The FBRK editorial team continues its series of articles dedicated to the analysis of the largest public procurements of 2024 in the regions of Kazakhstan.
This time, we examined the situation in the North Kazakhstan Region, where record sums were allocated to sports projects and property acquisition.
FOOTBALL BILLIONS: 1.92 BILLION TENGE FOR MODEST RESULTS
The Department of Physical Culture and Sports of the akimat of the North Kazakhstan Region concluded two major contracts in February 2024 with the LLP "Football Club 'Kyzyl-Zhar SK'". The first contract, for the training and participation of the regional team in national competitions, amounted to 1.2 billion tenge. The second contract provided for services related to preparation for the Kazakhstan Championship among Second League teams totalling 720 million tenge.
Both contracts were concluded under the simplified "single-source" procedure following failed tenders. This approach implies a lack of competitive bidding and may negatively impact the efficiency of budget expenditure. The combined spending of nearly 2 billion tenge for a regional football programme represents a significant sum for the regional budget.
Notably, the initial cost of the second contract was 800 million tenge, but in December 2024, a supplementary agreement reduced the amount by 80 million. Such an adjustment may indicate cost optimisation or a revision of the scope of services provided.
RESULTS DO NOT JUSTIFY THE COSTS
The club's sporting achievements in 2024 proved to be extremely modest against the backdrop of ambitious funding. In the Kazakhstan Championship, 'Kyzyl-Zhar SK' finished the season in the bottom half of the table, failing to contend for a European competition place. The cup campaign also yielded no tangible results — the team was eliminated in the early stages of the tournament.
Against this backdrop, the level of budgetary support appears disproportionate. Despite statements about infrastructure development and reserve training, the club did not demonstrate significant progress in national competitions. Their breakthrough in the Kazakhstan Cup — a victory over Kyzylorda's "Kaisar" and reaching the semi-finals — only occurred in the spring of 2025, after the aforementioned contracts had expired.
CRIMINAL CASE AND EMBEZZLEMENT
The situation surrounding the football club took an unexpected turn in November 2024. The Prosecutor's Office of the North Kazakhstan Region initiated a criminal case against officials of the LLP "FC Kyzyl-Zhar SK" regarding the embezzlement of budget funds. The case file mentions the name of the club's former president, Grigory Loria.
The trigger for the investigation was information about the club's multi-million tenge debts, published on social media. Prosecutor's inspections confirmed instances of misuse of state funds. Further details of the investigation have not been disclosed in accordance with the requirements of the Criminal Procedure Code of the Republic of Kazakhstan.
The club's management stated it was ready to "provide full assistance to the investigating authorities" and to take measures to resolve the situation. However, the very fact that a criminal case has been opened seriously calls into question the intended use of nearly 2 billion tenge allocated from the regional budget for sporting purposes.
HOUSING DEAL: 1.18 BILLION TENGE IN 15 DAYS
In 2024, the Department of Construction, Architecture and Urban Planning of the Petropavlovsk city akimat concluded a contract with the LLP "Miras Group" for the acquisition of a residential building worth 1.18 billion tenge. The transaction was formalised under a "single-source due to failed procurement" purchase, indicating a lack of competitive bids.
A particular feature of the contract was the extremely tight delivery timeframe — just 15 calendar days from the date of registration with the treasury. This suggests the building was ready for immediate handover and may point to a pre-arranged deal. The contract amount includes VAT of 126.4 million tenge; no advance payments are stipulated.
Financing was provided from the regional budget under the capital expenditure programme. A 12-month warranty period has been set for the purchased building, which is standard for such transactions. The supplier provided contract performance security amounting to 35.4 million tenge.
SYSTEMIC PROBLEMS
An analysis of the largest procurements in the North Kazakhstan Region reveals a persistent trend towards entering into contracts through simplified procedures without competitive bidding. This practice creates risks of inefficient budget expenditure and may facilitate corrupt schemes.
The situation with the football contracts is particularly concerning, where billion-tenge sums not only failed to lead to corresponding sporting achievements but also became the subject of a criminal investigation into the embezzlement of budget funds. The initiation of a criminal case against club officials confirms the validity of questions regarding the effectiveness and intended use of state funds.
CONCLUSIONS
Public procurement in the North Kazakhstan Region in 2024 demonstrates the critical need to strengthen control over the efficiency of budget expenditure. The practice of concluding "single-source" contracts requires additional justification and transparency.
Billion-tenge investments in sport must be accompanied by clear performance criteria and public reporting on achieved indicators. Major property transactions require thorough expert assessment of price justification and compliance with market conditions.
As a reminder, we previously reported on the largest public procurements in the Atyrau Region. You can read more about the most expensive contracts of the capital via this link.
The FBRK editorial team will continue to monitor the situation in the field of public procurement and will present analyses of other regions of the country in future articles.
To be continued...