Kazakhstan Temir Joly Overview and Operations

Kazakhstan Temir Joly is the main railway operator in Kazakhstan, and it's a vital part of the country's transportation system.

The company was formed in 1997, following the dissolution of the Soviet Union, and it has been operating independently ever since.

Kazakhstan Temir Joly has a vast network of railways, covering over 15,000 kilometers of track, which is a significant portion of the country's total railway network.

The company operates a diverse range of trains, including freight and passenger services, connecting major cities and industrial centers across Kazakhstan.

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Kazakhstan Temir Zholy, or KTZ, was founded by the government in 2002 as a joint stock company.

KTZ's main task is to develop, operate, and maintain railway transportation in Kazakhstan.

It is headquartered in Astana, and related stock companies own the rolling stock, hauling equipment, and passenger transport division.

Repair facilities have been privatized, and private companies can own or rent rolling stock that can use the rail system.

KTZ is the largest employer in Kazakhstan, with 119,071 employees as of 2020.

Approximately 1% of the Kazakh population are employed by the railroads and affiliated companies.

The company manages a massive fleet of 46,800 freight wagons, 1,700 locomotives, and 2,300 passenger cars.

KTZ's revenue in 2020 was a staggering 1,173.3 billion Kazakhstani tenge.

The freight industry saw an increase in overall tonnage of 3.5% in 2020 compared to the previous year, while passenger volume decreased by 54.5%.

Kazakhstan Temir Joly's infrastructure is a vital part of the country's transportation network, with a long history dating back to the Soviet era.

The company's headquarters is located in Astana, and it operates a vast network of 15,000 km of railway tracks. This is a significant expansion from the 16,400 km of track it controlled in 2005.

KTZ is a vertically integrated group, owning and operating all the state railway network in Kazakhstan. It's also the country's largest owner of rolling stock.

The company has a broad gauge of 1,520 mm, which provides a smooth transit at international borders to countries of the former Soviet Union. However, this means there's a break-of-gauge at Dostyk and at Khorgas/Altynkol, where the railway meets China's standard gauge of 1,435 mm.

KTZ has a significant electrification network, with 4,000 km of track electrified at 25 kV 50 Hz AC. This is an essential part of the company's operations, enabling it to transport freight and passengers efficiently.

Here's a breakdown of the company's key infrastructure statistics:

KTZ is investing heavily in its infrastructure, with a capital expenditure program (CAPEX program) in place to rehabilitate and repair its existing railway tracks network. This will improve the reliability and quality of its railway tracks infrastructure, which has been subject to important physical deterioration.

The company is also upgrading its fleet of electric locomotives and passenger cars to improve freight and passenger transport safety, speed, and capacity.

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Kazakhstan Temir Joly has made significant investments in rolling stock to improve its freight and passenger services. In 2010, the company ordered 295 KZ8A electric locomotives from Alstom, with the first train delivered in October of that year.

The company has also expanded its fleet of intercity vehicles, with a contract awarded to Talgo in 2010 to replace its existing fleet of 3000 vehicles. Unfortunately, this order was cancelled in 2019.

Some of the notable locomotives used by Kazakhstan Temir Joly include the KZ4A, VL80, TE33A "GE Evolution", and TEM2 "Tamara".

In Kazakhstan, the rail network is a vital part of the country's logistics. Kazakhstan Temir Zholy JSC, or KTZ, is the country's largest railway company and a key player in the national and regional transport system.

The company is 100% state-owned and owns and operates all the state railway network, making it one of the 15 largest railway companies in the world in terms of freight turnover. KTZ provides economic connectivity with 17 regions of Kazakhstan and with five neighboring countries.

KTZ is investing in a major railroad project to link China and Southeast Asia to Europe for a length of 3,900 kilometres. The project will start at the eastern border town of Druzhba and go to Aktau on the Caspian Sea.

The project will cost between $5–7 billion and is expected to take four years to complete. A link from Aktau to Iran is also required to complete the project.

KTZ is also working on a CAPEX program to rehabilitate and repair its existing railway tracks network, modernize its fleet of electric locomotives, and upgrade its passenger cars. The program is expected to increase the reliability and quality of its railway tracks infrastructure.

In addition to these projects, KTZ has signed a joint venture agreement with AD Ports Group to improve rail connectivity, maritime shipping services, and digital transformation in Central Asia.

Kazakhstan Temir Zholy, the national railway company, has been working to upgrade its rolling stock in recent years. In 2010, it ordered 295 KZ8A electric locomotives from Alstom for both freight and passenger services.

These locomotives are being manufactured at Alstom's facilities in France and Kazakhstan. The first train was delivered in October 2010, and the remaining locomotives are being built in Kazakhstan.

KTZ has also been working to modernize its passenger fleet. In 2010, it awarded Talgo a contract to replace its fleet of 3000 intercity vehicles. However, this order was cancelled in 2019.

Here are some examples of the rolling stock used by KTZ:

KTZ has a large and diverse fleet of rolling stock, and it continues to work on upgrading and modernizing its equipment to improve the safety and efficiency of its operations.

The sole shareholder of Kazakhstan Temir Zholy is Joint-stock company "National company «Kazakhstan temir zholy»" (JSC «NC «KTZ»), which is owned by Joint-stock company "National well-being Fund «Samruk-Kazyna»". This fund has 100% participation of the state in its authorized capital.

JSC «NC «KTZ» has a holding structure that provides functional integrity and management of the railway sector in the transportation process. It's managed by a committee of directors appointed by the fund, without interfering with its day-to-day operations.

The Republic of Kazakhstan transport and communication Ministry also controls JSC «NC «KTZ» activity, exercising state policies in the railway sector and regulating the transport complex activity in the country.

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KTZ issued bonds three times in 2024: to upgrade the Dostyq–Moiynty line, to build the Darbaza–Maktaaral line, and to refinance old debt.

The bonds issued to upgrade the Dostyq–Moiynty line totaled 163.9 billion tenge, with repayment due by 2044 and a low interest rate of 9.25%.

These bonds were issued in digital tenge, and auditors made a fair value adjustment, recording nearly 49.5 billion tenge as a shareholder contribution.

The bonds issued to build the Darbaza–Maktaaral line were worth 44.2 billion tenge and had an extremely low rate of 1.8%.

Auditors made another fair value adjustment, writing off 33.9 billion tenge to capital, since such a low rate can be interpreted as a form of government support rather than a standard market loan.

The bond issued to refinance old debt was 30 billion tenge, at the National Bank’s base rate +0.75%.

In some cases, KTZ received funding at preferential rates, almost interest-free, which was recorded as an additional shareholder contribution, not as debt.

The difference between the “preferential” and “market” value was recorded by the company as an additional shareholder contribution, reducing reported interest costs and improving the company’s financial appearance.

The sole shareholder of JSC «NC «KTZ» is the Joint-stock company «National well-being Fund «Samruk-Kazyna», which has a hundred-per-cent participation of the state in its authorized capital.

This means that the state plays a significant role in the management of JSC «NC «KTZ», with the goal of providing effective management of joint-stock companies.

JSC «NC «KTZ» is the sole shareholder of JSC «Kaztemirtrans», which is a 100% owned subsidiary.

The state's involvement in JSC «NC «KTZ» is aimed at improving corporate governance and providing budget transparency.

JSC «NC «KTZ» is managed by a committee of directors, which oversees the company's activity without interfering with its day-to-day operations.

The state's control over JSC «NC «KTZ» is exercised through the Republic of Kazakhstan transport and communication Ministry, which is responsible for implementing state policies in the railway sector.

As a result, JSC «NC «KTZ» operates in accordance with the laws and regulations of the Republic of Kazakhstan, including the Law «About the railway transport» and the Law «About the natural monopolies and regulated markets».