The FBRK editorial team continues to analyse the largest government procurements of 2024 in the regions of Kazakhstan.
This time, the focus has turned to the republic's capital, where, in our view, the key areas of expenditure have been social housing, public transport renewal, and energy infrastructure.
LARGE-SCALE HOUSING PROGRAMME: 18.46 BILLION TENGE
In 2024, the housing and housing inspection department entered into contracts with three companies: MERIDIAN stroy LTD LLP for the purchase of 402 apartments (8.89 billion tenge), Ar-Al-Di LLP for the purchase of 425 one-bedroom apartments (6.79 billion tenge), and Zharkyn Kuryllys LLP for the purchase of 195 one-bedroom apartments (2.78 billion tenge).
Notably, the suppliers received a 30% advance payment and secured insurance cover through Freedom Finance Insurance. However, the lack of complete information on the execution of the contracts on the public procurement portal and the incomplete security for the transactions raise questions about the transparency of the implementation of this socially significant project.
FLEET RENEWAL: 21.94 BILLION TENGE
In May, Bus Depot No.1 JSC concluded two identical agreements with the Industrial Development Fund JSC for the acquisition of Yutong ZK6128HG city buses through a financial leasing mechanism. Each contract included the supply of 100 units of equipment worth 10.97 billion tenge.
The terms of the deal appear attractive: a seven-year lease term at a rate of 7% per annum with a grace period of 9 months. The cost of one bus was 91.79 million tenge excluding VAT. Both deals are backed by guarantees from Bank CenterCredit JSC, which reduces risks to the budget.
PROVISIONING THERMAL POWER PLANTS: 10.93 BILLION TENGE
For 2024, Astana-Energia JSC concluded two contracts with Kaztemirtrans JSC for freight forwarding services for the transportation of coal with a total value of 10.93 billion tenge. The first contract, worth 10.74 billion tenge, provides for the delivery of 3.76 million tonnes of coal to CHP-2, and the second for 192.5 million tenge – the transport of 314,000 tonnes for CHP-1.
The contracts contain clear technical requirements for the formation of routes and the weight of coal in wagons, which, presumably, was intended to ensure the uninterrupted supply of fuel to the capital's thermal power plants throughout the year.
CITY HEAT SUPPLY: 3 BILLION TENGE
In January of last year, Astana-Teplotranzit JSC concluded an agreement with the same Astana-Energia JSC for the supply of thermal energy in the form of steam (57,188 Gcal) and hot water (1,015,391 Gcal) with a total value of over 3 billion tenge. Notably, the actual supply amounts turned out to be lower than the contractual ones: for steam – 148.3 million tenge against 162.7 million, for hot water – 2.54 billion tenge against 2.89 billion.
DIGITALISATION OF THE CAPITAL: 2.4 BILLION TENGE
Rounding out the top five is a contract for the comprehensive digitalisation of urban infrastructure between the digitalisation and public services department of Astana and Astana Innovations JSC. The project involved the integration of 70 digital services, the re-engineering of over 150 processes of the akimat, and the monitoring of more than 10,000 CCTV cameras.
Despite a budget reduction of 36% from the original amount, the scope of work remained the same. According to the public procurement portal, to date only 23% of the total contract value has been realised, despite the contract completion deadline being the end of 2024.
CONCLUSIONS
The analysis of Astana's largest government procurements shows the priority given to social projects and the development of urban infrastructure. Particular attention is paid to addressing the housing issue – a third of the budget for the largest procurements has been allocated for these purposes.
However, a number of systemic problems are noteworthy: insufficient transparency in contract execution, significant discrepancies between planned and actual amounts, and the risks of failing to meet obligations within set deadlines.
As a reminder, we previously wrote about the largest government procurements of the Kostanay region. You can find out more about the region's most expensive contracts by following this link.
The FBRK editorial team will continue to monitor the situation in the area of public procurement and will present an analysis of other regions of the country in subsequent articles.
To be continued...