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“Sea Gates” of Kazakhstan and mining industry: Development of Mangystau region

Thursday, 21 November 2019, 21:44:58

At a meeting with the participation of members of the Government, the Nur Otan party and its faction in the Majilis of the Parliament on Oct. 18, 2019, First President of Kazakhstan – Elbasy Nursultan Nazarbayev ordered to complete the preparation of the territorial development programs for each district, city, and region by March 1, 2020. Continuing the strategic course of Elbasy, the Head of State Kassym-Jomart Tokayev, in his Address to the people of Kazakhstan “Constructive Public Dialogue – the Basis of Stability and Prosperity of Kazakhstan” of Sep. 2, 2019, emphasized that in the development of regions, a special attention should be paid to the improvement of the efficiency of local authorities, reformation of the system of intergovernmental relations, managed urbanization and a unified housing policy. Read how the Head of State’s instructions are implemented in the Mangystau region in the report by PrimeMinister.kz.

The Mangystau region is located in the south-west of Kazakhstan, borders in the north-east with Atyrau and Aktobe regions, in the west — by sea with the Russian Federation, Azerbaijan and Iran, in the south — with Turkmenistan and in the east — with Uzbekistan. The territory of the Mangystau region is 165.6 thousand km2. There are two cities (Aktau, Zhanaozen), one small city of district significance, 5 districts and 58 rural settlements. The region is industrial, 25% of Kazakhstan’s oil is produced here.

The area of ​​the region is 165.6 thousand km2. The population as of Oct. 1, 2019, is 693.5 thousand people, of which the urban population is 272.6 thousand people (39.5%).

The volume of industrial production for 10 months of this year amounted to 2,440.2 billion tenge, an increase of 0.2% compared with the same period last year. Volumes in the mining industry — 2,194 billion tenge, in the manufacturing industry production volumes increased by 0.1% and amounted to 139 billion tenge.

The region's physical volume index in January-October 2019 was 100.2% due to an increase in technical services in the mining industry — 106.5%, and also due to an increase in the production of meat products — 139.3% and the production of dairy products — 110 ,8%.

In addition, investment in fixed assets over 10 months increased by 6.7% compared to the same period last year and amounted to 445.2 billion tenge.

The volume of construction work is 134.7 billion tenge, or 81.7% compared to the corresponding period of 2018. For January-October 2019, 961.3 thousand m2 of housing was commissioned.

106.5 billion tenge were allocated for the social sphere in 2019, including 78.3 billion tenge for education, and 4.4 billion tenge for health care.

The share of the network of local roads in satisfactory condition is 92% today.

23.5 billion tenge were allocated for the construction, capital, medium, current repair and maintenance of local roads from the republican and regional budgets, of which as of Nov. 1, 2019, 7.6 billion tenge was spent.

The gross agricultural output is 15.4 billion tenge. The number of livestock is growing: cattle — by 3.1% (20.5 thousand heads), camels — by 11.3% (69 thousand heads), horses — by 1.1% (75.9 thousand heads). Construction volumes increased by 1.2%, transport — by 0.1%. Growth in agricultural, forestry and fisheries production in January-October 2019 due to an increase in the slaughter of livestock and poultry in live weight by 1.5%, milk yield of raw cow's milk — by 1.1%, an increase in the number of eggs obtained — by 22.9%.

Within the framework of the Entrepreneurship Support Map for 2019, it is planned to implement 3 projects worth 1.9 billion tenge, with the creation of 166 new jobs:

  • construction of a feed mill in the Munailin district;
  • construction of a poultry farm in the Tupkaragan region;
  • construction and operation of a mini-plant for the processing of raw sugar and production of sugar and navat on its basis.

Development of Education and Health Systems for January-October 2019

Currently, there are 310 preschool educational institutions, 139 full-time secondary schools, 16 special educational institutions, 14 additional education organizations and 27 colleges in the region.

The number of children in kindergartens is 38,830, and the coverage of children aged 3-6 years with preschool education is 98%.

This year 23 private kindergartens with 1,678 places were put into operation, and by the end of the year 7 kindergartens with 624 places will be commissioned.

In the new academic year, 148,981 students were enrolled in schools, including 19,147 students in the first grades.

Project estimates for 18 schools with 15,924 places are at the development stage. The construction of three schools will begin next year.

To cover the need for teachers from the local budget, funds are allocated for 61 scholarships for training in higher educational institutions in the specialty of a teacher. The first graduation of teachers studying with a local grant is expected in 2021. Thus, the need will be completely closed.

In addition, a state order was placed in 5 state colleges that train teachers. The average salary of school teachers is 150 thousand tenge. Since July of this year, all teachers receive a 20% premium.

This year, 2.063 billion tenge was allocated for the purchase of textbooks and educational-methodological complexes.

The students' need for dormitories is 700 beds. This year 3 dormitories with 670 beds were commissioned. In 2020-2021, it is planned to open two dormitories with 600 beds. For this, land plots were allocated.

A system of gradual modernization of education has been built in the region: modern educational methods are actively being introduced and comfortable conditions are created for the development of the educational system as a whole.

Within the framework of the Nurly Zhol program, in order to solve the problem of 3-shift education, the construction of secondary schools has been completed in the region. More than 18 thousand teachers work in all educational institutions of the region, including more than 12 thousand teachers in general education organizations, more than 4 thousand teachers in preschool organizations, more than 1.5 thousand in colleges.

In 143 secondary schools of the region there are more than 12 thousand computer equipment.

The total health budget in 2019 amounted to 32,428,245 thousand tenge. Of these, the republican budget allocated 29,65, 824 thousand tenge, local budget — 2,775,421 thousand tenge. For 9 months of 2019, 99.3% was mastered.

The main indicators of the medical and demographic situation are stable, positive dynamics are observed. Thus, the birth rate is 29.5, the total mortality rate is 4.4, and the natural increase is 25.2.

Active work is underway to switch to a digital work format. The digitalization implementation indicator in the region: 89 objects are 100% provided with access to the Internet. More than 2.5 thousand jobs are 97% equipped with computer technology. 34 medical organizations (including 5 private institutions) are 100% covered by the medical information system. Of 29 medical organizations, 18 (62%) switched to paperless workflow.

30 digital literacy posts were created in the medical organizations of the region, more than 102 thousand people who visited the clinic were trained in key skills.

By means of digitalization of healthcare, it is planned to increase the labor productivity of medical workers and increase the satisfaction of the population of medical services by: saving doctors and patients up to 50%, reducing visits to a doctor by 2 times, reducing the waiting time for results by 2 times, increasing the share of pre-registration by 30%, reducing live bursts to 30%, as well as increasing the detection of diseases during screenings.

In 10 Months of 2019, Number of SMEs Increased by 6.5%

Today, the dynamics of entrepreneurship development in the Mangistau region has positive results. The number of operating small and medium enterprises in the first 7 months amounted to 53,000 units. The number of people employed in small and medium-sized businesses has reached 114 thousand people, and their share has grown to 37%. The growth of indicators was ensured by the state programs Business Roadmap 2020, Economy of Simple Things, Enbek Program for Development of Productive Employment and Mass Entrepreneurship for 2017-2021 implemented in the country.

It is worth noting that according to the results of the World Bank rating, Mangystau region ranks second after Almaty in terms of ease of doing business.

For 10 months of this year the number of operating small and medium-sized businesses amounted to 54 thousand units, which is 6.5% more than the same period last year.

Nov. 1, 2019, within the framework of the Business Road Map – 2020 State Program of Business Support and Development, 57 projects were approved for partial loan guarantee worth 470.5 million tenge. Subsidies for new 104 projects were paid for a total loan amount of 3.3 billion tenge with the creation of 635 new jobs. Also, within the framework of the Program, small businesses for the implementation of new business ideas received 9 grants worth 21 million tenge with the creation of 26 new jobs.

As part of the State Program for the Development of Productive Employment and Mass Entrepreneurship for 2017-2021, Enbek and JSC Damu Entrepreneurship Development Fund as of November 1 issued 47 microloans totaling 548.5 million tenge with the creation of 95 new jobs.

It should be noted that microcrediting of the population is carried out through Damu Entrepreneurship Development Fund JSC, Agricultural Financing Support Fund JSC, a branch of Agrarian Credit Corporation joint-stock company, Atameken Microfinance Organization LLP.

Nur Capital regional program is aimed at supporting and developing small medium-sized enterprises by issuing loans at a rate of 1% per annum. Since the start of the program (November 2018), 113 projects have been issued for a total of 2.2 billion tenge, with the creation of 932 new workers.

As of Oct. 1, all second-tier banks issued loans to small businesses worth 27.4 billion tenge, which is 19.9% ​​more than in 2018.

Construction of Fiber Optic Communication Line between Kazakhstan and Azerbaijan along the Bottom of the Caspian Sea

Within the framework of the state program Digital Kazakhstan, a number of promising projects are being implemented in the country, aimed at developing a qualitatively new stage in the economic development of society. Nov. 18-19, 2019, Prime Minister Askar Mamin, as part of a working trip to Mangystau region, together with Azerbaijani Prime Minister Ali Asadov attended the ceremony to begin the construction of TransCaspian Fiber Optic, a fiber-optic communication line between the two countries on the bottom The Caspian Sea.

The project is transcontinental and creates a digital telecommunications corridor between Europe and Asia. Cable laying along the bottom of the Caspian Sea with a length of about 380-400 km will be carried out by Transtelecom JSC, KazTransCom and the Azerbaijani telecom operator AzerTelecom. FOCL will be put into operation by the end of 2021, it will allow the transmission of data with a capacity of at least 4-6 terabits / s.

TransCaspian Fiber Optic is a large-scale project for laying a fiber-optic communication line along the bottom of the Caspian Sea between Kazakhstan and Azerbaijan. This is one of the global initiatives for developing the potential of both countries, whose close trade and economic relations are rooted in the historical past.

This was made possible thanks to the global digital transformation, which affects all spheres of life, stimulating the international investment activity of the business. Kazakhstan and Azerbaijan, being part of the world community, participate in these processes necessary for the successful development of the economies of both countries. This is also facilitated by the Digital Kazakhstan State Program, which provides for the development of a business working with digital technologies and supports the process of transformation of the economy as a whole.

The rapid development of such latest technologies as the concepts of Smart sity, IoT, Big Data, 5G is impossible without the development of trunk communication lines. In this vein, TransCaspian Fiber Optic will become a strategically important project for both countries, which will fully satisfy all the transit needs between Europe and Asia.

Against the background of international synergy on the development of communications between the countries of Central Asia, China and Europe — One Belt, One Way — the creation of the Trans-Caspian FOCL will open up new opportunities for both developing the economy of both countries and stimulating business activity in the entire Caspian region.

It is worth noting that TransCaspian Fiber Optic creates great opportunities for closer integration of Kazakhstan and Azerbaijan. The presence of advanced digital technologies has a direct correlation with communication capabilities, and the new highway, laid along the bottom of the Caspian Sea, will be an important milestone in the development of the digital Silk Road connecting the Central Asian region with Europe.

Askar Mamin emphasized that the joint TransCaspian Fiber Optic project will allow to reach a higher level of development of a high-speed and secure data transmission infrastructure, enter the number of leading Europe-Asia trunk routes and take its rightful place in world data transit.

AzerTelecom LLC is a telecommunications operator in Azerbaijan, a subsidiary of Bakcell, the first mobile operator and provider of the fastest mobile Internet in Azerbaijan. AzerTelecom through an extensive network connects Azerbaijan with the international Internet network. The company offers a wide range of modern services for local and foreign telecommunications companies. Currently, the company is implementing the Azerbaijan Digital Hub program to transform Azerbaijan into a Regional Digital Center.

KazTransCom JSC is a leading telecommunications operator providing a wide range of services in the field of telecommunications and information technology. Currently, KazTransCom has a developed branch network in major cities of Kazakhstan. The company owns its own modern and reliable network infrastructure with a length of several thousand kilometers. The technical and material base of KazTransCom is able to ensure the implementation of telecommunication projects of any degree of complexity.

According to the Vice Minister of Digital Development, Innovation and the Aerospace Industry Daryn Tuyakov, this project is a good help for the development of the digital economy of Kazakhstan as a whole.

“Today we launched the project, which can be called digital Silk Road. This section along the bottom of the Caspian Sea made it possible to connect the route that previously existed from Hong Kong to Frankfurt. This project opens up new possibilities. Today in Kazakhstan, the throughput is about 4 terabytes and this project increases throughput by 2-2.5 times. If we previously had about 15 billion tenge in revenue across Kazakhstan, this project will increase our profitability by 2-2.5 times from transit,” the vice minister said.

Tuyakov also noted that today a digitalization project is being implemented in Kazakhstan, which at one time was launched by the First President – Elbasy Nazarbayev, in the framework of which a number of large promising projects are being implemented. One of them is the laying of fiber-optic communication lines to rural settlements. It is planned by the end of 2020 to provide all settlements with coverage of communication lines and 4G technologies.

Mangystau Region — Locomotive of Industrial Development of Kazakhstan

In the Mangystau region, the largest number of large and medium enterprises operate in the mining industry. Industry employs about 20% of the region’s population. The basis of the manufacturing industry of the region is the chemical industry, mechanical engineering, the manufacture of finished metal products, the production of oil products and other non-metallic mineral products. The manufacturing industry is represented by the production of food products, the textile and clothing industries, the production of rubber and plastic products, mechanical engineering, the chemical industry, the production of other non-metallic mineral products and other industries.

The main activity of Mangystau Oil Refining LLP is hydrocarbon processing. In 2017, the first stage of the hydrocarbon processing complex was launched. Actual processing is 75-80 thousand tons per year. This year it is planned to commission the second stage of hydrocarbon processing with a design capacity of 300 thousand tons per year. In the second half of 2020, the third stage is planned with a design capacity of 830 thousand tons per year. Today, the company produces gasoline, fuel oil, diesel fuel and heating oil.

The enterprise is the only one in the region that sells the products of the plant, thereby partially covering the region’s needs with fuel and lubricants. The location of the company near the “sea gates” of Kazakhstan allows the free sale of fuel oil to the Caspian states. The heating oil produced by the plant will be supplied for bunkering of tankers and ships of KazMorTransFlot JSC. Gasoline and diesel will go all the way to the domestic market. The company also has its own tank farm for the intermediate storage of finished products and a building where the railway tanks are cleaned from bottom sediments. At the same time, a state expertise project is underway to flush railway tanks from the outside - the only one of its kind in Kazakhstan. The company has its own fleet of trucks for the transport of oil and oil products.

The lack of competitors in the region makes the project highly profitable in economic and social terms. The main factor is the large and constant demand for fuel and lubricants.

KazAzot JSC is a major producer of chemical products (more than 90% of the production of ammonium nitrate in the Republic of Kazakhstan) and a subsoil user for natural gas production.

Until 1992, the plant consistently produced mineral fertilizers. From 1992 to 2010, the plant was idle for various reasons, despite attempts to resume production. Starting in 2010, a large-scale modernization of production was carried out and over the next 5 years the plant reached its design capacity. Currently, gas production is 900 million cubic meters, ammonia production is 190 thousand tons, ammonium nitrate production is 330 thousand tons. All products are supplied both in Kazakhstan and abroad. Consumption by farmers is 41%, mainly in the south and north of Kazakhstan, industrial enterprises of the republic — 28% and 31% of products are exported.

Starting from 2010, 70 billion tenge were invested to achieve these production capacities, including 35 billion tenge to upgrade the plant.

The company plans to invest in geological exploration of the existing and new deposits. A program has been developed and is being approved for modernization of the entire production to stabilize and increase the output of finished products. Also, in the event of successful exploratory drilling at the Kosbulak field, in the future, the construction of a new gas processing plant will be considered. Today, the company employs more than 1 thousand people.

The plant is export-oriented, 80% of products are supplied to the domestic market, 20% — for export to the EU, CIS and Asia.

Maga – Bread bakery, included in the Industrialization Map, was commissioned in December 2014 in Aktau as part of the Business Roadmap 2020 program. The bakery's production workshop is equipped with modern German equipment from world leaders in the field of production of technological equipment. The whole bakery process from preparation to finished products is automated and occurs using modern computer technologies. When baking bread, conveyor-type tunnel thermal oil ovens are used to ensure a uniform temperature in the oven due to thermal oil heating. The whole process of making bakery products is controlled by three specialists using program control. Thanks to the use of new modern baking technological equipment and German technology, the company has reached a new qualitative level. In a short period of time, the range of products has been expanded, the volume of production of bakery products and sales volumes have been increased. Currently, the range of products is more than 50 items.

“Our first plant produced a ton per day, then 2 tons. And since 2011, we can already produce 50 tons per day. Our ovens with a capacity of 2500 pieces of brick bread per hour, and if we take it from the factory, we can produce 50 tons of bread per day,” said Aitzhan Saugabayev, director of MAGA BREAD LLP.

Aktau and Kuryk Ports: How the Sea Gates of Kazakhstan are Developing

The “sea gates” of Kazakhstan — Aktau, where the eponymous international transit port, important in developing the country's transit and transport potential, is located. South of the Aktau port, on the eastern coast of the Caspian Sea, there is the Kuryk multimodal ferry complex, which provides new opportunities for road transit. In general, the development of transport infrastructure provides a multiplier effect for the growth of the economy’s competitiveness and gives new impetus to the trade flows of the revived Silk Road, expanding cooperation and contributing to the economic advancement of the region.

Today, Aktau port is a large Kazakhstan hub. From here, through the ports of our neighboring states, you can send cargo to anywhere in the world. The port is a multi-functional modern complex, providing full transshipment of general, dry cargo, oil and grain. Railways and highways converge here. In general, in terms of its technical parameters, the Aktau port fully complies with international standards. The port water area is specially equipped for safe parking, versatile ship service and cargo operations. The port capacity is 16.5 million tons. In the conditions of a highly integrated economy and reorientation of international routes, the port of Aktau has set a course for the development of transit traffic.

One of the main priorities for the development of marine infrastructure and the increase in cargo turnover in the region is to increase the volume of container traffic between the ports of the Caspian basin and attract new types of cargo. Currently, much attention is paid to the development of the Trans-Caspian International Transport Route, which is focused on ensuring freight traffic between Kazakhstan, China, Southeast and Central Asia, Turkey and the countries of Southern Europe.

As a result of the development of the Nurly Zhol program and the transit strategy of Kazakhstan, transport routes have been developed that will allow the port of Aktau to attract significant transit cargo.

Aktau port is one of the important links in this route. The potential of the route is very high - up to 300 thousand containers per year. Therefore, the Northern Sea Terminal and the Kuryk port were additionally created in Kazakhstan. The Aktau port is also preparing hard for these volumes by purchasing new specialized equipment. Today, the port's capacity allows you to accept and process up to 40 thousand containers per year, but the strategic objectives are much higher — 75-100 thousand containers.

Currently, the Kuryk port ferry complex is equipped with modern infrastructure facilities. The design capacity of the port is 6 million tons of cargo per year. Further development of the port involves the construction of a universal berth and the installation of a crane for transshipment of oversized and other cargoes. Since the beginning of the port's operation, 1,128 vessels have been handled, cargo transshipment amounted to more than 3.7 million tons of cargo. In the nine months of 2019, about 1 million 62 thousand tons of various cargoes were handled, of which 600,000 tons were handled in the import direction and 463,000 tons in the export.

Currently, Kazakh grain, coal, petroleum products, fertilizer, chemicals are exported through the ferry complex of the port of Kuryk. Imports are food, industrial equipment, building materials and other goods. Various equipment, electronics, textiles, chemical products, metal products and more go through the port. In general, the port’s rail and road infrastructures are fully prepared for reception and operational service with a view to further sending all types of cargo that are transported through the port of Kuryk for export / import through Azerbaijan and Georgia to Turkey and Eastern Europe.

The capacity of the railway terminal is 4.1 million tons per year, and that of the automobile terminal is 1.9 million tons per year. Railway and automobile berths provide simultaneous processing of 4 ferries or up to 8 ferries per day. From the design capacity of the port, the loading is 27-30%.

In general, the railway and automobile infrastructure of the port are fully prepared for the reception and operational servicing of all types of cargoes passing through the port of Kuryk both in transit and in export / import destinations from / to Turkey.

For Kazakhstan, the lack of ferries of their own affects the geography of cargo transportation routes, makes it dependent on the capabilities and desire of foreign operators — ferry owners, and leads to a direct limitation of access to foreign markets.

In this connection, in order to ensure the country's transport security and give a new impetus to the development of ferry traffic in the Caspian, the issue of building Kazakhstan’s own railway ferries in the amount of two units at the initial stage, with a further increase in the number of ferries to four, is being worked out. The presence of its own ferries will allow the country to enter as a full partner in the market of transport ferry services in the Caspian region, independently determine the routes for transporting goods depending on market conditions and ensure independence from external international factors.

Since last year, Prima T8 freight locomotives have been sent to Azerbaijan via ferry complex Kuryk. These are one of the most powerful electric locomotives in the world, which are produced in Kazakhstan by the Electric Locomotive Krastyru Zauzy LLP. In total, by the end of 2019, it is planned to transport about 40 freight locomotives through the port of Kuryk in Baku.

Construction of Multifunctional Hotel Complex

In the region there are 40 travel agencies, of which 17 are tour operators, the rest are engaged in the sale of air and train tickets.

In accordance with the instruction of the First President of the Republic of Kazakhstan - Elbasy N.A. Nazarbayev developed a "Plan of action for the development of the resort area of ​​Aktau." Also, the State Program for the Development of the Tourism Industry of the Republic of Kazakhstan for 2019-2025 includes measures for the development of engineering and communications infrastructure of a sea resort on the Caspian Sea coast.

Beach tourism in the Mangistau region with an annual capacity of 750,000 people is included in the Tourism Map of Kazakhstan. The promising direction of tourism is the development of a sea resort on the coast of the Caspian Sea, on the site from Aktau to the port of Kuryk.

At the expense of the budget, design estimates were developed for the electric, water, gas supply and reconstruction of the existing highway with transfer to 4-lane traffic. Completion of the construction of engineering infrastructure in the area of ​​a warm beach in Aktau is expected by July 1, 2020.

In addition, in the area of ​​a warm beach in Aktau, work is underway to build a multifunctional hotel complex in Aktau Resort Hotel.

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