Erie, Pa.-based GE Transportation Friday said it had signed “two landmark agreements” with partners in Kazakhstan. The first, a 15-year customized service agreement (CSA) with Kazakhstan Temir Zholy (KTZ) valued at nearly $500 million, is the largest service agreement outside North America in GE Transportation’s history. Asecond agreement, outlined in a Memorandum of Understanding signed by bothparties, will involve GE Transportation and KTZ investing jointly in a GE Evolution® Series locomotive assembly plant in Astana, Kazakhstan.
In the first agreement, GE will provide maintenance and overhauls for Joint Stock Company (JSC) Lokomotiv’s fleet of 404 GE-modernized locomotives. JSC Lokomotiv, a subsidiary of KTZ, the nation’s state-owned railway, manages KTZ’s locomotive fleet. The 15-year contract is GE Transportation’s largest for locomotive maintenance outside North America and its first in Kazakhstan.
GE has teamed up with Kamkor Repair Corp. (Kamkor) to further improve performance of KTZ’s fleet of “2TE10” locomotives by providing guaranteed locomotive availability and reliability; supply of all material and componentsto safeguard JSC Lokomotiv’s fleet investment; manage locomotive component inventory and material logistics; and share training to ensure long-term maintenance capabilities from local personnel. Kamkor will provide the facilities, labor, and the remaining legacy equipment for the 404 “2TE10” locomotives.
"The ongoing cooperation between GE and the Republic of Kazakhstan is proof that a strategic partnership can help fuel long-term economic growth,” said Jeff Immelt, chairman and CEO of Fairfield, Conn.-based parent General Electric Co., at an official signing ceremony in Astana (photo at left). “Today’s announcements ensure that Kazakhstan’s critical rail infrastructure remains modern and efficient in the future while expanding GE’s global service base. GE not only continues to supply industry-leading products and services, but also helps Kazakhstan create sustainable growth through manufacturing capacity and a world class rail system.”
In the second agreement, GE Transportation will be an investment partner in the 54,000 square meter Astana Assembly Plant, expected to begin production of GE’s Evolution Series locomotives by the end of the year. The facility would be capable of assembling approximately 100 locomotives per year while employing more than 600 people. KTZ in 2006 ordered 310 GE Evolution Series locomotives and the first 10 units are already in operation in Kazakhstan. The 300 other locomotives will be assembled in the Astana plant from components and kits manufactured in Grove City and Erie, Pa.
“GE and the Republic of Kazakhstan have a long and fruitful history of working together,” said Lorenzo Simonelli, president and CEO of GE Transportation. “Since 1995, GEand KTZ have collaborated to drive Kazakhstan’s economic development. These agreements are a natural extension of our existing strategic partnership with KTZ and mark an important milestone in Kazakhstan. Both the locomotive assembly plant and service capabilities we provide will allow the customer to maintain its assets for years to come. We look forward to building upon our productive relationships in Kazakhstan to continue to serve the country’s infrastructure needs.”