2009-12-29 20:52:08 - New Transportation research report from Business Monitor International is now available from Fast Market Research

In June 2009, it was announced that the World Bank and the government of Kazakhstan had signed a multi-billion-dollar loan for the South-West Roads Project. This is a key transport artery that will traverse Kazakhstan, from the border with Russia to the north to the border with Kyrgyzstan to the south. It is part of a much larger transport programme to link Western Europe and China via Russia and Central Asia. The loan is for US$2.125bn to assist with the cost of upgrading the existing road - built during the Soviet years - between Aktobe, near the border with Russia, and Shymkent, near the border with Kyrgyzstan. The road will run for 1,062km and once complete it will form part

of the backbone of a new route from Europe to China that will be 3000km shorter than any existing route. The International Bank for Reconstruction and Development will provide the loan and the government of Kazakhstan will cover the remaining cost of the project with an allocation of US$375mn. The loan has a maturity of 25 years and a five-year grace period. This road is part of a wider transport programme, the Western Europe- Western China International Transport Corridor (WEWCITC). The government of Kazakhstan has been the main advocate of the project, as it provides an opportunity for Kazakhstan to become a key transit corridor for trade between China and Russia and Western Europe. Kazakhstan's Ministry of Transport and Communications has estimated the cost of the WEWCITC to be US$7.5bn and will extend for 2840km. After a small contraction in 2009, BMI is forecasting a period of moderate, oil export-led growth in Kazakhstan. We expect that GDP will rise at an annual average of 5.8% for the next five years, a rate that will be marginally lower than the 6.0% figure achieved over the preceding five years. These figures constitute our latest update and may supersede those in the preceding section. Although slower, this pace of development will provide an incentive for the freight transport business. In any case, Kazakhstan's development will be relatively transport-intensive, given the vast distances across the country and the location of its oil and mineral deposits. According to our latest estimates, transport and communications GDP fell by 2.6% in 2009, more steeply than overall GDP, which we estimate to have fallen by 1.9%. For the 2010-2014 forecast period, we expect the transport and communications sector to be fractionally ahead of the economy as a whole. It will achieve average annual growth of 5.9% vs. 5.8% for GDP%. The total value of transport and communications GDP will rise to US113bn in nominal terms by 2014, representing 7.4% of Kazakhstan's GDP. The transport and communications sector employed 532,000 people, or 7.2% of the labour force, in 2009. We see the total figure rising slightly to 552,000 by 2014. We have official data for freight traffic (measured in million-tonne/km) for road, rail and air haulage up to 2000, compiled by the UN Economic and Social Commission for Asia and the Pacific. To these we have added our own initial estimates for pipeline throughput. The estimates are being updated as we carry out further research. The current picture suggests that the fastest-growing transport mode over the next five years will be pipeline throughput, which will gain 7.2% per annum in 2010-2014. It will be followed by the rail sector, poised to gain from a round of new state investment in locomotives and track, which should take the annual rise in volume to 6.9%. In shared second place comes airfreight, based on the expected growth of Air Astana and others, also at 6.9%. Road haulage will grow slowest, but will still achieve an impressive 6.3% expansion rate.


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