26). These areas have the second and third largest levels
of regional GDP: 3,712.1 and 2,793.9 billion tenge respectively.
Table 2.26: Volumes of carriage of goods by road in the regions, millions of tonnes
2010 2011 2012 2013 2014 2015 2016 2017

Kazakhstan 1 971.8 2 475.5 2 718.4 2 983.4 3 129.1 3 174.0 3 180.7 3 322.3

Akmola region 95.8 112.4 112.6 121.5 121.3 120.3 113.1 116.1
Aktobe region 41.0 54.5 58.1 62.2 63.6 70.1 76.3 76.8
Almata region 116.6 142.7 158.1 159.0 951.9 167.2 179.0 181.1
Atyrau region 52.2 71.5 72.4 82.6 82.1 75.7 75.0 75.9
West Kazakhstan region 30.0 33.8 35.7 38.8 39.9 39.5 39.4 39.3
Zhambyl region 56.0 70.5 80.4 88.4 88.9 91.3 91.3 100.1
Karaganda region 444.0 551.1 619.7 676.7 719.2 709.9 727.5 795.5
Kostanay region 221.5 268.0 275.6 299.7 297.3 294.9 277.3 291.5
Kyzylorda region 66.3 95.5 98.4 106.1 107.2 99.0 96.9 104.6
Mangystau region 136.9 182.0 203.7 211.1 214.0 225.3 216.4 236.5
Turkestan region 77.5 106.5 123.8 133.0 145.4 155.0 158.7 ƽ
Pavlodar region 57.8 70.2 76.6 83.3 91.8 93.6 97.7 88.6
North Kazakhstan region 40.0 46.0 46.1 49.3 49.9 49.7 48.2 51.4

47
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

2010 2011 2012 2013 2014 2015 2016 2017

East Kazakhstan region 327.1 417.9 476.6 553.3 595.1 598.3 581.9 600.2
Astana City 66.7 97.2 112.6 124.1 136.7 142.5 142.6 ƽ
Almaty City 142.4 155.6 168.3 194.4 216.8 232.1 252.2 254.5

Source: Transport in Kazakhstan. 2010-2017. Statistical collection. Astana.

http://stat.gov.kz.
The Atyrau and Pavlodar regions are leaders in terms of cargo turnover. These two
regions account for almost 56% of total freight turnover. The average transport
distance in the Atyrau region is 357 km and in Pavlodar 264 km. These goods are
transported to/from the Russian Federation, with which Kazakhstan has the greatest
volume of trade (table 2.27).
Table 2.27: Turnover of road transport in the different regions, millions of tonnes
2010 2011 2012 2013 2014 2015 2016 2017

Kazakhstan 80 260.6 121 074.1 132 297.3 145 347.1 155 665.6 161864.7 163 262.7 166 146.1
Akmola region 2 827.7 4 057.7 4 426.4 4 768.1 4 996.4 5 010.5 4 992.6 5 265.2
Aktobe region 3 109.7 4 258.1 4 784.8 5 265.1 5 778.7 6 114.9 6 126.1 6 409.3
Almata region 4 770.4 5 816.3 6 220.6 6 874.7 7 476.9 7 480.9 8 042.2 7 887.7
Atyrau region 6 748.3 13 370.2 13 886.6 18 282.3 18 089.0 18 933.9 15 511.7 12 850.4
West Kazakhstan
region 1 539.2 2 129.2 2 425.4 2 633.6 2 722.3 2 721.7 2 906.0 3 099.6
Zhambyl region 1 707.7 2 247.0 2 477.8 2 726.5 2 731.5 2 733.4 2 735.1 2 961.0
Karaganda region 5 610.4 7 406.1 8 441.4 9 664.6 10 055.2 9 871.5 10 355.1 10 843.1
Kostanay region 5 538.8 8 257.2 9 237.1 9 883.0 10 119.6 10 701.1 10 527.5 11 413.7
Kyzylorda region 9 071.1 13 122.1 13 791.8 14 106.5 14 107.0 14 123.2 13 877.6 13 905.2
Mangystau region 1 990.7 4 284.9 4 846.5 5 885.7 6 423.7 7 252.5 6 484.2 6 935.9
Turkestan region 4 510.0 6 370.7 7 123.9 7 617.0 8 35.3 9 115.5 9 101.5 x
Pavlodar region 7 917.7 14 312.7 16 152.8 15 640.1 16 772.6 18 083.5 19 661.5 19 029.3
North
Kazakhstan
region 2 808.0 3 199.3 3 215.4 3 223.3 3 222.9 3 345.0 3 445.9 3 712.2
East Kazakhstan
region 7 160.8 10 383.2 11 245.0 13 087.7 14 325.5 14 478.9 15 220.2 16 078.6
Astana City 3 562.4 5 826.6 6 427.0 6 821.8 7 873.9 10 403.9 10 570.7 x
Almaty City 11 387.7 16 038.8 17 899.7 18 867.3 21 732.8 21 494.5 23 704.6 27 482.8

Source: Transport in Kazakhstan. 2010-2017. Statistical collection. Astana.

http://stat.gov.kz.
Despite the improvement in the quality of roads and the construction of new
highways, traffic density is growing at a slow pace and varies significantly by region
(table 2.28).

48
 ROAD TRANSPORT IN KAZAKHSTAN

Table 2.28: Density of traffic by region

Millions of tkm/1 km

2012 2013 2014 2015 2016 2017

Kazakhstan 1.4 1.5 1.6 1.7 1.7 2.0

Akmola region 0.5 0.6 0.6 0.6 0.6 0.7
Aktobe region 0.8 0.8 0.9 0.9 0.9 1.2
Almata region 0.7 0.7 0.8 0.8 0.9 0.9
Atyrau region 3.5 6.0 5.9 6.2 5.1 5.7
West Kazakhstan region 0.4 0.4 0.4 0.4 0.4 0.9
Zhambyl region 0.5 0.5 0.5 0.5 0.5 0.6
Karaganda region 1.0 1.1 1.1 1.1 1.2 1.3
Kostanay region 1.0 1.0 1.2 1.2 1.1 1.8
Kyzylorda region 4.1 4.2 4.2 4.2 4.1 4.9
Mangystau region 1.9 2.3 2.5 2.8 2.4 2.9
Turkestan region 1.0 1.1 1.2 1.3 1.3 1.3
Pavlodar region 2.9 2.8 3.0 3.2 3.6 4
North Kazakhstan region 0.4 0.4 0.4 0.4 0.4 0.5
East Kazakhstan region 1.0 1.1 1.2 1.2 1.3 1.5

Source: Based on the data in tables 2.2 and 2.27.

The density of traffic grew mainly on roads of international importance in the
direction of the Russian Federation through the Pavlodar and Atyrau regions, as well
as towards the ports of Aktau and Kuryk through the Mangystau and Atyrau regions.
In the different regions of Kazakhstan, the distribution of freight transport was
extremely uneven, due both to the difference in the economic performance of the
regions and investments in freight transport and infrastructure. Over the past
14 years, the distribution of regions of Kazakhstan in terms of freight transport has
remained the same. The leading position is held by the Karaganda and East
Kazakhstan regions. Almost all areas have maintained their position in the ranking.
All regions were able to double the volume of goods transported during the period
under review.

49
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Figure 2.22: Transport of goods by road in a breakdown by regions,

thousands of tonnes
1000000
800000
600000
400000
2017
200000
2010
0
2003

Source: Transport and communication in Kazakhstan 2000-2003. Statistical collection.

Almaty. 2004. Transport in Kazakhstan 2013-2017. Statistical collection. Astana, 2018.
http://stat.gov.kz.
Figure 2.23: Numbers of trucks in a breakdown by region
60000
50000
40000
2003
30000
2010
20000
2017
10000
0

Source: Transport and communication in Kazakhstan 2000-2003. Statistical collection.

Almaty, 2004. Transport in Kazakhstan 2013-2017. Statistical collection. Astana, 2018.
http://stat.gov.kz.
However, the comparison of the data in figures 2.22 and 2.23 indicates that the
volume of transport does not always correlate with the fleet of vehicles. For
example, in 2017 as in 2010, the Karaganda region had the largest volume of traffic,
but the number of vehicles in this region was more than two times lower than in the
Almaty region, which had traffic volumes four times smaller. In addition, there is no
information about the place of registration of vehicles carrying out freight transport.
Analysis of the average transport distance of 1 tonne of freight shows that it is small.
In 2017 it was only 5 km (table 2.29).

50
 ROAD TRANSPORT IN KAZAKHSTAN

Table 2.29: Average transport distance of 1 tonne of freight by regions

2012 2013 2014 2015 2016 2017

Kazakhstan 48.7 48.7 49.7 51.0 51.3 50.0

Akmola region 39.3 39.2 41.2 41.7 44.1 45.3
Aktobe region 82.4 84.6 90.9 87.3 80.3 83.4
Almata region 39.3 43.2 46.8 44.7 44.9 43.6
Atyrau region 874.8 221.3 220.3 250.0 207.0 169.3
West Kazakhstan region 67.9 67.9 68.2 69.0 73.7 79.0
Zhambyl region 30.8 30.8 30.7 29.9 30.0 29.6
Karaganda region 13.6 14.3 14.0 13.9 14.2 13.6
Kostanay region 33.5 33.0 36.7 36.3 38.0 39.2
Kyzylorda region 140.2 133.0 131.6 130.0 133.1 132.9
Mangystau region 23.8 27.9 30.0 32.2 30.0 29.3
Turkestan region 57.5 57.3 58.1 58.8 57.3 56.9
Pavlodar region 210.9 187.8 182.7 193.3 201.3 214.7
North Kazakhstan region 69.7 65.4 64.6 67.3 71.5 72.3
East Kazakhstan region 23.6 23.7 24.1 24.2 26.2 26.8
Astana City 54.4 55.0 57.6 73.0 74.2 59.6
Almaty City 106.4 97.1 100.2 92.6 94.0 108.0

Source: Based on the data in tables 2.26 and 2.27.

Comparison of data from figure 2.22 and table 2.29 shows that the greater the
volume of traffic, the shorter the distance of cargo transport, and vice versa. For
example, the largest volumes of traffic were in the Karaganda and East Kazakhstan
regions but these regions have the smallest distances for the carriage of goods.

2.2.4 Transport of goods in international traffic

Research undertaken during this analysis suggest that the role of road transport in
Kazakhstan will increase, especially when operators are provided with high-quality
and flexible logistics services. Road transport should be considered as an addition to
rail transport and not as a direct competitor. In particular, the areas of application
of road transport are:
x Cross-border trade in small volumes;
x Long distance transport where there are no railway lines or they cannot provide
efficient services for certain goods (perishables, high value, etc.); and
x As a component in an intermodal rail transport system. The section by road
connecting the consignor (consignee) and the intermodal terminal or logistics
centre could be hundreds or even thousands of kilometers. This is especially
true for Kazakhstan.
The latter option is the most important from the point of view of supply chains and
increasing the competitiveness of EATL. In order to achieve the efficiency of road
transport over long distances, it is important to ensure consistent weight and
dimension parameters for trucks along the main routes.

51
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Data on the carriage of goods by road shows that goods are mostly transported in
the national, regional and urban context. The volumes of road transport in
international traffic are negligible and not more than 0.1% (table 2.30).
Table 2.30: Volume of road transport of goods by type of journey
2013 2014 2015 2016 2017
Transported cargo, luggage, freight,
thousands of tonnes 2 983 350.1 3 129 109.7 3 174 021.8 3 180 655.7 3 322 267.3
Including types of journey:
International 1 119.8 1 277.8 906.6 904.1 3 323.2
In countries of the CIS 969.2 808.4 730.4 - -
In countries outside the CIS 150.7 469.4 176.2 - -
Transit - - - 19.0 61.4
National 18 677.6 19 732.0 20 619.5 23 316.2 18 234.4
Regional 14 450.7 18 132.0 14 774.5 10 737.8 ƽ
Urban 46 807.8 48 459.0 41 352.8 48 047.0 ƽ

Source: Transport in Kazakhstan 2013-2017. Statistical collection. Astana, 2018.

http://stat.gov.kz.
The main reason is that the carriage of goods in international transport is carried
out mainly by rail, as it is the most efficient means of transport in terms of costs. In
addition, Kazakhstan does not have enough modern trucks that comply with Euro-4
and Euro-5, not to mention Euro-6.
Higher value, perishable and other urgent cargoes are transported by road
transport. The largest share of cargoes in international transport by road in
Kazakhstan are construction materials (over 30%) and products of plant and animal
origin, food and others (almost 35%) (table 2.31). However, the transport of goods
is carried out mainly over small distances, for which rail transport is not efficient.
Table 2.31: Goods transported by road, by type
2012 2013 2014 2015 2016

Transported cargo,
freight, thousands of
tonnes 54 395.3 100.0 81 055.9 100.0 87 600.8 100 77 653.4 100.0 83 005.1 100.0
Building materials 13 884.5 25.5 17 997.8 22.2 19 974.4 22.8 20 814.0 26.8 26 437.9 31.1
Ores of non-ferrous
metals 10 121.8 18.6 11 215.5 13.8 9 991.9 11.4 9 830.1 12.7 9 855.3 11.6
Coal 1 348.4 2.5 1 501.9 1.9 3 384.7 3.9 5 387.2 6.9 7 782.8 9.2
Crude oil 2 848.1 5.2 2 512.2 3.1 2 341.6 2.7 4 348.3 5.6 2 910.6 3.4
Ferrous metals 64.3 2.3 490.7 0.6 1 125.0 1.3 1 097.1 1.4 1 043.8 1.2
Grain 1 511.5 2.8 1 412.9 1.7 1 310.2 1.5 1 165.1 1.5 9 81.5 1.2
Other goods 22 557.9 41.5 4 2862.6 52.9 46 670.6 53.3 32 528.6 41.9 30 253.6 35.6
Transport of dangerous
goods 397.1 0.7 1 135.0 1.4 263.0 2.4 1 421.6 1.8 2 953.3 3.5
Carriage of goods in
containers 51.8 0.1 73.7 0.4 82.2 0.4 445.0 2.1 761.7 2.9

Source: Transport in Kazakhstan 2012-2016. Statistical collection. Astana, 2017.

http://stat.gov.kz.

52
 ROAD TRANSPORT IN KAZAKHSTAN

Only a small amount of goods is transported in containers, which discourages the use
of intermodal transport. However, analyzing the growth of transport in containers,
over the past five years, it can be seen that it has increased by 29 times.
In Kazakhstan’s general commodity trade the export of raw materials
dominates: mineral products (70.2%) as well as metals and metal products (18.9%).
Products of animal and vegetable origin account for only 6.3%. Therefore nearly 90%
of goods exported by rail are not suitable for container transport.
The main import commodities are: machinery, equipment, vehicles (34.7%); mineral
products (14.9%); products of the chemical industry (12.5%); metals and metal
products (10.7%) and products of animal and vegetable origin (9.3%).
The main share of import traffic from European countries was by foreign carriers
from Belarus, Ukraine, the Russian Federation and the Baltic countries. In
Kazakhstan there are more than 400 companies that work in international road
transport. But Kazakhstan carriers are being forced out of the international market
for transport services by the inadequate technical condition of their vehicles, as well
as due to the creation of artificial barriers to Kazakhstan's carriers in other States.
Measures taken to increase the competitiveness of domestic carriers will lead to an
increase in the share of Kazakhstan carriers in the international freight market by
2020 to 50%. One of the important aspects of the increase in the share of domestic
carriers in the market for international road transport services is the development
of the market for forwarding services.
In the future, it will be necessary to take measures to prevent the decline of
domestic carriers’ share in international cargo transport as well as the reduction of
quotas to/from third countries. This will allow Kazakhstan carriers to take
a dominant position when shipping to/from the countries of Central Asia. To address
these important issues, it is necessary to increase the number of vehicles that meet
international standards.
Along with problems of a technical nature, transit through Kazakhstan is faced with
challenges of an institutional nature related to unwarranted delays and procedural
complexities at customs and border controls. This is something that can be
addressed by Kazakhstan.
In recent years, China’s economic growth has shifted from its eastern provinces to
the western and central provinces, which are well positioned for rail transport across
Kazakhstan. In accordance with the development programme “Western China
Development Planning 2011-2015” for the development of the western and central
regions of China it was planned to invest up to US$ 1 trillion. The accelerated
development of the western provinces of China will contribute to an increase in
freight traffic through Kazakhstan.
The increase in transit flows and increased demand for high-speed container
trains has resulted in the need for simplification of customs control and non-tariff
regulations. Customs clearance on the borders of Kazakhstan has the
following advantages:
x VAT on imported goods in Kazakhstan is only 12%;
x Customs duties on many goods in Kazakhstan are lower than in other countries
of the EEU after the entry of Kazakhstan into the WTO;

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

x Customs clearance at the Kazakhstan-China border is quick due to a shift of

emphasis in customs control from registration procedures to the stage of post-
control (after the release of the goods for free circulation). This is consistent
with the generally accepted world practice. As a result there has been a
significant increase in throughput at customs posts;
x From February 2016 for goods transported through Kazakhstan from the
Chinese province of Xinjiang, which does not have its own border with the
Russian Federation, there is a simplified mode of customs clearance without
the need for customs declaration and customs inspection. Previously, all goods
transported from Xinjiang to the Russian Federation had to stop in Kazakhstan
for customs inspection. Now the trucks only need to be registered to transit
through Kazakhstan; 8
x In April 2016, after a three-year interruption, the transit corridor through
Kazakhstan for exports from the Russian Federation to China opened again.
Russian carriers have received a special quota for the transit of Russian cargoes
through Kazakhstan. The special route for transit runs through the border
crossing point in the Altai region. 9 In addition, an important advantage for
transit of goods from China via Kazakhstan is the high speed of delivery.
Overland transport of goods from China to Moscow by road and rail with
customs clearance through the Kazakhstan-China border is 15-20 days faster
than shipping the same cargo through ports in the Baltic States and
St. Petersburg.
All of this significantly reduces the costs of customs clearance of goods imported
from China to Kazakhstan, which increases the attractiveness of the country for
transit transport.
The establishment of the EEU contributes to the creation of an effective transport
corridor linking China with Europe through Kazakhstan, Kyrgyzstan and the Russia
Federation, and through the simplification of customs procedures, as EEU customs
controls are only conducted at the external borders of the Union on the borders with
China and the European Union.
To expand freight transport it is necessary to continue drawing up intergovernmental
agreements with foreign States which provide mutually beneficial conditions for the
carriage of goods.
It should be noted that the tariffs for road transport in the period 2012-2016 have
remained practically unchanged.The tariff increased by 10.4% compared to the
previous year in 2017. This is due to the growth in traffic (table 2.32).

8
http://ekd.me/2016/02/kz-transit/.
9
http://inier.ru/blog/inier/15/.

54
 ROAD TRANSPORT IN KAZAKHSTAN

Table 2.32: Tariffs for cargo transport as an index

2012 2013 2014 2015 2016 2017

Cargo transport 115.9 102.4 113.6 125.9 104.6 106.8

including:
Rail 114.8 101.7 105.7 120.8 103.9 100.9
Road 105.0 101.4 103.2 98.4 101.6 110.4
Pipeline 118.5 103.3 124.2 135.2 105.6 106.2
Inland water 104.5 100.4 103.1 99.5 100.0 101.7
Air 104.3 100.0 100.0 100.0 122.3 106.8

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
The study on the cost of carriage of goods by road shows that, on average in
the European Union, Kazakhstan, Belarus and the Russian Federation, the cost per
kilometer is approximately the same. 10 In the European Union it is 0.660 Euro/km,
in Kazakhstan 0.692 Euro/km, in the Russia Federation 0.685 Euro/km and in Belarus
0.682 Euro/km. Focusing on the structure of the cost, the income of the driver and
the cost of fuel are the highest in the European Union at 21% and 29%, respectively.
The overhead costs in European Union countries are the lowest at 28%. The cost of
repairs, as well as other direct costs are virtually the same in all the countries
(figures 2.24-2.27).
Figure 2.24: Structure of the cost of freight transport in European Union countries

Source: Transit potential of the Republic of Belarus: assessment and development.

Minsk, 2017.

10
Transit potential of the Republic of Belarus: assessment and development. Minsk, 2017.

55
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Figure 2.25: Structure of the cost of freight transport in Kazakhstan

Source: Transit potential of the Republic of Belarus: assessment and development.

Minsk, 2017.
Figure 2.26: Structure of the cost of freight transport in the Russian Federation

Source: Transit potential of the Republic of Belarus: assessment and development.

Minsk, 2017.
Figure 2.27: Structure of the cost of freight transport in Belarus

Source: Transit potential of the Republic of Belarus: assessment and development.

Minsk, 2017.

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 ROAD TRANSPORT IN KAZAKHSTAN

In the conditions of intense international competition, relevant state bodies need to

develop flexible transit tariff policies that incentivise the movement of transit cargo
through Kazakhstan rather than through neighbouring countries. With the expansion
of regional trade and the creation of attractive conditions for transit business,
Kazakhstan should expect the arrival of foreign providers of logistics services.
National rules for freight transport in Kazakhstan need to be closer aligned to
international standards in order to attract interested partners to take advantage of
transit through Kazakhstan.
To promote the development of international road transport in the customs union of
the Russian Federation, Belarus and Kazakhstan, the permit system was cancelled
for all types of transport in 2015. This concerns bilateral transport performed in
transit through the territory of the three States by carriers resident in the Union, as
well as transport to/from third countries, but within the territory of the EEU. For
example, a Kazakhstan carrier can carry goods from Belarus to the Russian
Federation without a permit. Within the three States no permit is required for
transport. For third countries a phased liberalization has been agreed. Quotas for
transport to and from third countries are still in operation.
Fixed stages have been set out for the introduction of cabotage in the road transport
of goods:
x The first stage ended on 31 December 2017. In this stage, carriers registered
in the Russian Federation, Belarus, Armenia and Kyrgyzstan, after completion
of international carriage of goods by road from a non-member State of the
Union, had the right to perform one cabotage operation within the territory of
the Union upon return to the State of registration. In this stage, when carrying
out cabotage, unloading had to be carried out within three calendar days of
the completion of international transport in the member State in which the
cabotage was carried out.
x In the second stage (1 January 2018 – 31 December 2019), EEU carriers have
the same rights as in the first stage. However, when carrying out cabotage in
road transport of goods, unloading must be completed not within three
calendar days, as in the first stage, but within seven calendar days after the
completion of international transport in the member State in which the
cabotage is carried out.
x In stage three (1 January 2020 – 31 December 2024), Armenia, Belarus,
Kyrgyzstan and the Russian Federation grant the right to carriers registered in
the territory of the EEU, after completing the international carriage of goods
by road in the territory of another member State, to perform one cabotage
operation in road transport of goods between points located in other States of
the EEU, upon return to the State of registration. In this stage, when carrying
out cabotage, unloading must be completed within seven calendar days of the
completion of international transport in the member State in which cabotage
is carried out.

57
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

x In the fourth stage, after 1 January 2025, the EEU member States grant the
right to carriers registered in one of the member States, after completing the
international carriage of goods by road in the territory of another member
State, to perform in the same vehicle up to three consecutive carriages of
goods between points located in that other member State. In this stage, when
carrying out cabotage in the road transport of goods, the last unloading must
be made within seven calendar days of the date of the completion of
international transport in the member State in which the cabotage is carried
out.
Kazakhstan is joining the regime of cabotage shipping within the framework of the
EEU RQO\LQWKHIRXUWKVWDJHLƭIURP1 January 2025.

2.3 SWOT ANALYSIS OF THE ROAD SECTOR AND ROAD TRANSPORT

To determine the main directions for the further development of the road sector
and road transport, a SWOT analysis has been conducted, examining the strengths
and weaknesses of Kazakhstan in terms of developing national, transit and export-
import transport, as well as the country's opportunities and the threats it may face
as a result of the implementation of the planned activities (table 2.33).
Table 2.33: SWOT analysis of the road sector and road transport in Kazakhstan
Strengths

1. There is a strategy for the development of the road sector, included in the Strategic Development Plan
of Kazakhstan until 2020.
2. The interest of Kazakhstan and neighbouring States in the development of land corridors.

3. Favourable location from the standpoint of transport accessibility to world leaders in export-import of
finished products and raw materials.

4. The presence of a network of international transport corridors connecting China with the European
Union and the EEU countries through Kazakhstan.

5. The shortest overland route from China to the huge Russian market passes through Kazakhstan.

6. Transport corridors linking the Russian Federation with Kyrgyzstan, Tajikistan, Uzbekistan and
Turkmenistan pass through Kazakhstan.

7. A key transport corridor connecting China with Uzbekistan passes through Kazakhstan.

8. The huge reserves of various types of mineral products which require good roads for their transport.

9. A high level of cooperation with Russian enterprises in the development of transport links and logistics.

10. Steady growth in freight transport by road.

11. China's desire to significantly increase the volume of freight transport by land, including through
Kazakhstan.

12 Goods, once they have passed customs clearance in Kazakhstan, are transported through the territory of
the EEU without being subject to internal customs transit procedures.

13 A competitive level of tariffs for the delivery of transit cargo in intermodal transport (sea-road
transport).

14 China gives preference to Kazakh road carriers for the export of Chinese goods.

15. Simplified customs clearance of goods transported through Kazakhstan from the Chinese province of
Xinjiang.

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 ROAD TRANSPORT IN KAZAKHSTAN

Weaknesses

1. The difficult terrain in some regions of the country hinders the construction of highways and requires
large financial investment.
2. The large financial investments required for the construction and reconstruction of roads reduces the
capacity to maintain and repair existing roads with the limited financing for the road sector.

3. A significant number of local roads with low traffic density consume financial resources channeled into
the road sector.
4. Accelerated ageing of the road infrastructure due to increased traffic density, especially heavy
vehicles.

5. Inadequate transport links in the west-east direction increases the distance travelled and the cost of
delivery of goods.

6. Absence of systemic management of transport corridors.

7. Undeveloped transport infrastructure in the regions.

8. Low level of income of transport companies and the population in general, and an insufficient number
of high-quality and alternative roads make it difficult to widely introduce toll roads.

9. Lack of modern technologies for the maintenance and repair of road surfaces.

10. Lack of skilled workers and specialists in the road sector.

11. Low quality of roads reduces the speed of delivery of goods, increasing the cost of transport.

12. Low level of freight forwarding services in road transport.

13. Small number of large trucking enterprises capable of carrying out large volumes of cargo transport on
regular routes.

14. Low percentage of carriers that are members of the Union of International Road Carriers of Kazakhstan
“KazATO”, which indicates their weak financial position.

15. Transport companies are not customer-oriented and offer a limited range of services.

16. Depreciation of motor vehicles owned by Kazakhstan carriers and small share of environmentally
friendly vehicles.

17. Low share of combined transport.

18. The large territory of the country makes it difficult to effectively control the work of foreign road
carriers.

19. Inadequate number of measuring devices of weights and dimensions of vehicles on highways.

20. Length of time of customs controls by Kazakh borders.

21. The high percentage of road accidents.

Opportunities

1. The high growth rates of the economies of China and South-East Asian countries could contribute to an
increase in transit cargo flows through Kazakhstan.

2. Expansion of toll roads.

3. Attracting loans for the development of the road sector.

4. Application of modern technologies for construction, maintenance and repair of roads.

5. Involvement of foreign workers and specialists in road construction.

6. Expansion of public-private partnerships in the road sector.

7. Organization of systemic management of international corridors.

8. Development of forwarding services in road transport.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

9. State stimulation of renewal of fleet of trucks.

10. State stimulation of development of international road transport by Kazakh carriers.

11. State stimulation of intermodal transport including road transport.

12. Integration within the framework of the EEU of an information system that allows electronic monitoring
of vehicle permit forms.

13. The introduction of an automated system for monitoring the movement of freight vehicles.

14. Introduction of standardized shipping documents.

15. Increase in the number of measuring devices for weights and dimensions of vehicles on the most
intensive sections of highways.

16. Limiting the movement of heavy trucks in the daytime in high temperatures in order to preserve the
road surface.

17. Increasing compliance with speed limits to reduce the number of road accidents.

Threats

1. The increase in the density of traffic along international corridors and the increasing demands of society
for higher quality roads require increased funding for the road sector with the limited financial capacity
of the State.

2. High interest rates on debts.

3. Limited interest of private businesses in participating in public-private partnerships in the road sector
and road transport.

4. Increased demand for fleet renewal in combination with limited financial resources at the disposal of
the State and the private sector.
5. Limited access to loans for the purchase of vehicles by small and medium-sized enterprises, as well as
by private individuals.

6. The development of the railway and road sectors in the Russian Federation will reduce the flow of
goods through Kazakhstan.

7. Danger to freight transport posed by difficult meteorological conditions.

2.4 RECOMMENDATIONS FOR THE DEVELOPMENT OF THE ROAD SECTOR AND

ROAD TRANSPORT

This chapter outlines the main attributes and problems in the road sector and road
transport in Kazakhstan. Based on this and the SWOT analysis, the following
recommendations can be made.

2.4.1 For the road sector

x In a market economy, the road network should develop as an independent

business structure on the basis of public-private partnerships for the
construction and reconstruction of certain sections of highway;
x Make efforts to meet the expectations of the public regarding the quality of
roads and traffic safety;
x Promote the integration of Kazakhstan's road network into Euro-Asian transport
corridors to increase freight flows, ensure the high speed of delivery of goods,
timeliness, accessibility and reliability of transport;

60
 ROAD TRANSPORT IN KAZAKHSTAN

x Continue the construction of new sections of highway and engineering facilities

to solve the problems of interregional road transport and provide access to
historical, cultural and natural sites for the development of domestic and
international tourism;
x Improve mechanisms for financing road construction through public-private
partnerships and expanding the network of toll roads;
x Improve the state of public roads in accordance with regulatory and technical
requirements, taking into account the growth of traffic and axle loads;
x Expand the construction and reconstruction of access roads and bypass roads
around large cities and towns in order to reduce the negative impact of road
transport on the environment;
x Ensure the maintenance of the network of public roads to a level guaranteeing
the safe year-round passage of vehicles;
x Promote the development of roadside infrastructure and bring it into
conformity with international standards;
x Create an effective system for controlling the weight and dimensions of
vehicles used for the transport of goods; and
x Improve the level of training of engineering and management personnel.
The development of transport infrastructure in conditions of limited financial
resources should be implemented according to the following principles:
x Use internal sources of financing with national interest only. At the stage of
feasibility studies, projects should be ranked taking into account political risks
and an objective assessment of possible cargo flows;
x Co-finance projects when the interests of two or more States are affected;
x Use the political and financial support of international organizations and
interested transnational companies when there are global interests.

2.4.2 For road transport

x Continue the practice of concluding intergovernmental agreements with

neighbouring States in order to minimize the bypassing of Kazakhstan by transit
traffic;
x Ensure that all UN Transport Conventions and Legal Agreements related to the
road sector and border crossing facilitation are implemented and applied fully.
x Make efforts to provide villages and small towns with quality transport services;
x Develop public-private partnerships in the field of road transport;
x Allow for cabotage within the framework of the EEU in the near future;
x Increase the share of Kazakhstan carriers in the national market of
international road transport by 2020 to 50% by reducing quotas for foreign
carriers and developing forwarding services;
x Increase the fleet of vehicles suitable for the transport of temperature-
controlled goods and increase the speed of delivery and safety of goods;

61
LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

x Reduce the share of transport costs in the cost of the final product through the
development of transport logistics;
x Develop a flexible policy of transit tariffs to attract transit traffic through
Kazakhstan;
x Improve the quality of services provided by domestic operators in the field of
international freight transport and increase the number of Euro-5 and higher
vehicles to 20,000 by 2020 to ensure the competitiveness of national carriers
in the international road transport market;
x Develop intermodal transport to reduce the cost of transport services;
x Implement an electronic document management system for the transport of
goods, both internationally and at national level.

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 RAIL TRANSPORT IN KAZAKHSTAN

3. RAIL TRANSPORT IN KAZAKHSTAN

3.1 HISTORY OF THE DEVELOPMENT OF RAIL TRANSPORT IN KAZAKHSTAN
Rail transport is of strategic importance for Kazakhstan. The special geographical
conditions of the country, the vastness of its territory, the absence of direct access
to the sea, the large reserves of raw materials, as well as the insufficient
development of road infrastructure are all reasons for the importance of rail
transport in the country's economy.
Given the strategic ambition of the President to establish Kazakhstan as the largest
regional transit hub, a key role will be played by rail transport and its infrastructure,
since most of the transit and export-import cargoes that cross Kazakhstan are
transported by this mode of transport.
Since the country does not have access to the sea, the main burden in the transport
of bulk cargoes is borne by rail. The railways account for 47.2% of total freight
turnover and 6.6% of total passenger turnover in the country.
The railways of Kazakhstan began their history as a link between Russia and its south-
eastern provinces. The first railway was built in 1893. It linked Uralsk with Saratov
and Central Russia and was named the Ryazan – Ural Railway. In 1894, a 200 km
section of the southern part of the Transsiberian was built through
Petropavlovskovsk.
Figure 3.1: History of the establishment of the railway network of Kazakhstan

Source: Kazakhstan Railways - Railway. https://ru-

railway.livejournal.com/3137242.html.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Three routes were formed: Tselinnaya, Alma-Ata and West Kazakhstan. In 1990, on
the basis of these railways, the state enterprise “Kazakhstan Temir Zholy” was
established in order to optimize the management structure and the financial
recovery of railway enterprises.
In 2002, the company “National Company Kazakhstan Temir Zholy” was established
on the basis of “Kazakhstan Temir Zholy”. The State held 100% of the shares. The
railway network was transferred to the ownership and use of the company “KTZh”.
In 2004, “KTZh” was transferred to the joint stock company “National Company
Kazakhstan Temir Zholy”. At the same time, the Programme for the Restructuring
of Railway Transport in Kazakhstan for 2004-2006 was adopted which focused on
developing competition in the industry and attracting private investment.
With the independence of Kazakhstan, the task was to create a national, integrated
railway network, as a number of regions did not have domestic transport links and
passengers and freight were forced to travel through neighbouring States. For
example, the railway links of Pavlodar with the East Kazakhstan region, as well as
Central Kazakhstan with West Kazakhstan passed through the territory of the Russian
Federation.
In 2001, the new railway line Aksu – Degelen was launched with a length of 187 km.
It was the fastest route connecting Pavlodar and the East Kazakhstan region.
In 2004, the construction of the railway line Khromtau – Altynsarino with a length of
404 km was completed. It connected the regions of Kostanay and Aktobe.
In 2008, the Charsk – Ust-Kamenogorsk railway line was put into operation with a
length of 150 km. That completed the connection of the national railway network
within the borders of Kazakhstan.
The same year “Kazakhstan Temir Zholy” started the implementation of an asset
modernization programme. More than 1,000 locomotives were upgraded,
37,500 freight and 1,500 passenger wagons were manufactured or modernized,
4,700 km of track were modernized or renovated and 1,700 km of new railway lines
were laid providing the shortest routes for transporting goods both west to east and
north to south.
The implementation of the programme allowed for the domestic production of
modern freight and passenger cars, electric locomotives, diesel locomotives and
other components for the railways which were also thenare exported to other
countries in the region.
In 2010, a new programme was adopted to develop transport infrastructure until
2014. Within the programme the following activities were implemented:
x Amendments and additions were made to international treaties and the
national legislation of Kazakhstan on rail transport issues;
x Tariffs for the transport of goods by type of transport were unified;
x A mechanism for subsidizing losses of carriers engaged in inter-regional
passenger transport was developed;
x JSC “NC KTZh” was transformed into a transport and logistics holding company
that provides rail and sea transport, transport and logistics services, and
develops road, sea and airport infrastructure.

64
 RAIL TRANSPORT IN KAZAKHSTAN

In 2012, the railway section Zhetygen - Altynkol was put into operation which opened
the second railway crossing on the border with China. The new 550 km long section
has reduced the distance from China to the southern regions of Kazakhstan and
neighbouring countries of Central Asia.
In 2014, the International Transport Corridor Uzen – Bereket - Gorgan was opened.
This corridor significantly shortens journey times from China and the countries of
the Asia-Pacific region to Iran and the countries of the Persian Gulf.
A number of infrastructure projects were implemented, which offered competitive
railway routes:
x The construction of 2,500 km of new railway lines, including Zhetygen - Khorgos
(320 km), Uzen - Bolashak (22 km), Zhezkazgan - Beyneu (988 km), Arkalyk -
Shubarkol (214 km) and Borzhakty - Ersai - Kuryk with the ferry complex.
Figure 3.2: Development of the railways of Kazakhstan
Development of railway lines
Zhezkazgan – Beyneu – 2012-2015
988 km Astana

Arkalyk – Shubarkol – 2012-2016 Arkalyk

214 km
Shalkar Zherkazgan
Zhetygen – Kazybek Bek 2015-2017
74.7 km
Dostyk

Beyneu
Kazybek
Bek Khorgos
Zhetygen
Overhaul of railway lines about
7,000 km

Source: http://docplayer.ru/30130676-Razvitie-transportnoy-infrastruktury-respubliki-
kazahstan-do-2020-goda.html.
x The Zhezkazgan - Shalkar - Beyneu line directly connected the east and west
of the country, opening up many areas of the centre. Construction was
completed in 2015. This railway extends through the Caspian and Caucasus to
Europe in the west, and in the east to the port of Lianyungang on the Pacific
Ocean. Putting these railway sections into operation increased the transit
opportunities of the Trans-Asian and Euro-Asian transport corridors passing
from China and the countries of South-East Asia in the direction of the Russian
Federation and Europe. It also provided transit opportunities through the
Caspian Sea to Azerbaijan, Georgia, Turkey and the countries of Southern
Europe; and through Turkmenistan to the countries of the Persian Gulf in the
east and the port of Lianyungang on the Pacific Ocean;
x Putting into operation the first section of the port of Kuryk.
Also, a better link between the internal regions was ensured, which contributed to
the growth of the transit and export potential of Kazakhstan.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

3.2 CHARACTERISTICS OF THE INFRASTRUCTURE AND VOLUMES OF TRANSPORT BY

RAIL

In 2016, JSC “NC KTZh” modernized 354 km of railway lines. On the rolling stock
front, 25 new locomotives, 116 passenger wagons, and 4 convoys of suburban
electric trains were purchased.
One of the limitation of the railway network of Kazakhstan is the high proportion of
single-track lines where the capacity used is 70-100%. This limits the possibility of
introducing additional freight flows and significantly reduces the speed of trains.
Another problem is the inconsistency of the condition of the Kazakh railways with
the requirements of international standards, which hinders the country's transit
potential. The growth in traffic has meant that the tracks are wearing out sooner,
further affecting performance. 11 Therefore, one of the ways to improve rail
transport is renewal and modernization of the track surface to increase speeds and
the throughput and carrying capacity of railways by introducing more wear resistant.
The advantages of this are: reduced repair costs and current maintenance of the
track (by 25-30%), increases the service life of the rails (by 15-20%) and the service
life of the sleepers (by 5-6%). Improving the reliability of the track surface
contributes to an increase in speed and reduces the need to repair wheels and
bogies.
A study of the average speed of transportation of goods through the CAREC corridors,
as well as along the railways of Kazakhstan is extremely low. The speed of traffic
decreased on automobile routes by 8.6%, and on railway routes - by almost 36%
during the period under review. In 2016, the average speed on the CAREC rail routes
was 14.3 km/h.
The average speed of a freight train in Kazakhstan is 44 kilometers per hour, while
in China, it exceeds 60 kilometers per hour. The speed of freight trains in Germany
and the United States is 50-60 kilometers per hour and about 45 kilometers per hour,
respectively. 12

11
www.kazakhstan-bern.ch/en/?page_id=379.
12
https://lenta.ru/articles/2013/02/01/trains/.

66
 RAIL TRANSPORT IN KAZAKHSTAN

Figure 3.3: Cargo transport speed along CAREC corridors

30 kmh (2020)

Souce: www.unece.org/fileadmin/DAM/trans/doc/2018/speca/S1_GS_CAREC.pdf.
There has also been a gradual deterioration of the main transport infrastructure.
The problem areas are: Aktogay - Shymkent, Aktogay – Beskol - Dostyk, Aktogai -
Mointy, Petropavlovsk - Astana, Ozinki - Saryagash, Kandyagash - Makat, Makat -
Nikeltau, Aktogai - Lokot, border of the Russian Federation – Atyrau - Beineu, Iletsk
- Zhaysan and Kyzylorda - Shiely.
At the start of 2018, the total length of the railway was 16,614 km (table 3.1).
Table 3.1: Length of railways, km
2012 2013 2014 2015 2016 2017

Regions of Kazahstan 15 333 15 341 15 341 15 341 16 104 16 614

Akmola region 1 559 1 559 1 559 1 559 1 559 1 559
Aktobe region 1 443 1 443 1 444 1 444 1 499 1 839
Almata region 1 394 1 402 1 402 1 402 1 401 1 401
Atyrau region 742 742 742 742 742 742
West Kazakhstan region 431 431 431 431 431 431
Zhambyl region 1 103 1 104 1 104 1 104 1 104 1 104
Karaganda region 1 940 1 940 1 940 1 940 2 467 2 467
Kostanay region 1 271 1 271 1 271 1 271 1 336 1 336
Kyzylorda region 755 755 755 755 871 871
Mangystau region 926 926 926 926 926 1 097
Turkestan region 552 552 552 552 552 552
Pavlodar region 925 925 925 925 925 925
North Kazakhstan region 807 807 807 807 807 807
East Kazakhstan region 1 209 1 209 1 209 1 209 1 209 1 209

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
Out of the 16,614 km of railway lines operated by JSC “NC KTZh”, 574 km in
Kazakhstan belong to other States. Furthermore, 275 km of railways owned by
Kazakhstan are located in other States. Of the railways that belong to Kazakhstan,
4,217 km are electrified and 4,900 km are two-track or multi-track.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

The Karaganda, Akmola, Aktobe, Almata and Kostanay regions have the longest
railway lines. They account for more than half of the railway network in Kazakhstan.
At the same time, these areas occupy 47.5% of the entire territory of the country.
The density of railways on territory in 2017 was 6.1 km per 1,000 km2 (table 3.2).
Table 3.2: Density of railway lines, km per 1,000 km2 of territory
2012 2013 2014 2015 2016 2017

Regions of Kazahstan 5.53 5.53 5.53 5.53 5.70 6.1

Akmola region 10.66 10.66 10.66 10.66 10.66 10.7
Aktobe region 4.80 4.80 4.80 4.80 4.95 6.1
Almata region 6.23 6.26 6.26 6.26 6.27 6.3
Atyrau region 6.26 6.26 6.26 6.26 6.26 6.3
West Kazakhstan region 2.85 2.85 2.85 2.85 2.11 2.8
Zhambyl region 7.64 7.65 7.65 7.65 7.23 7.6
Karaganda region 4.53 4.53 4.53 4.53 5.76 5.8
Kostanay region 6.48 6.48 6.49 6.49 6.48 6.8
Kyzylorda region 3.34 3.34 3.34 3.34 3.85 3.9
Mangystau region 5.59 5.59 5.59 5.59 5.59 6.6
Turkestan region 4.71 4.71 4.70 4.70 4.70 4.7
Pavlodar region 7.41 7.41 7.41 7.41 6.32 7.4
North Kazakhstan region 8.23 8.23 8.23 8.23 6.31 8.2
East Kazakhstan region 4.27 4.27 4.27 4.27 4.27 4.3

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
The density of railways does not correlate with its length in some regions. The
highest density is in the Akmola region, where the length of railways is not the
largest. The Karaganda region, which has the largest length of railways, has only an
average level of density. The northern regions of the country that are closest to the
main export-import market of the Russian Federation, as well as the southeast
regions through which Chinese exports are transported to the countries of Central
and South Asia, have the greatest densities.
Kazakhstan railways run on the Russian standard gauge of 1,520 mm.
As part of the creation of domestic transport production capacity, factories have
been constructed for the production of diesel locomotives, shunting locomotives,
freight and passenger wagons and modern electric locomotives. These activities
have allowed the growth of the number of locomotives and freight wagons to meet
the needs of the country in the transport of goods (table 3.3).

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Table 3.3: Characteristics of locomotives and wagons in Kazakhstan

2012 2013 2014 2015 2016 2017

Locomotives 1 865 1 896 1 893 1 804 1 725 1 732

Freight wagons of railway transport
service providers 66 503 65 803 60 940 59 025 56 504 54 925
Freight wagons of enterprises of
consumers of railway transport services 61 192 63 477 71 351 73 177 72 848 75 496
Average daily productivity of a freight
car, tkm net per day 7 590 8 246 8 545 8 997 9 959 9 967
Traffic speed, km/h 41.9 42.8 42.9 44.0 44.0 44.2
Turnover of the working wagon, day 5.3 5.8 5.8 5.4 5.0 5.1

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
Despite the fact that the number of locomotives and freight wagons has decreased
in recent years, the rates of use of rolling stock is growing. Therefore, it can be
assumed that the average daily productivity of a freight car and the traffic speed is
growing and the turnover of wagons is increasing.
The fleet of electric locomotives under the age of years in 2017 increased by 2.8%
compared with 2016, their number over the age of over 25 years also decreased.
Only 20.1% of the fleet of electric locomotives are up to 10 years old.
The situation with diesel locomotives is different: 36.6% of diesel locomotives are
younger than 10 years. The share of freight cars under 10 years old is 52.7%, and the
share of cars over 25 years old is 25.7% (table 3.4).
Table 3.4: Age structure of the rolling stock of public railways at the end
of the year, percentage
2012 2013 2014 2015 2016 2017

Electric locomotives 100.0 100.0 100.0 100.0 100.0 100.0

including those in service, years
up to 5 years 6.3 9.1 11.3 6.7 10.0 12.8
between 5 to 10 0.9 0.3 0.3 4.7 4.5 7.3
between 10 to 15 - 0.5 0.5 0.6 0.9 1.0
between 15 to 20 2.0 - - - - -
between 20 to 25 26.5 7.5 13.4 7.7 2.0 0.9
over 25 years 64.3 82.6 74.5 80.3 82.6 78.0
Diesel locomotives 100.0 100.0 100.0 100.0 100.0 100.0
including those in service, years
up to 5 years 24.3 30 29.5 30.1 22.9 11.8
between 5 to 10 0.8 1.6 2.8 5.6 14.8 24.8
between 10 to 15 0.04 0.22 0.3 0.8 0.8 2.1
between 15 to 20 0.8 0.03 0.03 0.1 0.1 0.1
between 20 to 25 23.6 7.1 6.3 3.9 1.0 -
over 25 years 50.5 61 61.0 59.5 60.3 61.2

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

2012 2013 2014 2015 2016 2017

Freight cars 100 100 100 100 100 100

including those in service, years
up to 5 years 37.8 41.3 41.4 41.9 28.9 30.0
between 5 to 10 9.8 11.9 15.2 22.1 22.6 22.7
between 10 to 15 6.4 5.7 5.9 5.2 14.0 13.8
between 15 to 20 0.4 0.9 2.7 3.6 6.6 7.7
between 20 to 25 18.6 11.2 6.9 13.9 1.3 0.1
over 25 years 27.0 29.0 27.9 13.3 26.6 25.7

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
Over the last 10 years, from 8.4% to 12.3% of the total volume of transported goods
was carried by rail. There has also been a gradual decrease in the share of rail
transport in the total volume of transport. Kazakhstan railways transported
387.2 million tonnes of cargo in 2017, while in 2016 it transported
338.9 million tonnes. The freight turnover in 2017 was 266.6 billion tkm, which was
11.5% more than in 2016 (table 3.5).
Table 3.5: Freight transport by rail in Kazakhstan
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Cargo,
luggage,
freight
mln. tonnes 2 124.2 2 188.7 2 103.3 2 439.4 2 974.9 3 231.8 3 508.0 3 749.8 3 733.8 3 729.2 3 946.1
Including :
railways 260.6 269.0 248.4 267.9 279.7 294.8 293.7 390.7 341.4 338.9 387.2
Share of
railways in
the total
volume of
transport 12.3 12.3 11.8 11 9.4 9.1 8.4 10.4 9.1 9.1 9.8
Cargo
turnover,
bln.tkm 350.5 369.7 337.0 385.3 448.8 478.0 495.4 554.9 546.3 518.6 564.0
Including:
railways 200.8 214.9 197.5 213.2 223.6 235.9 231.3 280.7 267.4 239.0 266.6

Source: Transport in Kazakhstan 2007-2017. Statistical collection. Astana.

http://stat.gov.kz.
The volume of goods transported in national traffic is 62.1% and in international
traffic 37.9%. The main flow of goods as exports or imports is, with the CIS countries,
almost 89% and only 1.2% is transit (table 3.6).

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 RAIL TRANSPORT IN KAZAKHSTAN

Table 3.6: Key performance indicators of rail freight transport

2012 2013 2014 2015 2016 2017

Cargo, luggage, freight million tonnes

transported 294.8 293.7 390.7 341.4 338.9 387.2
including by type of journey:
International 136.0 137.2 121.1 137.0 130.6 146.7
CIS countries 119.7 137.2 105.1 121.3 116.2 -
Transit 16.3 - 16.0 15.7 14.4 17.5
Inside the country 158.8 156.3 154.2 204.4 208.3 240.6
Cargo turnover, billion tkm 235.9 231.3 280.7 267.4 239.0 266.6
including by type of journey:
International 144.2 143.4 129.3 159.7 130.1 143.8
CIS countries 117.0 143.4 101.5 132.2 104.9 -
Transit 27.2 - 27.8 27.6 25.2 28.0
Inside the country 91.7 87.9 87.3 107.6 108.9 122.8

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
The change in volumes of freight transport and freight turnover show no clearly
defined trend. In 2015, as compared to the previous year, the indicators decreased,
and in 2017 they practically reached the level of 2015. Transit volumes and cargo
turnover are also decreasing. This is more connected with the external economic
situation than with the economic situation in Kazakhstan.

3.3 INTERNATIONAL RAIL TRANSPORT

Rail transport plays a leading role in EATL and, above all, in the intermodal services
sector. For the development of intermodal transport, railways must:
x Cooperate extensively with forwarders, operators, terminals, transport
companies and logistics providers;
x Offer competitive tariffs and be able to adjust them in accordance with the
market situation;
x Be flexible in the choice of routes and schedules; and
x Cooperate at the international level to provide long-distance services.
In international traffic, Kazakhstan's rail transport specializes in the transport of
bulk cargo such as ore, ferrous and non-ferrous metals, oil, coal, grain and grain
products, which account for more than 80% of the total volume of transported goods.
The East-West and North-South transport routes have become more competitive in
the transport services market. The main competitors for Kazakhstan railway routes
in Euro-Asian transport are sea carriers, which provide more attractive terms
(especially with regard to tariffs), as well as the Russian Railways.
The Russian Federation is intensively upgrading its international transport corridors,
especially in the Trans-Siberian direction, both technically and organizationally. The
competition became even more acute after the commissioning of the Trans-Korean
Railway in 2011, which reduces the time for the transport of Euro-Asian cargo.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

The average distance of transport of goods in the whole country and in international
traffic is quite large. For domestic traffic it is 680-780 km and for international
traffic it is 1,000-1,200 km. This shows that the transport of goods is carried out
mainly to neighbouring countries and, primarily, to the Russian Federation. The
average distance of transport of transit cargo is 1,600-1,760 km.
Figure 3.4: Average distance of transit cargo transport

Source: Based on the data in table 3.6.

In recent years, at the level of government transport policy and in the expert
community of the Eurasian Economic Union countries, the competition of two groups
of railway routes for the delivery of goods between Europe and Asia is being actively
discussed:
x The “North-South” railway corridors along the western and eastern shores of
the Caspian Sea and the Northern Trans-Siberian with its branch lines; and
x The southern corridor – TRACECA.
These corridors are part of the Euro-Asian transport network. The Russian Federation
prioritizes the development of the Trans-Siberian Railway and its branch lines, since
it is not a party to the intergovernmental commission of TRACECA. Kazakhstan is
interested in the development of both the “North-South” railway corridor and the
northern route.
Kazakhstan, together with Turkmenistan and Iran, is actively involved in the
development of the “North-South” corridor along the eastern shore of the Caspian
Sea. This direction was developed after the completion of the Uzen (Kazakhstan) –
Kyzyl – Kiyak – Bereket - Etrek (Turkmenistan) - Gorgan (Iran) railway line in 2013
with a total length of about 700 km, which is part of the international “North-South”
transport corridor. The expected cargo turnover for 2018 is more than
10 million tonnes. In the future, the cargo turnover may exceed 20 million tonnes.
The new route allows a reduction in the transport distance from north to south in
comparison with the existing route through Beynau – Turkmenabat - Serakhs of more
than 600 km, and a travel time of about two days. If the railway is fully exploited,
the project will break even within 10 years.
In turn, the Ministry of Roads and Transportation of Iran is working on the
construction of the 150 km railway section Gorgan – Gonbade – Cavus – Ince-Barun
terminal on the border with Turkmenistan.

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An additional impetus to the development of the “North-South” corridor along the

eastern shore of the Caspian Sea was the accession in 2014 of Turkmenistan to the
intergovernmental agreement on the TRACECA corridor.
Using its unique geographical position, Kazakhstan is ready to play the role of a
transcontinental and transit bridge in trade between Europe and Asia. The basis for
this is the creation of favourable conditions for international transport between
West and East and a significant improvement in Euro-Asian transport links by land,
as well as the development of logistics.
The main destination countries for transit cargo flows through Kazakhstan are the
countries of Central Asia (Uzbekistan 45%, Kyrgyzstan 20%, Turkmenistan 6%,
Tajikistan 9%, Afghanistan 5%). For the Russian Federation it is 5.6% and for China
4.5%.
The position of Kazakhstan situated between the largest trading partners, China,
Russian Federation and the European Union countries, is central to the development
of the country's transport-logistics system. According to expert forecasts, by 2020
the volume of trade between China and the European Union will increase to
US$ 1 trillion, and the total freight turnover will be about 170 million tonnes or
about 17 million TEU.
Even before 2015, transit through Kazakhstan exceeded transit through Eastern
Siberia and the Far East. In 2014, the volume of transit traffic from East Asia and,
above all, from China to the Russian Federation and Europe via Kazakhstan was
91,500 tonnes, transit through Eastern Siberia was 73,100 tonnes, and through the
Far East 5,400 tonnes.
In 2017, the situation changed. 995,500 tonnes were transported from China to the
Russian Federation and in transit through Kazakhstan and the Russian Federation,
which was 51% higher than in 2016. Furthermore, 871,000 tonnes were transported
from the Russian Federation and in transit through the Russian Federation and
Kazakhstan, which was 28% higher than the level in 2016.
In 2017, 28.2 million tonnes were transported directly from the Russian Federation
to China, which was 21% or 4.9 million tonnes higher than the level of 2016.
The main cargo transported was: timber - 16.9 million tonnes (+11%), coal -
4.5 million tonnes (growth of 6.2 times), ore – 3.1 million tonnes (-18%), cellulose –
1.3 million tonnes (+8%), and chemical mineral fertilizers – 1 million tonnes (-34%).
From China, 3.4 million tonnes were transported to the Russian Federation, which
was 40.5% or 993,000 tonnes higher than the level of 2016. The main cargo
transported was: chemicals – 551,400 tonnes (-10%), hardware – 485,200 tonnes
(+63%), ferrous metals – 282,000 tonnes (+16%) and building materials –
285,200 tonnes (-8%). 13
The Russian Federation is developing direct transport to/from China, thereby
reducing transit flows through Kazakhstan.
According to calculations of specialists, about 2% of cargo goes to China from Europe
by land. Considering that by 2020 China's trade with European countries will
be US$ 1 trillion, the land route will transport goods worth about US$ 20 billion per
year. Transit through Kazakhstan is less than transit through Eastern Siberia and the

13
About the work of OSJD. http://osjd.org/statico/public/en?STRUCTURE_ID=5190.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Far East. The volume of transit cargo transport to/from China to the Russian
Federation and Europe via Kazakhstan according to OSJD reached
1,826.5 thousand tonnes in 2017, and through East Siberia and the Far East it
amounted to 31,600 thousand tonnes. Consequently, transport of only 5.5% of transit
cargo through Kazakhstan in the direction of the Russian Federation and Europe and
back, would amount to US$ 1,100 million per year. 14
The development of container transport is a key objective of the business strategy
of JSC “NC KTZh”. The growth of container transit through Kazakhstan is largely
determined by the competitiveness of services for exports from China and European
countries with the alternative route by sea. In addition, thanks to the newly acquired
fleet of refrigerated containers, all-season transport of computer equipment from
China to Europe is now available and 24 hour monitoring, control and remote
temperature control technology has been implemented.
The availability of high-quality logistics infrastructure and services has contributed
to the growth of container traffic.
In May 2016, the first container train was successfully organized from China to
Europe through the border crossing Khorgos - Altynkol. In the near future it is
planned to arrange the passage of all container trains along this route.
The organization of container transport through the border crossing of Khorgos-
Altynkol in comparison with the route through Dostyk-Alashankou has the following
advantages:
x The Dostyk-Alashankou border crossing and adjacent areas have severe
meteorological restrictions in the autumn and winter, which makes it difficult
to handle containers and increases the delivery time;
x The performance of Altynkol station in comparison with Dostyk station is much
higher at 1,638 and 360 TEU per day, respectively;
x Reduction of distance and delivery time for consignees; and
x Lack of the possibility to consolidate and form container trains at Dostyk
station.
The potential volume of transit cargo traffic through Kazakhstan (via Dostyk and
Khorgos) could reach up to 8% or 1.4 million TEU of total China-European Union-
China trade.
Since the organization of the first container train from China to Europe, a total of
2,964 container trains had been organized by the end of 2016. Currently,
200 container trains are being organized and operated on OSJD railways on a regular
basis, and 278 trains can be dispatched when required.
Despite the small volumes of transit cargo in the whole country, the volume of
transit container shipments in trade between China and Europe in Kazakhstan in
2016 amounted to 104,600 TEU, more than twice the 2015 value (47,300 TEU).
Furthermore, 1,230 container trains passed through the border crossings of
Alashankou and Khorgos from China to Europe (an increase of 111% compared to the
same period in 2015). This was also the case with the Manchuria border crossing with

14
About the work of OSJD. http://osjd.org/statico/public/en?STRUCTURE_ID=5190;
https://forbes.kz/finances/markets/popast_vkoleyu_1.

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 RAIL TRANSPORT IN KAZAKHSTAN

311 trains (an increase of 101%), and the Erlian border crossing with 161 trains (an
increase of 106%). In 2016, 66 new container train routes were organized.
The average distance traveled by container trains in Kazakhstan is 937 km/day, and
from China to Europe 977 km/day.
Container trains have operated transit through Kazakhstan along the following main
routes:
x Chengdu (China) – Lodz (Poland) since 19 December 2012;
x Zhengzhou (China) – Hamburg (Germany) since 17 July 2013;
x Chongqing (China) – Duisburg (Germany) since 19 March 2011;
x Wuhan (China) – Pardubice (Czech Republic) since 5 June 2014;
x Wuhan (China) – Hamburg (Germany) since 1 December 2014;
x Yiwu (China) – Madrid (Spain) since 8 December 2014;
x Hefei (China) – Hamburg (Germany) since 2015;
x Lanzhou (China) – Hamburg (Germany) since 2015;
x Putian (China) – Terespol (Poland) since 2015;
x Duisburg (Germany) – Chongqing (China) since 2013;
x Hamburg (Germany) – Zhengzhou (China) since 2014;
x Hamburg (Germany) – Wuhan (China) since 2014;
x Lodz (Poland) – Chengxiang (China) since 2015;
x Madrid (Spain) – Yiwu (China) since 2014;
x Kotka (Finland) by appointment to China since 2015;
x Hamburg (Germany) – Lanzhou (China) – 32 trains (new route).
Kazakhstan, represented by “Kazakhstan Temir Zholy”, has made great efforts to
support the development of the Trans-Caspian Transport Corridor. As a result,
in 2013, in the framework of the II International Transport and Logistics Business
Forum "New Silk Road" in Astana, the heads of the NC KTZh JSC, Azerbaijan Railways
CJSC, Georgian Railway JSC signed an Agreement on the establishment of
Coordination Committee for the Development of the Trans-Caspian International
Transport Route (TITR).
In February 2014, the Coordinating Committee for the Development of TITR was
established , which included: “Georgian Railways”, “Aktau International Sea Trade
Port”, “Kazakhstan Temir Zholy”, “Azerbaijan Railways”, “Azerbaijan Caspian
Shipping Company”, “Baku International Sea Trade Port” and “Batumi Sea Port”.
The work of the Coordinating Committee has resulted in the:
x Adoption of rates for container transport and preferential tariffs for transport
of fuel oil, gas oil and grain;
x Approval of the technology for interaction between transport companies
involved in the organization of container trains on the China-Kazakhstan-

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Azerbaijan-Georgia-Turkey route with the participation of rail and sea

transport in a direct international rail-ferry service;
x Creation of a container service called “Nomad Express”; and
x Organization of three pilot “Nomad Express” container trains:
Shihezi (China) – Kishly (Azerbaijan) on 28 July 2015; Lianyungang (China) –
Istanbul (Turkey) on 29 November 2015; and Ilyichevsk (Ukraine) – Dostyk
(Kazakhstan) on 15 January 2016.
In December 2016, the participants of the Coordinating Committee from Kazakhstan,
Azerbaijan and Georgia, decided to establish the International Association of the
Trans-Caspian International Transport Route (IA TITR), an association of legal
entities registered in Kazakhstan.
In April 2016, an agreement was signed in Baku on the establishment of the
Trans-Caspian International Transport Consortium (TITC) between the railway
departments of Azerbaijan, Georgia and Kazakhstan. 15 The members of the
consortium are “ADY Express” and “ACSC Logistics” from Azerbaijan, “KTZ Express”
from Kazakhstan and “Trans Caucasus Terminals” from Georgia. “Ukrzaliznytsia”
and “Ukrferi” (Ukraine) and “Translogistic” (Moldova) subsequently became
members of the Coordinating Committee.
In order to further develop the transport corridor connecting the ports of the Caspian
and Black Seas and increase cargo flows along the trans-Caspian international
transport route, a Memorandum was signed in Astana on 15 June 2017, which is
intended to initiate the accession of the Romanian port of Constanta to the
Association. 16
The Trans-Caspian International Transport Route runs through China, Kazakhstan,
the Caspian Sea, Azerbaijan, Georgia and further through Turkey and Ukraine to
Europe.

15
http://titr.kz/en/about-the-association/consortium.
16
http://titr.kz/en/pressa/news/17-romanian-port-of-constanta-plans-to-enter-to-the-
international-association-trans-caspian-international-transport-route.

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 RAIL TRANSPORT IN KAZAKHSTAN

Figure 3.5: Trans-Caspian International Transport Route

Source:
https://azertag.az/ru/xeber/Ukrzaliznicya_stala_chlenom_Mezhdunarodnoi_associacii_Tr
anskaspiiskii_mezhdunarodnyi_transportnyi_marshrut-1047634.
The basic principles of the development of TITR are the integrity of the service from
the point of departure to final destination, including through common tariff rates,
simplification of administrative procedures and the implementation of intermodal
transport using a single consignment note.
On January 2018, representatives of the international seaports of Kazakhstan, the
Georgian international sea port of Anaklia, and the dry port “KTZE-Khorgos
Gateway” signed an agreement on the entry of the port of Kuryk into the TITC. 17
On 8 May 2018, in Baku, at a meeting of the Association, a protocol was signed that
approves tariffs for the transport of coal, cereals, oil and vegetables, as well as the
admission of two new members: Anaklia Development Consortium (Georgia) and
“NMSK “Kazmortransflot” (Kazakhstan).
In June 2018 in Almaty, at a general meeting of the TITR Association, it was noted
that TITR has huge potential for increasing freight turnover among the member
countries. 18 It was expected that by the end of 2018 the volume of transport would
reach about 1.2 million tonnes instead of the planned 700,000 tonnes.
To further develop the route, competitive tariffs approved by all TITR participants
should be fixed for a longer period. New opportunities for the growth of transport
along the route are expected with the opening of the new Baku – Tbilisi – Kars railway
and the launch of the vehicle ferry terminal at Kuryk port.

17
www.kazpravda.kz/multimedia/view/port-kurik-prinyat-v-assotsiatsiu-transkaspiiskii-
mezhdunarodnii-transportnii-marshrut/.
18
http://prs.kz/press/30428/Okolo-1-2-milliona-tonn-gruzov-vmesto-planiruemih-700-tisyach-
tonn-budet-perevezeno-po-Transkaspijskomu-marshrutu-do-konca-2017-goda/

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Kazakhstan will create conditions to facilitate the growth of cargo flows and shorten
the time for the delivery of goods on the route.
To attract cargo traffic to the route, regular container trains should be organized at
least twice a month from China to Turkey/Georgia. In addition, consideration should
be given to the use of feeder vessels capable of transporting 40-50 containers.
OSJD international transport corridors are also of great importance in the
development of international freight and passenger transport. The OSJD
International Transport Corridors 1, 2, 5, 8 and 10 pass through Kazakhstan.
The OSJD International Transport Corridors 2, 5, 8, 10 passing through Kazakhstan
are included in the EATL network. These corridors provide access to neighbouring
States, major ports, transport hubs and terminals.
OSJD International Transport Corridor 1. The corridor passes through the
territories of Poland, Latvia, Lithuania, Estonia, Belarus, Russian Federation,
Kazakhstan, Uzbekistan, China, Mongolia and the Democratic People’s Republic of
Korea. A branch of the OSJD International Transport Corridor 1 passes through
Kazakhstan. The route of the branch is Moscow – Ryazan – Syzran – Orenburg – Aktobe
– Kandyagash – Arys – Tashkent. The length of the corridor through Kazakhstan is
1,754 km.
Figure 3.6: OSJD International Transport Corridor 1

Aktobe
Kandyagash

Source:Transit potential of the Republic of Belarus: assessment and development. Minsk,

2017.
OSJD International Transport Corridor 2. This corridor in the Petropavlovskovsk -
Astana - Karaganda - Moyinty - Balkhash - Aktogay - Dostyk section coincides with
the EATL railway corridor II. The route extends more than 8,000 km from the eastern
borders of the EU with the Republic of Belarus and Ukraine, through the Russian
Federation, Kazakhstan and eastern China to the ports of Lianyungang and Shanghai.
Route II continues Pan-European Transport Corridors II and IX in the direction of Asia.
Most of this route is part of the Trans-Asian Railway network. On this route, on the
border between Kazakhstan and China, the gauge changes from 1,520 mm to
1,435 mm.

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 RAIL TRANSPORT IN KAZAKHSTAN

Figure 3.7: OSJD International Transport Corridor 2

Electrification of the railway
section Dostyk-Aktogay until 2015

Strengthening the Dostyk-

Aktogay railway line to 2015

Electrification of the
Aktogay-Mointa railway
section after 2015
Strengthening of the line
Mojynty-Sayak till 2015

Source: Prospects for the development of the infrastructure of roads and railways
included in EurAsEC transport routes. Almaty, 2011.
Corridor 2 runs through the territories of the Russian Federation, Kazakhstan, China
and Viet Nam. It serves the transport of goods between the Russian Federation and
China. The route of the corridor is as follows: Moscow – Kazan – Ekaterinburg – Kurgan
– Petropavlovsk – Astana – Dostyk – Alashankou – Urumqi – Zhengzhou – Xuzhou –
Lianyungang. The territory of Kazakhstan accounts for 19% of the length of the
corridor. The corridor provides access to the port of Lianyungang, which is open to
foreign vessels.
The corridor passes through the territory of Kazakhstan along the Petropavlovsk –
Kokshetau – Astana – Karaganda – Moyynty – Balkhash – Aktogay – Dostyk section. The
total length of the corridor is 1,900 km. It crosses the country from the border with
the Russian Federation (Petropavlovsk station) to the border with China (Dostyk
station).
Branch a of the corridor passes through Kazakhstan along the Tobol - Astana section
and is 664 km in length.
Figure 3.8: Branch a of the OSJD International Transport Corridor 2

Construction of two portable

inserts on the Karlaman-Beloretsk
section after 2015

Source: Prospects for the development of the infrastructure of roads and railways
included in EurAsEC transport routes. Almaty, 2011.
The northern, central and south-eastern economic regions of Kazakhstan are located
on the corridor. In the central economic region of Kazakhstan there is a coal mining
and metallurgical complex that uses its own raw materials. From this region oil,
ferrous and non-ferrous metals and ferrous scrap are transported to China. From the
northern economic region, iron ore concentrate, ferrous metals and ferrous scrap

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

are supplied to China. At present, there are no alternatives to transport through

Dostyk station. The implementation of the action plan for the development of Dostyk
station and the Aktogay - Dostyk section has led to an increase in the volume of
cargo transport through Dostyk station to 13.1 million tonnes.
The largest volumes of cargo transport (up to 36, 33 and 30 million tonnes) are
carried along the route of the OSJD corridor 2 Astana – Anar, Anar – Karaganda –
Sortirovochnaya, and Karaganda-Sortirovochnaya - Zharyk along sections of the
Kazakhstan railway.
In Kazakhstan, the main cargo flow of containers passes through the border crossing
with China at Dostyk – Alashankou. Despite the growth of container traffic through
Dostyk terminal, there are technological problems with handling container cargo in
specialized trains and the lack of a system for preliminary information exchange
between the railways of China and Kazakhstan. Therefore, an objective will be to
reorient container freight traffic to the Altynkol – Khorgos terminal.
On the Kazakhstan section of the OSJD corridor 2 there are container terminals at
the stations of Kokshetau, Astana, Karaganda and Dostyk. The terminals are
equipped with technology for processing large containers and have a reserve of
processing capacity.
The largest exporters of ferrous metals to Kazakhstan are the Russian regions of the
Urals and Western Siberia. They account for about 80% of all Russian exports of
ferrous metals to Kazakhstan.
Analysis of the range of export cargoes to the Russian Federation, Kazakhstan's main
trading partner, shows that basically they are comprised of general, liquid bulk and
dry bulk cargoes. Exports such items as ferrous metals and ores account for about
half of Kazakhstan's total exports. The bulk of this cargo flow is iron ore from the
Sokolovsko-Sarbaiskoye Mining and Concentration Association and the main
consumer of these products in the Russian Federation is the Magnitogorsk iron and
steel works.
Almost all the coal exported to the Russian Federation from Kazakhstan is from the
Ekibastuz basin. The largest Russian consumer regions are Sverdlovsk, Chelyabinsk
and Omsk, which account for about 95% of the total volume of coal exported from
Kazakhstan to the Russian Federation.
About a third of the volume of Russian export cargo to Kazakhstan was transported
through the railway border points of Lokot and Kartaly.

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 RAIL TRANSPORT IN KAZAKHSTAN

Figure 3.9: Volume of Russian export cargoes to Kazakhstan, through railway

border points, in percentage
20
12.7 15.5 13.1 15.7
12.1
15 9.4 10.7
10 5.8 4.9
5
0

Source: Prospects for the development of the railway transport market of the Single
Economic Space. Almaty, 2014.
The most significant flows of Kazakhstan export cargoes to the Russian Federation
pass through the railway checkpoints of Zernovaya (30.5%) on the line connecting
the Kostanai region with the South Urals region in the Russian Federation and the
Trans-Siberian Railway and the new export checkpoint of Dina Nurpeisova (31%),
which, after modernization serves the shortest route for cargo flows from West
Kazakhstan to the Russian Federation and Ukraine.
Figure 3.10: Volume of the Kazakhstani exports to the Russian Federation, through
railway border points, in percentage
35
30.5 31.0
30
25
20
15 14.2
8.8
10
3.8 4.6
5 2.9 2.7 1.5
0
Aksu Zernovaya Iletsk-1 Kirilda Dina Semiglavy Kurmakys Petropavl Lokot
Nurpisova Mar

Source: Prospects for the development of the railway transport market of the Single
Economic Space. Almaty, 2014.
The comprehensive plan for the OSJD International Transport Corridor 2 provides for
the further development of railway infrastructure, improvement of the operation of
border stations, containerization of cargo flows, informatization and the unification
of tariffs.
OSJD International Transport Corridor Transport Corridor 5. This corridor on the
Presnogorkovskaya - Astana - Karaganda - Moiynty - Balkhash - Aktogay - Dostyk
section coincides with the EATL railway corridor Route II. The corridor 5 has the
following main route: Valuiki – Penza – Kurgan – Presnogorkovskaya – Kokshetau –
Astana – Karaganda – Aktogay – Dostyk. The length is 4,618 km.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Figure 3.11: OSJD International Transport Corridor 5

Electrification of
the railway section
Dostyk-Aktogay
Strengthening the to 2015
Construction of the four Dostyk-Aktogay
main roads on the dema- railway line to 2015
Chishma section
to 2015

Construction of the Strengthening

third bridge in the of the line
Kinel-Syzran section Mojynty-Sayak
after 2015 to 2015

Electrification of the
Aktogay-Mointa
railway section after
2015
Reconstruction of the bridge on the
Syzran-Bezenchuk site to 2015

Source: Prospects for the development of the infrastructure of roads and railways
included in EurAsEC transport routes. Almaty, 2011.
Branch j of the OSJD International Transport Corridor 5: Rtishchevo – Ozinki. The
corridor then passes through Uralsk, Aktobe, Shalkar, Kyzylorda, Arys, Almaty,
Aktogay and Dostyk (4,238 km) and through Lugovaya, Bishkek to Rybachye
(322 km).
On the Almaty - Aktogay - Dostyk section, the route of corridor No. 5j coincides with
the EATL railway corridor route II.
Figure 3.12: Branch j of the OSJD International Transport Corridor 5
Strengthening the Dostyk- Electrification of the
Aktogay railway line to 2015 railway section Dostyk-
Aktogay to 2015

Strengthening of the Aktogay- Electrification of the

Almaty line 1 (1 span on the railway section Almaty-
Ush-Tobe-Sary-Ozek section and Aktogay after 2015
2 sections on the Sary-Ozek
Almay1 section) to 2015

Construction of the Saratov Strengthening of the

railway junction to 2015 Strengthening Aktogay-Almary
the line of Shu- line 1 (1 span on the
Almaty 1 section Sary-Ozek-
(construction of Almaty 1 and 4 spans
the second track on the Aktogay-Matai
on the Kazybek- section) after 2015
Zhyren - Aigyr
and Kok-Tobe-
Kemer) after Rehabilitation of the
2015 road in the Balykchy-
Chaldovar section to
Construction of the second 2015
bridge across the Volga River in
the Anisovka-Saratov section Strengthening the line of Shu-Almaty 1
(construction of the second track on the
stretch of the Saz-Cola) to 2015

Electrification of the
Bishkek-Balkykchi railway
section after 2015

Source: Prospects for the development of the infrastructure of roads and railways
included in EurAsEC transport routes. Almaty, 2011.

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 RAIL TRANSPORT IN KAZAKHSTAN

OSJD International Transport Corridor 8. The main route: Red Tomb - Gukovo - Likhaya -
Volgograd - Aksaraiskaya - Atyrau - Makat - Oasis - Karakalpakia - Naimankul - Nukus -
Uchkuduk - Navoi. The length is 1,528 km. On the Atyrau – Makat – Beyneu – Nukus section,
the route III, V, VI (branch VId) and VII coincides with the EATL railway corridor, and the
III, IV and VII routes coincide with the Shymkent - Almaty - Dostyk section.
On the OSJD corridor 8, the export products of Turkmenistan and Uzbekistan are
supplied through West Kazakhstan along the northern coast of the Caspian Sea to
Russia’s Volga region, as well as to Ukraine.
Figure 3.13: OSJD International Transport Corridor 8

Construction of the second

main roads on the Akhtuba-
Trubnaya section to 2015

Electrification of
the railway
section Pipe-
Aksareyskaya to
2015

Strengthening of the Aksaray-Atyrau-

Beineu line (Ganyushkino-Atyrau,
Strengthening of the Aksaray-
Atyrau-Makat and Makat-Kulsary and
Atyrau-Beineu line (Atyrau-
Kulsary-Beineu) to 2015
Makat and Kulsary-Beineu
sites) after 2015

Source: Prospects for the development of the infrastructure of roads and railways
included in EurAsEC transport routes. Almaty, 2011.
Branch b of the OSJD International Transport Corridor 8: Makat – Kandyagash –
Nikeltau – Kartaly (912 km).

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Figure 3.14: Branch b of the OSJD International Transport Corridor 8

Strengthening the sections of the

line of Nikeltau-Macat (163.2 km) Step-by-step increase of power
after 2015 supply to the direction of
Chelyabinsk-Orsk (Kartaly-Orsk
section) 2015-2020

Strengthening the sections of

the line of Nikeltau-Macat
(180.5 km) to 2015
Electrification of the
Makat-Kyndyagash
railway section after 2015

Source: Prospects for the development of the infrastructure of roads and railways
included in EurAsEC transport routes. Almaty, 2011.
OSJD International Transport Corridor 10. The main route is as follows: border of
Turkmenistan – Bukhara – Djizak – Khavast – Tashkent – Saryagash – Lugovaya/Bishkek
– Aktogay – Dostyk; Aktogay – Lokot – Novosibirsk – Far Eastern ports of the Primorsky
Territory of the Russian Federation. The length is 9,005 km. The length through
Kazakhstan from Saryagash to Dostyk is 1,521 km and from Saryagash to St. Lokot
2,064 km.
On the Saryagash – Shymkent – Almaty – Dostyk section, the corridor coincides with
the EATL rail corridors III, IV and VII.

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 RAIL TRANSPORT IN KAZAKHSTAN

Figure 3.15: OSJD International Transport Corridor 10

Source: Prospects for the development of the infrastructure of roads and railways
included in EurAsEC transport routes. Almaty, 2011.
The OSJD corridor 10, supplies raw materials from Western Siberia are shipped to
Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan. In the opposite direction,
agricultural products of these countries are shipped.
In order to improve the efficiency of the OSJD corridors, the participating countries
of the corridors 2, 5, 8 and 10 have agreed with the proposal of Kazakhstan to
connect the following lines:
x Iletsk – Kandyagash – Nikeltau – Tobol, as a branch of the OSJD transport
corridor 2;
x Zhetygen – Altynkol, as a branch of the OSJD transport corridor 5;
x Beineu – Uzen – Bolashak on the OSJD corridor 8; and
x Dostyk – Mointy – Zhezkazgan – Saksaulskaya – Beyneu – Aktau port on the OSJD
corridor 10.
In this regard, it was decided to update the Comprehensive Plans for improving
transport and the development of the OSJD international transport corridors 2, 5, 8
and 10 by 2020 and to make appropriate changes to the Memoranda of cooperation
in the field of technical, operational and commercial development of the OSJD
Transport Corridors.

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3.4 RAILWAY COOPERATION WITH INTERNATIONAL ORGANISATIONS

Kazakhstan is actively involved in the activities relating to the updating of the
European Agreement on Main International Railway Lines (AGC) as well as the
European Agreement on Important International Combined Transport Lines and
Related Installations (AGTC) through its participation in the varius Working Party
meetings held at UNECE. In addition, it has been actively involved in the work of the
Group of Experts on the creation of Unified Railway Law aimed at creating one legal
regime, one contract of carriage and one liability regime for freight transport
between Europe and Asia.
The UNESCAP secretariat is currently implementing the following projects:
“Development of unhindered intermodal transport services in North-East and Central
Asia with the participation of railways in order to expand the Euro-Asian transport
connections” and “Facilitation of transboundary movements for international rail
transport”.
Within the framework of these projects the following areas will be investigated:
x Determining the list of current documentation requirements for intermodal rail
transport with road and sea transport segments, as well as border crossing
procedures for rail transport;
x Analysis of best available international practices;
x Possible ways of simplifying and streamlining documents and formalities for
intermodal rail transport (including seaports and border crossings) between
participating countries of the project in North-East and Central Asia.
In April 2016, representatives of UNESCAP held a number of meetings in Kazakhstan
on the implementation of these projects with government agencies, representatives
of national railway companies and freight forwarding companies.
In 2016, the intergovernmental agreement on Dry Ports entered into force within
the framework of UNESCAP, aimed at supporting and developing dry ports of
international importance, as a means of stimulating and developing an
internationally integrated intermodal transport and logistics system in Asia and
ensuring its connection with neighbouring regions.
In light of the growing interest in mutual trade among the countries of South-East
Asia and Central Asia, the Caucasus and Europe aimed at attracting additional
volumes of cargo for rail transport and ensuring unimpeded transport, work is
continuing on cooperation between OSJD and UNESCAP in order to improve the
efficiency of rail freight between these two regions.
Kazakhstan Railways participates in the following organizations:
x Central Council of Railway Transport of the Commonwealth and Baltic States
(CCRT). The agreement was signed on 14 February 1992 in Minsk, Belarus;
x Economic Cooperation Organization (ECO). Kazakhstan joined in 1992;
x Organization for Cooperation between Railways (OSJD). The agreement was
signed by the Department of Transport and Communications of Kazakhstan on
30 May 1995 in Hanoi, Viet Nam;

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 RAIL TRANSPORT IN KAZAKHSTAN

x Transport Corridor Europe-Caucasus-Asia (TRACECA);

x Shanghai Cooperation Organisation (SCO); and
x Coordinating Transport Council (CTC);
“Kazakhstan Temir Zholy” cooperates with the following international bodies:
x United Nations Economic Commission for Europe (UNECE);
x United Nations Economic and Social Commission for Asia and the Pacific
(UNESCAP);
x Intergovernmental Organization for International Carriage by Rail (OTIF);
x International Railway Transport Committee (CIT);
x European Union Agency for Railways (ERA);
x International Union of Railways (UIC);
x Coordinating Council on Trans-Siberian Transport (CCTT); and
x International Federation of Freight Forwarders Associations (FIATA).
Kazakhstan also participates in decision-making on rail transport issues in the
Eurasian Economic Community (EEC) and the Organization of Central Asian
Cooperation (OCAC). Within the framework of these organizations, uniform
regulatory documents have been developed for international freight and passenger
transport, tariffs and international transport corridors.
Kazakhstan has bilateral and multilateral agreements on the coordination of rail
transport with neighbouring countries. Intergovernmental meetings of commissions
have been organized between Kazakhstan and the following countries: Kyrgyzstan,
Uzbekistan, Russian Federation, Iran, Turkmenistan, and Turkey. Issues concerning
the regulation of rail transport are discussed at these meetings.
Certain adjustments are needed in the work on rail transport to guide its
development in accordance with the requirements of international competition and
to attract cargo flows through the territory of Kazakhstan.

3.5 SWOT ANALYSIS OF THE RAILWAY SECTOR

The implementation of a Strategy for the development of the railway sector can
have multiple effects on the sector. In this regard, a SWOT analysis has been
conducted, considering Kazakhstans’ strengths and weaknesses in terms of the
development of rail transport, as well as the opportunities available to the country
and potential threats it may face in implementing the planned activities (table 3.7).
Table 3.7: SWOT analysis of the railway sector in Kazakhstan
Strengths

1. A strategy for the development of rail transport is included in the strategic development plan of
Kazakhstan until 2020

2. Favourable location of the country from the standpoint of transport accessibility to world leaders in the
production of finished products and consumption of raw materials

3. China's aspiration to increase the volume of cargo transport by land and, above all, by rail

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

4. Five international OSJD railway corridors pass through Kazakhstan: 1, 2, 5, 8 and 10, linking the country
to China, the Russian Federation, the European Union and Central Asian countries

5. Inclusion of four new railway routes in Kazakhstan in the network of international OSJD corridors

6. The international corridor TRACECA passes through Kazakhstan

7. Rapid development of the Trans-Caspian international transport route

8. Huge stocks of various raw materials which are suited to transport by rail

9. Rapid development of container rail transport through Kazakhstan

10. Commissioning of KTZE-Khorgos Gateway Dry portin the special free Economic Zone “Khorgos-Eastern
Gate” which has railway connections with international corridors

11. Acceptable level of transit tariffs for the delivery of goods in intermodal transport (rail – maritime –
road transport)

Weaknesses

1. The topography of some regions of Kazakhstan and the large proportion of single-track railways reduce
the speed of delivery of goods and increase the cost of transport

2. Low level of freight forwarding services in railway transport

3. A small proportion of electrified railways

4. Obsolescence of the locomotive rolling stock, especially of electric locomotives

5. Small average distance of transport of transit cargo, which increases the cost of transport

6. Insufficient railway links between some regions in the west-east direction, which increases the distance
of transport and the cost of delivery of goods

7. Difficulties in setting unified long-term tariffs on the Trans-Caspian route

8. Insufficient capacities for cargo processing and inability to form trains at Dostyk station

9. Complex meteorological conditions in the autumn-winter period at Dostyk station, which makes it
difficult to handle containers and increases the delivery time

10. The different width of the track of the Chinese and Kazakh railways, which increases the processing
time of cargo and increases the cost of transport

11. Low average speed of trains of 44 km/h

12. Low share of intermodal transport with the participation of rail, water and road transport

13. Absence of public-private partnerships in rail transport

Opportunities

1. Attracting loans for the development of the railway sector

2. Development of public-private partnerships in rail transport

3. Involvement of foreign workers and specialists in the railway sector

4. Development of freight forwarding services in rail transport

5. Expansion of production of domestic freight wagons

6. Development of leasing of domestic freight wagons

7. Stimulate the expansion of the private wagon fleet

8. Continued electrification of the railways

9. Apply the practice of flexible tariffs for transit and domestic transport over long distances

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 RAIL TRANSPORT IN KAZAKHSTAN

10. Expand the railway network in the west-east direction

11. Implement modern customs control systems for goods

12. Upgrade the capacity for cargo processing at Dostyk station

13. Increase the speed of trains

14. Stimulate the development of intermodal transport with the participation of rail, water and road
transport

Threats

1. Constant increase in the need for the renewal of railway rolling stock with limited financial resources
from the state and the private sector

2. High interest rates on external and internal loans

3. The Russian Federation's aspiration to attract imports and transit cargo flows bypassing Kazakhstan

4. Any major catastrophe in rail transport of a technogenic nature will require significant financial
investments to eliminate its consequences

3.6 RECOMMENDATIONS FOR THE DEVELOPMENT OF RAIL TRANSPORT

The completion of the construction and reconstruction of important sections of
railway corridors has made it possible to link the eastern and southern regions of
Kazakhstan with international OSJD transport corridors Nos. 1, 2, 5, 8 and 10 and to
provide access to the ports of Aktau, Kuryk and Bautino.
Figure 3.16: Railways of Kazakhstan as of 1 January 2016

Kokshau
Kostanay

Rudny

ORSk

Aktobe

Kandyagash Semey
Karagaily

Shalkar
Karazhai
Zhezkazga
Kulsary
Atyrau
Aibat

Beineu Dostyk
Tyldykorgan
Kentau Kaochaz

Zhanaozen
Turkmenabat
Taraz
Arys
Shymekent
Gorgan

Source:
www.wikidata.org/wiki/Q1069105#/media/File:Railway_Map_of_Kazakhstan_(kk).png.
In recent years, transit container transport has grown at a rapid pace in China-
Europe-China trade through Kazakhstan. In 2016, 104,600 TEU passed through
Kazakhstan which is more than two times higher than in 2015. Recently, however,
economic relations between the United States and China have worsened due to the
introduction of additional duties by the United States on a number of imported
Chinese goods. If the situation worsens, this may have a knock-on effect on freight
traffic to Europe from China.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

As set out above, ferrous metals are transported along the OSJD corridor 2 to
Kazakhstan from the Russian regions of the Urals and Western Siberia. These are
fundamental flows for the rail sector. Coal from the Ekibastuz basin is exported from
Kazakhstan to the Russian Federation. The largest Russian consumers of coal are the
Sverdlovsk, Chelyabinsk and Omsk regions. Their share is about 95% of the total
volume of coal imported from Kazakhstan to the Russian Federation. About a third
of the volume of Russian exports to Kazakhstan was transported through the railway
border points of Kartaly and Lokot.
Considering the desire of the leaders of EEU countries to develop trade within the
union, further growth of cargo flows between the Russian Federation and Kazakhstan
along the OSJD railway corridors 2 and 5 can be expected, having a positive effect
on the demand for rail services through Kazakhstan.
Based on the review contained in this chapter and the SWOT analysis set out above,
the following recommendations can be made:
x Continue electrification of the main railway lines;
x Expand the practice of building a second track on the main railway routes;
x Create conditions for the development and enhancement of the
competitiveness of national transport operators;
x Make efforts to agree with all countries of TCTC on a single competitive tariff
valid for a long period on international rail corridors;
x Develop freight forwarding services in rail transport;
x Actively use leasing to renew the locomotive and wagon fleet;
x Continue the organization of transport of cargoes by container routes from
China to Europe and back through the territory of Kazakhstan;
x Increase the transport of goods in large-tonnage containers;
x Organize high-speed freight trains for the transport of perishable goods from
south to north;
x Continue to develop transport infrastructure and introduce traffic automation
tools to increase the speed of freight trains;
x In order to rationally use the capacity of the railway infrastructure, provide for
an increase in the composition of container trains;
x Expand the free development of tariffs for rail transport on the basis of supply
and demand;
x Introduce a system for monitoring the movement of goods;
x Continue work on improving electronic information exchange between border
stations, including preliminary information on the approach of cargoes to
adjacent stations;
x Expand the transport of goods using the CIM/SMGS consignment note;
x Expand the training of personnel in the railway sector.

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 WATER TRANSPORT IN KAZAKHSTAN

4. WATER TRANSPORT IN KAZAKHSTAN

4.1 INLAND WATER TRANSPORT
Water transport in Kazakhstan is composed of maritime and inland water
(river) transport. The efficiency of using water transport depends largely on the
availability of cargoes and coordination with other modes of transport. Kazakhstan's
water transport has significant potential to participate in the transit of goods, as
the main rivers in the country flow through the territory of several States.
There are eight water basins in the country: Aral-Syrdarya, Balkhash-Ili, Irtyshsky,
Ural-Caspian, Ishimsky, Nur-Sarysu, Shu-Talasskiy and Tobol-Turgayskiy.
Figure 4.1: Water basins of Kazakhstan

R.Ishim
Aktubinsk
Tobol-Turgai R.Nura
Basin
Nura-Sarysu
Atyrau basin

Balkhash-Alakol
basin
Aktau
Aral-Syrdarya Basin

Shymkent

Source: https://ru.wikipedia.org.
The total water resources of rivers are 101 km³, of which 57 km³ originate in the
country. The rest come from neighbouring States: Russian Federation 8 km³, China
19 km³, Uzbekistan 15 km³ and Kyrgyzstan 3 km³. The inland waterways in
Kazakhstan are public and are in state ownership.
The development of water transport, like other modes of transport, is closely linked
with industrial development and the rich natural resources of the country.
Shipping in Kazakhstan is possible on rivers such as the Irtysh, Syrdarya, Ural, Ili and
Ishim. River transport has been developed in the east in the basin of the Irtysh River,
in the west in the Ural and the Caspian basin, and in the south-east in the
Balkhash-Ili basin.
The transport of goods and passengers is carried out by private companies, with a
fleet of approximately 560 vessels.
Inland water transport accounts for a small percentage of the total volume of
transport of just 0.04%. Over the past 10 years, the volume of goods transported by
inland navigation has remained practically unchanged. In 2017 it increased by 33%
compared to 2016 (table 4.1).

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Table 4.1: Volumes of freight and cargo turnover of inland water transport
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Transported
cargo,
luggage,
freight
mln. t 2 124.2 2 188.7 2 103.3 2 439.4 2 974.9 3 231.8 3 508.0 3 749.8 3 733.8 3 729.2 3 946.1
Including:
Inland water 1.3 1.2 0.9 1.1 1.1 1.3 1.1 1.3 1.2 1.2 1.6
Turnover,
bln. tkm 350.5 369.7 337.0 385.3 448.8 478.0 495.4 554.9 546.3 518.6 564.0
Including:
Inland water 0.05 0.06 0.06 0.08 0.08 0.06 0.03 0.03 0.03 0.02 0.03

Source: Transport in Kazakhstan 2007-2017. Statistical collection. Astana.

http://stat.gov.kz.
In 2017, turnover increased slightly and amounted to 26,030 million tkm. In 2017,
compared to 2010, freight turnover decreased by 1.7 times due to a decrease in the
average transport distance which in 2010 was 72.7 km and in 2017 only 18.7 km.
In 2017, 1,649,440 tonnes of cargo and 58,700 passengers were transported.
Regional cargo transport by inland waterways amounted to 1.103 million tonnes
(92.8%). Among the goods transported 667,500 tonnes (56.2%) were construction
materials.
The length of inland waterways at the end of 2018 was 4,151 km (table 4.2).
Table 4.2: Length and density of inland waterways
2012 2013 2014 2015 2016 2017

Length of all inland waterways in

common use, km 4 151 4 151 4 151 4 151 4 151 4 151
Density of inland waterways, km per
1 000 km² of territory 1.52 1.52 1.52 1.52 1.52 1.52
Density of transport by inland waterways
per 1 km length:
Cargo turnover, thousands. tkm 14.9 7.8 6.4 7.4 5.2 5.2
Passenger turnover, thousands
passenger km 448.0 223.4 285.2 104.0 282.0 282.0

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
The data in table 4.2 show that the cargo turnover in thousand tkm during the period
2012-2017 decreased almost three times, while passenger turnover decreased by
1.6 times. Considering that the length of inland waterways in this period has not
changed, the turnover of river transport has also decreased three times.
River transport is undertaken mainly by non-self-propelled cargo barges (38.6%).
Self-propelled dry cargo vessels make up only 5.3%. Since 2015, there are no self-
propelled vessels in the river fleet. Barges are mainly used for dry cargo. Only 12.1%
are used for liquids. This indicates that it is mostly bulk cargo that is transported by
river transport (table 4.3).

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Table 4.3: Number of vessels operating in inland water transport

2012 2013 2014 2015 2016 2017

Total, including: 152 151 142 141 179 171

Self-propelled cargo vessels 10 12 12 8 9 9
Dry 8 10 10 8 9 9
Liquid 2 2 2 - - -
Non-self-propelled cargo vessels
(barges) 59 54 51 53 69 66
Dry 56 52 49 51 61 58
Liquid 3 2 2 2 8 8
Tugboats 56 56 54 55 74 75
Passenger, cargo vessels 27 29 25 25 27 21

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
The proportion of self-propelled cargo vessels over the age of 27 years is 77.8%, and
the proportion aged 47 years or older is 22.2%. Despite the worn out state of the
fleet of self-propelled vessels, the fleet is not being modernized. The situation is
much better for non-self-propelled cargo vessels. In 2017, the proportion of these
vessels increased by 24.5% compared with 2015. However, in 2017, the share of
these vessels compared with the previous year decreased by 4.4%. The same
situation can be observed for tugboats, the number of which increased by 36.4% in
2017 compared with 2015 (table 4.4).
Table 4.4: Age of vessels in inland water transport, percentage
2012 2013 2014 2015 2016 2017

Self-propelled cargo vessels, including by year of

manufacture (%) 100.0 100.0 100.0 100.0 100.0 100.0
Before 1970 10 16.7 16.7 25.0 22.2 22.2
1970 - 1979 40 41.7 41.7 12.5 22.2 22.2
1980 - 1989 40 33.3 33.3 37.5 33.3 33.3
1990 and later 10 8.3 8.3 25.0 22.2 22.2
Non-self-propelled cargo vessels, including by
year of manufacture (%) 100.0 100.0 100.0 100.0 100.0 100.0
Before 1970 17.0 11.1 9.8 9.4 11.6 10.6
1970 - 1979 18.6 20.3 19.6 18.9 13.0 12.1
1980 - 1989 52.6 55.6 58.8 56.6 49.3 48.5
1990 - 1999 6.8 7.4 7.8 5.7 5.8 6.1
2000 and later 5.0 5.6 4.0 9.4 20.3 22.7
Tugboats, including by year of manufacture (%) 100.0 100.0 100.0 100.0 100.0 100.0
Before 1970 5.4 5.4 5.6 7.3 14.9 16.0
1970 - 1979 28.6 28.6 27.8 29.1 24.3 21.3
1980 - 1989 39.2 39.2 38.8 38.2 31.1 30.7
1990 - 1999 21.4 21.4 22.2 20.0 16.2 16.0
2000 and later 5.4 5.4 5.6 5.5 13.5 16.0

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

The volume of inland water transport and cargo turnover has been decreasing as
shown in the figure below.
Figure 4.2: Key performance indicators of inland water transport in Kazakhstan
70000 2000
60000
Turnover, th. tkm
50000 1500
40000
1000 Transported cargo,
30000
luggage, freight,
20000 500 th. tonnes
10000
0 0
2012 2013 2014 2015 2016 2017

Source: Based on table 4.1.

In 2017, the internal waterways of Kazakhstan transported approximately
1,649,440 tonnes of cargo. This was 16% higher than in 2016. A total of 350 thousand
tonnes was with the Russian Federation. The turnover in 2017 amounted to
26,030 million tkm. Increasing the volume of cargo turnover has been achieved
through the timely implementation of activities to establish conditions for safe
navigation on the inland waterways of Kazakhstan and the Russian Federation.
In addition, by increasing the throughput of inland waterways, the interaction of
participants in river transport and the reduction of non-physical barriers, volumes
of river transport are expected to increase by 1.5 times and ensure competition with
traditional modes of transport in regional transport.
Almost the entire volume of cargo is transported domestically and particularly
within the regions - 93.8%. In 2015 to 2016, there was no international transport of
goods by inland waterways, although in 2012 international transport accounted for
4.2% (table 4.5).
Table 4.5: Key performance indicators of inland water transport
2012 2013 2014 2015 2016 2017

Transported cargo,
luggage, freight, thousands
of tonnes 1 290.7 1 106.5 1 320.8 1 218.9 1 188.6 1 649.4
Including type of transport:
International 54.8 7.2 5.1 - - -
CIS countries 54.8 7.2 5.1 - - -
Inside the country 121.9 121.8 19.1 96.7 85.5 101.8
Regional 1 114.0 977.5 1 224.6 1 122.3 1 103.1 1 547.1
City - - - - - 0.5

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 WATER TRANSPORT IN KAZAKHSTAN

2012 2013 2014 2015 2016 2017

Turnover, mln. tkm 61.9 32.3 26.6 30.9 21.4 26.0

Including type of transport:
International 32.9 4.3 3.0 - - -
CIS countries 32.9 4.3 3.0 - - -
Inside the country 19.4 20.3 15.3 17.2 18.8 18.0
Regional 9.6 7.7 8.3 13.7 2.7 8.0
City - - - - - 0.04

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
In 2017, the volume of carriage with the Russian Federation amounted to
350 thousand tonnes. 19
Turnover during the period under review decreased by 2.4 times and there was a
sharp decline in regional transport.
During the review, the average distance of carriage of goods by inland water
transport in the country as a whole and in regional transport it fell by 3.0 times and
1.6 times respectively, and and in national transport (between regions) it increased
by 1.1 times.
Figure 4.3: Average distance of carriage of goods by inland waterways in
Kazakhstan
250
Domestic (excluding urban and
200 suburban transportation)

150
Domestic (including urban and
100 suburban transportation)

50
Regional communication
0
2012 2013 2014 2015 2016 2017

Source: Based on table 4.5.

The number of freight and passenger berths in ports and wharves of inland waterways in
common use during 2012-2017 has remained at almost the same level (table 4.6).

19
https://zonakz.net/2017/12/13/350-tys-tonn-sostavil-obem-gruzoperevozok-rechnym-
transportom-mezhdu-rk-i-rf-v-2017-g/.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Table 4.6: Number of berths in ports and wharves

2012 2013 2014 2015 2016 2017

Number of freight and passenger berths in

ports and wharves of inland waterways in
common use, units 14 16 16 15 15 15
Of which, number of mechanized freight and
passenger berths in ports and wharves 11 11 11 10 10 10
Total length of cargo and passenger berths in
ports and wharves of inland waterways in
common use, m 2 181 2 201 2 201 1 801 1 801 1 801
Of which, total length of mechanized cargo
and passenger berths in ports and wharves, m 2 181 2 151 2 151 1 751 1 751 1 751

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
However, the overall length of cargo and passenger berths in ports and wharves of
inland waterways in common use declined in 2017 compared to 2012 by 380 m. Also,
the total length of mechanized cargo and passenger berths decreased by 430 m. This
shows that inland water transport in Kazakhstan is not being given proper attention.
The main river ports in the basin of the Irtysh River are Pavlodar, Semey, Ust-
Kamenogorsk and Bukhtarminsky. The river port of Uralsk and the port of Atyrau
have special status on the Ural River. Transport along the Ili River and Balkhash Lake
serves the port of Kapchagai and the wharves of Balkhash. In the city of
Petropavlovsk on the Ishim River there is a motorized wharf.
All river ports and mechanized wharves are provided with loading mechanisms and
storage facilities, as well as the necessary infrastructure for transshipment of goods
transported as part of intermodal transport. Currently, they are all privately owned.
In recent years, due to the economic crisis, the volume of cargo handling in ports
has declined sharply. The systematic lack of funds to upgrade and restore ports has
led to the outdating of fixed assets. In general, ports and wharves, with the
exception of Pavlodar river port, are in crisis conditions. The primary task for river
transport is the restoration of infrastructure and vessels.
Cargo transport by inland waterways is carried out on the navigable sections of the
Irtysh, Ural-Caspian and Balkhash-Ili basins.
The Irtysh basin has 1,719.5 km of waterways from the border of China to the border
with the Russian Federation, including 1,116.5 km in the East Kazakhstan region and
603 km in the Pavlodar region.
The Irtysh River is the main water artery of Kazakhstan and the world's longest river-
tributary. It is the main tributary of the Ob River and exceeds the length of the Ob
River itself. The length of the Irtysh River is 4,248 km, and together with the Ob it
is 5,410 km in length. The Irtysh is the longest river in the Russian Federation and
the second after the Yangtze River in Asia. The river originates on the border of
Mongolia and China and flows into the Ob near Khanty-Mansiysk. It flows through
China, East Kazakhstan and Pavlodar Regions (Kazakhstan) and the Omsk, Tyumen
Regions and Ugra Regions (Russian Federation). The area of the basin covers
1,643 thousand km2.

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 WATER TRANSPORT IN KAZAKHSTAN

Figure 4.4: The basin of the River Irtysh

Source:
https://go.mail.ru/search_images?fr=pult&gp=811620&q=%D1%80%D0%B5%D0%BA%D0%B0%2
0%D0%B8%D1%80%D1%82%D1%8B%D1%88#urlhash=6008106089889241009 .
In the basin there are three shipping gateways, which provide navigation on the
Irtysh River (table 4.7)
Table 4.7: Characteristics of gateways on the Irtysh River
Technical characteristics Ust-Kamenogorsky Bukhtarminsky Shulbinsky

Year of commissioning 1960 1963 2004

Draught, m 42.5 68.6 29.0
3
Volume of water in the reservoir, billions m 0.65 49.8 2.39

Source: http://geol.bobrodobro.ru/835.
The main port in the basin is Pavlodar river port. Its capacity is 13.2 thousand tonnes
per working period. The operating mode is round-the-clock. The port has two berths,
a cargo length of 650 m and one for passengers of 120 m.
The carriers are both Kazakhstan and Russian organizations: “Pavlodar River Port”,
“Nurkas PV”, “Irtyshtrans”, “Altaiimport”, as well as Russian ship owners.
The main categories of goods transported are sand and gravel mixture, gravel, sand,
coal and fish products.
In 2015, the basin accounted for 1.184 mln. tonnes of cargo, including
760,000 tonnes destined for the Russian Federation, as well as 20,500 passengers.
Ensuring the safety of navigation and the maintenance of navigable locks in the basin
is carried out by the “Irtysh Waterway Enterprise”. 20

20
http://transport.mid.gov.kz/ru/kategorii/statisticheskie-dannye-transport.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

On average, navigation is allowed for 188 days in the year, from April to November.
In the upper reaches the high water level begins in April and falls off in October.
In the lower reaches of the Irtysh River the high water level lasts from May to
September with a peak in June. In the upper reaches, the freeze usually starts at
the end of November, and in the lower reaches at the beginning of November. The
ice melts in early April.
In the middle of the 19th century, the Irtysh River was used for trade with China and
Mongolia. Early cargoes included skins, furs, wool and cotton and later the natural
ore resources from the Altai Region.
In the first decades of the 20th century trade relations developed with China, as
well as transport between regions of the country. Imports to China included metals
and various consumer goods. Exports from China included livestock products, wheat
and rice. Inside the country, grain, wood, coal, ore and building materials were
transported.
With the construction of the Bukhtarma, Ust-Kamenogorsk and Shulbinskaya
hydroelectric power stations, reservoirs were formed, the total length of which are
552 km.
From the village of Burchun (China) to Lake Zaisan the depth of the Black Irtysh
River does not exceed 1 m. Lake Zaisan with the Bukhtarma and Ust-Kamenogorsk
reservoir represents one huge reservoir, divided by the Bukhtarma dam. On this
stretch, the draughts of vessels are not limited. From Ust-Kamenogorsk hydropower
station to Ust-Kamenogorsk port (10 km), the depth is 210 cm. From Ust-
Kamenogorsk port to the Shulbinsky reservoir, 124 km, the depth of the river is
105 cm. From Shulbinsky reservoir to the city of Semey (75 km) the depth is also
105 cm.
With the construction of the Shulbin hydroelectric power station, the river was
closed, but after the construction of a shipping lock was completed, through
navigation between Ust-Kamenogorsk and Semey resumed. The vessel draught below
the hydroelectric power station is determined by the water supply from the
Bukhtarma, Ust-Kamenogorsk and Shulba reservoirs in accordance with the rules for
the operation of the hydroelectric power stations.
The construction of the hydroelectric power station significantly worsened the
situation of the Irtysh River, as the water flow decreased by four times, which led
to the formation of banks that are not washed away with the low water flow.
Currently, the Irtysh River is used for navigation over 3,784 km from the village of
Buran to the mouth of the Ob River. Navigation on the Irtysh usually lasts from late
April until mid-November. In 2017, shipping companies transported more than
7.2 million tonnes of cargo including oil, timber, grain and construction materials. 21
In 2015, a private Chinese company from the Xinjiang Uighur Autonomous Region
(XUAR) invited the Russian Federation to export Siberian oil and gas to China on the
Irtysh River.

21
http://omskregion.info/news/59094-na_irtshe_ofitsialno_otkrlas_172_ya_navigatsiya/.

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 WATER TRANSPORT IN KAZAKHSTAN

Navigation along the Irtysh River is complicated by the fact that in recent years it
has become shallower as a result of the construction of the Black Irtysh - Karamay
and Irtysh - Urumchi canals in China. On the first canal, part of the Black Irtysh
runoff is transferred to Lake Ulyungur, the area of which has grown by 200 km2 in
recent decades. The second canal is intended for water supply to the Tarim oil and
gas basin, where large oil and gas fields have been discovered and are being
intensively developed.
In this regard, Kazakh ecologists predict significant shallowing of the Black Irtysh
and Irtysh Rivers and Lake Zaisan.
The Ural-Caspian basin has 1,024 km of waterways from the village of Rubezhka to
the Ural-Caspian Canal, including 634 km in the West Kazakhstan region and 390 km
in the Atyrau region.
Figure 4.5: The basin of the Ural River

Source: KWWSVUXZLNLSHGLDRUJZLNLƜƨƱƳ8UDOBULYHUBEDVLQSQJ.
The Ural-Caspian river basin covers 415,000 km2 within the territory of Kazakhstan
and includes the catchment area of the Ural River (236,000 km2), the Volga-Ural
interfluve (107,000 km2) and the Uralo-Emba interfluve (72,000 km2). The Ural River
basin includes part of the territory of the Russian Federation, the West Kazakhstan
and Atyrau regions and part of the Aktobe region.
The Ural River is the second largest in terms of length and volume of transport in
Kazakhstan.
The average duration of the navigational period along the Ural and Kigach rivers
from April to November is 187 days, and 235 days along the Ural-Caspian canal.
The main port in the basin is Atyrau river port. The port is located at the mouth of
the Ural River and is able to accommodate vessels with a draught of up to 2.3 m.
There was reconstruction of the port infrastructure in 2010. The cargo capacity of
the port is 550,000 tonnes per year and it operates around-the-clock.
The carriers are LLP “Estoral” and fishing companies. The main categories of
transported goods are sand and gravel mixture, oversized cargoes and fish products.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

In 2015, 69.5 thousand tonnes of cargo and 18 thousand passengers were transported
in the basin.
The navigable waterways of the Ural River are maintained by two state waterway
enterprises:
x The Ural Waterway Enterprise provides navigable conditions on the section
from the village of Rubezhka to the village of Inder for a length of 623 km;
x The Atyrau Waterway Enterprise provides navigable conditions on the section
from the village of Gora to the Ural-Caspian Canal (maritime part), a length of
333 km.
Among the problems facing the Ural and Caspian Basin are the complexity of
navigation, a lack of industry experts and the obsolescence of vessels. The
development of navigation in the Ural is also hampered by conservation measures
and water taken from the river for irrigation.
The Transport Committee of the Ministry of Investment and Development of
Kazakhstan is considering two main options for the development of navigation in the
Ural Caspian basin:
x Transport on the northern route, requiring dredging operations within the
limits of the Caspian Sea and the Ural River and the modernization of the port
in Atyrau; and
x Direct access to the sea, requiring dredging operations on the Caspian Sea, the
construction of a new maritime terminal and the construction of a special cargo
road.
The Balkhash-Ili basin is one of the largest lake ecosystems on the planet and is a
unique natural complex. It covers an area of 413,000 km2 in the South-East of
Kazakhstan and the North-West of China. The basin is home to one fifth of the
country's population. The basin area in Kazakhstan is 353,000 km2. The city of Almaty
is in the basin.
Figure 4.6: Balkhash-Ili basin

Source: https://yandex.by/images/search?text=Or-Balkhash pool on the map&lr=157.

100
 WATER TRANSPORT IN KAZAKHSTAN

The Balkhash-Ili basin has 1,308 km of waterways along the Ili River from the Dubun
dock on the Kapchagai Reservoir to Lake Balkhash, including 330 km in the Almaty
region and 978 km in the Karaganda region. The length of the shipping route is
350 km, including 240 km of natural river with no guaranteed depth and 110 km on
the Kapchagai reservoir. During the life of the Kapchagai reservoir, a shallow bank
has formed in the overflow zone, which at times, when the water level in the
reservoir decreases, becomes impassable for loaded barges and tugboats. The
average duration of navigation from April to November is 222 days.
The main carriers include “Aina-Su”, “Rybprom”, “Fishmarket”, “Alpina XXI” and
private shipowners. The main goods transported are fish products.
In 2015, 12.2 thousand tonnes of cargo and 9.1 thousand passengers were
transported in the basin.
Maintenance of navigation is carried out by:
x In the Almaty region “Ili Waterway Enterprise”; and
x In the Karaganda region “Balkhash waterway enterprise”.
The total length of the navigable routes of Lake Balkhash is 978 km. Guaranteed
depths are provided in normal conditions. Of the 506 km of navigable routes
equipped with navigation signs, transport vessels use only 300 km. The rest is used
only by fishing vessels. The duration of navigation is on average 210 days a year.
Currently, the ecological situation in the Balkhash-Ili basin area is characterized as
unstable, with the vulnerability of Lake Balkhash. This is caused by irrational water
use, an inadequate resource management system, interstate water allocation
problems and other factors. The lack of a solution to the issue may lead to an
ecological catastrophe, the loss of natural heritage, social tensions and
environmental migration of the population.
Water transport also plays an important role in the development of tourism. In this
connection, it is necessary to improve port infrastructure, including the
reconstruction of the port at the resort of Peschanka and other ports along the Irtysh
River, as well as the port in the city of Aktau.
The western part of Kazakhstan has a coast with the Caspian Sea, which connects
the country with the Russian Federation, Iran, Azerbaijan and Turkmenistan.
Through the ports of the Caspian Sea, as well as the rivers and canals of the Russian
Federation, Kazakhstan is connected with the Black and Baltic Seas and further with
the countries of Western Europe.

4.2 SEA TRANSPORT

On the Caspian coast of Kazakhstan there are three major seaports - Aktau, Bautino
and Kuryk.
The port of Aktau started operations in 1963, with the transport of products from
the uranium industry and the oil fields of Mangyshlak. At that time, the port included
four dry cargo berths. In the 1969-1986 period, four tanker piers and a ferry complex
were added. The main cargo transported was oil which accounted for up to 7 million
tonnes. Transport of dry cargo did not exceed 300,000 tonnes per year. In 1999, the
port underwent its first reconstruction and in 2015 work was undertaken to expand

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

the port of Aktau to the north. As a result, the carrying capacity of the port has
increased from 16.8 million tonnes to 20.5 million tonnes a year.
The port of Aktau is the only ice-free sea port on international routes. It includes a
ferry complex, tanker berths, a grain terminal, a cargo terminal, loading and
unloading and loading in the Bautino area.
Ferry terminal in the port of Aktau. Between the ports of Aktau and Baku
(Azerbaijan) there is constant ferry service. Railway ferries and Ro-Ro ships carrying
petroleum products, consumer goods, grain and mineral fertilizers. The ferries cover
the 253 nautical miles in 18-20 hours and can usually accommodate up to 54 wagons
and 35 heavy trucks. The throughput capacity of the port is two million tonnes per
year. The processing of ships takes, on average, 18 hours.
Oil berths have a capacity of 12 million tonnes per year.
The Grain Terminal “Ak Biday Terminal” was established in 2002 for the expansion
of grain exports to the countries of the Caucasus and Middle East. The sole
shareholder is the JSC “National Company “Food Contract Corporation”.
The terminal has 11 silos for the temporary storage of grain up to a total volume of
22,500 tonnes. The capacity of the terminal for transshipment of grain is up to
350 tonnes per hour, which provides the ability to handle up to 3,000 tonnes of grain
per day and sea vessels carrying up to 4,000 tonnes of grain per day.
The terminal operates 24 hours a day. It is equipped with active ventilation, high-
precision electronic scales and an automated control system.
The Cargo Terminal contains 3 berths with a capacity of 2.5 million tonnes per year.
The terminal has 80,000 m2 of open storage space and a covered transit warehouse
area of 2,000 m2. In addition, the cargo terminal can handle up to 84 tonnes
of oversized cargo.
The loading and unloading facilities contains six 10-40 tonne gantry cranes, five
mobile cranes with a capacity of 36-84 tonnes, a self-propelled crane on an
automobile chassis with a carrying capacity of 53 tonnes, forklift trucks with a
carrying capacity of 1.5-28 tonnes, forklift trucks with a lifting capacity of 3 tonnes,
five port tractors with a load capacity of 32 tonnes, a backhoe loader and eight
semitrailers with a carrying capacity of 50 tonnes.
The construction of the railway line Zhezkazgan - Beineu with a length of 988 km,
has reduced the distance of transit transport to 1,200 km from the stations of Dostyk
and Altynkol to the port of Aktau.
The above-mentioned installations are responsible for an increase in the volume of
goods in transit through the territory of Kazakhstan, including between China and
the countries of the Persian Gulf and Europe. They will also contribute to the
efficient functioning of the international North-South and TRACECA corridors, and
the East-West corridor in Kazakhstan.
In addition, to promote the development of water transport in the Caspian Sea
region an international standard transport and logistics hub will be created in the
port of Aktau.
In order to improve the level of repair services for large vessels a ship repair facility
and shipyard will be built in the area of the village of Kuryk.

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 WATER TRANSPORT IN KAZAKHSTAN

The Bautino cargo area, a division of “Aktau International Sea Trade Port”, is
located in the village of Bautino 150 km from the city of Aktau in the Bautin bay.
The port can handle up to 200,000 tonnes of cargo per year. Its main advantage is
that it is naturally protected from the elements, which allows cargo operations to
be conducted even in stormy weather.
Navigation in the port is year-round, 24 hours a day. Pier one is equipped with two
gantry cranes with a capacity of 32 and 5 tonnes.
Cargoes include industrial equipment, construction materials, stone, firewood,
food, fodder for livestock, containerized cargo, scrap metals and others. 22
The Port of Kuryk is located on the east coast of the Caspian Sea, to the south of
the port of Aktau in a natural bay in the Gulf, which provides protection in
unfavourable weather conditions for cargo handling and Ro-Ro ferries. The ferry
facility, once completed will be used primarily for the transshipment of grain,
petroleum products, fertilizers, chemicals and other types of cargo. Diesel, mineral
fertilizers and barite from Karaganda are exported from here. Consumer goods in
containers in transit follow the Trans-Caspian International Transport Route through
Altynkol from China. All cargo is delivered to the Azerbaijan port of Alyat, then it
goes by rail to Georgia, then by the Black Sea to Europe, Turkey and other countries.
Food and furniture from Ukraine are carried on the return journey.
In the port of Kuryk, cargo and containers are transported intermodally: rail/road
transport – sea transport – rail/road transport; combined (piggyback) transport on
railway ferries and Ro-Ro vessels: rail transport – sea transport – rail transport; road
transport – sea transport – road transport. The port handles mainly cargo delivered
by rail. Kazakh coal is transported in high-sided wagons.
The construction of this ferry facility in the port of Kuryk began in April 2015. Once
completed it will have the following core infrastructure:
x Finger pier with two berths equipped with lifting facilities to service railway
ferries;
x Finger pier for Ro-Ro type ferries carrying vehicles;
x A universal berth for the reception of all types of ships, including for
transshipment of oversized and heavy cargoes; and
x Other hospitality facilities.
The ferry terminal in the port of Kuryk will serve five ferries a day, providing for the
processing of 4 million tonnes of cargo a year. 23
Cargo arrives in tankers, wagons and containers. Diesel, mineral fertilizers and
barite are exported from Karaganda. Consumer goods in containers in transit follow
the Trans-Caspian International Transport Route through Altynkol from China. All
cargo is delivered to the Azerbaijan port of Alyat, then by rail to Georgia, then by
the Black Sea to Europe, Turkey and other countries. Food and furniture from
Ukraine are brought back.

22
www.portaktau.kz/ru/.
23
The launch of the ferry complex in the port of Kuryk will increase ttransit via the Caspian Sea.
http://24.kz/ru/tv-projects/blogery-2-0/item/129798-zapusk-paromnogo-kompleksa-v-portu-
kuryk-uvelichit-tranzit-cherez-kaspij.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Railway carriages are handled at the port of Kuryk, and cargoes at the port of Aktau.
The processing of each ferry takes on average 6-7 hours, including the roll-out of
wagons and registration of shipping documents and transit declarations. At the
station there are customs, veterinary, sanitary and epidemiological services
processing documents and checking the goods.
Seven km from the port, a receiving and sorting station is being built to accelerate
the formation of unloaded trains. At present, cargo is sorted at Mangyshlak station.
The capacity of the port of Aktau is insufficient for handling cargo transport. This
problem arose as a result of a sharp increase in the flow of goods from
Turkey and Ukraine. The single ferry pier in the port of Aktau could not cope. To
address this situation there are plans to build a vehicle pier in the port of Kuryk and
a road from the village of Kuryk to the port of Kuryk.
By 2020, the port of Kuryk is expected to complete construction of shipbuilding and
ship repair facilities, which should meet up to 70% of the need for ship repairs.
A new customs clearance zone for cargo and passengers is also planned which will
serve as a model for the construction in the future of similar customs points. It will
occupy 5,000 m2 and provide 120 jobs. 24
Direct shipments on vessels are carried out only for containers. In this connection,
it is recommended to create a container terminal in the port to expand the volumes
of container handling in this port.
In 2017, the maritime transport fleet of Kazakhstan numbered 66 vessels or
1.4 times more than in 2014 (table 4.8).
Table 4.8: Maritime transport fleet
2014 2015 2016 2017

All vessels 48 59 65 66
Including:
Self-propelled cargo vessels 15 16 19 20
Non-self-propelled cargo vessels 19 18 18 18
Tugs 14 25 28 28

Source: Transport in Kazakhstan 2013-2017. Statistical collection. Astana, 2018.

http://stat.gov.kz.
The number of self-propelled and non-self-propelled cargo vessels is almost
identical. The total number of vessels is increasing. The number of tugs doubled in
the period 2014-2017. The degree of depreciation of fixed assets in maritime
transport enterprises is only 16.4%, which is lower than that of transport enterprises
and storage in general (23.6%). In 2016, 8.925 million tenge was invested in maritime
transport, which was six times more than in 2015.
Growth in the transport of goods and cargo by sea transport was negative in the
period 2012-2017. The volume of goods declined by 47.5%, and turnover by
40.8%. The volume of carriage of goods by sea in 2017 amounted to 0.05% of the
total volume of transport by all modes of transport (table 4.9).

24
State programme for the development and integration of the infrastructure of the transport
system of Kazakhstan until 2020. http://adilet.zan.kz/rus/docs/U1400000725.

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 WATER TRANSPORT IN KAZAKHSTAN

Table 4.9: Volumes of cargo turnover of maritime transport

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Transported
cargo,
luggage,
freight mln. t 2 124.2 2 188.7 2 103.3 2 439.4 2 974.9 3 231.8 3 508.0 3 749.8 3 733.8 3 729.2 3 946.1
Including:
Maritime 1.1 1.7 3.6 4.6 4.6 4.0 4.0 3.6 2.5 2.6 2.1
Turnover,
bln. tkm. 350.5 369.7 337.0 385.3 448.8 478.0 495.4 554.9 546.3 518.6 564.0
Including:
Maritime 0.3 0.8 1.4 3.1 3.2 2.7 2.7 2.5 1.6 1.8 1.6

Source: Transport in Kazakhstan 2007-2017. Statistical collection. Astana.

http://stat.gov.kz.
Over the past 10 years, the volumes of carriage of goods by sea grew until 2011,
then gradually started to decline. The 2017 value is less than half the 2010 volume.
In 2017, the turnover of maritime transport also declined compared to the previous
year by 11.1% amounting to 1.6 bln. tkm. Compared to 2011, turnover halved. The
average distance of maritime transport was 696 km in 2011 and 762 km in 2017.
Table 4.10: Key performance indicators in maritime and coastal transport by type
of message
2012 2013 2014 2015 2016 2017

Transported cargo, luggage thousands of tonnes 4 048.3 3 984.5 3 630.2 2 476.6 2 565.5 2 102.6
Including:
International 4 048.3 3 984.5 3 630.2 2 476.6 2 565.5 2 102.6
CIS countries 3 826.3 10.0 3 630.2 - - -
Countries outside the CIS 212.5 3 974.5 - - - -
Exports - - - 2 476.6 2 546.0 2 091.3
Domestic - - - - - -
Turnover, tkm 2 752.8 2 709.4 2 468.5 1 597.6 1 772.2 1 584.2
Including:
International 2 752.8 2 709.4 2 468.5 1 597.6 1 772.2 1 584.2
CIS countries 2 601.9 4.2 2 468.5 - - -
Countries outside the CIS 144.5 2 705.2 - - - -
Exports - - - 1 597.6 1 757.4 1 575.4
Domestic - - - - - -

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

The main cargo types in maritime transport are crude oil 86.1%, grain 8.4% and other
goods 5.5%, while in inland water transport the main cargoes were coal and
construction materials (table 4.11).
Table 4.11: Transport of goods by water transport by type of cargo, thousands of
tonnes
2012 2013 2014 2015 2016

Inland water

Inland water

Inland water

Inland water
nland water
Maritime

Maritime

Maritime

Maritime

Maritime
Transported cargo,
luggage 1 290.7 4 048.3 1 106.5 3 984.5 1 320.8 3 630.2 1 218.9 2 476.6 1 188.6 2 565.5
Including types of
cargo:
Crude oil - 3 816.3 - 3 791.8 - 3 630.2 - 2 245.7 - 2 208.1
Coal 21.7 - 19.9 - 21.6 - 29.2 - 16.5 -
Forestry products - - - - - - - - - -
Building materials 1 055.4 - 811.5 - 1 016.9 - 829.6 - 667.5 -
Grain - 108.2 - 55.3 - - - 178.2 - 214.9
Other goods 213.6 123.8 275.0 137.3 282.3 - 360.1 52.7 504.6 142.6

Source: Transport in Kazakhstan 2012-2016. Statistical collection. Astana, 2017.

http://stat.gov.kz.
To date there is no container transport of goods by sea or inland waterways in
Kazakhstan.
In order to increase the volume of maritime transport of goods, it is planned to
increase the number of dry cargo vessels to 20 vessels by 2020 and to purchase two
ferries. In the future, in the field of maritime transport, it is planned to implement
measures to occupy a dominant position in the Caspian Sea and to ensure the
transport of cargo using intermodal cargo delivery schemes.
It is also planned to upgrade the capacity of the port of Bautino and the construction
of terminals in the port of Kuryk, as a result of which, by 2030 the capacity of the
seaports of Kazakhstan will be 25 million tonnes.
In the conditions of tough competition in the Caspian Sea, in which state shipping
companies or companies with state participation compete, it is necessary to
continue providing state support for national shipping companies, which will ensure
up to 75% of the transport of goods is handled by seaports in Kazakhstan.

4.3 SWOT ANALYSIS FOR WATER TRANSPORT

The strengths and weaknesses of water transport in Kazakhstan and the
opportunities and threats that this sector may face are highlighted in the SWOT
analysis below (table 4.12).

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 WATER TRANSPORT IN KAZAKHSTAN

Table 4.12: SWOT analysis of water transport in Kazakhstan

Strengths

1. A Water Transport Development Strategy is included in the Strategic Development Plan of Kazakhstan
until 2020.

2. The availability of raw materials, which should be transported by water.

3. Possibility to transport raw materials to China from the Russian Federation through Kazakhstan by
intermodal transport: railway - Irtysh River - road transport and sea - rail - road.

4. The Ural River sea transport corridor passes through Kazakhstan, linking the Russian Federation with
Turkmenistan and the countries of the Persian Gulf.

5. The international transport TRACECA corridor passes through the Kazakh ports of Aktau and Kuryk.

6. Competitive level of tariffs for the delivery of goods in intermodal transport (sea - rail - road).

7. The presence of three national seaports on the Caspian Sea with developed infrastructure.

8. The presence of its own maritime fleet for the carriage of bulk, liquid and general cargoes.

9. Long experience in cargo transport by sea.

Weaknesses

1. High level of wear of the fleet.

2. Absence of domestic shipbuilding/ship repair enterprises.

3. Insufficient development of river port infrastructure.

4. Insufficient number of service vessels.

5. Low level of freight forwarding services in water transport.

6. Absence of flexible tariff regulation for transport by water transport.

7. Low share of intermodal transport with the participation of water transport.

8. The lack of a mechanism for public-private partnerships in the field of water transport

Opportunities

1. Completion of the construction of a shipbuilding/ship-repair plant in the port of Kuryk.

2. Creation of a dry port in the port of Kuryk.

3. Construction of a road pier in the port of Kuryk.

4. Providing state support to national shipping companies.

5. Development of public-private partnerships in the field of water transport.

6. Development of forwarding services in water transport.

7. Improving mechanisms of tariff regulation for water transport.

8. Development of intermodal transport with the participation of sea and river transport.

Threats

1. Constant growth of resources required to upgrade the fleet with limited financial capabilities of the
state and private sector.

2. High interest rates on external and internal loans.

3. Possible decrease in demand for raw materials in world markets.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

4.4 RECOMMENDATIONS FOR THE DEVELOPMENT OF WATER TRANSPORT

Sea transport is important for the development of Kazakhstan's international trade.
Three large seaports (Aktau, Bautino and Kuryk) are located on the Caspian coast of
Kazakhstan. The largest port is Aktau. It includes a ferry terminal, oil loading berths,
a grain terminal, and a dry cargo terminal. Its capacity is up to 20.5 million tonnes
per year. To increase the efficiency of the port's operation, the railway line
Zhezkazgan – Beineu, described in chapter 3, was opened in 2015 bringing significant
benefits to cross-Kazakhstan rail freight flows. As a result, the volume of transit
cargo through the territory of Kazakhstan has increased between China and the
countries of the Persian Gulf and Europe, including transit cargoes through the
seaport of Aktau.
In order to develop water transport in the Caspian region, it is necessary to create
an international transport and logistics hub based in the seaport of Aktau. The
construction of the hub would allow both export and import cargoes to be processed.
Intermodal transport (road and sea transport) is also widely used.
Considering the importance for the country of export-import and transit transport
through sea ports, as well as the efforts of “NC KTZh” to develop the port
infrastructure and attract cargo flows, a growth in traffic through the Caspian ports
should be expected.
Based on the analysis set out above and the SWOT analysis, the following
recommendations can be made in relation to water transport:
x Create attractive conditions for investing in the development of water
transport;
x Continue in the investments in and around the port of Kuryk to increase
capacity;
x Increase the number of Ro-Ro vessels based on the capacity of the Aktau and
Kuryk ports, as well as the volumes of cargo;
x Provide state support to national shipping companies;
x Build a dry port in the port of Aktau to expand the volumes of cargo in
intermodal transport;
x Expand the range and improve the quality of forwarding and logistics services
provided in the sea and river ports;
x Reduce the share of transport costs in the cost of final products through the
development of intermodal transport with the participation of maritime
transport;
x Develop river-sea cargo transport between the Russian Federation and
Kazakhstan;
x Increase the volume of transport of bulk and container cargo along the Irtysh
River between the Russian Federation and China;
x Implement a set of measures to ensure regular navigation in the Balkhash-Ili
water basin;
x Develop a mechanism for public-private partnerships in the field of water
transport;
x Consider building a shipbuilding and ship repair yard in the port of Kuryk to
meet the needs of the sector.

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 CIVIL AVIATION IN KAZAKHSTAN

5. CIVIL AVIATION IN KAZAKHSTAN

5.1 CIVIL AVIATION REGULATION
State regulation of civil aviation in Kazakhstan is carried out by the Civil Aviation
Committee of the Ministry of Investment and Development.
In its activities, the Civil Aviation Committee relies on various legal acts, orders,
documents of the International Civil Aviation Organization, decrees, laws and so on.

5.2 CIVIL AVIATION ASSETS

The aircraft fleet of Kazakhstan amounted to 895 aircraft as of the end of 2017
(table 5.1).
Table 5.1: Number of civil aircraft
2012 2013 2014 2015 2016 2017

Total number of civil aircraft at the end of the year 783 788 794 840 885 895

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
The aircraft fleet is growing, but it has many obsolete aircraft of both Soviet and
foreign production, which are still in service.
There are 23 airports in Kazakhstan. They are in the following cities: Astana, Almaty,
Aktobe, Karaganda, Shymkent, Ust-Kamenogorsk, Petropavlovsk, Taldykorgan,
Kostanay, Taraz, Kokshetau, Semey, Pavlodar, Zhezkazghan, Atyrau, Uralsk,
Balkhash, Kyzylorda, Aktau and Boraldai in the Almaty region. Of these, 17 meet
ICAO standards and are allowed to service international flights (table 5.2).

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Table 5.2: Airports in Kazakhstan

Total Of these - serving international flights

Kazakhstan 23 17
Akmola region 1 1
Aktobe region 1 1
Almata region 2 -
Atyrau region 2 1
West Kazakhstan region 1 1
Zhambyl region 1 1
Karaganda region 3 2
Kostanay region 1 1
Kyzylorda region 1 1
Mangystau region 1 1
Turkestan region 1 1
Pavlodar region 1 1
North Kazakhstan region 1 1
East Kazakhstan region 4 2
Astana city 1 1
Almaty city 1 1

Source: Transport in Kazakhstan 2013-2017. Statistical collection. Astana, 2018.

http://stat.gov.kz.

5.3 MAIN AIRLINES

As of 1 January 2018 there were 54 airlines and operators performing regular and
charter flights, cargo flights and aviation activities in Kazakhstan. Seven operate
flights on a regular basis, 10 of them operate charter flights, four operate cargo
flights, 32 are involved in other aviation activities and one is a general aviation
operator.
Airlines operating scheduled flights include Air Astana, SCAT, Zhezkazgan Air,
Zhetysu, BEK Air, Qazaq Air and Southern Sky.
Air Astana is the largest airline in Kazakhstan, registered in 2001. Its founders are
JSC “Samruk-Kazyna National Welfare Fund” (51% of shares) and BAE Systems PLC
(UK) (49% of shares). The company uses three airports in the country: Almaty
International Airport, Nursultan Nazarbayev International Airport in Astana and
Atyrau International Airport. 25
The Air Astana fleet consists of 33 aircraft of western production with an average
operational age of 8.5 years. By the end of 2020, it is planned to increase the fleet
of Air Astana to 43 units by purchasing modern Boeing 787, Airbus A320NEO and
Embraer 190 aircraft. The route network includes more than 60 domestic and
international flights.

25
http://avia.pro/blog/aviakompaniya-eyr-astana.

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 CIVIL AVIATION IN KAZAKHSTAN

Figure 5.1: Air Astana route network

Source: https://airastana.com/rus/en-us/About-Us/Overview/Route-Map.
In 2017, Air Astana recorded an increase in passenger traffic and revenues by 12%
and 22%, respectively, after falling in 2015 and 2016. The airline transported
4.2 million passengers in 2017. The growth of cargo transport amounted to
almost 30%. Transport capacity increased by 7% following the introduction of new
flights from Astana to Delhi and Kyiv, and also additional flights to London, Beijing,
Seoul, Moscow, St. Petersburg, Ekaterinburg, Novosibirsk, Omsk, Tbilisi, Tashkent,
Istanbul, Bangkok, Dubai and Urumqi. 26
JSC Airline SCAT was founded in 1997 in Shymkent. It is one of the leading airlines
in Kazakhstan. Its main offices are located in Shymkent and it operates flights from
Shymkent, Astana, Almaty and Aktau. The airline flies to 50 destinations including
international flights to Malaysia, Viet Nam, United Arab Emirates, India, Turkey,
China and Thailand. In the CIS countries there are flights to Baku, Astrakhan,
Yerevan, Dushanbe, Krasnodar, Kyiv, Mineralnye Vody, Makhachkala, Novosibirsk,
Moscow, Samara, Rostov, Tashkent, St. Petersburg and Tbilisi. Domestically it flies
to Aktobe, Aktau, Astana, Almaty, Atyrau, Zaysan, Zhezqazghan, Kostanay,
Petropavlovsk, Uralsk, Karagandy, Kyzylorda, Taraz, Semey, Urzhar, Shymkent and
Ust-Kamenogorsk. The airline also handles cargo transport.
In 2014, SCAT withdrew all Soviet equipment (An-2, An-24, Yak-42 aircraft) from its
fleet. These aircraft were transferred to a subsidiary of SCAT, Southern Sky. SCAT's
fleet consists of 20 aircraft: one Boeing 767-300, three Boeing 737-500, four Boeing
757-200, one Boeing 737-700 NG, one Boeing 737-MAX8, four Boeing 737-300 and
six CRJ190 / 200. The majority are owned by the company. The annual passenger
traffic is more than 1 million passengers.
In addition, SCAT has a Part-145 certificate, which allows it to provide maintenance
services for aircraft of western production. 27

26
www.rusaviainsider.com/kazakhstans-air-astana-sees-profit-rebound-2017/.
27
http://avia.pro/blog/aviakompaniya-skat.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

The airline Zhezkazghan Air was founded in 1996 by Zhezkazghan Airport

(Karagandy Region) and Zhezkazghan Combined Air Squadron. It is owned by KZMS
PLC. The company's fleet consists of 5 aircraft: one An-2, one Let L-410, one Yak-40
and two Mi-8 helicopters.
The air carrier provides domestic scheduled flights to Balkhash and Karaganda, as
well as charter flights. It also has its own office at Balkhash airport. 28
JSC Airline Zhetysu was founded in 1996 and is based in the airport of Taldykorgan.
Geographically, the airport is located 12 northeast of Taldykorgan on the route from
Europe to China. After reconstruction in 2004, the terminal building is now equipped
with modern technological and inspection equipment with a capacity of
100 passengers per hour. Flights are carried out to Astana and Almaty by three
Yak-40 aircraft. The airport has parking for aircraft of the type IL-76, TU-154, TU-
134, AN-24, YAK-42, YAK-40 and other smaller aircraft with the possibility of carrying
out commercial services. The aerodrome can be used as an alternate airport. 29
The airline BEK AIR was established in 1999 to carry out VIP flights. In 2008, it
acquired a stake in JSC International Airport “Ak Zhol” in Uralsk, which is currently
managed by the airline. Today it is the most important low-cost airline in
Kazakhstan. The company operates seven Fokker-100 aircraft, most suitable for
regional flights.
BEK AIR carries out domestic scheduled air services to/from the cities of Astana and
Almaty to the cities of Atyrau, Aktau, Aktobe, Uralsk, Kostanay, Pavlodar,
Karagandy, Shymkent, Kyzylorda, Zhezkazghan and between them, as well as to
Moscow and St. Petersburg from the city of Uralsk and charter flights to many
CIS countries, as well as the United Arab Emirates, Turkey, Mongolia and China.
In the near future the company plans to launch regular flights to other cities of
Kazakhstan, as well as charter flights to Istanbul, Sharjah and Urumqi.
JSC QAZAQ AIR is a regional airline that serves domestic routes in Kazakhstan. All
shares belong to the JSC “National Welfare Fund Samruk-Kazyna”. The company was
registered in 2015.
The airline operates three Bombardier Q400 NextGen turboprops of Canadian
production. Over the past year, the airline has developed and optimized its route
network, which includes 14 internal routes, 6 of which are not served at all by other
carriers or have not been for a long time. For example, on the Astana-Taldykorgan
route, the fleet has replaced outdated Yak-40 aircraft. The company also serves
routes such as Almaty - Taldykorgan, Shymkent - Aktobe, Aktobe - Atyrau and
Shymkent - Pavlodar, which have not been served in recent years. The QAZAQ AIR
route network has been significantly expanded to include Almaty - Semey - Astana,
Atyrau - Uralsk and Atyrau - Aktau.

28
http://avia.pro/blog/aviakompaniya-zhezkazgan-eyr.
29
http://taldyk.kz/airport/aboutkz.html.

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 CIVIL AVIATION IN KAZAKHSTAN

Figure 5.2: QAZAQ AIR's route network

Source: www.flyqazaq.com/en/menu/information/route-map.
Southern Sky is a subsidiary of SCAT. In 2014, the entire fleet of SCAT was
transferred to Southern Sky. The base airport is Shymkent.
The fleet includes An-2, An-3, An-24 and Yak-42. The airline performs domestic
flights to Almaty, Astana, Aktobe, Atyrau, Pavlodar, Kostanay and Shymkent, as well
as medical flights. 30
Other airlines in Kazakhstan perform only charter flights. Cargo transport is carried
out by Sigma Airlines (Almaty), Jupiter Jet (Almaty) and Kaz Air Trans (Taraz).It
should be noted, however, that cargo transport is performed not only by cargo
aircraft, but also by passenger aircraft.
The airline Jupiter Jet is based at Almaty airport. It offers cargo services for
transport of a wide variety of goods, including heavy and oversized cargo
internationally.
Sigma Airlines is based in Almaty.Capable of specific cargo delivery of virtually any
type of freight, the company provides on-demand or ad-hoc charter service. The
company's fleet consists of two Il-76TD aircraft.
The airline JSC Kaz Air Trans is based at the airport of Aulie-Ata, which is located
15 km south-west of the city of Taraz. The fleet consists of one Tu-154M aircraft.
The airline makes regular flights on the route Shymkent - Istanbul.

5.4 TRANSPORT OF PASSENGERS AND CARGO BY AIR

Official information on the volumes of cargo transport by both cargo and passenger
airlines is not available.
At the end of 2016, the Ministry of Investment and Development recognized as
unprofitable seven airports in the cities of Semey, Taraz, Zhezkazghan, Taldykorgan,
Kokshetau, Petropavlovsk and Balkhash. Currently, these airports serve from 7 to
70 thousand passengers per year. They cannot reach the annual threshold of

30
www.airlines-inform.ru/world_airlines/Southern_Sky.html,
http://avia-pro.net/blog/aviakompaniya-zhetysu.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

100 thousand passengers. According to the results for 2016, the most profitable
airports were Almaty and Astana. They served 70% of all passengers in the country.
In this regard, regional airports are looking for new sources of revenue. In
Petropavlovsk and Taraz, they plan to work mainly with cargo transport with
neighbouring States, primarily with China, given that the cargo sector at airports is
usually profitable.
The volumes of cargo transport and air cargo turnover in Kazakhstan have not been
stable. The data in table 5.3 show that before 2009 the volumes fell, then for two
years there was growth, and in the last five years there has been no discernable
pattern.
Table 5.3: Basic performance indicators for air transport
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total cargo
transported,
mln. tonnes 2 124.2 2 188.7 2 103.3 2 439.4 2 974.9 3 231.8 3 508.0 3 749.8 3 733.8 3 729.2 3 946.1
including:
by air
transport,
th. tonnes 25.7 22.7 22.0 28.9 31.6 21.9 23.9 19.1 17.2 18.0 22.5
Cargo
turnover,
billion tkm 350.5 369.7 337.0 385.3 448.8 478.0 495.4 554.9 546.3 518.6 564.0
including:
by air
transport,
mln. tkm 88.1 69.4 67.6 90.1 92.6 59.5 63.1 49.3 42.7 42.9 53.8
Passengers
carried, mln.
people 11 160 11 325 11 806 13 186 16 647 18 485 20 004 21 281 21 839 22 333 22 720
including:
by air
transport 2.7 2.8 2.7 3.4 4.1 4.5 5.0 5.4 5.9 6.0 7.4
Passenger
turnover,
mln. pkm 124 366 127 455 130 834 149 065 188 939 213 036 235 738 246 959 251 251 266 784 272 832
including:
by air
transport 5 457 5 495 5 303 6 469 7 838 8 623 9 688 10 586 11 153 11 313 14 384

Source: Transport in Kazakhstan 2007-2017. Statistical collection. Astana.

http://stat.gov.kz.
The cargo turnover of air transport in 2007-2014 had a clear growth trend. However,
after 2014 there was a decline for two years and only in 2017 did the industry reach
the 2014 level again.
The data in table 5.3 show that cargo transport by air has not been the focus of the
sector. Despite the fact that in Astana, Almaty and Shymkent large transport and
logistics centres have been built, intermodal transport involving air transport has
not been sufficiently exploited.

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 CIVIL AVIATION IN KAZAKHSTAN

Unlike air cargo transport, the volume of passenger transport during 2007-2017 grew
constantly as did passenger turnover. In 2017 there was an increase in passenger
turnover by 27.1%.
There was a significant increase in the volume of cargo transport in 2017. Cargo
transport to Western and Southern Kazakhstan resumed. However, in general, goods
were transported to/from Almaty (more than 90.6%) (table 5.4). At the same time,
intermodal transport was used. However, it is not possible to determine how much
cargo was transported with the participation of air and land transport due to the
lack of such data.
Table 5.4: Cargo and luggage carried by air transport, tonnes
2012 2013 2014 2015 2016 2017

Kazakhstan 21 954.2 23 873.5 19 082.4 17 178.2 18 015.9 22 531.0

Western Kazakhstan 183.0 227.2 239.4 131.0 x ƽ
Southern Kazakhstan 768.0 1 062.0 978.0 x x ƽ
Eastern Kazakhstan 5.8 - - - -
Astana city - - - - - -
Almaty city 20 997.4 22 584.3 17 865.0 15 956.2 16 810.9 20 432.0

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
A similar situation occurred with cargo turnover and the volume of cargo transport
which both fell. Most cargo was transported through Almaty (table 5.5). In 2017
cargo turnover grew by 25.4% compared to 2016.
Table 5.5: Cargo turnover in air transport, thousand tkm
2012 2013 2014 2015 2016 2017

Kazakhstan 59 462.2 63 130.1 49 273.3 42 699.9 42 903.5 53 793.0

Western Kazakhstan 367.0 469.3 370.3 189.3 x ƽ
Karagandy - - - - - -
Southern Kazakhstan 1 100.0 1 517.0 1 350.0 ƽ x ƽ
Eastern Kazakhstan 4.8 - - - - -
Astana city - - - - - -
Almaty city 57 990.4 61 143.8 47 553.0 40 704.6 41 060.5 59 509.0

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
Over the last five years the volume of goods carried by air in international and
domestic transport were approximately the same. However, starting from 2014,
domestic transport grew faster (table 5.6).

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

Table 5.6: Basic performance indicators by type of air transport

2012 2013 2014 2015 2016 2017

Cargo, luggage tonnes 21 954.2 23 873.5 19 082.4 17 178.2 18 015.9 22 531.0

including:
International 11 514.3 12 287.0 9 345.0 8 247.0 8 169.0 10 272.0
CIS countries 2 522.0 3 444.0 5 606.0 2 810.0 - -
countries outside -
the CIS 8 992.3 8 843.0 3 739.0 5 437.0 -
domestic 10 439.9 11 586,5 9 737.4 8 931.2 9 846.9 12 259.0
Freight turnover, mln. tkm 59.5 63.1 49.3 42.7 42.9 53.8
including:
International 43.1 45.4 35.8 30.7 30.7 38.8
CIS countries 2.8 10.0 19.0 7.6 - -
countries outside -
the CIS 1.7 35.4 16.8 23.1 -
domestic 16.3 17.7 13.5 12.0 12.2 15.0

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.
Considering that the average distance of carriage of goods in international traffic is
greater than in domestic traffic, freight turnover in international traffic is
accordingly much higher than in domestic traffic.
Analysing the transport of goods by type of countries, it can be stated that non-CIS
countries accounted for more cargo than the CIS countries, particularly in 2015
where three-quarters of the turnover was outside CIS countries. After 2015, data on
the transport of goods to the CIS countries and outside the CIS are not published.
Airlines receive almost all their revenue from passenger transport. Transport of
goods represents a very small percentage of their revenues.
Figure 5.3: Revenues of air transport enterprises from cargo and passenger
transport

120
97 97 97 97 98 98
100
80
60 passenger transportation

40 cargo transportation

20
3 3 3 3 2 2
0
2012 2013 2014 2015 2016 2017

Source: Transport in Kazakhstan 2012-2017. Statistical collection. Astana.

http://stat.gov.kz.

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The lack of interest of air carriers in cargo transport is also due to the fact that even
in large international airports there are no cargo terminals and equipment capable
of automatically processing goods. In addition, customs services are not sufficient
to handle export-import cargoes, transport and warehouse logistics in air transport
are not developed, personnel working at cargo terminals are not trained and many
other factors are hampering the growth of transport of goods by this promising mode
of transport.
The presence of international transport and logistics hubs and centres in the cities
of Almaty, Shymkent and Astana has led to the promotion of cargo transport by
various modes of transport, including with the participation of air transport.
Nevertheless, they are not contributing to the growth of cargo transport by aviation.

5.5 SWOT ANALYSIS OF THE STATE OF CIVIL AVIATION

The conducted SWOT analysis considered the strengths and weaknesses of
Kazakhstan in terms of the development of civil aviation, as well as the country's
opportunities and the threats it may face in the development of air cargo transport
(table 5.7).
Table 5.7: SWOT analysis of the state of civil aviation in Kazakhstan
Strengths

1. There is a Civil Aviation Development Strategy included in the Strategic Development Plan of
Kazakhstan up to 2020.

2. There are 23 airports, of which 17 comply with ICAO standards and are approved for servicing
international flights.

3. There are 21 national airlines, including four freight airlines.

4. National airlines serve a wide network of international and domestic routes.

5. Air corridors connecting Africa, Europe and the Russian Federation with the countries of South-East and
Central Asia pass through Kazakhstan.

6. The global growth in the volume of cargo transport by air necessitates the development of air cargo
transport in Kazakhstan.

7. The development of e-commerce in the world, and especially in China, is contributing to the growth of
transport of cargo by air.

8. Higher profitability of air cargo compared to passengers.

9. The large territory of the country is contributing to the development of domestic air traffic.

Weaknesses

1. Low interest of national air carriers in cargo transport.

2. Low level of forwarding services in air transport.

3. Lack of own modern cargo fleet.

4. Obsolescence of the small fleet of Soviet-made aircraft used in cargo transport.

5. Absence of modern cargo terminals at airports for processing cargo flows.

6. Lack of competition in the field of cargo and passenger transport by air.

7. Lengthy customs control procedures by Kazakh customs, which is unacceptable for air transport.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

8. Low share of intermodal transport involving air transport.

9. Absence of cargo transport by regular air flights.

10. Small volumes of cargo transport by air.

11. Need to improve national legislation in accordance with ICAO regulations.

12. Low level of transport and warehouse logistics in air transport.

13. Insufficient number of qualified personnel to work in air cargo terminals.

Opportunities

1. Creation of joint venture partnerships with foreign investors/airlines.

2. Attracting foreign air carriers to meet the growing volumes of export-import cargoes.

3. Expanding destinations for air cargo.

4. Improving national legislation in accordance with ICAO regulations.

5. Using airports in Astana and Almaty as transit hubs for cargo handling and aircraft maintenance.

6. Developing transport and warehouse logistics in air transport.

7. Organizing regular flights for air cargo on demand.

8. Creating modern cargo terminals in international airports.

9. Arranging training for workers in cargo terminals.

10. Developing public-private partnerships in civil aviation.

Threats

1. Increased resource requirements for air fleet renewal with limited financial capacity of the state and
private sector.

2. Limited opportunities to obtain loans for the development of the air fleet by private business.

3. China's policy aimed of expanding its influence in the field of civil aviation.

5.6 RECOMMENDATIONS FOR THE DEVELOPMENT OF CIVIL AVIATION

Studies have shown that cargo transport by air is not given due attention. Despite
the fact that in Astana, Almaty and Shymkent large transport and logistics centres
have been built, intermodal transport involving air transport has not been properly
developed, which limits possibilities for the urgent delivery of goods.
In Kazakhstan, the prerequisites for the development of air cargo transport have
been created with the following:
x A network of aviation lines covering almost the whole country;
x 17 airfields that are allowed to service international flights;
x Freight transport is cost-effective;
x Near the major cities logistics centres have been built or are planned; and
x Regional airports with spare capacity.
Nevertheless, the volume of air cargo is extremely small.

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 CIVIL AVIATION IN KAZAKHSTAN

For the development of air cargo transport, it is recommended to create a modern

cargo terminal in Almaty airport that would serve as a transit hub for cargo from the
Asia-Pacific region to Europe, the Russian Federation and the African continent.
Almaty is located in the centre of air corridors. Delivery of goods could be
undertaken at the same time as passenger transport to the regional airports of
Kazakhstan.
It should be noted that the State Programme for the Development and Integration
of the Infrastructure of the Transport System of Kazakhstan until 2020 states that
by 2030, it is expected that the country will have modern hub airports with a
developed route network. 31 Based on this, the review in this chapter and on the
above SWOT analysis, the following additional recommendations should be
considered for the development of civil aviation in Kazakhstan:
x Improve national legislation in accordance with ICAO regulations;
x Create a modern system of flight safety and aviation security;
x Ensure state preferences for the formation of a modern air fleet;
x By 2020, acquire 61 aircraft and 30 aircraft for smallscale aviation;
x Ensure the functioning of 70 domestic and 138 international routes by 2020;
x Kazakhstan to improve to 50th place in the ranking of the quality of air
transport infrastructure by 2030;
x Ensure that the national air carrier is among the three largest airlines in the
CIS and the 100 largest airlines in the world;
x Create cargo terminals at international airports to handle cargo traffic;
x Create conditions for the development of competition in the field of air cargo;
x Promote intermodal transport involving air transport;
x Develop transport and warehouse logistics in air transport;
x Raise the level of qualifications of staff working at cargo terminals;
x Make efforts to use the airports of Astana and Almaty as transit hubs for cargo
transshipment and aircraft maintenance; and
x Stimulate private business to participate in public-private partnerships for the
development of air cargo transport.

31
State Programme for the Development and Integration of the Infrastructure of the Transport
System of Kazakhstan until 2020.

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 LOGISTICS IN KAZAKHSTAN

6. LOGISTICS IN KAZAKHSTAN
In the globalized world economy, logistics plays an important role in the
development of a country. Many States have relied on the development of logistics
as one of the main factors in stimulating the development of the national economy.
In turn, logistics can be a very profitable sector. The world market for transport
logistics is estimated at US$ 2.7 trillion, or about 7% of world GDP. The share of
transport logistics in developed countries is 13-14% of GDP. For example, in Ireland
this indicator exceeds 14.2%, in Singapore 13.9%, in Hong Kong 13.7%, and in
Germany 13%. 32 Therefore, this sector is an important source of national income.
The share of logistics in the GDP of Kazakhstan is small. In this regard, the President
of Kazakhstan has repeatedly stressed that the development of transport logistics is
one of the most important challenges for the economy of Kazakhstan. At the 25th
plenary meeting of the Foreign Investors Council held under the aegis of the
President, it was noted that Kazakhstan plans to become the largest transit and
logistics hub in the Asian region, acting as a bridge between Europe and Asia.
The National Programme for Infrastructure Development “Nurly Jol” for 2015-2019
stated that the formation of a single economic market should be carried out by
integrating the country's regions based on building effective infrastructure based on
the hub principle to ensure Kazakhstan's long-term economic growth. One of the key
objectives of the programme is the creation of efficient transport and logistics
infrastructure based on the “spoke” principle.
The strategy “Kazakhstan 2050”indicates that one of the prime objectives for the
development of transport and logistics services is to create industrial transport and
logistics facilities outside Kazakhstan. To do this, it is necessary to create joint
ventures in the region and throughout the world and also to create transport and
logistics hubs in the key transit points of the world.
The measures taken in the field of transport and logistics have made it possible to
significantly improve the country's position in the Logistics Performance Index (LPI),
as evidenced by the results of logistics surveys undertaken in Kazakhstan in 2007,
2010, 2012, 2014, 2016 and 2018 (table 6.1).
Table 6.1: Logistics perfomance index in Kazakhstan
Indicator 2007 2010 2012 2014 2016 2018

LPI 133 62 86 88 77 71
Score 2.12 2.83 2.69 2.70 2.75 2.81
% of the highest score 46.1 60.2 54.2 54.4 54.3 56.5
Effectiveness of customs and border clearance rank 139 79 73 121 86 65
score 1.91 2.38 2.58 2.33 2.52 2.66
Quality of trade and transport infrastructure rank 138 57 79 106 65 81
score 1.86 2.66 2.60 2.38 2.76 2.55

32
Urkimbayev A. In the member countries of the CU 10-12% of GDP is due to logistics.
https://kapital.kz/expert/25573/za-schet-logistiki-v-stranah-chlenah-ts-formiruetsya-10-12-
vvp.html.

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Indicator 2007 2010 2012 2014 2016 2018

Simplicity of the organization of international rank 129 29 92 100 82 84
transport at competitive prices
score 2.10 3.29 2.67 2.68 2.75 2.73
Quality and competence of logistics services rank 126 73 74 83 92 90
score 2.05 2.60 2.75 2.72 2.57 2.58
Tracking and tracing of cargo rank 117 85 70 81 71 83
score 2.19 2.70 2.83 2.83 2.86 2.78
Domestic prices of logistics services rank 96 - - - -
score 2.81 - - - -
Timely delivery of goods rank 120 86 132 69 92 50
score 2.65 3.25 2.73 3.24 3.06 3.53

Source: Connecting to Compete. 2007, 2010, 2012, 2014, 2016, 2018. Trade Logistics in
the Global Economy. Communications Development Incorporated, Washington, D.C.
In 2007 the country ranked 133rd in the LPI. After analyzing the logistics situation,
the Ministry of Transport and Communications of the Republic of Kazakhstan, in
conjunction with the Transport Operators Union of Kazakhstan "Kazlogistics",
developed a “Plan of Measures to Improve the Logistics System of the Republic of
Kazakhstan”.The implementation of these measures has made it possible to improve
the LPI indicator thanks to the completion of major infrastructure projects in the
various transport sectors; improving the efficiency of the customs and border
services, which affected the reduction in border crossing times; elimination of
physical and non-physical barriers; reduction of the number of documents required
in foreign economic activities; tracking of goods throughout the supply chain; as well
as expanding the list of services provided by private entities in transport and in the
field of transport logistics.
Thanks to the implementation of the Action Plan, Kazakhstan moved from 133 place
in 2007 to 77 place in 2016 and 71 place in 2018, advancing 62 places. The republic
achieved the greatest results in terms of the efficiency of customs and border
clearance, rising by 74 places, as well as the timeliness of cargo deliveries -
70 places. None of the other CIS and Central Asia countries has achieved such
success.
In 2018, according to the LPI, Kazakhstan ranked the 71st one among 160 countries
identified, rising by 17 positions compared to 2014, ahead of all other EEU countries:
Russia (75), Armenia (92), Belarus (103) and Kyrgyzstan (108).
Looking more specifically at the last four years, Kazakhstan’s position on customs
efficiency (+56 places), quality of infrastructure (+25 places), ease of organizing
international transport (+16 places) and timeliness of cargo deliveries (+19 places)
have improved. During the same period though, some of the indicators worsened:
tracking and tracing of cargo (-2 places) and the quality and competence of logistics
services (-7 places). This indicates that this logistics sector requires fundamental
change and development.
The situation has changed significantly over the past two years. The results worsened
in infrastructure (-16 places), tracking and tracing of cargo (-12 places) and the ease
of organizing international transport at competitive prices (-2 places). At the same
time, the situation with respect to the timeliness of cargo deliveries (+42 places),

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customs efficiency (+21 places), the quality and competence of logistics services
(+2 places) improved.
In the future, Kazakhstan intends improve its position to 40th in the LPI rankings. To
accomplish this, the following measures will be pursued:
x Further simplification of customs procedures;
x Reduction of transport permits necessary for export-import operations;
x Creation of attractive conditions for foreign companies that can provide high-
level transport-forwarding services;
x Creation of an effective system for goods tracking; and
x Expansion of the network of regular container trains in the main directions of
cargo flows, reducing the cost of transport and delivery times. 33
The position of Kazakhstan between the largest trading partners – China and the
European Union – is the main stimulus for the development of the country's transport
and logistics system. As already mentioned, the share of Kazakhstan in providing
transit is currently less than half a percent and the bulk of goods from China to the
European Union goes by sea through the Suez Canal.
The creation of a highly efficient transport and logistics system in Kazakhstan is also
dictated by the fact that in the main areas of development of China's economy are
the western and central provinces that are well positioned for rail transport through
Kazakhstan. From 2000 to the present, the Chinese state has invested 6.85 trillion
yuan (US$ 1.04 trillion) in the western regions of the PRC. Though this, the country's
authorities are helping the less developed inner regions of China to catch up with
the economically developed coastal regions in the east. In 2017, approximately
500 billion yuan (approximately US$ 74 billion) was invested in the western regions
of China. They ensured the implementation of 17 infrastructure projects in the areas
of transport, protection of water resources and energy. 34
The accelerated development of the western provinces of China will contribute to
the development of logistics and increase the flow of goods through Kazakhstan. The
creation of the Eurasian Economic Union with a single customs space has led to the
development of efficient transport corridors connecting China with Europe, since
customs procedures are carried out only on the borders with China and the European
Union countries.
Experts predict an increase in the volume of foreign trade between China and the
European Union to US$ 781 billion by 2020, and the volume of freight traffic in this
direction will increase to 170 million tonnes, or about 17 million TEU. Since the
potential volume of transit traffic through the border crossings of Dostyk and Khorgos
could account for 8% of the total turnover, up to 1.4 million TEU could be
transported through Kazakhstan.
As noted earlier, Kazakhstan is 71st in the world in terms of logistics development,
ahead of all other CIS countries. Nevertheless, the market for logistics services is
still not sufficiently developed in the country. Despite the considerable success in

33
http://transport.mid.gov.kz/ru/news/za-poslednie-dva-goda-kazahstan-podnyalsya-na-11-
poziciy-po-indeksu-effektivnosti-logistiki-lpi.
34
www.chinapro.ru/rubrics/1/16610/print.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

the field of logistics over the past 10 years, this sector has grown most in large
industrial centres. This is evidenced by the fact that the bulk of enterprises in the
transport and warehousing sector are in the two largest cities in the country, where
the main financial flows are concentrated, Almaty and Astana. The other regions
and cities of Kazakhstan are experiencing an acute shortage of logistics services.
Given the importance of rail transport in international freight traffic, the President
of Kazakhstan has set the task of creating a transport and logistics cluster based on
the JSC “National Company Kazakhstan Temir Zholy (KTZh)”. In this connection, the
seaport of Aktau, the free economic zone (FEZ) “Khorgos - Eastern Gate”, airports
and the terminal network have been transferred to within this company. Kazakhstan
Temir Zholy will become an intermodal logistics operator on a transnational scale
with all the assets of these companies.
The integration of transport assets into a single structure will ensure the necessary
level of coordination and management, the integration of intermodal services and
the implementation of the one-stop-shop principle, thereby creating favourable
conditions for the realization of the country's export and transit potential. Access to
all transport assets will provide the intermodal operator with transport and logistics
functions, both within the country and within the framework of the EEU and beyond,
as well as the ability to create alliances and enterprises with global players.
Balanced asset management will optimize investment costs, and the linking of
transport services will ensure forecasting and predictability of transport, which in
combination with the integrated services of a single operator will enable it to offer
an efficient transport and logistics product.
As a single centre of transport and logistics services, “KTZh” will become a
coordinator of cargo flows, providing transport infrastructure and increasing the
efficiency and competitiveness of Kazakhstan’s transport corridors. As an intermodal
operator it will be in a position to ensure the unification of a single tariff for all
types of transport and the optimization of costs for transport throughout the country
as well as to simplify the passage of goods and customs clearance.
The development of the transport and logistics system will be facilitated by the
involvement of the global operator Dubai Port World in the port and terminal
infrastructure of Kazakhstan. 35
Kazakhstan, together with the Russian Federation and Belarus, established the
United Transport and Logistics Company (UTLC) within the framework of the
Common Economic Space. UTLC is an instrument for implementing transit potential
and is designed to ensure the development of a unified transport and logistics system
in Kazakhstan, Belarus and the Russian Federation on the basis of uniform principles
for pricing, mutual use of rolling stock, and the introduction of unified technology
for transport services in the countries of the Customs Union and the EEU. The railway
administrations of the three countries have formed a single market of integrated
services based on the principle of a one-stop-shop, unified technology, quality
standards and policy.

35
http://docplayer.ru/41850425-Ao-nacionalnyy-centr-razvitiya-transportnoy-logistiki-biznes-
model-funkcionirovaniya-terminala-v-portu-lyanyungan.html.

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 LOGISTICS IN KAZAKHSTAN

The activities of UTLC are aimed at coordinating the technological parameters for
railway infrastructure development of the main transport corridors. The
establishment of UTLC as a global competitor is contributing to the competitiveness
of the Customs Union in the global market for transport and logistics services,
ensuring the growth of container traffic, and the quality of logistics services for
customers.
The optimization of the terms and cost of transport will allow national railway
companies to increase the volumes of transit cargo by more than 800,000 TEU by
2020. To this end, Kazakhstan will attract about 5 trillion tenge of public and private
investments for the development of infrastructure.
With a view to increasing the fleet of grain wagons, a joint venture has been created
with the participation of the Kazakhstan and Russian operators Kaztemirtrans and
Rusagrotrans. The number of grain wagons will increase to more than 10,000 units.
This will allow Kazakhstan to avoid leasing wagons at great expense from foreign
railway administrations for the transport of Kazakh grain.
It is necessary to create a strong network of transport and logistics centres within
the country and abroad in order to meet the needs of Kazakh companies for quality
logistics services, to implement the transit potential of the country, to engage in a
direct dialogue with shippers and to promote the advantages of overland routes
through Kazakhstan.
In the European Union, the creation of a Europe-wide product distribution system
provides for the presence of several European logistics centres and regional logistics
transport and distribution centeres that interact with them. This solution is designed
to ensure the choice of the most direct routes and to accelerate commodity flows.
Based on the European experience, it would be advisable to establish a commodity
distribution system in Kazakhstan from the network of cross-border international
logistics hubs (dry ports) and regional transport and logistics centres in the places of
origin of exports and the crossing of transit cargo flows.
The National Programme for Infrastructure Development “Nurly Jol” for 2015-2019
states that it is planned to continue the development of the transport and logistic
infrastructure by creating international logistics hubs in large urban centres
designed to store and process large volumes of cargo for subsequent delivery to
other regions. These hubs will be connected with Astana, as well as with regional
transport and logistics centres by road, railway and airline routes or spoke routes.
In addition to these spoke routes, regional transport and logistics centres will be
linked to roads of regional and national importance. For this purpose, such road
corridors as Western China - Western Europe; Astana - Almaty; Astana - Ust-
Kamenogorsk; Astana – Aktobe - Atyrau; Almaty - Ust-Kamenogorsk; Karaganda -
Zhezkazghan - Kyzylorda; and Atyrau – Astrakhan have been finished.
A dry port has been established in the east of the country in the free economic zone
(FEZ) of Khorgos - Eastern Gate. In the west, in the ports of Kuryk and Aktau, as well
as in the centre in Astana, dry cargo terminals have been created. This network will
promote the development of internal logistics, as well as increase the export and
transit potential, both in the western and eastern directions.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

The Khorgos – Eastern Gate FEZ is in the Panfilov district in the Almaty region. It was
put into operation in 2016, and its planned operation is until 2035. The total area of
the FEZ is 4,591.5 hectares.
The FEZ is intended for the:
x Creation of a favourable investment climate with a view to attracting domestic
and foreign investments for the implementation of innovative projects;
x Accelerated development of the eastern region and promoting integration into
the world economy; and
x Creation of a large transport and logistics and industrial centre, specializing in
trade and export activities, as well as contributing to the development of the
transit potential of Kazakhstan.
The Khorgos-Eastern Gate FEZ has a strategic location. It is connected with the
railway line Zhetygen – Khorgos and the Western Europe – Western China road
corridor. In addition, Almaty International Airport is only 360 km away.
Figure 6.1: Strategic location of the Khorgos - Eastern Gate free economic zone

Source: http://atameken.kz/uploads/content/filesƬƳLJưƵƪƭƹƺƶƸƶƪƝƶƸƫƶƹpdf.
In the FEZ there are:
x A dry port which acts as a transport and logistics centre;
x Trade and exhibition facilities;
x An industrial zone;
x Supporting infrastructure; and
x A zone for future developments.
The dry port KTZE-Khorgos Gateway is located on the Kazakhstan-China border, in
Kazakhstan, in the centre of the Khorgos-Eastern Gate FEZ. On the south side of the
free economic zone is the Western Europe - Western China road, on the west side
the Pidzhim road and Altynkol station, on the north side the Zharkent road and the
state border of Kazakhstan with China, and on the east side a border checkpoint and
the Khorgos river.

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 LOGISTICS IN KAZAKHSTAN

Connecting the railway line Zhetygen - Khorgos, the Western Europe-Western China
road corridor and the international airport of Almaty, the Khorgos-Eastern Gate FEZ
has established Kazakhstan as a regional business centre and a trade and logistics
hub.
The total area of the dry port is 129 hectares, the total area of the logistics zone is
225 hectares and the industrial zone is 224 hectares.
Figure 6.2: Map of the Khorgos - Eastern Gate free economic zone

Source: http://atameken.kz/uploads/content/filesƬƳLJưƵƪƭƹƺƶƸƶƪƝƶƸƫƶƹpdf.
The dry port KTZE-Khorgos Gateway functions as a large transport and logistics
centre and an industrial centre on an international scale. It will service the world
market from China to Europe, through the countries of Central Asia, Turkey and the
Persian Gulf.
The operator of the dry port is KTZE-Khorgos Gateway LLP, a subsidiary of KTZ
Express, in joint management with DP World, the third largest port operator in the
world.
Thanks to the experience and management of DP World, KTZE-Khorgos Gateway is a
world-class project providing services in accordance with international standards
based on efficiency, safety and environmental protection.
The effectively conceived infrastructure of the project actively promotes the
development of trade and economic relations between East and West. Also, new
logistics solutions significantly reduce costs in the supply chain and accelerate
delivery times to world markets.
The dry port KTZE-Khorgos Gateway is an evolving intermodal logistics hub, which
services cargo operations, such as trucking and container operations, reshipping,
terminal handling and additional logistics services.
The dry port is connected with cargo terminals in Europe and Asia by rail and water
routes. Cargo is carried through the “West Gate” of the seaport of Aktau on the
Caspian Sea.
Almaty International Airport with a cargo terminal of 5.5 hectares is located 360 km
from the FEZ. The management company offers a single customs service integrated
with the airport's cargo terminal. The average flight time from the airport to any
European city is about five hours.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

The Khorgos – Eastern Gate FEZ has direct access to the 4-lane Western Europe –
Western China motorway with a total length of 8,445 km, ensuring the delivery of
goods from China to Europe within 10 days.
Figure 6.3: Intermodal capability of the KTZE - Khorgos Gateway dry port

Total Length: 360 km Total Length: 11 000 km Total Length: 10 000 km Total Length: 8 500 km
Transit Time: 4 hours Transit Time: 10-13 days Transit Time: 20-23 days Transit Time: 10-12 days

Source: http://atameken.kz/uploads/content/filesƬƳLJưƵƪƭƹƺƶƸƶƪƝƶƸƫƶƹpdf.
It is expected that by 2020, cargo flows through the Khorgos - Eastern Gate FEZ will
amount to 170 million tonnes of cargo. It is planned that up to 6% of Chinese exports
to Europe will be transported by rail. At the same time, the volume of container
transit will be 1.7 million tonnes.
The operational activities of the dry port include:
x Acceptance and dispatch of trains;
x Transshipment of goods from wagons of a gauge of 1,435 mm into wagons of a
gauge of 1,520 mm and vice versa;
x Transshipment of road trains;
x Transshipment of vehicles (wagon - wagon, truck - wagon);
x Formation of container trains;
x Warehouse operations and a container site: loading, sorting, storage, dispatch
of cargoes, etc.;
x Storage of dangerous goods and cargoes with temperature requirements;
x Scanning, weighing, packing/unpacking; and
x Customs procedures and insurance providing guarantees for all types of risks.
The dry port has the following capacity:
x A container area for 18,000 containers a day;
x A container terminal with six loading and unloading places;
x A terminal for packaged goods on narrow and wide gauge track;

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x A terminal for bulky goods;

x A terminal for explosives and dangerous goods;
x A terminal for goods with temperature requirements;
x An area for sanitary-veterinary control;
x Railway tracks totalling 25 km in length (narrow and wide gauge); and
x Two warehouses with an area of 5,000 m2 each, including cameras with a
climate control function of 700 m2 each.
The main advantages of the dry port include:
x Access to the Western Europe - Western China motorway.
x Fast train handling time;
x Intermodality;
x The possibility to consolidate cargo from different modes;
x Safety and security of cargo in accordance with DP World standards;
x Minimal probability of loss of cargo;
x Online cargo information;
x Information in real time, including photographs of cargo/containers available
on the website;
x Services for the formation of container trains in various directions;
x A fixed on-line schedule for the reception and dispatch of container trains;
x Providing new opportunities for business development thanks to the convenient
location of the logistics and industrial zones;
x Tax benefits (exemption from VAT, land tax and property tax);
x Preferential customs treatment (exemption from customs procedures for goods
imported into the territory of the FEZ);
x Simplified procedures for employment of foreign citizens;
x Strategically important location (at the crossroads of the old and new Silk
Roads and the centre of the Eurasian continent); and
x Open access to a wide market (Eurasian Economic Union, Central Asia, China,
Europe, Turkey and the Persian Gulf countries). 36
The dry port is intended as an international logistics hub in Central Asia. To facilitate
this, a railway line connecting Kazakhstan and Iran via Turkmenistan has been put
into operation. Trains with goods and raw materials from the Russian Federation and
Asian countries can travel to the port of Bandar Abbas in the south of Iran. This port
provides access to major sea trade routes. The total length of the railway line Uzen
(Kazakhstan) – Gyzylgaya – Bereket – Gyzyletrek (Turkmenistan) – Gorgan (Iran) is
935 km. The territory of Kazakhstan accounts for 130 km, and the territory of Iran

36
https://kazakh-tv.kz/en/view/news_kazakhstan/page_150603_construction-of-dry-port-
facilities-at-%E2%80%98khorgos-eastern-gate%E2%80%99-fez-under-way.

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accounts for 82 km. At the start of 2018, the volume of cargo transport between
Kazakhstan and Turkmenistan amounted to 1.4 million tonnes.
The opening of the North-South transport corridor with access to the Persian Gulf
will increase both the volume of transit goods through Kazakhstan and export
opportunities for the country. The planned volume of transshipment of cargo is up
to 10 million tonnes per year. In addition, Kazakhstan plans to build grain terminals
on the border of Turkmenistan and Iran for grain exports to the east.
The construction of the largest transport and logistics centre in Astana was
completed in 2015 by Continental Logistics, which is actively developing a network
of transport and logistics centres across Kazakhstan. Starting in 2015, specialists
from Continental Logistics successfully developed integrated logistics services for
3PL operators in Kazakhstan. 37
The transport and logistics centre (TLC) in Astana is located on the national road
from Karaganda to Astana, near the ring road and Sorokovaya railway station.
The TLC comprises dry warehouses with an area of 29.3 thousand m² (including a
warehouse for temporary storage – 4,541 m², a mezzanine – 1,176 m², shelf storage
– 38,253 pallet places), a climate controlled warehouse – 13,300 m² (a refrigerated
zone – 5,771 pallet places (0 r 5°C), frozen storage – 4,150 pallets (- 18°C), a
controlled atmosphere zone – 577 m², a warehouse for temporary storage - 580 m²),
a distribution centre – 25,000 m², a container area – 70,000 m² and a shopping centre
– 24,000 m².
There is also a customs clearance centre operating as a one-stop-shop. The TLC in
Astana is an intermodal centre benefitting from rail and road transport. A total of
5 km of access railways are connected to the warehouses.
According to the warehouse management system, goods enter the warehouse and
are automatically entered into a database, which fixes their place of storage.
Various strategies are used for warehouse management, warehouse operations,
including scheduling of shipments, automatic marking of compliance and other
operations. The use of advanced technologies allows the speed of loading and
unloading of goods to be significantly increased. The capacity of the TLC is up to
one million tonnes of cargo per year and about 850 new jobs have been created.
In addition to the creation of large international logistics hubs in Kazakhstan,
considerable attention is being paid to the development of the domestic transport
and logistics network. Transport and logistics centres will be built in the major cities
of Aktobe, Pavlodar, Almaty, Uralsk, Atyrau, Aktau, Kostanay and Ust-Kamenogorsk.
Hubs will be created for storage, processing and consolidation of goods in regional
centres. In the long term, these large regional logistics centres will be connected
with the central hub in Astana according to the “spoke” principle. The construction
and reconstruction of roads between central and regional logistics hubs are planned
in the framework of the Nurly Zhol programme until 2020.
Regional logistics centres will create logistics infrastructure through which goods
will be distributed to smaller logistics centres intended for storage, processing and
consolidation of goods.

37
http://c-l.kz/kontakty/novosti/38/.

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In December 2017, a class A transport and logistics centre, which distributes goods
imported from China and the Russian Federation in the southern regions of
Kazakhstan (Zhambyl and Kyzylorda regions and Almaty) was put into operation near
the airport in Shymkent.
Figure 6.4: Transport and logistics centre in Shymkent

Source: http://c-l.kz/o-tlts/tlts-v-g-shymkent.php.
The total area of the TLC is 34 hectares. Its main advantages are its proximity to the
new railway terminal, the possibility to deliver goods by road and rail, the siting of
the facility away from populated areas and the 24-hour operation of its warehouses.
The Shymkent TLC offers a full range of logistics services including secure storage,
temperature control, selection of orders and shipment of goods of client companies,
as well as additional services related to the supply, cleaning and unloading of railway
wagons and large-tonnage containers, customs registration, sorting of defective
goods, inventory and other services.
The TLC fully complies with the requirements for class A warehouses according to
Knight Frank's international classification.
The TLC comprises a dry warehouse with an area of 10,400 m² (warehouse for
temporary storage – 2,300 m², mezzanine – 1,000 m², shelf storage – 12,788 pallet
places), climate controlled warehouse –10,400 m² (refrigerated zone – 3,250 pallet
places (0 r 5°C), frozen storage – 2,560 pallets (- 18°C), controlled atmosphere zone
- 609 m², warehouse for temporary storage – 4,125 m²), container area – 40,000 m²,
and shopping centre – 2,500 m².
The warehouse complexes are equipped with high-rise reach stackers and automatic
docks, which will significantly increase the capacity of the loading and unloading
zone by up to 1,000 pallets a day.
It is planned to build a TLC in Aktobe. The total area will be 40 hectares.
The main advantages of the TLC will be its direct access to the highway and
proximity to the railway at Aktobe station, which will allow it to carry out intermodal
transport.
The TLC will include the offices of Kazakhstan Temir Zholy and KTZ receivers, the
offices of state control authorities (phytosanitary and veterinary), veterinary
examination rooms, vehicle weighing facilities and support facilities.

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The following facilities will be part of the TLC:

x Dry warehouse with an area of 19,000 m², including a warehouse for temporary
storage (4,000 m²);
x Climate controlled warehouse – 10,000 m²;
x Container area – 26,500 m²;
x Warehouse for temporary storage – 7,000 m²;
x Administrative buildings and facilities – 4,000 m²;
x Customs clearance centre – 1,900 m²;
x Inspection complex; and
x Vehicle repair workshop and garage – 1,500 m².
In addition to regional transport and logistics centres, residents and non-residents
of Kazakhstan can create their own warehouse network for the servicing of their
production.
Systemic work to improve the quality of transport and logistics services is being
carried out including the reduction of transport time through route optimization,
reduction of transport costs, cargo security, optimization of tariffs, training and
retraining of personnel, etc.
Kazakhstan also needs to develop an international strategy for the further promotion
of foreign markets by creating and developing terminal and service infrastructure
and a modern sales network outside the country, mainly on trade routes between
Asia and Europe. To facilitate this, terminal capacities should be constructed or
rented in the seaports and dry ports of the Caspian Sea, Black Sea and Baltic Sea, as
well as in China, the Russian Federation, the European Union and the Persian Gulf.
The network of transport and logistics centres, linked by a centralized management
system and a single technological process, will provide Kazakhstan with international
transport corridors and access to key sea trade routes in South-East Asia and Europe.
The terminal in the port of Lianyungang on the east coast of China was created as a
result of the implementation of activities outlined by the Kazakhstan 2050 strategy
to expand the country's presence in key logistics centres of other countries. The
terminal is connected with Kazakhstan by a road corridor and railway line.
The logistics terminal in Lianyungang port is also connected by rail to a number of
major Chinese ports such as Shanghai, Ningbo, Qingdao and others, as well as by sea
with the Japanese port of Osaka and the port of Busan in the Republic of Korea.
KTZ Express, together with its Chinese partners, operates a Kazakh-Chinese terminal
in the port of Lianyungang (China).
Container trains run regularly from Lianyungang port to Kazakhstan, Iran, Turkey,
Central Asia and Europe.
Terminal services in the port of Lianyungang include cargo handling, cargo storage,
cargo consolidation, cargo distribution, container shipment from the terminal, a
temporary storage warehouse, etc.

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The terminal in Lianyungang also provides the opportunity for processing and
transshipment of transit cargo from the countries of South-East Asia and North
America, as well as goods exported from Kazakhstan. The delivery time of goods has
decreased from 45 to 10-15 days.
An important issue for transport through the terminal is the use of uniform tariffs
for the carriage of goods, which will reduce the cost of exports and imports. It is
planned that the terminal will be able to service over 500,000 TEUs by the end of
2020.
Kazakhstan should also create its own terminals in the Chinese centres of Urumqi
and Chongqing, which would allow it to influence the formation of the cargo flows,
conduct direct dialogue with the shippers and promote the advantages of overland
routes through Kazakhstan. In addition, given the great potential for Kazakhstan's
agricultural exports, primarily grain and meat, joint ventures should be set up to
build or purchase trade and logistics facilities in the Russian Federation. This could
lead to increased meat exports to foreign markets of 180,000 tonnes by 2020 and
promote Kazakhstan’s meat in the Siberian regions of the Russian Federation.
The effectiveness of logistics depends not only on the level of development of
transport infrastructure and optimization of supply routes, but also on the
availability of modern warehousing. Currently in Kazakhstan, and especially in the
regions Currently there is not enough warehouse space of class A or even B.

6.1 SWOT ANALYSIS OF THE LOGISTICS SECTOR

The development of the logistics sector in Kazakhstan faces risks that may hamper
the achievement of the planned results. In this regard, a SWOT analysis has been
conducted, examining the country’s strengths and weaknesses in terms of logistics
development, as well as its potential and the threats it may face in the course of
implementing the planned activities (table 6.2).
Table 6.2: SWOT analysis of Kazakhstan's logistics sector
Strengths

1. Desire of the country's leadership and business to develop transport logistics

2. High demand for Kazakh raw materials and goods in external and internal markets requires optimization
of transport costs

3. Removal to the external borders of the EEU of customs clearance of cargo promotes the growth of
freight traffic and the development of transport and warehouse logistics

4. Interest of China, Kyrgyzstan, Tajikistan and Uzbekistan in the development of land corridors through
Kazakhstan contributes to the need for the development of logistics

5. Delivery of goods by intermodal transport requires the use of logistics

6. Availability of free economic zones that need to develop logistics

7. Need to build modern transport and logistics centres

Weaknesses

1. Low level of logistics services

2. Insufficient number of own terminal networks outside Kazakhstan, which increases logistics costs for
cargo processing

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3. Lack of a logistics management system

4. Insufficient transport links between regions in the West-East direction, which increases logistics costs

5. Low level of automation in the field of logistics services

6. Low level of use of logistics for export, import and transit operations

7. Lack of third and fourth party logistics operators in the country, especially in remote regions

8. Low level of interest of business in the development of public-private partnerships in logistics

Opportunities

1. Adoption of the State programme for the development of the logistics sector in Kazakhstan

2. Development of an Action Plan to improve the logistics performance index (LPI) and to reach 40th
position in the world for this indicator

3. Creation of a three-tier network of transport and logistics centres

4. Expand the practice of creating transport and logistics centres outside the country to reduce logistics
costs

5. Efforts to attract export cargo flows from Japan and the Republic of Korea through the terminal in
Lianyungang

6. Attract foreign logistics operators

7 Make efforts to develop transit air flights and create a transshipment hub in Astana and Almaty

8. Introduce the specialty course “Logistics” in universities

Threats

1. Lack of financial resources to create a wide network of transport and logistics centres and terminals,
both in Kazakhstan and abroad

2. Limited opportunities for obtaining loans in the logistics sector

3. High interest rates on external financial resources

4. Lack of interest of private business in public-private partnerships in the field of logistics

5. Possibility of cargo transport between China and the European Union bypassing Kazakhstan

6. Desire of the Russian Federation to develop its own logistics for the export-import of goods using
Russian logistics operators

6.2 RECOMMENDATIONS FOR THE DEVELOPMENT OF LOGISTICS

The creation of a highly efficient transport and logistics system in Kazakhstan is
dictated by the development of the western and central provinces in China that are
well positioned for rail transport through Kazakhstan.
Based on the European experience, a network of international logistics hubs (dry
ports) should be established in Kazakhstan as well as transport and logistics centres
in the places of origin of exports and border crossing of transit cargo flows. These
hubs should be connected with Astana and with transport and logistics centres by
road, rail and airline routes. In addition to radial routes, transport and logistics
centres shold be linked by roads of regional and national importance.

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Drawing on the experience of creating a dry port in the Khorgos - Eastern Gate FEZ,
similar dry ports should be established in the west in the ports of Kuryk and Aktau
and also in the centre in Astana. Such a network would contribute to the
development of domestic logistics, as well as increase the export and transit
potential, both in the western and eastern directions.
In addition to creating large international logistics hubs, an internal transport and
logistics network should be developed. Transport and logistics centres need to be
built in the large cities of Aktobe, Pavlodar, Almaty, Uralsk, Atyrau, Aktau, Kostanay
and Ust-Kamenogorsk.
In the long term, the TLCs will be connected with the central hub in Astana according
to the “spoke” principle. To build such a network, the construction and
reconstruction of roads is planned between the central and regional TLCs in the
framework of the “Nurly Zhol” programme until 2020.
Regional TLCs will create a logistics infrastructure through which goods can be
distributed to smaller logistics centres intended for storage, processing and
consolidation of goods.
For the further development of transport logistics it is recommended to:
x Introduce a system for the simplified passage of goods across borders through
effective organization and regulation of customs and technological procedures;
x Improve existing standards and tariff policies;
x Attract large investors, including domestic ones, to invest in the development
of the transport complex of the country by creating favourable conditions for
them;
x Improve the legal framework for the transport of goods, especially with regard
to international container transport;
x Choose the optimal siting of transport and logistics complexes taking into
account the prospects for the development of the region and international
transport corridors; and
x Create favourable conditions for the effective integration of transport and
logistics systems into international transport services markets.
Furthermore, the following additional recommendations for the development of
logistics can be made:
x Provide state support for the integration of the transport and logistics
infrastructure of Kazakhstan into the Euro-Asian transport and logistics system;
x Create a three-level system of logistics centres: three dry ports (Khorgos -
Eastern Gate, Astana and the Aktau port area), logistics centres in large cities
and a network of modern small logistics centres in other regions;
x Expand the practice of creating logistics centres in the countries where the
main cargo flows originate;
x Provide conditions for increasing the competitiveness of the country's transport
and logistics system;
x Determine the organization responsible for the development of logistics;

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x Approve the reporting form for logistics activities;

x Legally bind the organization and entrepreneurs carrying out logistic activities
and submit reports in accordance with established procedures;
x Create the necessary conditions for attracting external freight traffic to the
country's transport routes;
x Considering the importance of the Trans-Caspian Corridor for the country's
economy, create an effective network of logistics operators at the points of
origin and transshipment of goods;
x Apply intermodal transport principles taking into account optimal schemes for
the interaction of the different modes of transport;
x Move from the practice of competition with Russian transport routes to
competition in the field of logistics;
x Provide state support for creating the infrastructure of the logistics system;
x Develop the transport and logistics infrastructure in the regions;
x Ensure efficient functioning of customs logistics;
x Reduce logistics costs in supply chains; and
x Open courses on logistics in universities.

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7. LEGISLATION IN THE TRANSPORT SECTOR

7.1 THE REGULATORY AND LEGAL FRAMEWORK IN THE FIELD OF TRANSPORT
A listing of relevant legal instruments in the field of transport is provided in the
Annex to this study. A review of the existing legislative and regulatory framework
has shown that much has been done to improve the legislative framework in the
field of transport, customs and trade, but that there are still areas where further
legislation needs to be pursued.
The improvement of legal support for the transport sector must be carried out taking
into account the fact that transport legislation should:
x Provide legal regulation not only for transport in general, but also for each
mode of transport: rail, road, water and air;
x Be harmonized as closely as possible with the relevant legal norms of
neighbouring countries and other trading partners. At the same time, national
legislation and bilateral and multilateral treaties and agreements should not
conflict with international conventions and agreements on transport.
Improvements in transport legislation of Kazakhstan should focus on addressing:
x The lack of a clear delineation of powers of ministries and departments in the
organization of management and control of the transport sector as a whole and
of certain modes of transport;
x The need to improve the accountability of the large number of small operators
providing transport and logistics services;
x Insufficient information support for participants in the transport industry on
normative legal acts; and
x Inadequate measures to counter corruption in transport that allows certain
participants not to comply with the provisions of the law.
A fully-fledged transport services market has been created in the road transport
sector, where enterprises with different ownership as well as individuals are
represented. More than 50% of carriers in road transport are private individuals.
Effective state regulation of the transport market can only be carried out if complete
and objective information is received by the Committee on Statistics of the
Economics Ministry.
According to the Law on State Statistics, legal entities are obliged to submit
information on transport activities to the Committee on Statistics. 38 For non-core
companies, information on property and financial results is sufficient. Individual
carriers must submit performance reports in accordance with the requirements of
the law. However, further explanation of this requirement is not given.
Consequently, more than half of carriers do not submit reports on their activities to
the statistical bodies.

38
Law of the Republic of Kazakhstan On State Statistics No. 257-IV dated March 19, 2010.

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In addition to direct reporting by carriers and forwarders, there are other channels
for obtaining information on the transport market. For example, customs authorities
maintain records of the foreign economic activities of transport companies. Their
databases contain complete information on international transport. Based on this
information, it is possible to analyze and forecast cargo flows by all modes of
transport, by destinations and groups of goods.
The traffic police gather information on the activities of vehicles on the domestic
market.
Other ministries and departments also have some information about the transport
services market.
However, due to the fact that transport issues are not within the competence of
these state structures, their information is not provided to statistical bodies. This
information is provided only at the request of interested parties.
Improving the quality of statistics in the transport sector of Kazakhstan is possible
through selective surveys of carriers.
It is important to develop mechanisms to facilitate the interaction of various
government bodies with a view to creating a unified framework for monitoring the
market for transport, logistics and forwarding services. One recommendation that
stems from this is to set up transport sector databases managed by a single operator
accountable to the Ministry of Investment and Development.
Currently, insufficient attention is paid to intermodal transport, which is regulated
by the following documents:
x Civil Code of Kazakhstan (a specific part);
x Law on Road Transport;
x Law on Rail Transport; and
x Order of the Acting Minister for Investment and Development on Approval of
Rules for Intermodal Transport.
Intermodal transport has not developed satisfactorily in Kazakhstan. In this regard,
it would be advisable to review the experience of the European Union in promoting
intermodal transport. In accordance with Directive 92/106/EEC, European Union
member States shall take all necessary measures to reduce or reimburse taxes that
are imposed on vehicles used in intermodal transport. Moreover, vehicles used
before or after intermodal transport (delivery of cargo to/from cargo terminals)
should be exempted from all kinds of tariff regulation. Subsequently, tax benefits
have been applied to vehicles of all modes of transport involved in intermodal
transport.
The European Union also supports intermodal transport by financing innovative
projects in the field of intermodal transport which demonstrate the effectiveness
and viability of this mode of transport.
Control and enforcement in the field of transport are carried out on the basis of the
following regulatory acts:
x Code on Administrative Offenses No. 235-V of 5 July 2014 (as amended on
16 April 2018);

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x Law on Transport in Kazakhstan; and

x Decree of the Government of Kazakhstan No. 1358 of 8 September 2000 on the
establishment of a unified state control system for road transport on the
territory of Kazakhstan (as amended on 27 February 2004).
The Transport Control Inspectorate of the Transport Committee of the Ministry of
Investment and Development is responsible for control and enforcement of
legislation in the field of road, inland waterways and maritime transport. Its
competence includes control of weight and dimensions, driving times of vehicles,
etc. In addition, it operates a licensing system for road transport (issue of permits)
and licensing of transport activities established by law.
However, there is insufficient coordination between the Committee and other
monitoring bodies and primarily with the traffic police. Hence, the large number of
inspections on the roads and the lack of improvement in the quality of traffic and
road safety. In addition, this facilitates corruption in the system of state control,
which is one of the main non-physical barriers to a country’s integration into the
international transport system.
In the process of improving national transport legislation, it is necessary to use the
experience of the European Union in developing procedures for the control and
enforcement of legislation in road transport. To this end, special attention should
be paid to the unification of control procedures on highways and at border crossing
points.
It is also necessary to refine the Code on Administrative Offenses in terms of
delineating responsibility for violation of the rules.

7.2 PROPOSALS FOR HARMONIZATION OF THE LEGISLATIVE FRAMEWORK IN THE

FIELD OF INTERNATIONAL FREIGHT TRANSPORT

Harmonization of legislation in the field of transport activities is one of the most

important conditions for the development of the transport infrastructure of
Kazakhstan and of the CIS as a whole. Harmonization should also be considered from
the perspective of the EEU and the CIS, since the decisions Kazakhstan takes in this
sphere also depend on the policies of these entities.
In recent years, integration processes have been taking place all over the world.
Such regional associations as the European Union, the CIS, the Customs Union and
the EEU have made the most tangible progress.
The European Union is actively developing a single internal market based on the four
freedoms of movement of goods, services, investments and people.
The challenge of the economic integration of the CIS member States is using the
historically accumulated potential and the existing advantages of the division of
labour for the realization of the interests of member countries.
The basic principles of the CIS are:
x Creation of a free trade zone oriented to international standards in the field
of interstate relations;
x Creation of an effective mechanism for implementing decisions and
arrangements;

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

x Increasing the responsibility of member States to fulfil their obligations; and

x Systematic elimination of barriers in mutual trade, ensuring fair competition
in national markets.
These principles are directly related to transport activities. An efficient transport
system is the key to the successful development of the economy of the CIS.
Studies have made it possible to identify the following systemic problems, which
currently have a serious detrimental effect on the development of transport and
logistics activities in the CIS region as a whole and, by consequence, have an effect
on Kazakhstan. 39
1. Lack of harmonization of the basic legislation in the sphere of transport
activities with neighbouring countries and CIS countries.
The statutes, codes and laws in the field of transport adopted in the member States
of the CIS and the EEU have national specificities on certain issues. In a number of
countries there is no legislation on a whole range of important issues, or regulations
are sometimes based on old laws that do not meet modern realities.
There is no regulation on many issues that are extremely relevant at present, such
as payment for the use of infrastructure or the transport of special cargoes. Clearly
all States of the region are interested in creating a new legislative and regulatory
framework on a unified basis that meets both the interests of trade and the interests
of carriers.
2. Weakly unified technical and technological standards in the field of cargo
transport.
Work on the harmonization of standards and technical norms is carried out through
accession to international agreements and conventions, their ratification and
harmonization of national legislation and regulations. Analysis of the accession of
CIS member States to the basic multilateral legal instruments in the field of road
transport has shown that none of the agreements is fully effective throughout the
Community. The level of applicability and adaptation of European norms is also
relatively low. Of the 40 UNECE agreements and conventions affecting road
transport and border crossing procedures, 11 have not been signed by any of the CIS
member States.
Only the Customs Convention on the International Transport of Goods under the TIR
Carnet (1975) has been adhered to by all CIS member States, but carriers in the
Central Asian countries do not sufficiently use this procedure.
3. Absence of an effective licensing system in the CIS. The transport permit
system has been abolished within the framework of the EEU. Transport to/from third
countries is still carried out on the basis of special permits. Bilateral agreements
concluded between individual countries presuppose different approaches in respect
of taxes, road tolls and transit. The diverse legal regimes created by the existing
bilateral agreements contradict the principles of free trade and the common
economic and transport space.

39
www.ingruz.ru/poleznoe/zakonyi-i-pravila.

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4. Various barriers of a technical, administrative, fiscal and transboundary

nature. It should be noted that there have been significant changes in this sphere
lately. The CIS adopted a declaration on countering unfair competition in road
transport. It should now develop a mechanism for implementing the provisions of
the declaration, which should include the removal of administrative barriers to
transport.

7.3 RECOMMENDATIONS FOR LEGISLATION

The efficiency of transit traffic is largely determined by the capacity of border
checkpoints. Currently, there are long waiting times for vehicles at customs
clearance points on the borders with Uzbekistan, Tajikistan, Kyrgyzstan and China.
Reducing the downtime of vehicles associated with waiting for customs controls is
one of the main ways of improving the efficiency of transport. To solve this problem,
it is necessary to continue work on improving customs legislation, introducing
modern information technologies for customs control and developing transport
infrastructure.
To this end it is recommended to:
x Combine all control functions under the supervision of customs and implement
a one-stop system;
x Maintain a continuous flow of goods 24 hours a day, 7 days a week;
x Divide passenger and cargo flows to reduce queues and delays;
x Manage queues and improve the queuing culture;
x Introduce a separate accelerated corridor for trucks with perishable goods
under the TIR regime at major international border crossings;
x Increase the capacity of major border crossings by creating additional lanes
and increasing the number of personnel during peak hours;
x Introduce electronic seals;
x Install inspection systems;
x Reduce the number of required documents; and
x Introduce a system of preliminary applications for border crossings.
To reduce the downtime of vehicles during customs controls it is recommended to:
x Introduce special scanning devices at the main checkpoints. The use of such
devices would allow not more than 0.5% of vehicles in transit to be inspected;

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x Implement the experience of Belarus and the Russian Federation of single

window customs checks. In these countries, all the functions of state control
at the border with regard to companies, individuals, vehicles, cargo, goods and
animals are distributed between the two services: passport control is carried
out by the border service, and all other types of control are under customs
services. Customs officers are given responsibility for verification of documents
for imported goods subject to veterinary, quarantine and sanitary and
phytosanitary control. The introduction of this technology has shown that the
downtime of vehicles at border crossings can be reduced by approximately two
times;
x Introduce an automated system of electronic preliminary information of goods
transported by road and rail through the borders of Kazakhstan. This will
reduce the time spent at border checkpoints by about 1.5 times;
x Set up a special simplified procedure for customs clearance of goods in logistics
centres at the legislative level;
x Use automation and unification of transport documents to simplify the
document flow in the provision of logistics services;
x Develop the carriage of transit cargo in containers and the national
infrastructure of customs clearance points;
x Provide customs and information services and the services of a customs
representative to accredited freight forwarding and logistics companies;
x Continue work on the unification of the legislation of Kazakhstan and
neighbouring countries in the field of logistics and transport and forwarding
activities, taking into account the national interests of freight forwarders and
logistics experts;
x Abolish the mandatory transshipment of goods from foreign carriers to national
carriers in terminals; and
x Eradicate corruption at border checkpoints.
The introduction of these measures would increase the attractiveness of Kazakhstan
for transit traffic through its territory.
Furthermore, the following plan for the harmonization of legislative and regulatory
activities in the field of transport and logistics can be proposed:
x Conduct analysis of existing regulatory and legal acts. Identify inconsistencies
with international provisions and the provisions of neighbouring States and
develop proposals for their elimination. Develop new legislative acts (on toll
roads, on the transport of dangerous goods, on concessions in the road sector,
etc.) based on successful models in these areas.
x Unify technical norms and standards in transport with the norms of the
European Union and neighbouring countries to promote Kazakhstan’s
integration into the world transport system. An important aspect of this
unification is the introduction of the practice of mutual recognition of
diplomas, certificates and other documents issued in CIS member States and
officially certifying the qualification of freight transport operator.

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x Ensure an effective system for implementing international transport between

the States of the Central Asian region by eliminating administrative barriers.
To do this, it is necessary to remove barriers such as transit fees and other
charges on free roads and introduce a permit system for bilateral transport and
delivery of heavy, oversized and dangerous goods.
The contradictory provisions of numerous existing rules and regulations makes it
difficult to interpret and appeal various procedures. As a result, the rates and
volumes of cargo deliveries is decreasing, which in turn leads to direct financial
losses.
Various mechanisms for implementing these changes are possible. Firstly the revision
of all existing bilateral agreements and second the introduction of appropriate
amendments and additions to them. The most effective would be the development
and adoption of a multilateral agreement on international transport, which would
bring together all the different modes of transport.
Responsible ministries should be encouraged to accede to international agreements
and conventions. The harmonization of the legislation of Kazakhstan with the
current rules in the European Union, CIS, EEU and neighboring countries has become
an important task, and the development of international cargo transportation in
Europe and Asia depends on the success of its solution.

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8. PROSPECTS FOR THE DEVELOPMENT OF TRANSIT AND TRANSPORT

LOGISTICS IN KAZAKHSTAN
8.1 DEVELOPMENT OF TRANSIT AND LOGISTICS IN EURO-ASIAN TRANSPORT
As mentioned previously, sea transport is dominant in the transport of goods
between Europe and Asia due to the following factors:
x Flexible tariff policy;
x Absence of borders between States;
x Well-functioning logistics;
x Simplification and digitization of procedures in ports;
x Low cost of transport; and
x The effectiveness of associations of carriers and various operators; etc.
Euro-Asian inland transport routes will never be able to compete with the volume of
transport by sea. However, they can prove themselves as a valuable addition to sea
transport by ensuring high reliability of delivery of expensive and/or time-sensitive
good.
The inland Euro-Asian transport links are continuing to evolve. State and private
carriers and logistics operators carrying out container transport along Eurasian land
routes are continuing to prove themselves as an alternative to sea transport.
The competition of transport corridors on the Euro-Asian continent is not a choice
between transport routes or modes of transport. It is a competition of logistics
solutions based on intermodal transport and logistics services, focused on specific
supply chains. At the same time, the basic requirements for the supply chain are
regular services, a high degree of reliability, flexible tariffs, and the required speed
of delivery for the different types of cargoes. These requirements are applicable to
the logistics of the entire transport chain.
Decision making in supply chains with regard to the choice of routes and modes of
transport is usually not made by consignors or consignees, but by logistics operators,
who, with information on the transport market, are able to take into account the
interests of the numerous market players (carriers, terminal operators,
infrastructure owners etc.) and effectively meet the requirements for a particular
supply chain.
In this regard, a transport route will attract freight flows only when it is competitive
in the context of supply chains. No political decisions or investment projects
developed outside this context can be successful from an economic point of view.
Therefore, attempts to link cargo flows to certain routes or modes of transport will
not be effective.
It is necessary to consider the effectiveness of the functioning of Euro-Asian
transport routes taking into account the level of development of economies and the
state of transport and logistics capabilities of individual regions throughout the
supply chain.

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Rapidly developing China-Europe trade, China's economic growth and China's

political and economic reorientation towards intra-Asian cooperation is creating the
opportunity for Central Asian countries to become a transport and trade bridge
between the west and the east.
Recent years have also seen rapid growth in the Turkish economy, Iran's growing
interest in Asia, the renewal of the Russian Federation's interest in trade and
economic integration with a number of Central Asian States and the ever-growing
trade relations between the Arabian Peninsula and East Africa on the one hand and
the Asia-Pacific region and India on the other hand. These trends can help to identify
deeper and longer-term geopolitical and geo-economic areas for cooperation.
Central to these trends is the further integration of national transport systems and
logistics into Euro-Asian transport links. Despite the high transport costs, which are
a decisive barrier to trade and commercial integration, the growth of continental
trade provides an opportunity for the development of the economies of the Central
Asian countries.
In this process Kazakhstan is the most active and successful partner. After the
President’s speech on the new economic policy, investments in infrastructure are a
top priority for the economic development and diversification of the country.
Kazakhstan is pursuing a multi-pronged foreign policy, balanced between the Russian
Federation, the United States and China, while deepening relations with Germany,
India, Turkey, Iran and countries in the Middle East. Transport cooperation can
become a catalyst bringing together various initiatives, such as the Eurasian
Economic Union, the Silk Road Economic Zone and the New Silk Road Strategy.
Eurasian economic development and continuing geopolitical challenges determine
the need for Kazakhstan to open new transport routes that will complement the
northern corridor through the Russian Federation. Kazakhstan should not be afraid
of competition on transport corridors.
China has identified three main routes, which will be given priority in the
development of the One-Belt-One-Road Initiative. These are the northern corridor
through the Russian Federation and the central and southern corridors. The northern
corridor through the Russian Federation and the central corridor are the most direct.
Kazakhstan was one of the first initiators of the idea of the southern route. Its active
role in the development of the southern corridor is determined by the fact that the
distance from Astana to Beijing is more than 4,000 km, while from New Delhi it is
only 1,500 km.
At this stage, the southern corridors seem to be the most difficult. These corridors
include India, Kyrgyzstan, Tajikistan, Turkmenistan, Afghanistan, Iran, Turkey,
Georgia and, and partly the Russian Federation.
Turkey is making significant efforts to improve the country's position as a transport
bridge and logistics hub. It has invested almost US$ 190 billion over the past 11 years
in transport and logistics. In the railway sector, 1,466 km of new tracks have been
laid and 3,400 km are under construction. Among them are such key projects as the
national part of the Baku – Tbilisi – Kars line and the completed mega project, the
Marmarin Tunnel. In addition, 19 logistics centres will be completed by 2020. In the
eastern part of Turkey logistics centres are being established in Kars, Mardin and
Habur. They are important for improving cross-border transport.

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Georgia is also modernizing its transport and logistics sector.

The further relationship of the region with Afghanistan is of interest. Afghanistan is
taking steps to open up trade and interact with international projects. A joint
Chamber of Commerce and Industry of Central Asia and Afghanistan has been
established. A draft agreement between Turkey, Azerbaijan, Turkmenistan and
Afghanistan (TATA) on the new south-central corridor has been drawn up. However,
in terms of cost, the Afghan route is still restrictive: the cost for moving a 20-foot
container from Mazari-Sharif to the border with Uzbekistan (75 km) is about
US$ 3,000, which is higher than the rate for moving the same container from
Uzbekistan to the Russian Federation.
India could become the next powerhouse on the continent in terms of economy and
demography. At the same time, the Republic of Korea and Japan are trying to bypass
China and use India as a bridge.
The southern corridor could include the Caspian-Caucasus route as an alternative to
the trans-Iranian route. The Caspian-Caucasus route will become a serious
alternative once the necessary infrastructure is created. Despite the fact that the
One-Belt-One-Road investment is not currently planned on this route, it will become
a viable option as soon as all links along the route are completed.
Modernization of the port infrastructure in the Caspian Sea, unification of transit
and customs procedures and construction of new transport highways in Kazakhstan,
Turkmenistan and the Caucasus are making the Caspian Sea and Caucasus corridor
the fastest growing. The Baku – Tbilisi - Kars railway project is strategic for the
entire Caucasus in this regard.
The KTZh and Kazlogistics projects, which aim to improve Kazakhstan's position in
Eurasian transport markets, offer integrated logistics products, improvements in the
quality of transit and supply chains using 5S-Principles and the single window
principle and are investing in terminals in China and Dubai.
At the same time, there are restrictions and bottlenecks along the route, including
tensions at borders. Nevertheless, trade between India and Pakistan has already
reached US$ 5 billion. This figure is likely to be nearer US$ 10 billion if unofficial
trade is taken into account. Afghanistan and Pakistan have signed an Agreement on
transport and trade. In addition, investments along the route by Turkmenistan,
Azerbaijan, India, Japan and Turkey have amounted to almost US$ 100 billion in
recent years.
Despite the improvement of the business climate in Afghanistan and in cross-border
trade, TRACECA still does not consider Afghanistan as part of its route but there are
close ties between the TRACECA countries and Afghanistan.
The Central Asian countries should understand that the southern corridor may be an
important next step in Eurasian transport, economic and cultural integration,
despite the high cost, delays and risks along the route.
Businesses and experts are more sceptical about the transit potential across all
corridors and have pointed to technical and economic restrictions, including the
Eurasian Economic Union itself. The EEU is viewed more as a project for integration
within the union than with the rest of the continent. Nevertheless, the Eurasian
Economic Union could become a valuable tool for creating an open common
transport and transit space.

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In spite of the huge problems, transport and trade integration in Eurasia and
especially in the Central Eurasian zone will be one of the most challenging but
important issues of the 21st century.

8.2 KAZAKHSTAN PERSPECTIVE OF THE DEVELOPMENT OF TRANSIT AND LOGISTICS

The export/import and transit potential of Kazakhstan from the point of view of the
location of external markets, as well as foreign economic relations in the Eurasian
sphere, should be considered from regional and transboundary perspectives.
The regional perspective determines cargo transport between Kazakhstan and the
countries bordering it. The transboundary perspective concerns transport between
countries that do not have common borders with Kazakhstan.
The determining factors of regional trade flows are the close interconnection and
interdependence of the economies of the Central Asian countries, as well as the
existing transport and communication infrastructure of the countries of the region.
In the regional plan for exports-imports and cargo transport, the potential of
Kazakhstan can be seen as sufficiently high and stable. This is due to the long-term
economic ties between the countries of the region, a similar level of development
of their economies, and the fact that almost all trade between the Central Asian
countries and the Russian Federation passes through Kazakhstan. Total international
cargo transport in 2017 amounted to 150.0 million tonnes, including 17.6 million
tonnes of transit. The volume of transit cargo in 2017 was only 0.4%. Moreover, there
is no stable growth of these shipments.
The main competitors to Kazakhstan's routes in Eurasian trade are the network of
roads in the Russian Federation and sea carriers, which offer more attractive
transport conditions, especially with regard to tariffs and logistics.
Transport of goods along the Europe-Kazakhstan-China railway line has significant
economic advantages, as the transport distances are approximately 30% less than on
the Trans-Siberian Railway. Nevertheless, the Russian Federation is working
intensively on improving its international transport corridors, especially the Trans-
Siberian, both technically and organizationally.
The distance for Chinese transit cargo through Kazakhstan to the countries of Central
and Northern Europe is 8,000-10,000 km. For comparison, the average transit
distance is 1,700-1,800 km. Consequently, goods are shipped mainly to countries
neighboring Kazakhstan. Therefore, at this stage regional transport can be
considered the main type of rail transport.
In 2016, only 1.1% of the total volume of cargo was transported by road in
international traffic, while transit amounted to 0.02%. From this, it follows that
goods are transported by road mainly within the country itself.

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Since no countries in the Central Asian region have access to the sea, access to world
markets is carried out mainly through the Russian Federation. The western, southern
and southeastern links of these countries with world markets through the Caucasus,
Iran, Afghanistan and China are limited by difficult transport conditions in the
mountains, a high degree of risk in certain regions and political restrictions. It is
assumed that the situation with these corridors will change only after the creation
of a modern infrastructure within the framework of China’s One-Belt-One-Road
initiative mentioned above and the normalization of the political situation in the
region.
At present, the main transit flows pass through Kazakhstan to the Russian Federation
and to European countries, as well as to Central Asia and China. Transit from China
through Kazakhstan is insignificant.
In recent years, the Russian Federation has been developing direct transport to/from
China, thereby reducing the transit flows through Kazakhstan. Consequently, in the
long term, an increase in transit through Kazakhstan to the Russian Federation and
China should not be expected.
In 2017 transit through Kazakhstan as a whole amounted to 17.6 million tonnes. The
main volumes of transit were carried from north to south: Russian Federation, Iran,
Turkmenistan, Uzbekistan, Tajikistan and Kyrgyzstan, as well from east to west:
China, Uzbekistan, Turkmenistan, Iran, Turkey, Azerbaijan and Georgia.
In this regard, transit may increase from China through Kazakhstan in the direction
of the Russian Federation and Europe and in the opposite direction on the road
transport corridor “Western Europe - Western China”. However, a significant
increase in transit by road cannot be expected.

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9. CONCLUSIONS
This study has identified a number of good practices and recommendations going
forward for Kazakhstan’s transport network. This conclusding chapter provides a
summary of the main areas of the study, the individual, detailed, sectoral
recommendations are included in the sectoral chapters.
It is extremely important for Kazakhstan to create a modern transport infrastructure
network as the country does not have access to transcontinental sea routes.
International transport corridors on the territory of Kazakhstan provide one of the
only ways for the country to access regional markets for goods and services and play
a significant role in ensuring communication between the main economic centres
within the country.
Kazakhstan has an underdeveloped network of roads. Their length is 138,700 km,
including 95,409 km of public roads. The density of public roads is 35.4 km per
1,000 km2 of territory of the country. Of this, 85.7% of the roads are paved, but the
quality of these roads is low.
The national “Nurly Zhol” programme envisages the creation of an extensive
network of roads for transit and for domestic transport. The implementation of the
programme will lead to the creation of a network of roads connecting Kazakhstan
with neighbouring States, as well as the capital of the country with Kazakhstan’s
largest cities.
To complete the network of public roads, it is necessary to build and reconstruct a
number of sections of the six major international transport routes connecting
Kazakhstan with neighbouring States. These international corridors are the
foundations for East-West transport and, in particular, a a key component of Euro-
Asian Transport Links through the provision of access to major ports, transport hubs
and terminals.
A modern transport network will be created after completion of the planned works
for the construction and reconstruction of the road network in Kazakhstan in 2021.
This also needs to be accompanied by the improvement of the existing network of
regional and local roads.
Road transport in Kazakhstan is the most important mode of transport in terms of
the volume of transport of goods and passengers. It is predicted that road transport
will develop more rapidly than other modes of transport, primarily compared to rail.
Over the past seven years, the road vehicle fleet has increased by 10.5%, however,
investments in road transport remain at a low level of 4-7% of the total volume of
investments in transport and storage. Increasing investment flows to the industry
could be facilitated by tightening environmental requirements for vehicles.
In 2017, 84.2% of the total volume of cargo was transported by road. The volumes
of road transport in international traffic are negligible and amount 0.1%. The small
amount of cargo carried in containers makes it difficult to use intermodal transport.
However, figures show that over the past five years container transport by road has
grown 29 fold.

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Imports are brought into the country mainly by foreign carriers. These carriers do
not however work in the domestic market. By 2020, it is planned to increase the
share of Kazakh carriers in the national market for international freight to 50%. This
could be facilitated by the removal of the permit system within the EEU and later,
from 2025, the introduction of cabotage provisions.
Since independence, a number of infrastructure projects have been completed in
the country that have made it possible to offer competitive rail transport routes
which has also increased the transit potential of Trans-Asian and Euro-Asian
transport corridors. The main drawback of the railway sector is the high proportion
of single-track rail lines that limits the ability to introduce additional freight flows
and reduces the speed of trains. Also, an insufficient number of wagons for the
transport of goods by rail has also lead to increases in the competitiveness of road
transport.
Over the last 10 years, 8.4%-12.3% of the total volume of transported goods was
transported by rail, however this has been accompanied by a gradual decrease in
the share of rail transport in the total volume of transport. The volume of goods
transported at the national level is 61.5% and at the international level 38.5% with
only 11% of total volumes being transit traffic. Going forward, a key area of focus
for the railways will be container traffic.
Water transport in Kazakhstan is comprised of sea and inland water transport. River
transport is possible in the Irtysh basin, in the Ural-Caspian basin and in the
Balkhash-Ili basin.
Inland water transport accounts for 0.04% of the total volume of transport. Over the
past 10 years, the volume of transport of goods by inland waterway transport has
remained largely unchanged. But in 2017 it increased by 33% compared to the
previous year. Virtually the entire volume of cargo is transported in regional
transport – 92.8%.
Maritime transport is concentrated through the three major seaports of Aktau,
Bautino and Kuryk. Cargo transport volumes and cargo turnover by maritime
transport for 2012-2017 have fallen. During the period, the volume of cargo transport
decreased by 48.5%, and cargo turnover by 40.8%. The volume of cargo transported
by sea in 2017 was 0.05% of the total volume of all types of transport. Sea transport
is only used in international traffic.
In order to increase the volume of cargo transport by sea, it is planned to increase
the dry cargo fleet to 20 vessels by 2020 and purchase two ferries. In the future, it
is planned to occupy a dominant position in the Caspian Sea and ensure the transport
of goods using intermodal transport.
There are 23 airports operating in Kazakhstan, 17 of which comply with ICAO
standards and can service international flights and 54 airlines operating in
Kazakhstan, four of which carry out cargo transport. To improve the financial
condition of a number of unprofitable airports, it has been decided to develop air
cargo transport services, primarily with neighbouring States also because at the
moment it is underdeveloped.
Almost twice as much cargo is transported by air to countries outside the CIS as
compared to destinations within the CIS countries with the transport of goods being
carried out mainly to/from Almaty (more than 93%).

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Kazakhstan in terms of logistics development is ranked 71st in the LPI, ahead of all
other CIS countries. Kazakhstan is pursuing policies to move to 40th position in the
ranking.
In accordance with the State Programme for Infrastructure Development “Nurly
Zhol” for 2015-2019, it is planned to continue the development of the transport and
logistics infrastructure by creating international logistics hubs or dry ports in large
urban agglomerations. This needs to be accompanied by an internal transport and
logistics network to be connected through a hub and spoke network.
In accordance with the “Kazakhstan 2050” strategy to expand the country's presence
in key logistic centres of other countries, a terminal has been created in the port of
Lianyungang on the east coast of China, which is connected with Kazakhstan by a
road and rail corridor. The logistics terminal in Lianyungang port is also connected
by railway lines to a number of major Chinese ports, as well as by sea with the
Japanese port of Osaka and the port of Busan in the Republic of Korea. Terminals
are planned to be established in other Chinese cities to facilitate transport to and
through Kazakhstan. This, along with the ongoing activities of the United Transport
and Logistics Company (UTLC) should further help the growth of transit traffic.
Harmonization of legislation in the field of transport activities is one of the most
important conditions for the development of the transport infrastructure of
Kazakhstan and the other countries in the region. The deepening of Kazakhstan’s
integration into the Eurasian transport and logistics system should be based on the
harmonization of the country's legislation with the legislation of the European Union,
the EAEU, the CIS and neighboring countries. In addition, these transport related
challenges can be further addressed with additional accession to UN inland transport
Conventions and Legal Agreements and with participation in UNECE projects such as
the Euro-Asian Transport Links. The development of international cargo
transportation in Europe and Asia also depends on a modern legislation framework.

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ANNEX
1. THE REGULATORY AND LEGAL FRAMEWORK FOR TRANSPORT
As a transit state, Kazakhstan has to have legislation in the field of transport which
is regulated both by acts of national legislation and supranational regulations.
Now all existing documents can be consolidated in the following main groups:
x Transport infrastructure:
x Traffic and traffic signs and signals;
x Road vehicles;
x Other legal documents in the field of road transport;
x Facilitation of transport conditions;
x Internal shipping;
x Transport of dangerous goods; and
x Transport of perishable foodstuffs.

1.1 TRANSPORT INFRASTRUCTURE

x Declaration on the construction of international traffic arteries dated
16 September 1950;
x European Agreement on Main International Traffic Arteries (AGR) dated
15 November 1975;
x European Agreement on Main International Railway Lines (AGC) dated
31 May 1985;
x European Agreement on Important International Combined Transport Lines and
Related Installations (AGTC) of 1 February 1991;
x Protocol on Combined Transport on Inland Waterways to the European
Agreement on Important International Combined Transport Lines and Related
Installations (AGTC) of 1991, of 17 January 1997;
x European Agreement on Main Inland Waterways of International Importance
(AGN), of 19 January 1996.

1.2 ROAD TRAFFIC AND ROAD SIGNS AND SIGNALS

x Convention on Road Traffic, of 19 September 1949;
x Protocol on Road Signs and Signals of 19 November 1949;
x European Agreement on the Application of Article 23 of the 1949 Convention
on Road Traffic concerning the Dimensions and Weights of Vehicles Permitted
to Travel on Certain Roads of the Contracting Parties, of 16 September 1950;
x European Agreement supplementing the 1949 Convention on Road Traffic and
the 1949 Protocol on Road Signs and Signals of 16 September 1950;

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x European Agreement on Road Markings of 13 December 1957;

x European Agreement supplementing the Convention on Road Traffic of 1968 of
1 May 1971;
x Convention on Road Traffic of 8 November 1968;
x Convention on Road Signs and Signals of 8 November 1968;
x Protocol on Road Markings, Additional to the European Agreement
supplementing the Convention on Road Signs and Signals, of 1 March 1973;
x Agreement on Minimum Requirements for the Issue and Validity of Driving
Permits (APC) of 1 April 1975.

1.3 ROAD VEHICLES

x Agreement Concerning the Adoption of Uniform Conditions of Approval and
Reciprocal Recognition of Approval for Motor Vehicle Equipment and Parts
dated 20 March 1958;
x Agreement concerning the Adoption of Uniform Conditions for Periodical
Technical Inspections of Wheeled Vehicles and the Reciprocal Recognition of
Such Inspections, of 13 November 1997;
x Agreement concerning the Establishing of Global Technical Regulations for
Wheeled Vehicles, Equipment and Parts which can be fitted and/or be used on
Wheeled Vehicles, of 25 June 1998.

1.4 OTHER LEGAL DOCUMENTS IN THE FIELD OF ROAD TRANSPORT

x General Agreement on Economic Regulations for International Road Transport,
of 17 March 1954;
x Convention on the Taxation of Private Road Vehicles used in International
Traffic of 18 May 1956;
x Convention on the Contract for the International Carriage of Goods by Road
(CMR), of 19 May 1956;
x Protocol to the Convention on the Contract for the International Carriage of
Goods by Road (CMR), of 5 July 1978;
x Convention on the Taxation of Road Vehicles engaged in International Goods
Transport, of 14 December 1956;
x Convention on the Taxation of Road Vehicles Used for the International
Carriage of Passengers of 14 December 1956;
x European Agreement on the Work of Crews of Vehicles Engaged in International
Road Transport (AETR) of 1 July 1970;
x Convention on the Contract for the International Carriage of Passengers and
Luggage by Road (CVR) of 1 March 1973;
x Protocol to the Convention on the Contract for the International Carriage of
Goods by Road (CMR) of 5 July 1978.

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1.5 FACILITATION OF TRANSPORT CONDITIONS

x International Convention to Facilitate the Crossing of Frontiers for Passengers
and Baggage carried by Rail of 10 January 1952;
x International Convention to Facilitation the Crossing of Frontiers for the
Carriage of Goods by Rail of 10 January 1952;
x Convention concerning Customs Facilities for Touring, signed in New York on
4 June 1954;
x Customs Convention on the Temporary Importation of Private Road Vehicles,
signed in New York on 4 June 1954;
x Customs Convention on the Temporary Importation of Road Vehicles for
commercial purposes on 18 May 1956;
x Customs Convention on Containers, of 18 May 1956;
x Customs Convention on the Temporary Importation for Private Use of Aircraft
and Pleasure Boats of 18 May 1956;
x Customs Convention on Spare Parts Used for the Repair of ECCOR Wagons dated
15 January 1958;
x Customs Convention on the International Transport of Goods under Cover of
TIR Carnets (TIR Convention), of 15 January 1959;
x European Convention on the Customs Regime Applicable to Pallets Used in
International Transport of 9 December 1960;
x Customs Convention on Containers of 2 December 1972;
x International Convention on the Harmonization of Frontier Control of Goods of
21 October 1982;
x Convention on the Customs Regime Applicable to Containers Transferred to the
Pool and Used for International Transport, dated 21 January 1994.

1.6 INLAND NAVIGATION (PRIVATE LAW)

x Convention on the Unification of Certain Rules Relating to Liability arising from
the Collision of Inland Navigation Vessels of 15 March 1960;
x Convention on the Registration of Inland Navigation Vessels of 25 January 1965;
x Convention on the Measurement of Inland Navigation Vessels of 15 February
1966;
x Convention relating to the Limitation of the Liability of Owners of Inland
Navigation Vessels (CLN), of 1 March 1973;
x Convention on the Contract for the International Carriage of Passengers and
Luggage by Inland Waterway (CVN) of 6 February 1976;
x Convention on the Limitation of Liability of Owners of Inland Navigation Vessels
(CLN) of 5 July 1978;

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x Protocol to the Convention on the Contract for the International Carriage of

Passengers and Luggage by Inland Waterway (CVN) of 5 July 1978.

1.7 TRANSPORT OF DANGEROUS GOODS

x European Agreement concerning the International Carriage of Dangerous Goods
by Road (ADR) of 30 September 1957;
x Protocol amending article 1 (a), article 14 (1) and article 14 (3) (b) of the
European Agreement of 30 September 1957 concerning the International
Carriage of Dangerous Goods by Road (ADR), of 28 October 1993;
x Convention on Civil Liability for Damage Caused by Carriage of Dangerous Goods
by Road, Rail and Inland Navigation Vessels (CRTD), dated 10 October 1989;
x European Agreement Concerning the International Carriage of Dangerous Goods
by Inland Waterway (ADN), of 25 May 2000.

1.8 TRANSPORT OF PERISHABLE FOODSTUFFS

x Agreement on the International Carriage of Perishable Foodstuffs and on the
Special Equipment to be Used for such Carriage (ATP) of 1 September 1970.

2. OTHER INTERNATIONAL AGREEMENTS AND CONVENTIONS

The following international agreements and conventions developed within the
framework of the CIS apply in Kazakhstan:
x Agreement on the principles and conditions of relations in the field of transport
of 30 December 1991. The agreement was concluded by the countries of the
Commonwealth with an awareness of the benefits of economic integration and
the need for concerted action in the context of the common economic space;
x Agreement on the implementation of the agreed policy on the definition of
transport tariffs of 17 January 1997. It is aimed at developing a set of measures
to regulate the tariff policy, aimed at ensuring the free movement of goods
and passengers. In the field of rail transport, the concept of the establishment
of an agreed tariff policy for rail transport in the CIS member States is in force;
x Convention on the International Carriage of Passengers and Luggage by Road
dated 9 October 1997. The Convention regulates the conditions and rules of
transport, the liability of carriers, and the procedure for making claims.
Transport of passengers and baggage in international traffic can be carried out
by private, collective, state or mixed ownership carriers, subject to an
appropriate license;
x Agreement on the principles of the creation of a common transport space and
the interaction of the CIS member States in the field of transport policy of
9 October 1997. This Agreement was concluded for a period of 10 years and
may be extended for another 10-year period, unless the Parties decide
otherwise. However, not all the States participants of the Agreement have
actively fulfilled its conditions, as a result of which the effectiveness of the

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 ANNEX

provisions of this Agreement has declined year by year, and transport problems
have not been solved;
x Protocol on the international highways of the CIS of 11 September 1998;
x Agreement on compulsory passenger insurance for international road transport
dated 13 January 1999;
x Agreement on the order of transit through the territories of the CIS member
States of 4 June 1999;
x Agreement on the masses and dimensions of vehicles engaged in interstate
transport along the roads of the CIS member States of 4 June 1999;
x Agreement of the CIS member States on the approximation of taxation in rail
transport of 10 March 2000. The agreement is aimed at reducing transport costs
for rail transport in international traffic between the CIS countries. It was
noted that the Parties should implement measures to harmonize tax collection
systems and state fees related to the use and maintenance of railways, and the
ownership and use of railway vehicles. The parties agree not impose a value-
added tax on railway transport services for the carriage of transit goods of CIS
member States, including forwarding, loading, unloading and reloading
services;
x Agreement on the use and development of a network of transport for economic,
military and humanitarian transport of the CIS member States of 31 May 2001;
x Agreement of the CIS member States in the field of international road freight
transport dated 18 September 2003;
x Declaration on Transport Security in the CIS member States of
18 September 2003. This document is related to the problems of preventing,
detecting, intercepting and investigating criminal acts and terrorist acts that
threaten the safety of transport;
x Agreement of the CIS member States in the field of international road freight
transport dated 18 September 2003. The document provides for measures to
ensure concerted actions in this area, fair competition and equal conditions for
carriers and the removal of barriers in international road transport;
x Decision of the Council of Heads of State “On the Harmonization of National
Air Traffic Management Systems of Member States of the Commonwealth of
Independent States” dated 19 September 2003. The objectives are to
harmonize national air navigation systems, increase the safety of civil aviation
flights, enhance the economic and defense effectiveness of the use of CIS
airspace and create favourable conditions for the implementation of the
strategy of the International Civil Aviation Organization for the integration of
European and global air navigation systems;
x Agreement on the introduction of an international certificate for weighing
trucks in the CIS member States of 16 April 2004;
x Concept for a coordinated transport policy of the CIS member States of
15 September 2004. The concept reflects an agreed viewpoint on the prospects
for the further development of the transport system, the most relevant areas
for cooperation in shaping the common transport space of the CIS member

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States and approaches for the creation of a market for transport and forwarding
services. However, not all the goals set out have been achieved to date;
x Agreement on Cooperation of the CIS Member States on Combating Crime in
Transport of 15 September 2004, according to which the parties agree to
cooperate in the prevention, detection, suppression and disclosure of crimes
committed in transport;
x The development of the market for international road transport services dated
29 June 2007;
x The development of civil aviation and measures to improve safety in the CIS
member States of 22 November 2007;
x Priorities for cooperation of CIS member States in the transport sector for the
period up to 2020 of 14 November 2008. This is the creation of a network of
transit transport highways of continental importance, Euro-Asian transport
corridors; increasing the level of interaction between various modes of
transport in international transport; strategic development of railway transport
of CIS member States; increasing the effectiveness of tariff policy; elimination
of the negative impact of fiscal and administrative barriers in the
implementation of international road freight transport; cooperation in the field
of air traffic management of CIS member States; creation of conditions for
effective development of air transport; improvement of the legal and
regulatory framework for cooperation in the field of transport; and formulating
a coherent policy in the field of transport security and environmental
protection.
Factors constraining the development of a single transport space of the CIS
The analysis of international agreements and conventions developed within the
framework of the CIS showed that there are many problems, which have a serious
deterrent effect on the development of a common transport space in the CIS.
These problems are:
x Lack of harmonized legal norms in many areas of regulation of the transport
services market;
x Non-unified technical and technological standards in the field of passenger and
cargo transport;
x Lack of coordinated approaches on many issues of international cooperation
and the future development of the transport system in the CIS;

x Various barriers of a technical, administrative, fiscal and transboundary

nature, etc. 40

40
Resolution of the Interparliamentary Assembly of the Member Nations of the Commonwealth of
Independent States No. 33-26 “On Recommendations on legislative support for the development
of transport infrastructure in the CIS member States”. Text of the document with amendments
and additions as of November 2013.

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 ANNEX

3. NATIONAL LEGISLATION
Kazakh legislation in the field of transport is represented by normative legal acts of
various levels.
Chapter 34 on Transport of the Civil Code of Kazakhstan (a special part) the legal
norms of which determine the general conditions concerning the conclusion of
transport contracts is devoted to the transport of cargo, passengers and baggage.
Legal relations between the carrier and the client are based on the contract of
carriage. At the same time, taking into account the specificities of the transport
sector, the will of the parties in determining the conditions of the contract of
carriage may be limited in cases directly provided by the Civil Code and other
legislative acts. This happens due to the special importance of transport, the need
for a balanced social policy and security requirements. The basis for the legal
regulation of relations related to the provision of carrier services is enshrined in the
Civil Code in Chapter 35. It defines the form of the contract, the subject of the
contract and provides the right for the freight forwarder to involve other persons in
the performance of his duties, while not relieving him of responsibility to the client
for the performance of the contract.
At present, the main legal act regulating transport activities is the Law of Kazakhstan
“On Transport in Kazakhstan” No. 156-XIII dated 21 September 1994 (as amended on
25 December 2017). The law regulates the basic principles for economic activity in
the market and determines the basis for the relationship of all participants in
transport on the territory of Kazakhstan. The market of demand and supply of
transport services forms the basis of economic relations. Transport companies and
carriers operate on a commercial basis.
State bodies do not have the right to interfere in the economic activities of transport
enterprises, and to distract the operating personnel of transport enterprises for
other work, except in cases stipulated by the legislation of Kazakhstan.
The Law of Kazakhstan on Railway Transport No. 266-II dated 8 December 2001
(as amended on 1 January 2018) regulates the relations between carriers,
participants in the transport process, state authorities, passengers, shippers,
consignees, consignors, and other physical and legal persons in the course of
transport of passengers, luggage, cargo and postal items by rail.
The Law of Kazakhstan on Merchant Shipping No. 284 dated 17 January 2002
(as amended on 10 June 2017) defines the legal, organizational, economic and
international foundations of state administration in the sphere of commercial
navigation and regulates issues related to the carriage of passengers, luggage and
cargo, security for maritime transport and environmental protection.
The Law of Kazakhstan on Inland Water Transport No. 574-II of 6 July 2004
(as amended on 10 June 2017) regulates the relations between state bodies,
individuals and legal entities in the field of inland waterway transport in the conduct
of navigation, transport of passengers, luggage and cargo, and operation of small
vessels, including those in water reservoirs, which are not related to inland
waterways and sea waters; and determines their rights, duties and responsibilities.

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LOGISTICS AND TRANSPORT COMPETITIVENESS IN KAZAKHSTAN

The Law of Kazakhstan on the Use of the Airspace of Kazakhstan and Aviation
Activities No. 339-IV of 15 July 2010 (as amended on 25 December 2017) regulates
issues related to the use of the airspace of Kazakhstan and aviation activities. It
determines procedures for the use of airspace and aviation activities for the
protection of human life and health, the environment, the interests of the State,
ensuring the safety of aircraft operations, individuals and legal entities in aviation
services.
Kazakhstan has complete and exclusive sovereignty over the airspace above the land
and water of Kazakhstan and its territorial waters. The airspace of Kazakhstan is
part of its state territory.
The decree of the President of Kazakhstan on the use of airspace and aviation
activities of Kazakhstan No. 2697 of 20 December 1995 was issued to protect the
interests of the state and determine the place and role of aviation and other entities
using the airspace of Kazakhstan.
The Law of Kazakhstan No. 202-V of 16 May 2014 On Permits and Notifications
(as amended on 1 January 2018) regulates issues related to the introduction of a
permit or notification procedure for the implementation of certain activities or
actions by private business entities and others.
Order of the Chairman of the Customs Control Committee of the Ministry of Finance
of Kazakhstan No. 33 dated 30 January 2013 On Approval of the Strategy for
Development of the Customs Service of Kazakhstan to 2020. This document defines
the goals and main directions for improving the customs administration in the short
and medium term, as well as financial support and mechanisms for implementing
the envisaged activities.
The following legislative acts regulating relations in the road transport sector have
been adopted in Kazakhstan:
x The Law of Kazakhstan on Road Transport No. 476-II of 4 July 2003 (as amended
on 1 January 2018) regulates relations between carriers, passengers,
consignors, consignees, other physical and legal persons in the field of road
transport. The law applies to all individuals and legal entities that carry out
activities in the field of road transport in accordance with the legislation of
Kazakhstan;
x The Law of Kazakhstan No. 245-II of 17 July 2001 On Roads (as amended on
3 July 2017) regulates the legal, organizational and economic foundations for
state management of roads in Kazakhstan, their construction, operation and
development in the interests of state and road users. The law determines the
economic and legal basis; principles of road management by organizations and
enterprises providing development, repair, maintenance of highways; types
and legal regime of highways, territories and objects adjacent to roads; rights
and duties, as well as the responsibility of owners, departments in charge of
roads and users of roads; and the relationship between state and local
authorities;

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 ANNEX

x The Law of Kazakhstan On Road Traffic No. 194-V of 17 April 2014 (as amended
on 1 January 2018) establishes the legal framework and general conditions for
the functioning of road traffic and ensuring its safety in Kazakhstan. The main
principles are priority of life and health of road users over economic activity;
responsibility of the state for ensuring road safety; respect for the interests of
road users, society and the state while ensuring road safety; a systematic
approach to road safety;
x Decree No. 2273 of the President of Kazakhstan of 12 May 1995 on the Accession
of Kazakhstan to the Agreement on the International Transport of Perishable
Foodstuffs and on the Special Equipment to be Used for such Transport (ATP)
of 1970.
State control over the implementation of legislation
Ensuring state control over the current legislation, which is directly related to the
issue of road transport, is carried out on the basis of and within the framework of
the following legal acts:
x Resolution of the Government of Kazakhstan of 14 December 2006 On
ratification of the Intergovernmental Agreement on the Asian Highway Network
No. 1198;
x Decree No. 816 of the Government of Kazakhstan of 23 July 2014 On approval
of the Rules for compliance with the procedures and requirements for
inspection of passengers and persons visiting transport infrastructure facilities,
and things in their possession, including hand luggage and luggage;
x Resolution of the Government of Kazakhstan No. 697 of 9 July 2013 On approval
of the list of checkpoints across the State borders of Kazakhstan and stationary
transport control posts in the territory of Kazakhstan;
x Order of the Acting Minister of Investment and Development of Kazakhstan
No. 318 of 26 March 2015 On approval of the Rules for levying a fee for a public-
sector toll road (section);
x Order of the Acting Minister for Investment and Development of Kazakhstan
No. 1104 of 26 November 2015 On Approval of the Rules for Intermodal
Transport.

163
 REFERENCES

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166
Logistics and Transport Competitiveness
in Kazakhstan

Improving the competitiveness of Kazakhstan as a transport logistics centre at the crossroads

of Europe and Asia could enable the country to unlock significant untapped benefits of
growing cargo flows between the two continents.

This study identifies the transport infrastructure and services available in Kazakhstan, reviews
the country’s extensive recent and future transport investments, and sets out
recommendations to ensure its transport network is ready to harness the growth in inland
transport from rising East-West trade, particularly in the context of the Belt and Road Initiative,
within which Kazakhstan could occupy a strategic geographical position.

To further capitalize on Kazakhstan’s pivotal role in Euro-Asian transport logistics, this study
also presents the benefits of adhering to and implementing the full spectrum of UN Transport
Conventions and Legal Instruments administered by UNECE, and through its continued
participation in UNECE initiatives such as the Euro-Asian Transport Links project.

The study also highlights strengthening the harmonization of legislation as one of the most
important conditions for the development of the transport infrastructure of Kazakhstan and
the broader region, of which Kazakhstan is a member.

Information Service
United Nations Economic Commission for Europe

Palais des Nations

CH - 1211 Geneva 10, Switzerland ISBN 978-92-1-117205-8
Telephone: +41(0)22 917 12 34
E-mail: [email protected]
Website: http://www.unece.org

Printed at United Nations, Geneva – 1908061 (E) – August 2019 – 351 – ECE/TRANS/286