At a meeting of the Majilis, the head of the Supreme Audit Chamber, Alikhan Smailov, spoke about the dire situation of the company "Kazakhstan Temir Zholy" (KTZ).
According to Liter.kz, KTZ is now on the verge of bankruptcy due to inefficient and conservative management.
"All high-income services have been transferred to private companies. Excessive intermediaries around KTZ inflate the cost of purchased goods and services by more than 80 billion tenge," said Smailov.
He noted that 73% of all KTZ's freight turnover from 2020 to 2023 was sold at tariffs below cost. Losses amounted to 907 billion tenge.
"These losses are mainly covered by transit income, which is economically impractical. No entrepreneur is interested in operating on a charity basis. This is a direct path to bankruptcy," added the head of the Supreme Audit Chamber.
At the same time, he said that the company KTZ is unable to pay its obligations and is in the 'red' zone of credit risk. It is reported that at the beginning of 2024, the company's debt stood at 2.9 trillion tenge and continues to grow. 1.3 trillion tenge of that was used to refinance previously accepted debt obligations.
Smailov noted that the methods of "Samruk-Kazyna" would not be able to prevent the KTZ crisis. Without drastic changes in management, KTZ faces a technical default.
In conclusion to his report, Smailov proposed the following measures:
- for the government and JSC "Samruk-Kazyna" to resolve the issue of KTZ's debt burden;
- to ensure that income is directed exclusively towards the restoration of production assets, including the renovation of the main railway network;
- to provide for the institution of an external manager for the development of the National Railway Company;
- to accelerate the digitalisation of management processes for railway infrastructure and transportation;
- to eliminate excessive private intermediary structures in the organisation of production and technological processes and in the transportation of goods and passengers.
As reported by Informburo.kz, Transport Minister Marat Karabayev in turn stated that citizens could save KTZ if they paid significantly more for tickets than they do now.
It is reported that the cost of passenger railway transport in Kazakhstan is not yet set to be raised, but Karabayev believes that a price increase could help KTZ get rid of state funding.
"Approximately 23 billion tenge. State subsidies are, again, taxpayers' money. Therefore, to reduce the subsidised portion, we could consider the issue of increasing ticket prices. But at the current stage, an increase in passenger ticket prices is not being considered," said the minister on the sidelines of the Majilis.
Journalists then asked how much Kazakhs would have to pay for train tickets for the state to stop funding KTZ.
"For it all to be recouped, ticket prices would have to be three times more expensive," added Kanat Almagambetov, acting chairman of the KTZ board.