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. The Times of Central Asia reports in its article Kyrgyzstan: Government proposes to corporatize the state railways enterprise that Former CEO Almazbek Nogoibaev was dismissed after being accused of corruption by MPs.
“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.
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.
On the company’s sale to Russia
“We are not negotiating the sale of the enterprise,” Abdykerimov said answering journalists' questions about selling the company to Russia. At a press conference in Bishkek on February 7, Security Council Secretary Damir Sagynbayev did not comment on rumors that Kyrgyz Temir Jolu and other strategic facilities would be transferred to Russia. To assess the proposal for the company’s reorganization, it is necessary to conduct a comprehensive economic analysis of the relevant decisions, he added. Regarding the sale of Kyrgyzgaz (Kyrgyz Gas) to the Russian side, it is a good example. Local citizens saw that household gas comes to their houses without fail and at a low price, he said.
Rumors on the sale of the state-owned Kyrgyz Temir Jolu to Russia began to circulate after the recent meeting of the Kyrgyz Temir Jolu General Director with the head of the Russian Railways Oleg Belozerov in Moscow. They discussed the development of a preliminary feasibility study of projects for Kyrgyzstan’s railway network development, the issue of purchase of Russian coaches and reducing the fare for passengers in the Russian-Kyrgyz train connections, and on the transfer to the ownership of Kyrgyz Railways of the locomotives of the Russian Railways which are now leased by the Kyrgyz Temir Jolu. There was no issue of selling the company on the agenda, the company spokesman Erkin Kaimov told Azattyk Radio.
Railways development concept
Kyrgyz Temir Jolu General Director Kanatbek Abdykerimov presented a draft Concept of Kyrgyzstan’s railway transport development for 2019-2025 to Prime Minister Mukhammedkaly Abylgaziyev. Within the Concept, it is planned to build a new model of enterprise management including corporatization and public-private partnership mechanisms, Abdykerimov said. Attraction of highly qualified personnel is among the important tasks of the Concept. “It is unacceptable that such a strategic facility as the Kyrgyz Temir Jolu national company be in such a state as it is now. It is necessary to take decisive measures to radically change the situation in the railway transport and to make the company profitable, modernized and developing,” stressed PM Abylgaziyev. He ordered to accelerate the implementation of measures for the development of railway transport related to the Kyrgyz Temir Jolu corporatization.
