Kazakhstan Freight Transport Report 2007

Kazakhstan is sitting on a lot of oil and gas - 29bn barrels of proven reserves at present, which is likely to rise further according to officials. One of the key issues for the freight transport industry as the country pushes ahead with development plans, which could make it one of the world's top five oil exporters, is how to shift all this oil and get it to consumers in both the West (Europe) and the East (principally China). At present there are four main export routes, the latest of which started pumping crude to China earlier this year. Two further routes are being proposed. In our first Kazakhstan Freight Transport Report, BMI concludes that pipeline throughput can be expect to increase by an annual average of 11% per annum Various factors support this prediction. The most important is the rapid pace of development of new oil and gas fields, and strong demand from customers to both East and West. The forecast is also underpinned by strong economic growth and a particularly dynamic future for foreign trade over the next five years.

The overall outlook for the Kazakh freight transport sector is very positive. The rail sector is poised to gain from a round of new state investment in locomotives and track, which should take the annual rise in volume to 10.6% in the 2006-2010 period. The comes airfreight, based on the expected growth of Air Astana and others, at 10.4%. Road haulage will grow slowest, but will still achieve an impressive 9.6% expansion rate. Kazakhstan scores 48 out of a theoretical maximum of 70, compared to an average of 43.5 for its regional peers, in our freight business environment rating. This high score reflects the country's strength in transport intensity - a measure of the dynamism of foreign trade - and freight growth. Areas for improvement include the regulatory and competitive environments.

The total value of transport and communications GDP will rise to US10bn in nominal terms by 2010, representing 7.4% of Kazakhstan's GDP. The transport and communications sector employed 519,000 people, or 7.2% of the labour force, last year. We see the total figure falling slightly to 517,000 by 2010 (Kazakhstan has a contracting population) but remaining at 7.2% of the total.