Kazakh minister beats back: tariff hikes justified

Image: Kazakhstan Railways (KTZ)

Kazakhstan is in the wake of a series of tariff hikes on the Kazakh rail network. Businesses and parliamentarians have protested the frequent price increases, and the government cancelled an earlier planned hike. Now, the Kazakh transport minister is beating back: the Kazakh network is cheap and the hikes are justified.

“We need to point out that our tariffs are approximately twice as low as in neighbouring countries”, transport minister Roman Sklyar said. He added that the Kazakh government does not expect any “excessive income” from Kazakh Railways (KTZ), but the Kazakh rail operator and infrastructure manager should be self-sustaining.

For that reason, charges for the transport of goods on the Kazakh railway network need to be higher, according to Sklyar. The current system is said to be out of balance: “It is very difficult to find a balance, it is obvious that industry is the most important thing for us. Transport, with all due respect, may they not get offended, is a service.”

Covering KTZ’s debt

Tariffs on the Kazakh railway network have doubled over the past eight years, yet KTZ has not been performing well financially. Last year, the company made a loss of 329 billion Kazakh tenge (675 million euros), even with a fourfold revenue increase and three price hikes in 2023 throughout the year. The company’s debt currently amounts to nearly 6 billion euros, which KTZ earlier this year referred to as the primary reason for price hikes.

In March, businesses and parliamentarians protested KTZ’s intention to further increase charges on the rail network, citing concerns about the country’s competitiveness. Minister Roman Sklyar cancelled a planned rail tariff increase for mining products, but KTZ returned with a request for a general 20,3 per cent tariff hike in April.

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Author: Dennis van der Laan

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Kazakh minister beats back: tariff hikes justified | RailFreight.com

Kazakh minister beats back: tariff hikes justified

Image: Kazakhstan Railways (KTZ)

Kazakhstan is in the wake of a series of tariff hikes on the Kazakh rail network. Businesses and parliamentarians have protested the frequent price increases, and the government cancelled an earlier planned hike. Now, the Kazakh transport minister is beating back: the Kazakh network is cheap and the hikes are justified.

“We need to point out that our tariffs are approximately twice as low as in neighbouring countries”, transport minister Roman Sklyar said. He added that the Kazakh government does not expect any “excessive income” from Kazakh Railways (KTZ), but the Kazakh rail operator and infrastructure manager should be self-sustaining.

For that reason, charges for the transport of goods on the Kazakh railway network need to be higher, according to Sklyar. The current system is said to be out of balance: “It is very difficult to find a balance, it is obvious that industry is the most important thing for us. Transport, with all due respect, may they not get offended, is a service.”

Covering KTZ’s debt

Tariffs on the Kazakh railway network have doubled over the past eight years, yet KTZ has not been performing well financially. Last year, the company made a loss of 329 billion Kazakh tenge (675 million euros), even with a fourfold revenue increase and three price hikes in 2023 throughout the year. The company’s debt currently amounts to nearly 6 billion euros, which KTZ earlier this year referred to as the primary reason for price hikes.

In March, businesses and parliamentarians protested KTZ’s intention to further increase charges on the rail network, citing concerns about the country’s competitiveness. Minister Roman Sklyar cancelled a planned rail tariff increase for mining products, but KTZ returned with a request for a general 20,3 per cent tariff hike in April.

Also read:

You just read one of our premium articles free of charge

Want full access? Take advantage of our exclusive offer

See the offer

Author: Dennis van der Laan

Add your comment

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