Kazakh Railways (KTZ) has once again requested approval for an increase of track access charges. The request for a 20,3 per cent increase comes after the loss-making rail company saw an earlier price hike cancelled by the government.
According to the Association of Kazakh rail freight carriers, KTZ is insisting on a 20,3 per cent price hike in track access charges. KTZ justifies its request by referring to wage expenditures, the growth of its investment programme and interest payments for the Dostyk – Moyynty project. The company needs to find an additional 73 billion Kazakh tenge, or over 150 million euros.
Hike after hike
KTZ has faced backlash from Kazakhstan’s business community over its frequent price hikes. At the beginning of 2024, KTZ already raised track access charges by five per cent. Additionally, it increased its fees for freight transportation by 35 per cent.
In March, the company planned to increase prices for the transportation of coal, iron, non-ferrous ore as well as non-ferrous and ferrous scrap metals. The plan was shot down by the government after businesses expressed concern over their competitiveness.
Large debt
The costs of transporting goods on the Kazakh rail network have doubled over the past eight years. Even with a fourfold revenue increase and three price hikes in 2023, KTZ still incurred a 675 million euro loss. The company’s outstanding debt currently amounts to nearly 6 billion euros, which KTZ earlier this year referred to as the primary reason for price hikes.
KTZ’s frequent price hikes and debt situation prompted parliamentarians to call for a break-up of the company. Currently, it is both a rail operator and an infrastructure manager. Members of parliament spoke out in favour of removing infrastructure management from the company’s portfolio and transferring it to the transport ministry directly.
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