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DE RUEHTA #2277/01 3241042
ZNR UUUUU ZZH
O 191042Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3870
INFO RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0223
RUEHKO/AMEMBASSY TOKYO 0933
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RUEHNO/USMISSION USNATO 2391
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RULSDMK/DEPT OF TRANSPORTATION WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0388
RUEKJCS/SECDEF WASHDC 0305
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 0928

UNCLAS SECTION 01 OF 02 ASTANA 002277 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
STATE PLEASE PASS TO USTDA DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV PREL EAIR ELTN EINV MARR AF KZ
SUBJECT:  KAZAKHSTAN:  TRANSPORT AND COMMUNICATIONS MINISTER 
DISCUSSES TRANSPORT INFRASTRUCTURE PLANS 
 
ASTANA 00002277  001.2 OF 002 
 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2.  (SBU) SUMMARY:  Minister of Transport and Communications Serik 
Akhmetov told the Ambassador on November 19 that Kazakhstan aims to 
improve its transport infrastructure and develop itself as a transit 
corridor.  The capacity of the port of Aktau will be doubled by 
¶2012.  Modernization of the railway system is ongoing, and General 
Electric's locomotive factory in Astana will commence production in 
¶2009.  The Ambassador noted that the U.S. government is preparing 
Open Skies proposals for discussion with Kazakhstan, and suggested 
resuming negotiations on a bilateral agreement on state aircraft 
fees.  Akhmetov said Kazakhstan welcomes public-private partnerships 
in highway construction and is preparing to announce several highway 
tenders in December.  The Ambassador stressed the importance of 
finalizing a Kazakhstan-NATO agreement for a northern GLOC for 
Afghanistan.  Akhmetov responded that Kazakhstan supports the idea 
in principle.  END SUMMARY. 
 
AMBITIONS TO DEVELOP TRANSIT CORRIDORS 
 
¶3. (SBU) During a November 19 meeting with the Ambassador, Minister 
of Transport and Communications Serik Akhmetov detailed Kazakhstan's 
efforts to improve its transport infrastructure and develop itself 
as a transit corridor for international trade.  Kazakhstan's 
geographic location in the center of Eurasia and long borders with 
China (4,000 km) and Russia (7,000 km) provide the country with 
great transit potential, he maintained.  China-Europe transit is 
particularly important and is growing rapidly.  Akhmetov said that 
Kazakhstan has established several international transit routes -- 
both road and rail -- which it intends to bring up to international 
standards.  He added that the TRACECA (Transport Corridor - Europe - 
Caucasus - Central Asia) initiative is also very important for 
Kazakhstan, and noted that there will be a TRACECA anniversary event 
in Baku on December 2. 
 
SEAPORTS:  AKTAU'S CAPACITY TO DOUBLE 
 
¶4. (SBU) Akhmetov also stressed the importance of transit across the 
Caspian -- which is the shortest route from Kazakhstan to Europe. 
He noted that the port of Aktau, which is the country's largest on 
the Caspian, currently handles the transit of approximately 10 
million tons of crude and 1.5 million tons of dry goods annually. 
Work is ongoing to double Aktau's capacity by 2012 -- in time for it 
to handle crude from Kashagan, which is expected to begin production 
in 2013. 
 
RAILWAYS:  MODERNIZATION UNDERWAY 
 
¶5. (SBU) Kazakhstan is also modernizing its railroad system, 
Akhmetov explained, extending electrification and bringing it up to 
European standards.  He told the Ambassador that General Electric's 
locomotive factory in Astana is expected to commence production in 
2009 and will have a capacity of 100 locomotives per year. 
According to Akhmetov, Kazakhstan is also interested in the 
production of passenger wagons. 
 
AIR TRANSPORT:  NAVIGATION SYSTEM REACHING WORLD STANDARDS 
 
¶6. (SBU) Akhmetov explained that because of Kazakhstan's geographic 
location, it has many important air corridors.  The government is 
very open to air transport and transit.  FedEx, he noted, flies 
daily into Kazakhstan.  The country began modernizing its air 
navigation system six years ago and has almost completely brought it 
up to world standards.  Lockheed-Martin has been a key supplier in 
the modernization effort, Akhmetov said. 
 
¶7. (SBU) The Ambassador thanked Akhmetov for permitting senior 
Kazakhstani civil aviation officials to attend the 14th annual 
American Association of Airline Executives Conference held in Athens 
in October.  (NOTE:  Their attendance was funded by USTDA, which 
 
ASTANA 00002277  002.2 OF 002 
 
 
used the event to bring together South and Central Asian civil 
aviation officials and airline representatives in order to promote 
liberalization and regional integration of the aviation sector.  END 
NOTE.)   The Ambassador noted that in Athens, the Kazakhstanis had 
discussed with their U.S. counterparts the possibility of an Open 
Skies Agreement.  He promised Akhmetov that the U.S. side is 
currently preparing specific Open Skies proposals for discussion 
with Kazakhstan. 
 
¶8. (SBU) The Ambassador also said that the United States would like 
to resume negotiations on a bilateral agreement on state aircraft 
fees.  The two countries have differences on definitions of state 
aircraft, but we hope that they can be bridged.  Akhmetov noted that 
negotiations had been initiated in 2001 and ascribed the difficulty 
in finalizing an agreement to differences in U.S. and Kazakhstani 
legislation.  (NOTE:  Kazakhstani legislation defines a state 
aircraft very narrowly, as one carrying a head of state or head of 
government.  END NOTE.)  He said the two sides need to find a 
compromise, and explained that the latest text proposed by the 
United States remains under review by the Ministry of Foreign 
Affairs. 
 
ROADWAYS:  PRIVATE SECTOR INVESTMENT WELCOMED 
 
¶9. (SBU) The Ambassador asked Akhmetov about Kazakhstan's plans for 
the development of highway infrastructure and what role 
public-private partnerships (i.e., concessions) might play. 
Akhmetov explained that Kazakhstan has a network of 100,000 km of 
roadways, including 22,000 km of roads of national importance.  The 
country's highway budget, however, is only $1 billion per year.  The 
government's aim is to develop two modern road transit corridors 
that meet European standards.  Next year, work will be completed on 
the Astana-Shchuchinsk autobahn -- a 224 km-long, six-lane highway, 
with construction costs of $4.5 million per kilometer.  The transit 
corridors will require construction of a length of roadway five 
times as long.  According to Akhmetov, since the highway budget can 
not cover those costs, the government is actively seeking 
public-private partnerships.  A recent legislative change that 
permits toll roads should facilitate private-sector investment in 
roads.  The government is willing to provide co-financing, as well 
as share the risks by promising to compensate investors if road 
usage does not meet expectations. 
 
¶10. (SBU) Akhmetov said that the government will announce four 
tenders in December for reconstruction of the Astana-Karaganda, 
Almaty-Kapchagai, Almaty-Khargoz, Almaty ring roads.  These four 
roads, he maintained, have excellent potential.  Akhmetov admitted 
that since the onset of the global financial crisis, the interest of 
major lenders in such projects in Kazakhstan appears to have waned 
to an extent.  He claimed, however, that the EBRD remains interested 
in the Almaty-Khargoz road.  (NOTE:  Khargoz is on Kazakhstan's 
border with China.  END NOTE.)   The Ambassador asked about the 
prospects for financing from the Asian Development Bank (ADB), which 
has an interest in transit corridors.  Akhmetov said that the ADB is 
waiting to see what the World Bank does. 
 
NORTHERN GLOC:  SUPPORTED IN PRINCIPAL 
 
¶11. (SBU) The Ambassador stressed the importance to Afghan 
stabilization efforts of finalizing a Kazakhstan-NATO agreement for 
a northern GLOC.  He added that TRANSCOM Commander General Duncan 
McNabb would be visiting Astana on November 21 to discuss transit of 
Afghanistan-bound supplies and hoped to meet with Akhmetov. 
Akhmetov responded that Kazakhstan supports the concept of ground 
transit of NATO supplies.  He said he might be on a business trip on 
November 21, but would meet with General McNabb if he is in Astana. 
He appeared willing to have one of his deputies meet with McNabb if 
he could not do so himself. 
 
HOAGLAND