Kazakhstan and the United States are boosting economic ties through a series of deals, including $900 million worth agreements signed last week by Kazakhstan’s national railway company Temir Zholy and the U.S. industrial giant General Electric (GE), to upgrade Kazakhstan’s railway fleet.
“The new agreements are aimed at the modernization of our locomotive fleet and will allow expanding the line of locomotives produced in Kazakhstan, as well as their service maintenance,” Temir Zholy CEO Kanat Alpysbaev said during the signing ceremony held in Washington during President Nursultan Nazarbayev’s three-day visit to the U.S.
According to the first deal, signed on January 16, GE Transportation division, which produces equipment for the railway, marine, mining and drilling industries, will design and manufacture up to 300 shunting locomotives for Kazakhstan Temir Zholy.
“Our agreement with Kazakhstan Temir Zholy (KTZ) includes delivery of 300 shunter locomotives. Shunters are used in rail yards to assemble trains and make short hauls,” read a tweet posted to GE Transportation’s Twitter account.
Also known as a switcher, these small railroad locomotives are used for assembling trains ready for a road locomotive to take over, disassembling a train that has been brought in, and moving railroad cars around easily.
The first two of 300 locomotives are expected to arrive in Kazakhstan in 2019, while the delivery of the rest will be over a period of 10 years.
Final assembly of locomotives will take place at a plant in Kazakhstan’s capital city of Astana that generally produces diesel locomotives. The two sides also agreed to expand the plant during Tuesday’s signing, with GE Transportation’s help.
An 18-year service agreement to maintain and support 175 Kazakhstani diesel locomotives previously manufactured by GE Transportation was also signed on Tuesday. These freight locomotives were among some of the first diesel-electric locomotives with alternating current traction motors to operate within the Commonwealth of Independent States, a group of post-Soviet countries to which Kazakhstan belongs.
According to a press release issued by the U.S. State Department, it is expected that the two deals will sustain or create over 3,500 American jobs.
GE’s current work with Kazakhstan is not exactly new: the company’s relationship with the Caspian region state date back to 1994, when GE opened a representative office in Kazakhstan’s former capital Almaty, not long after the collapse of the Soviet Union in December 1991 and at which time Kazakhstan, along with 14 other modern states, became independent. Today GE has its headquarters in Astana, and representative branches in Almaty and Aksai.
GE’s activities in Kazakhstan range from transportation and logistics to oil and gas developments, water treatment and health.
In 1995, GE Transportation, the world’s leading manufacturer of diesel locomotives, signed its first contract with KTZ to modernize its fleet of Soviet-era locomotives. Kazakhstan also purchased GE’s Evolution Series line locomotives and completed a 15-year service contract to develop the units in Kazakhstan.
“During the years of successful cooperation with GE Transportation, we were convinced of the effectiveness of joint work and the great potential for further development of the strategic partnership. GE technologies were chosen as the main ones for the development of locomotive facilities in Kazakhstan,” the head of the Temir Zholy said in Washington.
The deals signed with GE are just a fraction of those signed during President Nazarbyev’s visit to the U.S., which total about $2.5 billion and include agreements in agriculture, commercial aviation, digital infrastructure and healthcare, amongst others.
The head of the Central Asia’s largest country and economy met with President Trump during what was the White House’s first foreign visit in the New Year. Issues discussed included Kazakhstan’s diplomatic initiatives in helping bring various parties to the Syrian conflict together as well as the situation in Afghanistan.