Kyrgyzstan to privatise national railroad

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BISHKEK — The government of Kyrgyzstan announced Dec. 4 that the national railway company is up for sale.

“Now almost everything is up for sale [in Kyrgyzstan]. The fact that the government has decided to sell the railway is beyond all understanding, however, as it is of strategic value,” said Kyrgyz parliament member Isa Omurkulov. “No EU country would do such a thing. In 2001-2002, Estonia sold its railway to the U.S., but had to buy it back later,” he added.

Omurkulov said he was well informed about the situation with the Kyrgyz railway as he worked in the industry for more than six years. According to him, the railroad industry was never unprofitable.

Some analysts feel that, based on the experiences of other countries, it is inadvisable for such a strategic sector as the transport industry to be completely privatised. They believe that it is best for the railroad to be incorporated with the state holding a majority stake. According to experts, rail carriers have already been incorporated with good economic results in all CIS countries except Kyrgyzstan and Turkmenistan. The reorganised Kazakh rail company managed to triple its earnings to US$3 billion after incorporation.

Furthermore, the rail service industry is generally thought to be unattractive to investors. It requires substantial investments, which are not as quickly recoverable as, for instance, the building industry. Investors are more likely to look at the real estate market where a $500,000 investment may generate considerable profit, while investment in the railway would require $10 million or so. The fact that it belongs to the state also deters investors. Yet, as the company requires additional financing, it has been keeping the door open for potential investors and international financial institutions.

Moreover, Kyrgyz National Railway Director Almaz Rysmendiyev says the most significant problems the system has to contend with are substantial delays of trains and violations of passengers’ rights when trains enter Kazakhstan and Russia. He said that solutions to these problems are under consideration by government agencies that will reduce conflicts between railway personnel and police, by basing resolutions on relevant legislation and intergovernmental agreements.

Earlier this year, the Kyrgyz National Railway introduced an innovation in international train travel by having a group of lawyers aboard trains to Russia. According to passengers, this innovation assisted considerably in protecting Kyrgyz citizens’ rights and interests and reduced the number of unwarranted inspections and fees levied by a variety of government agencies during the journey.

[Times of Central Asia]