Kazakhstan • 22 April, 2020

Five-year results of Nurly Zhol program: Construction of toll roads, creation of new jobs and freight traffic growth

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Kazakhstan has launched the next five-year plan of the Nurly Zhol State Infrastructure Development Program. As a result of the completion of the first five-year plan of the State Program, the share of republican roads in good and satisfactory condition was brought up to 88% and local significance — up to 71%. Read the review about the development of the republican road infrastructure the overall effect of the program’s implementation.

Recall, the Nurly Zhol State Program of Infrastructure Development was approved in April 2015 by the First President of Kazakhstan – Elbasy Nursultan Nazarbayev. The goal of the program was to integrate the country's macro-regions by building an effective infrastructure.

Subsequently, the Nurly Zhol program became one of the key drivers of the national economy. Along with the advent of modern and high-quality highways, new jobs were created, transit freight flows increased, and social infrastructure was improved. Over the five years of implementation, it has become apparent that the state program has a significant impact on the country's GDP growth. According to the Ministry of National Economy, during the implementation of the state program, economic growth of 16% was achieved.

As a result of the implementation of the State Program, about 3 thousand km of republican roads were built and reconstructed, including:

Western Europe – Western China — 527 km, Center – South — 324 km, Center – East — 795 km, Kapshagai – Taldykorgan — 160 km, Astana – Petropavlovsk – Russian border — 177 km, Uralsk – Kamenka — 100 km, Aktobe – Atyrau – Astrakhan — 42 km, Taldykorgan – Ust-Kamenogorsk — 20 km, Kalbatau – Maykapshagay — 18 km, Beineu – Aktau — 382 km, Zhetybai – Zhanaozen — 73 km, Beineu – Akzhigit — 85 km, Schuchinsk – Zerenda — 80 km, Taskesken – Bakhty — 80 km, South – West bypass of Astana — 34 km, Satpayev bypass — 15 km, Pavlodar – Omsk — 59 km, bridge over the river Tobol — 3 km.

About 10 thousand km of republican roads and 15 thousand km of local roads were repaired.

Following the completion of the program, the share of republican roads in good and satisfactory condition was brought up to 88% and local roads to 71%.

The length of roads of I and II technical category of republican significance has been increased to 34% (8.2 thousand km).

According to the Ministry of Industry and Infrastructure Development, the provision of roads of national importance with roadside service facilities amounted to 100%. According to the results of 2019, 1,803 roadside service facilities are functioning along national roads, of which 883 (49%) meet the requirements of the national standard.

In 2015-2017, 108 new secondary schools and 19 kindergartens were built as part of the Nurly Zhol State Program.


Wide opportunities for developing international cooperation

In the field of maritime transport, in the framework of the Nurly Zhol State Program in 2015-2019, three new dry cargo terminals were built in the port of Aktau with a capacity of 3 million tons. The implementation of the project allowed increasing the volume of cargo transshipment through the Aktau seaport to 20.7 million tons per year through construction of a grain terminal with a capacity of 1.5 million tons per year, as well as two terminals for general cargo and containers with a capacity of 1.5 million tons per year.

In order to develop multimodal transport within the framework of the state program, a multifunctional ferry complex was built in the port of Kuryk with a capacity of 6 million tons. As a result, the throughput capacity of Kazakhstan seaports has been increased to 27 million tons.

Compared with 2014, today the volume of transportation of dry and ferry cargoes through the seaports of Aktau and Kuryk has almost tripled.

Since the beginning of operations, the port of Kuryk has provided transshipment of more than 4.8 million tons of ferry cargo.

In order to speed up the processing of ferry cargoes, the port organized the work of regulatory authorities (customs and border control authorities, SES) on the principle of "one window," which allows processing ferry vessels for 2-2.5 hours.

Also, in the framework of maritime transport between the ports of Kuryk - Baku, a preliminary exchange of electronic information on ships and cargo is carried out.

In 2019, about 6 million tons of cargo were carried through the seaports of Aktau and Kuryk, of which 2.2 million tons of oil, 2.5 million tons of dry cargo and 1.4 million tons of ferry cargo.

For the I quarter of 2020, more than 1.6 million tons of cargo were transported through the seaports of Aktau and Kuryk, which is 2% lower than the same period last year.

Since the beginning of the year, about 6,400 containers have been transported through seaports, of which more than 50% were transported via the Aktau – Baku feeder line and further along the Trans-Caspian international transport route.

The share in the total cargo turnover in the Caspian Sea has been increased from 21% to 38%.

In order to further develop maritime transport, the domestic merchant fleet was replenished with 4 dry cargo carriers with a carrying capacity of 5 and 7 thousand tons each. This has a positive effect on the overall growth in shipping by sea.

At the same time, service is being developed and the technology of work on the Trans-Caspian International Transport Route is being improved. So, in April 2020, in order to increase the efficiency and reduce the turnover of the fitting platforms used on the route through the port of Aktau, container shipments were launched by feeder vessels on the route Aktau – Baku – Aktau.

According to the Ministry of Industry and Infrastructure Development, the above-mentioned measures with the earlier development of port infrastructure made it possible to strengthen the integration of the sea port infrastructure in the Caspian Sea, the country's Western Gate, into the network of international transport corridors.

The volume of freight traffic on inland waterways since the start of the Nurly Zhol program has grown by 86% or from 750 thousand tons to 1.4 million tons.

In particular, as a result of the construction of the Shulba lock gateway and the renewal of the state technical fleet, through navigation on the Irtysh River was resumed and the quality of navigable waterways was improved.

Overhaul of locks and updating of technical fleet continues as part of the new Nurly Zhol program.

Also, important projects have been implemented as part of the state program — ICBC Khorgos and the SEZ Khorgos – Eastern Gates, which are capable of making a significant contribution to the development of transport and logistics potential and the economy of Kazakhstan as a whole.

In 2015, the construction of the Dry Port and infrastructure was completed in 2015 to develop the logistics potential on the basis of the Khorgos – Eastern Gates free economic zone.

Technologically linked to two railway crossings on the border with China and the Western Europe – Western China motorway, the Dry Port forms a powerful transport and logistics hub that will ensure the efficient distribution of freight traffic from China to Europe, as well as Central Asian countries, Turkey and Gulf countries.

Since July 29, 2015, the Dry Port has been in commercial operation; on March 24, 2016, the Act of acceptance of the facility into operation was signed.

The total area of ​​the Dry Port is 129 hectares, integrated with the logistics and industrial zones. In the Dry Port, it is possible to provide customers with a full range of transport and logistics services on the basis of the One-Stop Shop principle, including customs and brokerage services. In 2019, more than 158.2 thousand TEU (twenty-foot equivalent) were processed at the Dry Port, which is 16% more than the same period last year.


The length of roads with four-lane traffic increased to 8.2 thousand km

In the field of automobile transport, the share of worn-out buses on regular routes from 2015 to the present day has been reduced from 65% to 46%. This was facilitated by the measures taken by state support when updating the fleet of city buses. Since the implementation of the Comprehensive Program for the Development of Bus Transportation, 615 buses have been delivered to the regions.

The share of Kazakhstan freight carriers in the international market of motor transport services has been increased from 2015 to the present day from 40% to 47%. In order to increase this share of the Ministry of Industry and Infrastructure Development, work is ongoing with the competent authorities of foreign states to establish quotas for the exchange of forms, taking into account the interests of domestic carriers.

In addition, in order to create conditions for increasing the fleet of domestic freight vehicles within the framework of the Law of Kazakhstan “On Amendments and Additions to Some Legislative Acts of the Republic of Kazakhstan on Transport” adopted on April 19, 2019, the rate for the state registration of truck tractors aged 3 to 7 years amounted to 350 MCI, which was previously 2,500 MCI for truck tractors aged 5 years and above. This allows carriers to purchase foreign freight vehicles under the age of 7 years (Euro-5) at an underestimated registration fee.

These measures contributed to an increase in the number of freight vehicles for international transport from 2015 to today from 15% to 53%.

In turn, for the proper functioning of regular transport, it is necessary to fully subsidize socially significant routes from local executive bodies.

In this regard, in 2019, local executive bodies allocated 23.5 billion tenge to subsidize socially significant routes, which is 20% more than the funds allocated in 2018 (18.5 billion tenge). This, in turn, contributes to increasing the profitability of passenger transportation and updating the bus fleet in subsidized regions of the country.

As part of the implementation of the Nurly Zhol program, the length of roads (up to 8.2 thousand km) with technical category I and II with four lane traffic was increased, a megaproject for the reconstruction of the Western Europe – Western China International Highway was implemented, which serves as the main transit corridor in Central Asia, connecting east and west. Also, thanks to the program, the mechanism of Public-Private Partnership was first used in the construction of roads, in addition, the transition from expensive overhaul to a more economical method of cold recycling was launched, and the priority of the development of roads in the local network increased, the development of which will not be allocated annually less than 200 billion tenge.


Toll roads as a tool to ensure safe and comfortable travel

In order to switch to a self-maintenance regime, a system of toll collection on roads was first introduced, which has shown its effectiveness. So, today there are four sections (Nur-Sultan – Temirtau, Almaty – Khorgos, Almaty – Kapchagai) with a total length of 682 km, the content of which is carried out at the expense of tolls.

At the end of 2019, fees amounted to 5.4 billion tenge. With a view to further introducing payment in December 2019, an agreement was signed at the end of the investment competition for the installation and maintenance of a charging system for 11 thousand km. Under the Agreement, this year it is planned to install a toll collection system on reconstructed sections with a length of 5.7 thousand km. Launching in test operation is provided from the end of this year.

In the remaining 5.3 thousand km, it is planned to introduce payment until 2024 as reconstruction works are completed.

The main goal of introducing toll roads is unloading the republican budget. Funds collected from paid road sections are allocated for the maintenance of these sections and the charging system without allocating funds from the republican budget. In addition, the objectives of the project are to improve the quality of maintenance and preservation of roads, reduce accident rate, as well as the development of an intelligent transport system.

Construction of new railways with a focus on route optimization

In the field of railway infrastructure, the formation of an optimal railway network with an emphasis on optimizing intra-republican transportation routes by creating direct links between regions, as well as increasing the attractiveness of Kazakhstani routes for transit shippers, has almost been completed.

As part of the Nurly Zhol program, in 2016, the Borzhakty-Yersay railway line, 14 km long, was put into operation, which connected the ferry complex in the port of Kuryk with the railway.

Along with this, in 2017, work was completed on the project for the construction of second tracks on the Shu – Almaty section, 112 km long.

The implementation of the project allowed to increase the capacity of the section from 17 to 68 pairs of trains per day, and the practical benefit for shippers was to reduce the transportation time on the section by 2.5 times, due to a twofold increase in the estimated speed of trains.

The development and implementation of new technologies for organizing container transportation along major international corridors made it possible to bring the average speed of container trains to 1,108 km per day. At the same time, the growing demand for the transportation of goods and the expectations of shippers dictate the need for a further increase in the speed of processing and delivery of goods in transit to 1,150 km per day, which is provided for in the framework of the second Nurly Zhol program.

Also, since last year, work has been actively carried out on the development of the Concept of the draft Law of the Republic of Kazakhstan “On Rail Transport,” which is aimed at reforming the railway industry taking into account the orientation of transportation to the competitive market of carriers, and determining the role, rights and responsibilities of each participant in the transportation process.

At the same time, in order to increase efficiency and improve the quality of service, the Ministry of Industry and Infrastructure Development is working to amend the standards for servicing passengers in trains and stations.

In order to reduce depreciation and timely renewal of passenger rolling stock, state programs for subsidizing interest rates and budget loans for the purchase of wagons have been developed and are being implemented.

In general, the state program showed its multiplier effect — the 1,489 fitting platforms purchased were used for transit traffic and allowed to increase the volume of container traffic by 23% (from 537 thousand TEU in 2018 to 664 thousand TEU in 2019) and revenue from transit traffic by 20 % (from 253 billion tenge in 2018 to 302 billion tenge in 2019).

310 open wagons made it possible to transport more than 2 million tons of coal during the heating season.

About 580 open railroad freight cars run on republican railway networks.

In 2019, under the budgetary interest rate, 2,441 wagons (62 passenger and 2,379 freight) were subsidized.

As part of the budget leasing, in 2019, 77 passenger cars were purchased, renewing the composition of the Almaty-Mangistau train in 100%, as well as the trains Nur-Sultan – Saryagash, Nur-Sultan – Atyrau and Almaty – Atyrau.

The deficit of wagons has been reduced from 250 to 160 wagons. More than 1,000 settlements are covered by rail.

Thanks to the measures taken, the stable operation of the domestic plant of the Tulpar Carriage Works LLP was ensured, 130 jobs were created at the plant and about 500 jobs of the train crew and maintenance personnel.

But the problem of depreciation of passenger cars also faces the ministry, as part of the new program, it is planned to purchase 100 cars each year.


Airports in Kazakhstan repaired as part of Nurly Zhol

One of the main directions of the Nurly Zhol State Program for 2015-2019 is the modernization of airport infrastructure.

At the airports of Kazakhstan, systematic modernization of ground infrastructure is being carried out, and this in turn will make it possible to accept all types of modern aircraft.

The condition of the runways and other facilities of the terminal are annually certified and inspected for compliance with the standards of validity of the Republic of Kazakhstan. As necessary, a feasibility study and design estimates for reconstruction and other documents for repair work are developed.

In 2015, the reconstruction of the runway of the airport of Uralsk was completed.

At the expense of the owner, SKAT Airlines reconstructed the airport terminal of the city of Taraz. The commissioning of the facility took place in November 2015, and was dedicated to the celebration of the 550th anniversary of the Kazakh Khanate.

In 2016, reconstruction of the runway, apron, taxiway and airport complex of the airport of Petropavlovsk was completed.

In 2017, as part of the implementation of the Nurly Zhol State Program, the construction of a new passenger terminal at the airport of Astana was completed. During the specialized exhibition Expo-2017, the terminal worked in full.

The total area of ​​the new passenger terminal is 47 thousand m², the throughput capacity is 8.2 million passengers per year or 2525 passengers per hour.

In 2017, at the expense of the owner of the airport in Almaty, the reconstruction of one of the runways was completed, with an increase to III B in the ICAO category.

In 2017, the akimat of the East Kazakhstan region implemented the construction project — Arrivals Terminal of the Ust-Kamenogorsk International Airport for 200 Passengers Per Hour. The implementation of the construction project was carried out through an increase in the authorized capital of JS NC Ertis.

Also in 2018, the Akimat of the East Kazakhstan Region implemented the project "Reconstruction of the runway, taxiway and airport terminal of Semey airport."

In 2019, reconstruction of the runway of the airport Kostanay airport was completed.


Engineering infrastructure in housing and communal services updated as part of the state program

One of the sections of the program is the modernization (reconstruction and construction) of the infrastructure of the housing and communal services and heat, water and wastewater systems, which are financed through the mechanism of budget lending and subsidies. As part of the program, it was planned until 2020 to reduce depreciation from 67% to 57%. In addition, it was planned to improve the quality of public services provided to consumers.

For the period from 2015-2019, 267.1 billion tenge was allocated for the implementation of 418 projects, 3,482.6 km of heat, water and wastewater networks, 24 boiler houses, 88 other facilities were built and reconstructed.

The ministry notes that the wear of networks by the end of 2019 has been reduced to 57%. Construction and installation work is ongoing.


Over the years of the implementation of the Nurly Zhol program, more than 500 thousand jobs have been created

For 2015-2019, under the Nurly Zhol State Program, with a plan of 392.9 thousand jobs, 559.3 thousand jobs were created, including permanent — 93.9 thousand and temporary — 465.4 thousand.

The construction of the ferry complex in the port of Kuryk during the implementation period allowed the creation of about 3,000 jobs and currently about 200 people are provided with work on an ongoing basis.

The construction of the second tracks on the Almaty – Shu section made it possible to create about 1,400 people with temporary work.

During the construction of the Nurly Zhol station complex, about 2,400 people were involved, today the complex provides about 800 people with permanent work.


Accelerated launch of active construction season under Nurly Zhol

Implementation of the Nurly Zhol and Employment Roadmap programs for 2020 will give a positive impetus to the development of road transport infrastructure and the accelerated launch of the season of active construction work, as well as improve macro and microeconomic indicators:

  • providing employment;
  • support for construction companies by providing volumes of work;
  • support for manufacturers of building materials, including petrochemical plants, due to the needs of bitumen;
  • improving the social climate in the regions, as well as their economic development through the repair of infrastructure;
  • favorable impact on the economy of regions and the country as a whole.

As part of the accelerated launch of the construction season within the framework of Nurly Zhol, akimats regions and cities of republican significance have begun and are conducting competitive procedures to determine contracting organizations.

In addition, contracting organizations in order to avoid disruption and timely construction and installation works, work is currently underway on the procurement of construction and installation works.

According to the approved calendar schedules, it is planned to carry out the deployment of specialized equipment and engineering and technical workers by contractors in the near future, and construction and installation work will begin in the second quarter of 2020.

In order to strengthen control over the quality of road construction works, akimats will involve the RSE National Center for the Quality of Road Assets.

At the same time, within the framework of the Employment Roadmap, the lists of projects submitted by akimats within the framework of competence were agreed by the authorized state body for the road industry.


The Nurly Zhol program provides for the expansion of public-private partnerships

The Nurly Zhol program provides for the expansion of public-private partnerships in the construction of roads. The development and expansion of the mechanism of public-private partnership in the construction of roads will have a huge effect on achieving the objectives of the infrastructure development of the Nurly Zhol program. Since PPPs have a number of advantages that allow for the effective implementation of infrastructure projects, these include reducing the burden on the budget by attracting investment in the implementation of projects, expanding models of interaction between the state and business, and effectively sharing risks.

Using the PPP mechanism in the framework of the Nurly Zhol State Infrastructure Development Program, in 2017 the first contract of the republican significance PPP Construction and operation of the Nur Zholy checkpoint on the Kazakh-Chinese border was concluded. The construction and operation of the facility was carried out in 2018.

According to the results of the project, the transit time of vehicles through the center from the start of registration to release from the checkpoint was reduced from 180 minutes to 40 minutes.

At present, at the checkpoint, freight traffic on the Kazakhstan-China border provides more than 200 automatic telephone exchanges per day, with the potential to increase up to 2,500 automatic telephone exchanges per day in subsequent years of operation, which will allow annually collecting income from import and export worth 50 billion tenge, this the queue provides self-sufficiency of the project.

In parallel, in the framework of the Nurly Zhol program, in 2015 a two-stage competition was held to determine the Concessionaire for the creation and operation of the Big Almaty Ring Road with a length of 66 km over 20 years. Based on the results of the competitive procedures, the winner of the competition was determined and in 2018 between the Government of the Republic of Kazakhstan and the winner of the competition – the Turkish-Korean Consortium Alsim Alarco-Makyol-SK-Korea Expressway, the first concession agreement of republican significance was concluded.

In 2019, agreements were reached on financing the project. At the beginning of this year, a Direct Agreement was signed between the Government of the Republic of Kazakhstan, the Concessionaire and the Lenders of the project. Starting this year, an influx of foreign direct investment in the amount of at least 150 billion tenge will be ensured for the implementation of the project, which will ensure construction with the expected completion in 2022.

In turn, according to the analysis, the planned fee for fare for 15.5 years will be 231 billion tenge, for 25.5 years – 570 billion tenge, thereby the project will be self-supporting.

Thus, the Nurly Zhol State Infrastructure Development Program had a positive impact on the expansion and development of the PPP mechanism with gaining experience on achieving the self-sustaining effect when implementing large investment infrastructure projects without burdening the republican budget.


Goals and objectives of the second five-year plan of the program

President of Kazakhstan Kassym-Jomart Tokayev in his Address to the People of the Republic of Kazakhstan “Constructive Public Dialogue – the Basis of Kazakhstan's Stability and Prosperity” paid special attention to the implementation of the Nurly Zhol State Program. The head of state noted that the full and high-quality implementation of the Nurly Zhol should be in the field of vision of the executive branch.

“This is a strategic project which allows effective modernization to affect the entire transport infrastructure,”said the President of Kazakhstan.

It is noted that the government will invest more than 1.2 trillion tenge of investments for these purposes by 2022.

Thus, the Nurly Zhol, which over five years of implementation has clearly demonstrated its success and importance for the economic growth of Kazakhstan, has today found its continuation in the new state infrastructure development program Nurly Zhol for 2020-2025.

On Dec. 31, 2019, the Government of the Republic of Kazakhstan approved the Nurly Zhol State Infrastructure Development Program for 2020-2025.

The program aims to create a transport infrastructure that will be comfortable and accessible for the population, will increase mobility, labor productivity and quality of life.

Under the program, until 2025, it is planned to implement 112 infrastructure projects totaling 5.5 trillion tenge.

The main tasks within the framework of the Nurly Zhol State Program for 2020-2025:

  • construction and reconstruction of 10 thousand km of roads (including 3.8 thousand km of rolling projects), as well as major and medium repairs of 11 thousand km of roads of the republican network.
  • the share of republican roads in good and satisfactory condition will be increased to 100%, and the length of roads of I and II technical category will increase to 60%.
  • repair of more than 27 thousand km of roads of regional and district significance and bringing the share in good and satisfactory condition to 95%.
  • modernization of the Dostyk – Moyynty section and electrification of the Moyynty – Aktogay section.
  • acquisition of 600 new passenger cars.
  • construction of 16 airfields.
  • the acquisition of 48 units of ships, including 6 merchant fleets and the overhaul of locks.

Following the results of the implementation of the state program, it is planned to achieve the following indicators:

  • increase labor productivity growth by 40% compared to 2016;
  • investment in fixed assets in Transport and Warehousing to increase by 308% compared to 2016;
  • create new jobs for 550 thousand people (48.5 thousand permanent, 502.2 thousand temporary);
  • bring 100% of republican roads and 95% of roads of regional and district importance to good and satisfactory condition;
  • Take 50th place in the Logistics Performance Index, the index is evaluated every two years, according to the results of 2018 – 71st place;
  • 49th place in the Infrastructure of the WEF GIC, is estimated annually, according to the results of 2019 – 67th place.

One of the priority tasks is to provide the population with a road to home, that is, local roads, the total network of which is 70.9 thousand km.

In 2020, construction covered 4 thousand km of roads:

Karaganda – Balkhash – Kapshagai, Aktobe – Atyrau – Astrakhan, Taldykorgan – Ust-Kamenogorsk, Kalbatau – Maykapshagai, Kokshetau – Petropavlovsk – Kurgan, Uzynagash – Otar, Merke – Burylbaital, Kostanay – Denisylovka.

To restore and maintain the technical condition of the republican network, it is planned to cover 1.5 thousand km (of which 438 km are overhaul and 1.1 thousand km are medium repairs) of roads, for which 59 billion tenge is planned.

To date, out of 51 competitions on average repair, 18 have been concluded.

In 2020, it is planned to open traffic on road sections with a total length of 2.6 thousand km, for which today 27% of crushed stone, 44% of concrete products and 14% of bitumen from the total annual demand are harvested.

This year, toll will be introduced on 5.7 thousand km of republican roads.

In the field of civil aviation this year, as part of the state program, it is planned to complete the construction of an international airport in Turkistan and a passenger terminal at the airport of Shymkent.

As part of the state program to stimulate domestic tourism this year, it is planned to begin reconstruction of the runway of the airport of Urjar.


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