Kazakhstan Upgrades Locomotives with Pennsylvania Made Kits

Kazakhstan's national railway will modernize its locomotives with kits from the U.S. General Electric will supply the kits from its Erie, Penn., plant to upgrade the locomotives which were originally built in the then Soviet Union.

Washington, DC (PRWEB) December 29, 2003 --Kazakhstan's national railway will modernize its locomotives with kits from the U.S. General Electric will supply the kits from its Erie, Penn., plant to upgrade the locomotives which were originally built in the then Soviet Union.

The deal, for US$33 million, was signed at the U.S. Export-Import Bank Bank in Washington on December 19. The Ex-Im bank supported the deal with a loan guarantee, while ABN AMRO Bank N.V., Chicago, IL, serves as the guaranteed lender on the transaction.

The contract calls for the delivery of 54 locomotive modernization kits to Kazakhstan's state-owned national railway, Kazakhstan Temir Zholy (KTZ). Sub-contractors in at least nine U.S. states will be called on to support the GE/KTZ project.

KTZ will refurbish 27 of its locomotives, extending their useful life by 15-20 years. KTZ is modernizing its locomotives to meet the increased demand of freight and passenger traffic created by the rapid economic development of the country and its prime position in the heart of Eurasia.

The financing documents were signed at a ceremony at Ex-Im Bank headquarters following Ex-Im Bank board approval of the transaction earlier last week. The signers were Ex-Im Bank First Vice President and Vice Chair April Foley; KTZ President Yerlan Atamkulov; and Douglas Kennedy, chairman of the board of ABN AMRO Bank Kazakhstan. His Excellency, Kanat Saudabayev, Ambassador of Kazakhstan to the United States, was also in attendance at the ceremony.

"This is Ex-Im Bank's first transaction with KTZ, and the first time that the Ex-Im Bank has provided financing for a non-bank, government-owned company in Kazakhstan without a sovereign guarantee," explained Ms. Foley. "Ex-Im Bank is pleased to help KTZ modernize its fleet and contribute to Kazakhstan's economic development while supporting U.S. exporters and U.S. jobs." She called the signing "a beginning of a very promising future", and added the Bank's board has also approved providing guarantee for KTZ modernization of 200 additional locomotives worth US$154 million.

Michael Gadbaw, GE's vice president and senior counsel, said at the signing the contract will provide jobs for almost 1,000 people at its plant in Erie, Penn., over the life of the project.

Mr. Atamkulov said this cooperation with GE will allow his company to take fuller advantage of Kazakhstans geographic position. Rail traffic is a growth area in Kazakhstan, in 2003 KTZ hauled 180 million metric tons of cargo, or 70 percent of all cargo shipments in the country. Next year this figure is expected to grow to as much as 200 million metric tons, mostly due to increases in transit traffic passing through Kazakhstan, Mr. Atamkulov noted.

Ambassador Saudabayev welcomed the signing and expressed hope it would lead to greater trade cooperation between Kazakhstan and the United States.

Officials at the ceremony also noted two developments in recent years helped Kazakhstans companies get better rates on loans and greater access to world markets. Those developments were Kazakhstan's being upgraded to investment grade rating in 2002, and OECD's elevation of Kazakhstan to a higher category of borrowing nations in November 2003.

Kazakhstan officials at the ceremony also pointed with pride to the recent closure of the IMFs office in the country after Kazakhstan paid off its IMF loan eight years early.

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