2014-03-30 13:48:01 - New Construction research report from Business Monitor International is now available from Fast Market Research
Kazakhstan's construction industry will experience solid growth over our forecast period on the back of continued investment into the hydrocarbons sector, transport links and industrial projects. However, following a major devaluation in the tenge, we have downgraded our forecasts for the sector, as the nascent development of the residential and non-residential sectors will be negatively impacted. We estimate that 5.7% growth was posted in 2013 and as progress is made on a number of largescale projects, a revised down forecast of 7.3% is expected in 2014. Long-term political stability remains the major risk to confidence, although there are signs that a presidential successor is being lined up, which will lower the risk outlook. The construction sector will remain exposed to
global oil and commodity price fluctuations.
Full Report Details at
- www.fastmr.com/prod/782561_kazakhstan_infrastructure_report_q2_2 ..
Key Trends And Developments
* We are mainly highlighting the downside to the currency devaluation. While the devaluation will provide a boost to net exports, it is set to drag on the key driver of Kazakh economic activity: private consumption. As such, demand for housing, commercial and industrial construction will all diminish over the short term at least.
* Kazakhstan President Nazarbayev said the Light Rail Transport project proposed by Alstom is overly expensive for Astana, so the city will get a bus rapid transit network instead. The bus system, involving a network of designated lanes, will be ready by 2016.
* DP World will develop a new free economic zone in Kazakhstan. DP World will develop the Khorgos- Eastern Gates zone and Aktau port in order to establish the largest logistics centre in Eurasia. It will invest at least AED3.67bn (US$1bn) in the project.
* The much touted high-speed line between Astana and Almaty, has been postponed due to a lack of financing. The government has stated that a lack of commercial viability has made financing the project a challenge, confirming our view that the demand dynamics for such a project were likely to be a major hurdle to overcome.
* The 2017 EXPO in Astana is set to boost the construction industry. Construction of the site, which the government is funding to the tune of US$325mn, is expected to begin in March 2014.
* Astana is the focus of residential and non-residential construction activity in the country. Most recently, a US$1.4bn contract was been awarded to a joint venture company, led by Arabtec. The project will be named Abu Dhabi Plaza, comprising a mixed-use development of 500,000m2. The project is expected to be completed in 2017, although a recent strike by Arabtec construction workers over pay rises may delay that.
* Kazakhstan has ambitions for a domestic nuclear power industry, although just two plants are in the pipeline. Balkhash, Aktau and Kurchatov (East-Kazakhstan oblast) were all being considered as locations for sites for the nuclear plants, which are planned to have a 1,000MW generation capacity. However, Aktau has now been ruled out, due to the site's proximity to the city among other reasons.
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