Talgat Yermegiyaev, CEO of National Company Astana EXPO-2017:
“ASTANA WILL BE READY FOR EXPO-2017 IN TIME, I HAVE NO OTHER CHOICE”
In two year’s time Astana is to see one of the long awaited and publicized events – the international exhibition EXPO-2017, the topic of which is entitled “Energy of the Future”. Talgat Yermegiyaev, CEO of JSC National Company Astana EXPO-2017, talked in an interview with Interfax-Kazakhstan on how thoroughly Kazakhstan has been preparing for this event and how it is going to surprise its guests and preparations are ongoing
- Please tell us whether Kazakhstan’s businesses are being interested in participating in the implementation of the exhibition projects. How many domestic companies are willing to participate in the construction of facilities?
- Kazakhstan’s businesses, part of the construction industry, are taking a great interest and willing to participate in the construction of the EXPO exhibition facilities in Astana, and we are trying to attract them to the fullest possible extent. Moreover, it was the relevant instruction by the Kazakh president to support the domestic manufacturers. It is understandable that we are unable to involve all of them because the project is limited, has its boundaries.
To date 19 contracts have been concluded with domestic manufacturers from the country’s various regions nearly to the tune of 60 billion tenge [185.05 tenge/ $1]. But I assure you that this amount and the number of companies will just keep growing. Today it is hard to say how many Kazakhstan’s companies in total will be involved, moreover one and the same producer can enter into several EXPO contracts. But I believe that about 50 to 100 small and medium-sized businesses will participate in the construction.
When we proceed directly with the organizational part of holding the exhibition then a different range of works and services will be in demand and we will also do our best to prepare our companies as much as possible for that. I would like to note that not all our Kazakhstani companies operating in the services market can be up to the latest world standards. Cerainly, we will try to attract mainly domestic businesses at this point as well. But if something needs to be done at the highest level then we will also attract the world-class companies to this job.
- We know that you traveled across the regions in quest of companies to work with; have you visited all the regions and how do you select companies?
- We made tailored visits on purpose. Currently the first stage is under implementation – it’s construction - and so relevant companies are of interest to us. We have in Kazakhstan industrial areas such as Karaganda, Pavlodar. We have been over there. We are closely working with Astana. For example, we have already signed 10 billion tenge worth of memoranda with those companies for the delivery of goods. We do not aim to go all over Kazakhstan to get PR for ourselves right now so that afterwards everything falls silent. That’s why contracts originate there where we have demand.
Our businesses proposed various proposals on cooperation, in particular, regarding both work wear tailoring and provision of services. We are examining these proposals and already listing up companies for ourselves with goods prices and quality fitting us. But at the moment we are closely working with the construction companies and will approach other companies later on.
By and large we do not have much time, the deadlines are very tight. People wonder from time to time: can we or not, will we manage or not? The second question - which is of great interest to everyone – is price. I have been hearing of these two questions from everyone. Though now few people doubt that. To be honest, I have no other choice and there is no way back either. There is just one task to be taken on and we will take on it. There will be no problem with getting it done.
- Are you succeeding in attracting investment and how is this work being done to this end? How many contracts have been concluded and what amount is worth of? Are there major global renowned holdings and companies?
- There are plenty of globally renowned companies as you said, who are taking an interest in. For example, Samsung. They have had an interest but are not ready yet to invest. Company Bouygues [France’s major construction company ] is also interested but mainly in contracting activities. Nevertheless, to date we have had 127 billion tenge in investments attracted. In addition, literally the other day I met a Korean company, which is ready to invest $200 million, and I already ordered that a contract be concluded [with them]. At the moment there are three foreign companies, investing in EXPO, there are also JVs, but by and large domestic investment prevails. I attribute this to the fact that our businessmen are well-aware of this market, they assess risks faster and accordingly Kazakhstani businesses are quicker to tackle than overseas companies. Foreigners require time or reliable partners.
Why is EXPO attractive for investment? Why is everybody coming here? Because the area allocated for the exhibition will become one of the unique city quarters, which will become a center of science and technology afterwards with offices and all the required range of services. Importantly the engineering networks, infrastructure are being prepared at our expense, we are providing these conditions for. Moreover we have certain tax breaks – preferences stipulated by the law on EXPO. That is why we made this project attractive. Now if you express a wish to invest in the project, then it would be difficult for you to find a sector to be invested; everything is already actually covered. There are small sections which I plan to leave for the development of small and medium-sized business so that they can open booths, boutiques, stores. So, there is no free place already in the exhibition compound.
- In the revised budget the government reduced spending by 10 billion tenge on the construction of the EXPO facilities in 2015. Will this affect the deadlines and quality of the construction of facilities or your plans?
- This will certainly affect the plans but not the construction quality. Regardless of the amount we are not going to deviate from the world standards when performing the design and construction works. As for the deadlines - we will observe the main construction schedule. The only thing in what we altered is the schedule which we decided to adjust slightly – to deal with the most required major facilities at first and adjust a little bit the schedule of simpler facilities, the construction of which does not require a lot of time. Now the urgent task for us is to develop 25 hectares of land, build up international pavilions, topic pavilions, Kazakhstan’s pavilion, a congress center, a hotel and a corporate pavilion. But we will not deviate from the main plans to get everything ready by late 2016. By the way, we will possibly present our office this year. This will be the showcase office using “green technologies”. You may like to come this autumn to have a look and you will be surprised with some things.
- Did you manage to realize your intention to cut down the cost of tickets up to maximum?
- My stance is to cut the ticket cost for local residents to 1,000 tenge from 28 Euros and even possibly to 500. I believe that we can achieve that. In the end, EXPO is implemented for people so that people do not watch all that on TV only. Not everyone can afford 28 Euros. I consider that the ticket cost should not exceed 1,000 tenge for residents of our country. Clearly there will be different kinds of VIP tickets, which will be more expensive and affordable for wealthy citizens only. We think of making several types of tickets and there will be days when the tickets will cost more and at the expense of that it would be possible to make the ticket cost affordable for ordinary residents.
- How many countries have confirmed their intention to participate in the exhibition to date?
- To date 17 countries have confirmed their participation in writing. We do not doubt that all the CIS countries will participate in our exhibition. There is no doubt that major states such as the UK, France, Germany, Italy will take part. We continue working in this aspect and have been in talks with countries, which have not expressed much interest so far. I think that a threshold of more than 100 countries we have set in order to attract is quite achievable.
- How many volunteers will be required for holding EXPO? How many volunteers have expressed a wish to participate?
- Work on attracting volunteers is complex enough. A volunteer’s job in our understanding is to make calls to a local administration, educational establishments and “round up” students for this job. Now this will not happen this way! In this case we will not get quality service. We decided to approach this issue otherwise. We need to train a group of 300-500 people this year and select for that group not 18-year-old young men and women but people a little bit older working as civil servants, entrepreneurs - the educated and experienced people. And chiefs for other volunteers should be appointed from among them. I think we will pay this group of people or put forward a proposal to the government so that their employers retain their salaries for the period of their voluntary activity during the EXPO exhibition. Certainly these people must know English. We are in the process of devising a language-training program for them because not all of them know a foreign language.
In addition, I would like to note that we will invite only those who are eager to be volunteers, we will select real volunteers. We are not going to apply the so-called voluntary-compulsory method and I consider that there should be no show-off on this matter.
- During one of the sittings Member of the Majilis [the lower chamber of Kazakhstan’s parliament] Aldan Smaiyl proposed to treat the EXPO-2017 guests to the national delicatessen items - kumys and kazy. What is your opinion about this proposal?
- There will be plenty of restaurants in the exhibition compound. I can assure you that one of these restaurants will be a national style restaurant for sure where all our national dishes will be without doubt served. Over there the exhibition visitors, foreign tourists, could taste besbarmak, kazy, kumys.
- How are you planning to entertain the exhibition visitors?
- I think by the end of this year we will have worked out an entertainment program concept. The exhibition will last three months and all this time we should entertain visitors. Naturally our company cannot do so using its own resources. We have to involve different companies, which specialize in that. There are Spanish, American, Chinese ones, we invite them to cooperation and they offer their options. For example, Cirque du Soleil - they have the biggest show program, I visited them and got to know, all is beautiful, all is good. But they offer a show which is too big and want to turn everything into some sort of circus. This is not acceptable to us because visitors will be of different ages. We would probably take some elements of theirs and use our traditional music, our opera in this show. I think it would be possible to put together all that and adapt for our spectator. As I already said the entertainment concept will be ready by the end of the year. We expect 3,000 entertainment events.
- A lot of questions arise about the post-exhibition utilization of the EXPO facilities; do you have a plan to this end?
- Yes, I have the plan. I will submit it to the government before July1 and then will brief the head of state. Clearly facilities such as the congress hall should be part of the city municipality. Let’s say the building Sphere is a facility which is unique of its kind worldwide. It would possibly be transformed into a science center or a museum, but by no means into an entertainment facility. Now we have several concepts for further use of this building. We should study all that, finalize our proposal and submit to the government. We propose to make it a science center where students not only from Nazarbayev University but from other educational establishments would study as well. We intend to supply this museum – science center with whatever cutting- edge, innovative things, the know-how, novelties invented worldwide so that our students can see, learn and study at first hand. Clearly the upper floor will be used by us as a skydeck. We assume that many students would want to get over there. As for the international pavilions there are various proposals: to sell, rent out or use as government offices. The biggest error the previous EXPOs had has is that their pavilions were designed so that their utilization for other purposes would not be possible - they were made as pavilions and remained as pavilions. We will do our best to think everything out in order for their utilization not to raise questions.
- Many oil producers are operating in our company. Are they not expressing a wish to be sponsors for EXPO?
- We have offers for such companies. We will try to involve them in select programs, for example , the construction of a kindergarten or an innovative school in the exhibition compound and compensate them at the expense of sold tickets in order for these facilities to be affordable etc. In particular, I can say that we contacted NCOC, the operator of the Kashagan oilfield, and they agreed on $50 million. Currently we are discussing this issue with the other major company. We want to spend their funding on the use of technology, improvements to the city appearance and other similar actions.
Thank you for the interview!
March, 2015
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