Construction and operation of the railway line Zyryanovsk-Maikapchagay

Project objective:

• Optimization of the transit of goods by means of the shortest routes between regions and accelerated delivery of the exported goods outside of the Republic of Kazakhstan;

• Providing of the further increase of international transport and economic relations with People’s Republic of China, Russian Federation;

• Development and effective use of the transit potential, organization of the effective schemes of products and services promotion to the sales markets within the framework of transport and logistical system implementation;

• Assistance to the development of mineral deposits, development of agriculture and economics, development of the localities adjacent to this railway line, assistance to the increase of production and population’s employment.

Place of the project implementation:

Zyryanovsk, Katon-Karagay, Zaisan districts of the East Kazakhstan Region.

Contract type:

Scheme of BTO concession (build-transfer-operation).

Project implementation period:

• Scheduled start of construction: 2016;

• Expected end of construction: 2020;

• Period of operation (operating life): 2021-2045.

Type of activity:

Transportation of freight, transport and logistical service.

Financial and economic indicators of a project:

• Cost of a project: 394 billion KZT (2,1 billion US Dollars);

• Project capacity: Length – 461,4 km;

Services sales markets: Freight forwarders, industrial enterprises of Kazakhstan, Russia and China.

Indicators of the project efficiency:

• Net Present Value (NPV): 5179,1 million KZT;

• Internal Rate of Return (IRR): 8,4 %.

Measures of the state support:

Granting of the plot of land with the right of temporary gratuitous use and connection of the necessary utility facilities.

Form of the Investor’s participation in the project:

Investments to the project should be at the rate of 10% of own funds and 90% of borrowed funds in relation to the cost of concession project, or 100% of own funds.

Initiator of the project:

Akimat of the East Kazakhstan Region (Akimat – is a regional body of the executive power in the Republic of Kazakhstan).

Requirements to the Investor:

For the participation in the tender for selection of Concessioner, the potential Concessioner shall conform to the following qualifying requirements:

1) Potential Concessioner shall have financial and material resources for fulfillment of obligations under the concession contract;

2) Potential Concessioner shall be payable, not to be subject to the liquidation, his property shall not to be arrested, his financial and economic activities shall not to be stopped in accordance with the legislation of the Republic of Kazakhstan;

3) Potential Concessioner shall not to be brought to responsibility for non-fulfillment or improper fulfillment of his obligations under concession contracts concluded during the last three years on the basis of decision of the court entered to the legal force;

4) Potential Concessioner shall have owned capital equal to not less than 10 (ten) percent against cost of the offered concession project, or to provide bank guarantee to the amount equal to not less than 10 (ten) percent against cost of the offered concession project;

5) Potential Concessioner shall have financial reporting for the previous two comprehensive financial years, confirmed by the audit report.