KAZAKHSTAN: AMBASSADOR MEETS WITH MINISTER OF

UNCLAS SECTION 01 OF 02 ALMATY 001485

SIPDIS


SENSITIVE
SIPDIS

DEPARTMENT FOR SCA/CEN (J. MUDGE)

E.O. 12958: N/A
TAGS: ECON EAIR EIND EINV PREL KZ
SUBJECT: KAZAKHSTAN: AMBASSADOR MEETS WITH MINISTER OF
TRANSPORT MAMIN

Ref: Almaty 1068 (Bodman-Nazarbayev),B) Almaty 557


1. (SBU) Summary: Air Astana is considering buying several
Boeing aircraft for its fleet, according to Transport
Minister Mamin. He will travel to Seattle in June for
discussions with Boeing, as well as to Toulouse to discuss
the Airbus offer. Mamin confirmed that Kazakhstan also
wants to host a Boeing maintenance facility and a GE
airplane engine repair facility. Mamin told the Ambassador
that the GOK's agreement with FedEx would likely be signed
during an expected Nazarbayev visit to Washington in the
fall. He expressed willingness to examine the commercial
feasibility of an Air Astana flight from Almaty to Kabul,
and informed the Ambassador that the GOK's shares in
national railway Kazakhstan Temir Zholiy would soon be
transferred to the new Samruk holding company. End summary.

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Possible Boeing Order
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2. (SBU) In an April 18 meeting with the Ambassador to
discuss pending bilateral issues in advance of the Vice
President's upcoming visit to Astana, Minister of Transport
and Communications Askar Mamin confirmed that Air Astana is
still considering purchasing several Boeings. They were
waiting for proposals from both Boeing and Airbus. (Note:
Air Astana reports that the RFP deadline has been extended
to May 5 at Boeing's request. End note.) Mamin said he
would travel to Seattle in early June for discussions with
Boeing. He also plans to visit Airbus in Toulouse. The
Ambassador expressed hope that the Boeing bid would
ultimately win out on cost and financing. He offered to
help Mamin make contact with EXIM during his trip to the
U.S. in order to discuss financing for the planes. Mamin
said that Kazakhstan also wants to host a Boeing maintenance
facility (Ref A).

--------------
Kazakhstan Seeking GE Plant
--------------


3. (SBU) Mamin informed the Ambassador that the GOK was also
aggressively courting GE in hopes that it will locate a
planned airplane engine repair facility in Kazakhstan rather
than Russia. Mamin said he was personally directing the
Kazakhstani effort, and asked for the USG's support. The
Ambassador noted that the investment climate for such a
project might well be more favorable in Kazakhstan than in
Russia. Mamin emphasized that Kazakhstan was favorably
positioned to host the GE facility, as it was centrally
located in a vast region without a similar plant.

--------------
FedEx Agreement
--------------


4. (SBU) The Ambassador asked Mamin about prospects for
signing the agreement that will allow FedEx to use its own
planes rather than sending its shipments to Kazakhstan as
cargo on other airlines. Mamin said the GOK was ready, and
asked about the possibility of signing during the Vice
President's upcoming visit to Astana. The Ambassador
indicated that that was unlikely. Mamin said the agreement
would therefore likely be signed during President
Nazarbayev's planned tripped to Washington in the fall.
Cooperation would begin before the signing, the Minister
stressed.

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Regional Integration
--------------


5. (SBU) The Ambassador underscored the importance the USG
attaches to increased Central Asian regional integration in
the form of transport links, and asked Mamin if it might be
feasible for Air Astana to add an Almaty-Kabul flight. The
U.S. realizes that such a flight would be feasible only if
the commercial basis existed, the Ambassador added, noting
that we planned to discuss the idea directly with Air Astana
as well. Mamin said the idea was interesting and deserved
closer examination. (Note: In a April 19 meeting with
post's Commercial Officer, Air Astana president Peter Foster
expressed considerable skepticism regarding the commercial
viability of an Almaty-Kabul route given extremely high

ALMATY 00001485 002 OF 002


insurance costs. He noted that Air Astana is however in
discussions to begin two to three flights per week to
Dushanbe and Ashgabat from Almaty, and to Baku from Aktau or
Atyrau. End note.)

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Kazakhstan Temir Zholiy
--------------


6. (SBU) Mamin confirmed that the state's shares in
Kazakhstan Temir Zholiy, the national railway, would be
transferred to the new holding firm Samruk (Ref B) in four
to six weeks. There are only a few legal questions to
resolve, he said. Mamin explained that his Ministry would
remain responsible for setting Kazakhstan Temir Zholiy's
policies and strategy. Samruk will handle business
management aspects. Mamin said that Kazakhstan plans to
open a second railway crossing into China in the near
future. The railway has also been purchasing additional
freight and passenger cars from Russia and the PRC.


7. (SBU) Mamin said that he was quite pleased that President
Nazarbayev had just signed a national transportation
strategy that had been under development for the past six
months. It includes expenditures of $30 billion over ten
years for roads, ports, railways, etc. Mamin expects the
strategy to improve freight transport through Kazakhstan.
He informed the Ambassador that there would be a conference
in September on the Boston-China multi-modal trade route
that passes through Kazakhstan.

ORDWAY