Kyrgyzstan: Government proposes to corporatize the state railways enterprise
BISHKEK (TCA) — The Kyrgyz Government proposed to corporatize the Kyrgyz Temir Jolu State Enterprise (Kyrgyz Railways). The issue was discussed on February 5 at a meeting of the Parliamentary Committee on Transport, Communications, Architecture and Construction. “At the initial stage, we propose to create a joint venture with a potential investor in freight forwarding. We believe that this will allow us to attract additional financial resources for the development of the railway industry. It is also planned to introduce a mechanism of state and private participation in financing the railway transport modernization,” said Kyrgyz Temir Jolu General Director Kanatbek Abdykerimov, who was appointed to head the company three months ago. Former CEO Almazbek Nogoibaev was dismissed after being accused of corruption by MPs. Some deputies are skeptical about the idea of the enterprise’s transformation into a joint stock company. The Kyrgyz Temir Jolu had already been renamed into the national company, but it has not brought any results. In is necessary to develop the railway network and connect the north and south of the country by the railways, the MPs said. Timber, metal building materials from Russia and other cargoes that pass along the Bishkek—Osh highway have put this motor road in poor condition, MPs said. It is necessary to transport such cargoes through railways only, the MPs believe. They asked the Transport Ministry to make every effort to remedy the situation. The Kyrgyz Temir Jolu is now negotiating with banks on buying of new passenger and freight cars this year. The shortage of freight cars hinders the development of the country’s coal industry and creates difficulties for entrepreneurs, the MPs added. The purchase of freight cars in the near future would allow increasing the exports of goods from the southern regions of the country. Following the discussion, the parliamentary committee members suggested the Government to reduce by 50% the company’s net profit payment to the national budget and to allocate the released funds for modernization of the track infrastructure. Background The Kyrgyz Temir Jolu was established in 2005 as a successor to the Kyrgyz Railways, which, in turn, inherited the functions of the Frunze branch of the Alma-Ata Railways in 1992. The length of Kyrgyzstan’s railways was 470 kilometers in 2006, and it is 426 kilometers now. The track network is fragmented, and the rolling stock including coaches, locomotives and freight wagons, is outdated. Rail transport accounts for only 3% of the cargo turnover in the country. 4,812 people are now working in the state-owned enterprise. Rolling stock Over the 27 years of independence, Kyrgyzstan has bought only six locomotives. The rest have been exploited for 40 years, despite the expired usage period, Kyrgyz Temir Jolu General Director Abdykerimov said. More than 52.5% of freight cars and 51.6% of coaches are inoperative. From 2020, 94 coaches will be sent for scrap. To restore the freight car fleet and fully meet the needs of business entities until 2022, it is necessary to purchase 200 freight cars annually for more...
