Narrative
Full Description
Project narrative
On May 15, 2017, the Export-Import Bank of China and JSC KazAutoZhol National Company Joint Stock Company (JSC NC KazAutoZhol or азАвтоЖол)— a Kazakh state-owned transportation company — signed a $253.3 million preferential buyer’s credit (PBC) agreement for the 262 km Merke-Burylbaital Highway Reconstruction Project. The PBC carries the following borrowing terms: a 2% interest rate, a 5-year grace period,. and a 20-year maturity. The Government of Kazakhstan provided a sovereign guarantee for the loan. The proceeds of the PBC were to be used by the borrower to finance approximately 85% of the cost of a $297 million commercial (EPC) contract between China Xinxing Construction and Development Co. Ltd (Xinxing Construction) and KazAutoZhol. The purpose of the project was to reconstruct the Merke-Burylbaytal highway (MB266) in 4 sections measuring 262 km in length, The first (86 km), four-lane section runs from Merke to Shu. The 3 remaining, two-lane sections (measuring 176 km in length) run from the town of Shu to the village of Burybaytal. The highway passes through the settlements of Tatti, Shu, and Birlik. The project includes the construction of six bridges, three overpasses over rail lines, 11 illuminated traffic intersections, 276 culverts, recreation areas, and auto pavilions. Xinxing Construction is the general EPC contractor responsible for implementation. However, China General Technology Group (Genertec) is also involved in implementation. A groundbreaking ceremony was held on March 26, 2019. The project was originally expected to reach completion in June 2022. However, it has encountered various implementation problems, including the COVID-19 pandemic. According to the Official Information Source of the Prime Minister of Kazakhstan, the project was then scheduled for completion in 2024.
Staff comments
1. This project is also known as the Merke-Shu-Burylbaytal highway project. The Chinese project title is 梅尔克-布鲁拜塔尔公路改造 or 哈萨克斯坦MB266国家级公路改造项目 or “梅尔克—布鲁拜塔尔”公路改造项目 or 梅尔克-布鲁拜塔尔公路改造项目 or 梅尔克-布雷拜塔尔公路项目（266公里) . The Russian project title is Реконструкция автомобильной дороги республиканско-го значения «Мерке –Бурылбайтал» км 7-273. 2. In its 2018 financial statements, JSC NC KazAutoZhol disclosed that it signed 4 preferential buyer’s credit (PBC) agreements with China Eximbank in 2017 worth $1,667,577,000 to support 4 road reconstruction projects: a $434.5 million PBC for the Kalbatau–Maikapshagai Road Reconstruction Project (captured via Record ID#54990), a $796 million PBC for the Taldy-Korgan-Kalbatau-Ust-Kamenogorsk Road Reconstruction Project (captured via Record ID#55016), a $253.3 million PBC for the Merke-Burylbaital Highway Reconstruction Project (captured via Record ID#54989), and a $183.95 million PBC for the Astana Bypass Road Reconstruction Project (captured via Record ID#54991) (see that the loans were PBCs at "哈萨克斯坦总理马明视察中国企业承建公路项目": see rest at pg.14 of "Financial Statements for the year ended 31 December 2018"). The combined monetary value of these 4 PBC is $1,667,750,000, which is very close to $1,667,577,000 figure reported in the 2018 financial statements of JSC NC KazAutoZhol. 3. This project and Kalbatau-Maykapshagai Road Project's combined cost was $808 million USD. Kalbatau-Maykapshagai Road Project's individual cost of $511 million USD was known. Therefore, to calculate the cost of this project, AidData subtracted $511 million USD from $808 million USD and got $297 million USD). 4. This China Eximbank loan is not included in the China’s Overseas Development Finance Dataset that Boston University's Global Development Policy Center published in December 2020. 5. The borrowing terms of the loan are specified in this official source (https://www.dropbox.com/s/5bx9wt7r2tq10ag/%D0%93%D0%BE%D0%B4%D0%BE%D0%B2%D0%BE%D0%B9%20%D0%BE%D1%82%D1%87%D0%B5%D1%82%20%D0%B7%D0%B0%202020%D0%B3.pdf?dl=0).