Strategic background ofSEZ “Khorgos – East Gate” development
• Strategic Plan for Development of Kazakhstan till 2020
•State program of forced industrial-innovative development of Republic
Kazakhstan for 2010 - 2014
Background of SEZ “Khorgos – •The program on investments attraction, development of special
East Gate” economic zones and export stimulation in RK for 2010-2014
•President of RK signed the Decree № 187 of November 29, 2011 "On
creation of free economic zone" Khorgos - East Gate "
• Creating a Hub "Khorgos" by technological coordination SEZ "Khorgos
- East Gate" with the railway line "Zhetygen-Korgas", highway "Western
Head of State tasked to ensure by Europe - Western China" and in the long run with the airport
2016 the establishment of •International consultants LLP "Deloitte TCF" and AECOM are attracted,
Kazakhstan as a trade, logistics which develop the concept of further SEZ development, feasibility study
hub of the region adjustment, master plan and business plan for SEZ
3.
SEZ“Khorgos – EastGate” is located in Panfilov area of Almaty region
at the distance of 1 km from the state border with China
Components of SEZ:
• International Center for Boundary Cooperation (ICBC) International
• Dry Port (Inland Port) airport
• Industrial Zone
• Residential Zone
Strategic sites:
• Airport CPP 1
• Altynkol Station Residential
• Zhetygen-Khorgos Railways zone
• West Europe – West China Highway
ICBC
Tax and customs privileges and preferences
• CIT - 0 %
• Land tax- 0 % Industrial zone Dry Port
• Property tax - 0 %
• VAT - 0 %
• Release from payment for the use of land for up to 10 years
• Increase maximum level of depreciation on software from 15% to 40%
• Regime of a free customs zone
Reserved
Benefits to investors: zone for
• Provision of infrastructure facilities (power, heat, water, CBS) by SEZ
government Highway Western China and Western Europe
• Simplified procedure for labour importation
• Guarantee of legal protection of SEZ participants
Altynkol Station
Priority activities: PRC
• Warehousing and supporting transportation activities;
• Food production;
Total cost of the project – 3, 49 billion US dollars
• Leather goods Manufacturing;
Including:
• Textile Manufacturing;
Public funds – 0, 72 billion US dollars
• Nonmetallic mineral product manufacturing;
Private investments – 2 ,76 billion US dollars
• Chemical products manufacturing’
• Manufacture of metal products other than machinery and equipment;
• Manufacture of machinery and equipment not elsewhere classified ;
• Construction of buildings for exhibitions, museums, warehouses and offices in accordance with the design estimate documentation.
4.
Benefits of SEZ“Khorgos – East Gate”
• Geographical location, where East and West intersect
• Creation of production with a difference of customs tariffs on
finished products and components imported from China
• Dry port as an integral part of transport zone
• Management on the principle «one window»
• Proper level of preferences (customs duties, property and
income taxation)
• National economic policy and Government financial support
• Availability of electricity and utilities
• Availability of skilled labor
5.
Benefits to companiesare competitive to other SEZ developments
Kazakhstan SEZ is better
Philippines
Republic
Morocco
than benchmarked
China
Egypt
Czech
UAE
Assessed Location Factors
Locations
Business Environment
Nominal GDP
Real GDP Growth
GDP Per Capita
Inflation
FDI Inflows Kazakhstan SEZ is worse
Overall Doing Business Score
Overall Economic Freedom than benchmarked
Starting a Business
Obtaining Construction Permits
Locations
Registering Property
Getting Credit
Protecting Investors
Paying Taxes
Export/Import Documents
Enforcing Contracts Kazakhstan SEZ is neutral to
Resolving Insolvency
Operating Costs benchmarked Locations
Sukhna SEZ,
Tangier Free
Philippines
Guangzhou
MOROCCO
Free Zone,
Subic Bay
FZ, Czech
Free Zone,
Pardubice
Republic
Jebel Ali
CHINA
Egypt
Zone,
UAE
FZ,
Assessed Location Factors
Labor Costs ($/year)
Land Lease ($/m2/year) TBD TBD TBD TBD TBD TBD
Land Sale ($/m2) TBD TBD TBD TBD TBD TBD
Construction Cost for SFB ($/m2)
Electricity Cost (kWh)
Cost of Getting Electricity (% of
income/capita)
Water ($/m3)
Diesel ($/liter)
Page 5
6.
With an easeof Doing Business in Kazakhstan
Starting a Business (57)
180
Dealing with Construction
Getting Electricity (86)
Permits (147)
Resolving Insolvency (54) Registering Property (29)
0
Enforcing Contracts (27) Getting Credit (78)
Trading Across Borders (176) Protecting Investors (10)
Paying Taxes (13)
Source: The World Bank
Page 6
7.
SEZ: Industry Model
Multi-modal Automotive Light Agriculture Construction Visitor Workforce
logistics hub assembly and Manufacturing agro-food and Building economy development
machine /Engineering/M sector / Materials and Technical
assembly etal Products processing College
Core Logistics Automotive Supporting the Opportunity for Supporting •Casino (long- •Technical level
Plus support assembly plants other sectors value added development of term) and basic skills
function processing the zone •Hotels provision
•Automotive •Automotive •Complementary •Sector specific
•Financial supply cluster supply chain • Added value •Added-value food/drink and workforce
•Legal •Agricultural •Light food processing assembled leisure offer training facilities
•Administrative vehicles manufacturing products and •Other leisure •High Education
•Trains/rolling •Precision •Canning and components and recreational Facility
stock Engineering packaging
•Processing •Agricultural
Machinery supply industry
Page 7
8.
alleged zoning plan ALLEGED SEZ ZONING PLAN
Stage-by-stage development of SEZ zones
(logistical, trading, industrial) within 25 years is
planned
9.
Components SEZ «Khorgos– East gate»
1) ICBC "Khorgos" - a network of trade and
exhibition centers with appropriate transport
and logistics, social, domestic, administrative
and business infrastructure, and with a special
legal regime to conduct of cross-border trade
and cooperation with China and other countries.
2) Dry port - transport and logistics center with
railway lines, railway branches deadlocks, rail
and truck terminals, a set of specialized
terminals and warehouses.
3) Industrial Zone - a complex of industrial
enterprises on various types of industrial
activity, linked by a single engineering and
transport infrastructure.
4) Basic infrastructure of SEZ "Khorgos - East
Gate":
Railway line Zhetygen - Khorgos was opened
on December 9, 2011.
Highway Western Europe - Western China will
be opened in 2013
Airport Khorgos is a perspective.
10.
International Center forBoundary Cooperation (ICBC):
Main preconditions:
Initiative of Presidents of the RK and PRC during the visit
of President of the RK Nursultan Nazarbayev to China 22-
25 December 2002
Agreement between the Government of the RK and the
Government of the PRC on the regulation
of "Khorgos"ICBC dated July 4, 2005. 3,42 km sq area
1 ,85 km sq area
Aims:
To develop cross-border trade and economic, scientific-
*CCP-1
technical and cultural cooperation of the RK and PRC
Special legal regime::
30 days a visa-free regime;
Free moving of citizens of Kazakhstan, China and other
countries between the Kazakhstan and Chinese parts of the
Center within its borders through special pedestrian traffic shift.
Exemption from customs duties for goods, the amount and
weight of less than 1,500 euros, and 50 kg;
Cost of project according to Feasibility Study – 2, 551 Vehicle and
billion US dollars: pedestrian crossing
Private investments – 2,061 bill. US dollars
Public budget - 0,49 bill. US dollars
Stages of completion of constriction at «Khorgos» ICBC:
December 2, 2011 - construction sites to ensure free people
flow
August 2012 - construction sites to provide freight flows
December 2012 - completion of major infrastructure sites
STATE BORDER
From 2013 to 2018 - phased completion of construction
projects funded by private investment.
Total area of ICBC 5,28
km2
www.mcps-khorgos.kz
11.
Attraction of PrivateInvestment to ICBC “Khorgos”
Cultural Center for
Trade Exhibition International
Transportation and Zone Ehxibition Zone
(0,065 km sq ) Business
Transshipment (0,384 km sq ) Cooperation
terminals
(0, 047 km sq )
(0,166 km sq )
Hospitality area
(0, 031 km sq )
Center for regional
Total area
cooperation and small Sports and 1,85 km sq
business recreational area
(0,10 km sq ) (0, 06 km sq ) Ethnographic
Investment objects: park International Tourist
There are 103 investment objects on the territory of Kazakhstan part of (0,192 km Resort Area
the ICBC “Khorgos" and 48 of them are free.
sq) (0, 033 km sq )
Free investment objects:
7 ethnographic parks, hotel and tourist complex Conditions for attracting investors:
• Provision of infrastructure facilities (power, heat, water, CBS) by government
• International Tourist Resort area
• Preferential rates for renting lands
• 12 hotels
•Duty-free trading (1500 euro,
• 2 administrative buildings
up to 50 kilos)
• 5 conference rooms under construction objects
•Simplified procedure for labour importation
• 16 trade pavilions with warehouses
• 5 terminals designed objects
The expected amount of tariffs for communal services:
free objects
Electricity 0, 08 US dollar per 1 kWh (without VAT
Water 0, 31 US dollar per 1 cub. meter (excl. VAT)
Drainage 0,26 US dollar per 1 cub. meter (excl. VAT)
www.mcps-khorgos.kz
12.
Industrial Zone inSEZ “Khorgos – East Gate”
Features of Industrial
Priority activities:
Zone
• Industrial zone is a unified •Food production (processing of
cereals, bakery, mill)
engineering and transport
infrastructure • Light industry (processing of wool and
leather goods, agricultural products)
• using the features of Dry Port
• Production of building materials
• 80% from gross production is (brick, cement, asphalt plant, the production
oriented to export of ceramic tiles, etc.)
•Chemical industry (domestic
• 20% of gross production is oriented
chemistry, lacquers, paints)
to import substitution
• gasification territory of industrial • Assembly plants (basing on the
zone assemblages of the Assembly machine-
building equipment)
• release from payment for the use of
land for 10 years • Other manufacturing (reinforced concrete
products, metal constructions, metal alloy)
• increase in the market manufactured
Perspective:
products due to union economic space -Pharmaceuticals
of the Customs Union -Car Assembly production
www.kaznextinvest.kz
www.mint.gov.kz
13.
Dry Port inSEZ “Khorgos – East Gate”
Features of dry port Objects
• Terminal zone
• Implementation of • Warehouse zone
warehousing and supporting • Special storage area
transport activities • Container yard
• Business Centre
• Operation of multimodal • Administrative
transport, linking the port with building Forecast for goods traffic in the
rail and road routes direction of the China-Europe to
2020 year
• The prospect of the
construction of the airport
• Good traffic will reach
170 million tones, 45% above the
• Maintenance of high year 2010 (117 million tonnes).
consequence dangerous
goods, goods with temperature • The challenge of Kazakhstan to
attract 15 million. tones (8%) of
this goodtraffic
•Via Khorgos 3-4 million tons
14.
Customs Procedures
• Creationof industrial and logistics free economic zones, using free customs zone treatment.
• Giving the status of SEZ-FCZ during construction of infrastructure facilities with amendments to
the Law on SEZ.
• Initiation of the prohibitions and restrictions ordering in the CU
• Fully interconnected electronic system of customs for both sides of the border, to avoid duplication.
Logistics SEZ
• The import of foreign goods into the territory of the logistics SEZ does not require declaration, but
only the implementation of procedures at the arrival of the goods.
• In order to avoid double declarations, to coordinate a question on allocation LSEZ to the area of the
customs authority of st. Altynkol.
• In order to use simplified procedures, to develop a procedure for customs declarations and
verification of goods imported exported from the territory LSEZ.
• Fencing of railway line and construction of selected path from the checkpoint at the border to LSEZ.
Industrial zone
• To speed up customs clearance procedures, to provide for the temporary storage
Key requirements for border and customs checkpoints:
•Existing border and customs checkpoints at railway
•Border and customs checkpoints at the new road (the Kazakh side of the boundary)
•The customs checkpoint in the Dry Port Transport Area
•The customs checkpoint at the road between transport area / duty-free zone (containing industrial and processing
zones)
15.
Customs procedures schemeof “Khorgos – East Gate” hub
Direct Transit:
Products are issued at the Altynkol station by transit
procedure based on customs declaration and
followed by logistics SEZ.
Logistics SEZ
(storage, loading, unloading, crushing):
Items are followed to logistics SEZ and are issued by
the customs authorities in a simplified manner by
putting a mark on railway invoices at Altynkol station
and at entrance to logistics SEZ.
After the terminal operations, goods, exported from
logistics SEZ, are declared with statement in customs
declaration as a transit procedure or release for a
domestic consumption.
Industrial SEZ (recycling):
The goods are followed to the industrial SEZ through
the logistics SEZ with customs declaration
registration in the customs procedure of Customs-
free zone;
Placing of the goods in territory of logistics SEZ is
carried out in the simplified order;
Export of the processed goods from SEZ territory is
carried out by the statement of transit procedure or
release for internal consumption (re-import), re-
export.
16.
Management
JSC MANAGING COMPANY "KHORGOS – EAST GATE”
Created by: In a perspective: Functions:
JSC Managing company of special 75% Private 25% • Developer
economic zone “Khorgos – East Gate” Government • Infrastructure funding
with 100% participation of JSC “NC • Services to zone and tenants
“KTZH” • One stop shop
Operator
• Investment promotion
Participants:
Registered in SEZ Showing interest:
• Panalpina World Transport LLP
82 • Kuehne + Nagel Ibrakom L.L.P
Participants, out of • TOO «AsstrA Almaty»
each: • TOO «Apply Logistics»
• «Deutsche Bahn Schenker»
38 44 • Panalpina World Transport LLP
In industrial • China Shipping
In Dry Port
zone • Cosco Group
• M&M Logistics
• DHL
• InterRail
The question of international managing
company involvement is considered to ensure effective administration and management of
SEZ "Khorgos - East gate“
Page 16
17.
Transportation and logisticshub "Khorgos – East Gate”
Murmansk
Arkhangelsk
reverse traffic
Kandalaksha
Saint Petersburg
Helsinki
Ust-Luga
Tallinn Krasnoyarsk
Ekaterinburg
Riga N.Novgorod
Klaipeda Moscow Omsk
Kaliningrad Novosibirsk
Ulan-Ude
Berlin Chita
Samara
Duisburg Minsk Astana Semey Vanino
Warsaw
Kiev Qaragandy Khabarovsk
Aktobe
Praha Ulan-Bator
Kishinev Dostyk
Odessa Ussuriisk
Budapest
Bucharest Rostov-na-Donu
Khorgos
Konstanca Aktau Vladivostok
Novorossiisk Urumchi
Alma-Ata
Поти Quryk Beijing
Burgas Shymkent
Sofia Bishkek
Tashkent
Tbilisi Turkmenbashi Pyongyang Seoul
Istanbul
Baku Dushanbe
Ankara Gorgan
Sarakhs Kuandzhu
Ashkhabad Pusan
Amirabad
Tehran Changzhou Liayungang
TLC and hubs on the Chingqing
Gravity cargo for distribution
territory of the RK Bender-Homeini
Deli
Bender-Abbas
Kunming
TLC and hubs in the Dubai The direction of traffic
TC after the distribution
Dhaka
TLC and hubs in foreign
countries Direction of reverse
Yangon traffic
Agent network Transcontinental corridor "Western Europe - Bangkok Transport and Logistics
Western China" Cluster
17
18.
The Map ofthe Transeuroasian Routes
TRANSIT CORRIDORS OF KAZAKHSTAN
ИСЛАНДИЯ
RUSSIA
Хельсинки
Saint Petersburg
1
Moscow
Omsk
Yekaterinburg
2
Petropavlovsk
Pavlodar
3 ASTANA
Brest Lokot
7-2 7-3
Ozinki
Уральск
Karagandy Semey Naushki
Uralsk
Ukrain Aktobe KAZAKHSTAN Zabaykalsk 7-1
Mongolia
Chop Shubarkol
Shalkar
8 Zhezkazgan
Saksaulskaya
Dostyk
Beineu Almaty
Nahodka
AKTAU 4 Shymkent
Khorgos Urumchi
Poti
ГРУЗИЯ
Georgia
Тбилиси
5 KYRGYZSTAN
Saryagash
Baku Ablyk
6 Kashgar
TURKEY
Antequera
CHINA Lianyungang Pusan
Sarakhs
Серахс Hakata
ТУНИСА
Route Distance, km Building of a railways line
Zhezkazgan – Beineu
Lianyungang – Riga – Krasta exp. 9 754
Lianyungang – Brest – Severny exp. 9 654 Length – 988 км;
Lianyungang – Chop exp. 10 184 Cost – 591 млрд. тг.
Lianyungang – Poti exp. 9 195
Volume of transportations to 2020 – 13
Lianyungang – Ablyk 6 128 mln.t/year
Lianyungang – Sarakhs exp. 6 721
7-1 Nahodka exp. – Brest – Severny exp. 10 504 Reduction of distance of a route Dostyk st. –
7 739 Aktau st. on 1200 km;
7-2 Zabaykalsk exp. – Brest – Severny exp.
7-3 Naushki exp. – Brest – Severny exp. 6 981 The realization beginning – December, 2012
19.
TRANSIT CORRIDORS OFKAZAKHSTAN
Main objective – to ensure the establishment of SEZ “Khorgos – East Gate” as one of the Customs Union
gates and the realization of transit potential, corresponding to the existing potential of Kazakhstan, on
international transport corridors.
20.
АО «Национальный Центр
National Center for Development
Развития Транспортной
KAZAKHSTAN TEMIR ZHOLY
of Transport Logistics
Логистики»
Thank you for attention!
Contacts
Yerhat Iskaliev Yermek Zhumashev
Logistics Vice-president Acting President of JSC "International Centre for Boundary
Cooperation “Khorgos" 041310, 28 Ten In Gen st.
JSC «National Company Golovackiy village,
«Kazakhstan Temir Zholy» Almaty region,
Telephone: +7 7172 604308 Republic of Kazakhstan
Email: iskaliev_e@railways.kz Phone: +7 (72831) 3 63 51
Phone/Fax:+7 (72831) 3 63 12
Websites: www.kazlogistics.kz
E-mail: ao_mcpshorgos@mail.ru
www.railways.kz Web-site: www.mcps-khorgos.kz
Svetlana Aubakirova
Vise-president of JSC «National Center for
Development of Transport Logistics» Dastan Zholzhanov
Phone: +7 (7172) 611 735 President of JSC “Khorgos – Eastern Gates” Special Economic
Zone Management Company”
E-mail: aubakirova_s@kazlogistics.kz
Phone:+ 7(701)7159395
sveta.01.70@gmail.com
Fax 8 (72831) 3-62-01
Web-site: www. ncrtl.kazlogistics.kz
E-mail: karatal-73@mail.ru
www.railways.kz
Web-sites: www. ncrtl.kazlogistics.kz
www.railways.kz
