The news that 173 billion tenge of pension contributions would be used to buy new Russian-made railway carriages stirred up the public. Kazakhstanis are baffled as to why their taxes should go to the budget of a neighbouring country.
However, the practice of supplying foreign carriages under the guise of domestic ones has been going on in Kazakhstan for quite a few years. Often, when officials say 'domestic production', they mean the Kazakh assembly of foreign carriage kits.
As is known, at the end of January 2024, the now former Minister of National Economy, Alibek Kuantyrov, reported that 173 billion tenge borrowed from the Unified Accumulative Pension Fund (UAPF) would be used to buy passenger and freight carriages. Kuantyrov then assured that the carriages would be of domestic production, therefore the money would stay in the Kazakh economy.
Later, the news about the purchase of carriages began to acquire new details. The Minister of Transport, Marat Karabayev, for some reason reported that 184 billion tenge from the pension fund would be spent on buying carriages. The National Bank refuted this information, noting that 173 billion tenge were indeed used from the UAPF, as previously stated.
The other day, the media reported that the supplier of passenger carriages would be the Kazakh company JSC 'Ziksto', which concluded a deal to supply carriage kits of three modifications with the trading company LLP 'Intersnab'. As journalists reported, the carriages that 'Intersnab' plans to supply are made at the Tver Carriage Works.
This news not only stirred up the public once again but also contradicted the earlier statement by ex-Minister Kuantyrov about the domestic production of the carriages.
Let's delve into the recent past and recall the practice of JSC 'NC 'Kazakhstan Temir Zholy' ('KTZ') of supplying foreign carriages under the guise of Kazakh ones.
In 2010, the Kazakh-Spanish carriage-building enterprise LLP 'Tulpar-Talgo' opened in the country. In 2016, production became uneconomical and the contract was terminated. Later, the Spanish withdrew from the company's founders, and production of 'Talgo' carriages was halted.
In September 2018, 'Tulpar-Talgo' was sold to the Russian JSC 'Transmashholding'. The contract stipulated the supply of 1,200 carriages between 2018 and 2026 for the sum of 23 million euros. Six months later, the deal was cancelled. The enterprise returned to Kazakhstan's ownership.
In 2019, 'Tulpar-Talgo' was renamed to 'Tulpar Carriage Building Plant'. 'Kazakhstan Temir Zholy' began looking for 'economically beneficial' investors, among whom was the Swiss company 'Stadler' (remember this company, we will return to it). However, 'KTZ's' choice fell on OJSC 'Tver Carriage Works', which is part of the already familiar 'Transmashholding'.
Under the renewed contract with 'Transmashholding', the plan was to update the passenger carriage fleet for a total of 37.9 billion tenge. 'KTZ' stated their previous intention to acquire 1,200 new carriages over 10 years, not hiding the fact that the carriages would be produced in Russia.
Subsequently, new carriages were increasingly presented as 'domestic'. The only thing that could justify this title was the rather indirect fact that they operated on the territory of Kazakhstan. And already in August 2021, workers at the 'Tulpar' carriage building plant revealed to journalists the main secret of the 'domestic know-how'.
It was reported that the enterprise received fully finished Russian carriages manufactured by 'Transmashholding', onto which 'an orange Kazakh stripe was then stuck'. Journalist Tanirbergen Berdongarov stated that he wanted to visit the plant to familiarise himself with the production of 'domestic' carriages, but the attempts were unsuccessful.
At the time, 'Transmashholding' itself called the activity of their Kazakh colleagues 'screwdriver assembly'. That is, there was no sign whatsoever of actual carriage production in Kazakhstan. The so-called 'domestic' carriages were the fruits of the labour of Russian carriage builders.
In November 2021, 'Kazakhstan Temir Zholy' did manage to sign a cooperation agreement with the Swiss company 'Stadler'. A year later, JSC 'Passenger Transportation' concluded a contract with LLP 'Stadler Kazakhstan', a 'daughter' company of this very 'Stadler', for the supply of 537 carriages between 2025 and 2030 for the sum of 730 billion tenge. Additionally, 'Stadler' will service the carriages until 2044, for which Kazakhstan will pay another 648 billion tenge.
In January 2023, the now former Prime Minister Alikhan Smailov reported that in 2023-2024, 307 passenger carriages of Russian production would be purchased. In August 2023, 'KTZ' wrote that 100 new passenger carriages of JSC 'Ziksto' production would be delivered by the end of the year.
Speaking about these same 100 carriages, the General Director of 'Passenger Transportation', Zhanibek Taizhanov, in turn stated that the carriages would be of Russian production, but later qualified this, saying the carriages were ours, but made using Russian technology:
'When the carriages arrive, there will be more detailed information. These are carriages of Russian production, they will come this year. <…> We are making these carriages ourselves, but using Russian technology.'
Remarkably, domestic carriage production in Kazakhstan supposedly does exist. In January 2023, JSC 'Ziksto' opened an enterprise for manufacturing passenger carriages in Petropavlovsk. It was reported that it had already completed the construction of the first five carriages.
It was assumed that the price of such a carriage would be significantly lower than that of other suppliers working with Kazakhstan. Previously, journalists calculated that the price of one 'Stadler' carriage from 2025 to 2030 risks increasing from 1.2 billion to 1.5 billion tenge. The Petropavlovsk ones, it was stated, would cost approximately 700 million tenge per carriage.
As for freight carriages, there are 3 production sites in Kazakhstan – 'Ziksto', 'Cool Infinity', and 'Kazakhstan Carriage Building Company'. Besides this, this year in the Atyrau region, they plan to open an enterprise with a design capacity of up to 6,000 carriages per year and an initial investment plan of 76 billion tenge ($17 million).
The statements by officials and representatives of 'KTZ', in which they pass off Russian-assembled carriages as products of domestic production, are reminiscent of the situation with JSC 'NC 'Kazakhstan Gharysh Sapary', which resells satellite images from foreign suppliers to local state bodies and passes off open data as exclusive data from their own 'geoservices'.
It is not out of the question that this rather incoherent tradition of passing off others' work as one's own is aimed at undermining the trust of Kazakhstanis in everything said from high podiums. The goals of such duplicity cannot but cause, at the very least, anxiety for our immediate future.
Speaking of trust. The public remains concerned whether the renewal of the carriage fleet really requires such colossal expenditure – particularly on the purchase of Swiss carriages, given the recent revelation about embezzlement at 'KTZ' under the contract with LLP 'Stadler Kazakhstan', as well as the obvious economic advantage of alternative options, be they the Pavlodar carriages or even those supplied from neighbouring countries.