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High-flying hopes of nonexistent planes in Kazakhstan

Farmer-2 agricultural plane ©karaganda.all.biz Farmer-2 agricultural plane ©karaganda.all.biz

The first aircraft plant in Kazakhstan might lose public funding in the near future. All because it hasn’t produced even a single flying plane.

Sunkar plant owned by KazAviaSpektr was opened in November 2011 in Karaganda with great pomp. The ceremony was attended by President Nursultan Nazarbayev. The project cost more than two billion tenge (approx. $13.6 million) and was included into the state-run Industrialization Roadmap and "Business Road Map-2020". Money from the state budget in the amount of 689 million tenge (approx. $4.7 million ) was allocated to build some of the plant's infrastructure in 2010-2011. Back then, the head of the enterprise Alexander Vaschenko said that the plant had received enough orders to keep working for the first two or three years, each order numbering at least 50 planes.

KazAviaSpektr intended to produce several types of agricultural aircraft: Farmer-2 worth around $145 thousand and Farmer-500 worth at least $200 thousand. A four-seat multipurpose private jet Sunkar was also envisioned. Besides satisfying domestic demand, the factory was to sell agricultural planes to other countries of the CIS (post-Soviet space), particularly to Russia.

Unfortunately, all these high-flying hopes evaporated. Not a single plane from Karaganda has risen into the sky to this day.

In October last year Nazarbayev expressed his dissatisfaction with how state support had not produced the intended results in several enterprises, paying special attention to the case of Sunkar, which he called “ostentatious”.

A few days after the statement was made, Karaganda officials responded to the critique. The oblast Akimat (administration) said that the factory had been idle because of its Russian partners. Allegedly, a firm in Kazan, Russia, had never provided sketches for building the planes that it was supposed to provide according to the contract. In addition, the Russian partners failed to provide the certificate for serial production of the aircraft.

Director of KazAviaSpektr Vaschenko confirmed this information. He said that their Russian partners had not given them the technical documentation for serial production. "We have built a factory for serial production of the aircraft, and therefore we need the technology. Our partners were supposed to provide it. (...) All terms of the agreement have been met on our part – prepayment, provision of human resources and so on. That is why we are having a hard time setting up serial production. Such situations are pretty common and can even be considered normal," he said.

However, not everyone at the time thought that it was normal. On 22 October 2013 Tengrinews reported that there was a criminal case initiated against the plant management under "Misappropriation or embezzlement of entrusted property” article. The money allegedly stolen were those provided by the state company called KazAgroFinance JSC, a government arm created to boost development of agriculture in Kazakhstan, but the exact amount of embezzled money was not made public. Press secretary of Karaganda Oblast Financial Police Department Gulzhan Suleimenova said that the fact of embezzlement had been established and the prosecutor’s office opened a criminal case.

Karaganda Oblast Akim (governor) Baurzhan Abdishev commented on the situation on 25 October 2013 and said that the results of the criminal case would be announced to “all of us”. He also noted that the infrastructure built using the state money was a municipal property. Abdishev once again stressed that the company had not received necessary technical documentation because KazAviaSpektr Russian partners failed to perform their contractual obligations.

Soon the cost of this idle technology became known. Head of the production department of KazAviaSpektr Andrei Glushen’ said on 7 November 2013: "The technology has been purchased. We have this set of schematic drawings but they have a lot of errors and defects that do not allow us to build anything at the moment. It [the technology] cost us $1.7 million. The money was wired to a company in Kazan."

KazTAG reported that the name of this partner from Kazan was MVEN. Glushen’ did not comment on whether the Russian partners had intentionally sold the technology with errors, but he said that the defects had been discovered by local engineers.

"Currently, there are negotiations at the level of directors. There is an agreement that the partners from Kazan will arrive here after November 20" to deal with the problem, Glushen said.

So he said. Yet, days went by, but no planes were built.

Now, in his most recent interview last week Vaschenko said that the first plane will finally be built at the plant. Vaschenko promised to produce it by October 2014. The company is working according to schedule, he said. By October 1, 2014 the factory plans to produce its first Farmer-2 and by September 2015 it will reach the full capacity of 36 Farmer-2 aircraft per year.

The same week it became known that the criminal case against the top managers of Sunkar was closed. "We examined the accounting documents and all the calculations, but there was no theft of money revealed," the prosecutor's office said, though refusing to explain why in October last year it said there were firm grounds for charges and prosecution.

With so many good news for KazAviaSpektr, it was somewhat surprising to hear Karaganda officials declare that the plant would be excluded from the Industrialization Roadmap and would lose the state budget funding. But so it was. On July 22, 2014, Tengrinews quoted Karaganda Oblast Akimat (authorities) as saying: “Consistent failure to fulfil the terms of the agreements signed between the two partners cast doubt on the future prospects of the project in its original format. In this respect, Karaganda Oblast Akimat is planning to apply for exemption of the project from the list of the Industrialization Roadmap projects and shifting the plant to other, more effective, production.”

The Akimat confirmed that the exemption would result in termination of support and monitoring from the state bodies. 

Meanwhile, in an interview to Tengrinews Vaschenko declared that he was not aware of any such plans: "I am in no position to comment on the stance of the Oblast authorities. I do not know on what grounds they were making such statements.”

This makes one wonder: Will there be planes or not? With the ball of responsibility being struck consistently in various directions, the hopes of aircraft finally flying out of Karaganda plant become more and more elusive.

By Dinara Urazova (Additional reporting by Vladimir Prokopenko and Aisulu Bushtayeva)

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