QAZAQ GREEN.  Today, the open meeting of the Public Council chaired by Bolat Zhamishev has been held in Samruk-Kazyna. The management of the Fund and Portfolio Companies, headed by the Managing Director, Yernat Berdigulov, has presented to the expert community the second list of priority projects of Samruk-Kazyna, which included 18 initiatives worth more than KZT13 trillion. The projects are aimed at the early modernization of the oil and gas, energy, railway and telecommunications systems of Kazakhstan and require considerable investments, are designed for several years and assume a long-term economic effect. Samruk-Kazyna, being the strategic holding, is ready to undertake their implementation, Samruk-Kazyna reports.

 Main directions and projects

Seven of 18 initiatives are related to electricity generation. Thus, two new coal-fired power units will be launched at GRES-2 in Ekibastuz, and new GRES-3 will be built on the basis of clean coal technologies. A new gas power plant will be established in Turkestan region, and a new nuclear power plant will be built in Ulken village of Almaty region. It is also planned to build two large wind farms with a capacity of 1 GW each. The list also includes two new oil and gas processing plants near Atyrau: at the Kabatan site, butadiene and its derivatives (rubbers) will be produced from a mixture of butanes from the Tengiz field.

In addition, a polyethylene production plant is planned to be built in the region. In the gas industry, the implementation of Stage 2 of the Kashagan Gas Processing Plant and the construction of the second line of the Beineu-Bozoi-Shymkent main gas pipeline is also planned.

Three projects are related to the construction of new railway lines. It is planned to open a new border railway crossing with China and build a new Bakhty – Ayagoz line. A new railway will be built from Darbaza station to the border with Uzbekistan. A new bypass line will be built around Almaty to unload the Almaty railway junction.

Two initiatives relate to telecommunications. A fiber-optic cable will be laid along the bottom of Caspian Sea to improve Kazakhstan’s connection to global Internet traffic. The second initiative is the introduction of 5G technology in the country. Telecom operators owned by the Kazakhtelecom group are planning to participate in the auction for radio frequencies to deploy the 5G network. 

Opinion of the expert community

Meeting participants, which included experts, politicians and public figures, expressed their comments and recommendations to the list of priority projects. For example, Olga Bulavkina, the deputy of the Senate of the Parliament of the Republic of Kazakhstan from East Kazakhstan Region, has asked whether Samruk-Kazyna is going to return to plans on creating a nuclear power plant in Kurchatov village in the east of Kazakhstan. Yernat Berdigulov, the Managing Director of the Fund, commented that there are no such plans in the near future, however, in the long term, the Fund may consider this possibility depending on the progress of the Ulken nuclear power plant project.

Daniyar Temirbayev, the Head of the Kazakhstan Association of Minority Shareholders (QAMS), believes that many Samruk-Kazyna projects are still only declarative in nature. There is a lack of the clear scheme for their implementation. In turn, Yernat Berdigulov assured that the Fund is ready to present to the public and experts a more detailed scheme for the announced initiatives implementation. At the moment, the Fund is developing detailed roadmaps for the projects implementation. Deadlines, activities and responsible persons are planned to be approved for each project and stage.

Delving into the projects, Bolat Zhamishev, the Chairman of the Public Council has recommended prescribing a step-by-step plan for their implementation and financing. Along with this, since the projects are of high importance and affect various industries and spheres of life, Samruk–Kazyna must first discuss all sides and nuances, answer all questions and be the initiator of discussions.

Oraz Zhandosov, the economist, shared his opinion that it remains unclear how Samruk-Kazyna selects partners, including foreign ones, when implementing major projects. The Fund should strive for greater transparency in this area, the expert is sure. In response, Yernat Berdigulov commented that a large list of counterclaims is presented to foreign investors and before entering the market of Kazakhstan, the investor also guarantees the fulfillment of certain obligations, and they must also meet a whole list of criteria. In turn, the Fund is ready to work with investors who meet all the requirements of investment legislation. 

A number of issues in the oil and gas and telecommunications sector related to details of the projects was satisfied by representatives of Portfolio Companies of Samruk-Kazyna JSC - professionals with broad industry expertise.

Consider comments and finalize plans

 At the end of discussions, Bolat Zhamishev, the Chairman of the Public Council of Samruk-Kazyna JSC, has summarized that in the future, projects should pass through all stages of planning and preparation, it is necessary to forecast the effect at all stages of the life cycle, to make proposals for amendments to the regulatory framework – in other words, approach even more comprehensively and systematically. Ultimately, enterprises and projects will not only have a long-term effect on the activities and value of Portfolio Companies of the Fund, will create new jobs, but also be backbone ones and will affect the development of industries and strengthening of the national economy, will have an impact on improving the investment climate in general. In addition, when implementing projects, the Fund must adhere to and comply with all the principles for putting such projects into operation and synchronize global actions and changes with interacting state bodies. 

Bolat Zhamishev has also stressed that the discussion was not only theoretical, but also applied. “At the moment, it is premature to say that final decisions have already been taken on these projects. So far, Minutes instructions have been given – and these are the very first and important steps. Subsequently, the Board of Directors will have to take a number of decisions, and today’s discussion is an important step in the framework of the new strategy of the Fund for maximum openness to the community. Our Council is a very important channel for communicating the opinion of the public to the management of the Fund, that is, everyone who took part today and openly shared their expert opinion,” the Head of the Public Council said.

Representatives of the Fund have stated their readiness for joint discussions, including with the participation of responsible Portfolio Companies.