Kyrgyzstan
Striving towards democracy and economic development

Mr. Omurkulov Isa Sheishenkulovich

Read this interview in russian
Mr. Omurkulov Isa Sheishenkulovich

President of Kyrgyzstan Railways Company
September 30, 2002
 
The main issue I want to discuss today in our interview is the project that will connect Uzbekistan, Kyrgyzstan and China. We will be back to this issue later, but firstly can we talk a little bit about the current state of Railway network in Kyrgyzstan.

You have already an understanding about Central Asia republics. Particularly, about the railroads. Our road is very short: only 423 kilometers. Accurately, 324 kilometers. 100 kilometers are in the southern part of the republic, and the rest are in the north side. Why do I distribute in this way, because within our republic these two roads aren't connected, South and North aren't connected. And this is the biggest problem. In order for us to transport one load from south to north, we are passing three countries: Tajikistan, Uzbekistan and Kazakhstan. This distance costs tariffs to cross the boundaries. And this is the biggest problem. The road doesn't have any transit. The most important, after the collapse of Soviet Union, the road became our property. But during the Soviet times, the road also was divided into two parts, and the northern part was under supervision of Alma-Arty, and the southern part was subordinate to Uzbekistan, Tashkent. And from the beginning this became a problem for us, because they were not developing our Kyrgyz railroad networks. It was very good for tariffication in the stations Lugovaya and Alamedin 1 in the first place, and Alamedin 1 station in Ribachi.
But the last one remained unrealized, though you know perfectly about the financial power of the Soviet Union. Besides, there were no plants and factories for repairing trains of load and passenger transportation, and container packs. We did not have an opportunity to repair the 40-pound containers. After the separation of trains parks within the Soviet Union, Uzbekistan took all the trains in the southern part, and Kazakhstan in the northern part. On that day when they were closing the border, only that trains were left here, which were located that time in the territory of our republic. And they even were able to take most of the wagons. And this was the way we were starting our Kyrgyz independent railways. Besides, they did not have their own information center. They were depending on Russia and the Railroad of Kyrgyzstan. Up to year 2001, I am leading this sector since 1998, with the small vacation for six months.

Taking into consideration, the project that will connect Uzbekistan, Kyrgyzstan and China, is it a done deal already?

We were working on these conditions for the last 10 years. Nowadays, after 10 years, we managed to achieve the results that I've already mentioned above. We had certain conditions for repairing some of the trains, but I am not speaking about purchasing of new stuff, whatever. Taking into consideration, from the first day of our independence , we did not have any investments. This enterprise is a 100% state bond one. There is a law about the railroads, which claims that the railroads can't be privatized. This law was adopted nearly in 1996. Nevertheless, we have 500 workers in our department. Average salary is 3300 soms. I would say that comparing with the republican scale, it is a good salary. We are trying to achieve all these by improving services' quality, economizing and by rational use. And concerning your second question, if you would allow me , I will show it on the map.
This is Kyrgyzstan, here is Uzbekistan and Kazakhstan. From the northern side we go only through Kazakhstan to the other world from Bishkek station. From the southern part we can go only through Uzbekistan and Kazakhstan. This is the Kyrgyz railway in the north, and in the south there are railroads only in three places: in Tash-Kymir, Shamaldi-Sai, Jala-Abad, Kok-Yangak and Osh. Even within this south region these railroads aren't connected each other, not talking about the whole republic.
And now to your question. We are planning the project: Kashgar-China, Kashgar- Tory-Gar. We are planning to go through Kok-Yangak to Tory-Gar. If we are building a transit way, this way to south-eastern Asia shortens the way for 1000 kilometers, than that another way that goes through the Kazakhstan territory. This is the shortest connection to China. There is also the way from Russia, which is 10000 times longer. Today we are very interested in building of this road, with the length of 256 kms. There are two ways of building the road: whether they are going this way or that way. But it is not important. And now we are very actively working on researching and preparing the technical-economic data. If we will be able to build this road, it'll be a way out for Kyrgyzstan to seas through China, and it will be a continuation of Silk Road and a transit from Europe to the East. I should say that Kazakhstan isn't really interested in building of this road, and so is Russia.

In terms of financing of the project. Who will or could be the invertors. It will surely will be very expensive.

Approximately, it will take about 2-3 billion dollars. I should say that this is a real project. China is ready to build it today. There are several financial institutions which are offering to built this road. It will depend very much on how Kyrgyzstan will be able to negotiate with this financial division, on which condition they will finance.

In terms of the economic impact this project would have, what do you think the railroad will bring for the economic development of Kyrgyzstan, particularly in linking the south and north parts of the country ? Do you think it is more important than elementary roads, perhaps, in terms of economic development?

I consider that nowadays our company is stable. We are paying regularly all the taxes and salary, we are paying for social fond, we are meeting all of our international liabilities. We are the members of several international organizations of railroad cooperation. But we have a great load of old debts after the collapse of the USSR. After year1998, there was a great failure of Russia, which has influenced to the economy of Kyrgyzstan. Since 1999 we are firmly trying to improve our financial side. But our country is very small with population of 5 mln. And the building of this road will bring profit , which will annually go direct to the state budget.
Financially it seems to be a challenge. I know that the current conditions of the railway is that there are no plans for its privatization. Nevertheless, will you consider a join venture or partnership of foreign investors to further develop, or perhaps create additional links to neighboring countries as you have mentioned. Will you consider giving certain parts of country to foreign investors to develop railway systems?

We are interested in this. We see our development in this: sharing and privatization of all auxiliary subordinate services. Specialists on traces studied this issue and have provided us two versions:
1)To start immediately privatization;
2) Firstly to make it profitable and then to privatize.
I chose the second version, in order not to implicate certain issues such as social one. When I joined this company, 7000 people were employed there. So there wouldn't be any failures in transportation, just in order to create all the conditions you could work without any failures. We see certain goals for ourselves, and we are working on them. As an ancient Greek philosopher said: everything is changing all the time. The most important thing is the work with stuff: to prepare the stuff for transition to new economic conditions.

During our conversation with Mr.Turbaliev and as well as with minister of transport Mr. Jumaliev, it was pointed the great future that tourism has here in Kyrgyzstan. What is your opinion on joining railways and tourism in Kyrgyzstan. It is something that Switzerland did many years ago, and today Switzerland is plotted by railway lines everywhere, even if it is mountainous country What is your opinion on the possible increase of private capital investment there?

I think it is a future. I was almost in all the countries of Europe and also in the USA. Everywhere I saw what are you saying now. It's undoubtedly that we have to connect all this. Did you visit actually Issik-Kyl? Today having such good services over there , all the region of western Siberia and Kazakhstan are coming to have a rest, from Alma-Aty they come by car ,which is about 250 kms long, and from Russia and Siberia they came by our trains. Of course, the economy of Kyrgyzstan will be developing, service will be improved, then there will be a certain need for such services. And we are interested in transportation and there will be more money, and we will have an opportunity to develop.

How much turns of money does the National Railway Department of Kyrgyzstan annually have?

400 mln soms.

Couple more questions. One of them in your vision and opinion on the investment climate in Kyrgyzstan. Do you think that the right conditions are being created for more investors coming?

I think in order to attract the investors, we should have normal taxation for it. I think that if somebody is going to credit, tariffs should be minimal. Is somebody is investing his capital to our country, we should provide them kind of vacation time, or privilege time like 5 years.
The first condition should be that law must be attractive, the conditions should be good and should be certain guarantee that their money won't be in risk. This all should be protected by Law. This is the first criteria of all that.

In addition to learning about the most representative companies also like to learn about the people in the country. You being the top representative of the National Railway of Kyrgyzstan and also being invoking governor. What is your future vision of the railway network?

I wouldn't answer only one question: about the lovers. Everything else I will answer. I am 45 years old, married and have 3 children: two boys and one girl. The eldest son has married this year, and I have already a daughter-in-law. My daughter is a second year student in Medical Academy. The youngest son is 7 years old and started his second year at school. He is very active in learning English. I am very good at computers. I am engineer by occupation. I have worked in different duties. I had leaded this company since 1998. Before that I was heading the transport inspection. After graduating the university I started working as a simple engineer. I am a depute of second calling.

I told you about my hobby already. I am also an honorable Railway worker, this degree was given to me for my contribution to the development of Railway, for my being head of this department and also for the development of cooperation among the railroads of the country.
In order to keep horses, you should first keep household. First of all, feeding stuff and grain. In order to get this grain you should plant them, cut it, prepare equipment for all these tractors and cars, as trains can't go to the mountains. I have a private farm. I also like hunting for ibex, climbing and play football. I play in the team of veterans of deputes and people of government. We also go to international meetings. This is shortly about myself.

Thank You very much.
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