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Viewing report
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Kazakhstan Infrastructure Report Q4 2011
Business Monitor International, Oct 2011, Pages: 63
BMI View: Kazakhstan’s construction industry maintains significant upside this quarter despite a slight downward revision to growth rates in line with official statistics. As a result, year on year (y-o-y) growth is expected to come in at just 2.5% for 2011. This will rise, averaging 5.9% over the forecast period to 2015. Driven by a robust oil sector, numerous pipeline projects and its location as a central Asian hub the country is expected to generate industry value of US$12.9bn this year.
Key developments include:
- Infrastructure major Alstom won a contract from Kazakhstan's Astana LRT to build a 41.8km light rail network in the country. Alstom will build a depot in which the trams will be stored and maintained, install the power supply and signalling systems and oversee the delivery of information equipment in addition to laying tracks. The project, due to start in 2011, is schedule for completion during 2014.
- Construction work on an 86km railway line linking Iran to Turkmenistan and Kazakhstan is scheduled to be concluded by early-2012. The US$150mn railroad is part of a 1,000km railway line construction project which was agreed by the three countries in September 2007. The line will cover 90km in Iran, 700km in Turkmenistan and 210km in Kazakhstan.
- Kazakhstan's President Nursultan Nazarbayev has laid the first foundation stone at Nazarbayev University to mark the launch of construction work on a 4.8km light rail network in Astana, reports Railway Gazette. The line is planned to run from the international airport to the Abu Dhabi Plaza development, where it will split to reach the main station by a circuitous eastern route and a direct western route.
Signs that President Nursultan Nazarbayev's health is worsening, coupled with the absence of a strong candidate for succession, are a growing concern for policy continuity in Kazakhstan. This exacerbates a problem BMI had previously identified, namely the reliance of the whole Kazakh political system on the leadership of its current aging president. Timor Kulibayev, Nazarbayev's son-in-law, is starting to look like the most likely presidential successor, but doubts remain as to whether he will be up to the job and whether a smooth transition will be ensured.
BMI continue to expect robust expansion in the Kazakh economy over the coming quarters, forecasting real GDP growth of 7.2% and 6.9% in 2011 and 2012 respectively. Nevertheless risks exist to Kazakhstan's rapid economic development, and as such BMI highlight the main factors that they believe could see economic growth fall short of our 6.6% per annum average forecast through to 2020.
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