THE MONOPOLISTIC STATE OF THE GRAIN CARRIER OPERATOR'S SERVICES MARKET IS THE CAUSE OF ABUSE AND THE RESULT OF THE PRIVATIZATION OF KTZ ASSETS

The Agency for the Protection and Development of Competition of the Republic of Kazakhstan conducted analyses on the markets of freight forwarding services and operator services with grain wagons for the period 2022 and January – May 2023, respectively.

According to the results of the analysis of the markets, their high concentration and the dominant position of Astyk Trans JSC in the market of freight forwarding services of the operator of grain wagons with a share of 53.0% in 2022 and 89.5% in 2023 were established.

To date, the total fleet of grain wagons of this joint–stock company is 10.5 thousand units, of which half or 5.1 thousand belong to one company.

It should be noted that JSC "Astyk Trans" was created as a joint venture of JSC "Kaztemirtrans" (a subsidiary of JSC "KTZ") and JSC "Rusagrotrans" with the transfer of the KTZ wagon fleet in the amount of 3 thousand units. In 2016, 50% of the shares of Astyk Trans JSC owned by Kaztemirtrans JSC were privatized.

During the analysis, the facts of imposing freight forwarding services, unjustified refusal to conclude contracts, and creation of discriminatory conditions were revealed in the actions of this joint-stock company. The antimonopoly notice on the termination of the specified signs of violation was executed voluntarily.

Barriers to the development of competition have also been identified. This is the absence of an increased load on the railway transport infrastructure; a shortage of shunting and mainline locomotives, reduced capacity.

In general, according to the antimonopoly authority, the monopolistic state of the freight rail transportation market and the lack of access to it by private carriers reduces the investment attractiveness not only of the main freight railway transportation market, but also of related commodity markets (wagon handling, forwarding services, etc.), the renewal and expansion of the wagon fleet and locomotives, which it affects the quality and cost of services.

According to the identified barriers, the Agency, together with the Ministry of Transport, will adopt a Roadmap for the development of competition in the relevant commodity markets and send recommendations to government agencies for further work. As part of the privatization process, recommendations will also be given on the fragmentation of realizable assets in order to prevent the creation of private monopolies.

The analysis can be found in more detail here: https://www.gov.kz/memleket/entities/zk/documents/details/584093 ?lang=ru