Development Strategy
Dear Sirs,
Throughout the history Kazakhstan’s railways have been ensuring that the needs and demands of the population and economy are fully satisfied by transportation services. Despite the economy’s downturn and decrease in traffic volumes in 1990s the country’s railway industry was continuously functioning meeting the needs of the economy in transportation services.
However today the National railway company enters a period of serious challenges as a result of the completion of life cycle of production assets, which were formed by 1991. In the period up to 2020 more than 54% of freight cars of the current Company’s fleet, 68% of main-line locomotives, 82% of switch engines and passenger cars will be written off due to the end of service life.
Given this the provision of transportation in foreseeable future becomes a serious challenge for the Company.
Rail transportation is a basic element of country’s transport infrastructure. Therefore it is clear that the solution to this problem requires a balanced and drastic strategy at both the Company and the state levels.
The current model of industry’s regulation and tariff control policies do not satisfy the long-term consumer interests. As a part of the Strategic plan on development of Kazakhstan till 2020, State program for accelerated industrial-innovative development of the Republic of Kazakhstan for 2010-2014 and the Program for development of transport infrastructure of the Republic of Kazakhstan for 2010-2014 the railway transport reform, which is aimed at achieving an optimal system of railway transport functioning, must be brought to its fruition. Thus, aims and objectives of corporate development are inseparably linked with the goals of industry’s structural reform.
On 7th of May 2010 the Board of Directors of JSC “NC KTZ” (Protocol #3) approved the Strategy of development of JSC “NC “KTZ” till 2020.
The mission of JSC “NC “KTZ”: “Being a backbone of infrastructure, we ensure an adequate transport basis for sustainable economic growth and create values for the Shareholder, customers and society as a whole by providing quality and competitive transportation and logistic services for cargo, passenger and main-line network services”.
We see ourselves as a highly efficient national transport corporation of Kazakhstan, which conforms to the best world business practice and meets the requirements of the Sole Shareholder.
Company’s employees also need to realize the objective importance of containing and reducing the costs in order to increase investment resources. Therefore a substantial increase of quality indicators of operational work is required in such aspects as: performance of cars and locomotives, conduct an optimization of passive sites, review the standards of raw materials consumption, the personnel involved and so on. Ensuring the competitiveness of the Company is a significant task in the light of industry’s structural changes, therefore our strategy includes:
- Formation of an optimal corporate structure and modern management system within the new conditions of functioning;
- Optimization of production and portfolio assets;
- Modernization of production and comprehensive improvement of labor productivity;
- Solution of strategic task of creating a base of machinery construction to meet the Company’s needs;
- Realization of effective investment program;
- Transformation of the current corporate cost oriented culture into market one.
The strategy’s implementation will form a stable infrastructure framework for the growth of the national economy, significantly impact investment attractiveness and competitiveness of Kazakhstan.
President of JSC “National company “Kazakhstan temir zholy”
A. Mamin
