Many multimillion-dollar projects remain unfinished in Kazakhstan. Now, the government says enough is enough

It’s not uncommon for investment projects in Kazakhstan to take several years to complete. During this period, construction costs can increase, leading authorities to adjust design specifications and estimates, which further drives up the overall cost of these projects. It’s no surprise that this issue caught the attention of members of the Senate, the upper house of Kazakhstan’s parliament, who asked Prime Minister Olzhas Bektenov to investigate the situation.

According to the head of the country’s cabinet, the cost of 25 investment projects in Kazakhstan surged by an average of $7.4 million. However, four projects reported even larger increases:

• The construction of the first line of the subway in Almaty (the project cost has risen by $42.5 million);
• The construction of a heat pipeline in Karaganda (+$46.4 million);
• The construction of a bridge over the Bukhtarma reservoir in the East Kazakhstan region (+$64.9 million);
• The construction of Thermal Power Station No. 3 in Astana (+$73 million).

To prevent future projects from becoming more expensive, the cabinet plans to amend the Budget Code. Under new requirements, the amount of funding for a project within the framework of public procurement must match the financing specified in the approved design specifications and estimates.

«We have introduced a requirement that mandates the volume of funding in the first year of a project’s life to be at least one-third of its entire cost,» Bektenov stated.

He explained that expenditures associated with investment projects will now be calculated based on methodologies accepted within the industry. These methodologies will account for potential cost increases, while local executive authorities will be given control over planning essential infrastructure.

«Starting from 2026, local executive bodies will have full control over planning essential infrastructure when forming overall monetary transfers. All targeted transfers will be added to local budgets to make them more autonomous. The state budget will be used only for national projects,» Bektenov said.

• The government expects local budgets to be based on development plans. This will include:
• Ongoing projects started in previous years;
• Nationwide projects;
• Construction of new facilities based on design specifications, estimates, and standardized plans from the State Bank of Construction Projects.

State agencies will be required to analyze the implementation of investment projects, the reasons for cost increases, and the causes of unfinished work. They will also assess the relevance of projects to ensure they meet their strategic goals. After completing this analysis, authorities will be expected to propose measures to address the causes of unfinished construction.