The Chairman of the Supreme Audit Chamber (SAC), Alikhan Smailov, has discussed the possible default of national rail carrier, Kazakhstan Temir Zholy (KTZ). According to Smailov, the company cannot currently fulfill its obligations.
“The company is in the ‘red’ zone of credit risk. At the beginning of 2024, its debt amounted to 2.9 trillion tenge ($6 billion) and continues to grow; 45%, or 1.3 trillion tenge ($2 billion), of the total debt is aimed at refinancing previously assumed debt obligations,” said Smailov, answering questions from deputies.
According to Smailov, Samruk-Kazyna JSC’s existing corporate governance methods and development strategy, which include KTZ, are not able to prevent the crisis the country’s national railway company is facing.
“Further deterioration of assets, the build-up of debts, and the inability to service them without fundamental management changes will lead to the default of KTZh,” Smailov stated.
A large amount of budget funds has been spent on developing the railway industry over the past four years, but it has not been enough. The money invested has yet to meet the nation’s needs for freight and passenger transportation, Smailov emphasized.
