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Economy

Kazakhstan's utilities overhaul has finished 14 of 347 projects as contractors win 112 complaints against its tenders

A deputy prime minister's review on Friday put the government's own numbers on the national project meant to renew Kazakhstan's utility and power networks by 2029. They show a programme budgeted at 13 trillion tenge and held up at the tender stage.

Two sawn sections of heating pipe on a bench, one new with intact insulation and one old and corroded.

Kanat Bozumbayev, a deputy prime minister, chaired the project office of the national project “Modernisation of the energy and utilities sectors” on Friday 18 September, and the government's site posted the readout at 16:52. The project runs from 2025 to 2029. Its budget is 13 trillion tenge, about $29 billion at Friday's KASE close of 446.56 to the dollar: 6.8 trillion for utilities and 6.2 trillion for energy, on government figures carried by Kazinform on 20 August.

The readout's ledger is smaller. 347 projects worth 839 billion tenge ($1.9 billion) have been formed and contractors chosen for 220 of them. Building work or equipment purchases have begun on 77 projects worth 126 billion tenge, and another 29 are in tender.

Completed so far: 14 sites worth 27.3 billion tenge ($61 million), 7 of them in Pavlodar region and 2 in West Kazakhstan.

On CAW's arithmetic the projects formed equal 6.5% of the 5-year budget, and the finished ones 3.3% of the projects formed, in the second year of 5.

The readout says where the time goes. About 300 complaints have reached the supervising body since July, and Bozumbayev told the meeting that 112 from EPC contractors had been upheld, “which points to the low quality of the tender documentation”. Work on 67 projects at 30 enterprises has not started “for various reasons”. Approvals are in hand and tenders under way for 245 projects worth 300 billion tenge.

What the government's own numbers describe is a state that has budgeted the renewal and cannot yet procure it.

Six places were named for slow progress: Shymkent, the Abai and Ulytau regions, and the Almaty, Atyrau and Turkestan regions. The instructions carry dates. The economy ministry owes a region-by-region analysis before October; the regulations are to be amended by 15 October; and by 1 October the ministry and the regional governments are to work out whether the heads of natural monopolies can be held administratively liable. If unlawful conduct turns up in the tenders, Bozumbayev said, he will take it up personally and bring in law enforcement.

The grid gave its own reminder a day later. On Saturday a state commission under the first deputy prime minister, Nurlybek Nalibayev, heard the grid operator KEGOC report on a “technological disruption” in the southern zone of the national power system. The readout gave no date, cause or figure, and ordered the measures from the investigation carried out.

What the government's own numbers describe is a state that has budgeted the renewal and cannot yet procure it. One of the programme's key targets is to bring the wear of the networks down to 40% by 2029. With 3.3% of the formed projects finished in year two, that target now rests on the 3 building seasons from 2027 to 2029, and on whether the tender documents improve faster than the pipes age.