PPPs have reduced burden on Kazakh budget by $282 million

ASTANA – Kazakhstan is seeking to make greater use of the private public partnership (PPP) mechanism that has commissioned 140 projects since 2006 and reduced the burden on the national budget by 90.6 billion tenge (US$281.7 million), reported Minister of National Economy Timur Suleimenov. To date, 78 more objects are being constructed.

Timur Suleimenov. Photo credit: primeminister.kz.

Timur Suleimenov. Photo credit: primeminister.kz.

“The experience shows that the use of the PPP mechanism brings positive results. In the past, if we take into account the 140 objects that were commissioned, it allowed decreasing the budget load by nearly 90.6 billion tenge (US$281.7 million),” he said.

Kazakhstan introduced the mechanism to its legislation in 2006, when it endorsed the law on concessions. Since then, 212 PPP agreements worth 766.4 billion tenge (US$2.38 billion) have been registered, while 81 agreements worth 14.6 billion tenge (US$45.4 billion) are currently in the registration stage. More than 75 percent of those agreements are in the social sector.

Forty-four PPP projects are currently being either studied or implemented, said Minister for Investment and Development Zhenis Kassymbek. One of the key projects is constructing the Big Almaty Ring Road by Turkish firms Alsim Alarko and and Makyol Construction and South Korean companies Korea Expressway and Korean SK. The corporations are set to invest 150 billion tenge ($466.5 million)

The 66-kilometre road is expected to ease traffic jams in the nation’s most populous city by enabling transit trucks and passenger vehicles to bypass the urban area through the Ile, Karasai and Talgar districts. Construction will begin in May.

Kassymbek also noted the railway bypass line to be built at Almaty station. The cost is estimated at 96.6 billion tenge (US$300.4 million) and construction is scheduled for next year.

Prime Minister Bakytzhan Sagintayev, who chaired the meeting, noted expanded PPP use is of paramount importance to the nation’s growing economy.

“The main issue today is the construction of dormitories for students based on PPP as part of the implementation of the Five social initiatives voiced by the President. The akims (governors) of the regions need to pay special attention to this aspect,” he said, addressing the ministers.

As the majority of projects do not always reach the final stage, the government is taking steps to ease the procedures and create more favourable conditions for potential investors.

Kazakhstan adopted a law late last year to further improve and simplify the PPP mechanism. The document optimised the procedures by reducing the number of required stages from five to three, cutting the approval period and expertise for projects from seven months to three.

The law also envisioned guaranteed use for three or more years and an opportunity to plan a standard PPP project taking into account the specifics of a particular industry within the national programmes.


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