A Trillion Tenge Investor

On 24 April, 2021, the Kazakh Prime Minister’s press-service published a most interesting press-release that, albeit repeated by some local media, has gone unnoticed by the public.

Let us quote the text in its entirety for it is quite short (text in bold by KZ.expert).

“Prime Minister of the Republic of Kazakhstan Askar Mamin has inspected the progress of the construction of the multi-functional tourist complex in the Nur-Sultan city situated on the territory of the Astana, the New City special economic zone (to the west of the Barys Arena ice palace).

An UAE developer, the Ellington Properties Development LLC is acting as the project’s investor; Renaissance Construction serves as the project’s general contractor. The total cost of the project surpasses 1 trillion tenge. The complex’s square footage is to constitute 2.6 mln square meters, the construction territory constitutes 333 ha. The facility will include a waterpark with an area of 15 thousand square meters, recreational grounds, parks, terraces, office and commercial facilities, hotels, social and housing infrastructure etc.

The first stage of the project (29 ha) is to be completed by the end of 2022. 21.3 thousand temporary and 2 thousand permanent jobs will be created.

The Head of the Government has requested to provide the new district with the necessary engineering and communication infrastructure as well as to skilfully complete all the construction operations within the established time limit.

Deputy Prime Minister Roman Sklyar, Akim of Nur-Sultan Altay Kulginov, Minister of Industry and Infrastructural Development Beybut Atamkulov, Minister of Finance Erulan Zhamaubayev, Minister of Energy Nurlan Nogayev, Vice Minister of Culture and Sport Gabidulla Abdrakhimov and others have participated in the inspection visit”.

The press-release is illustrated by three photos of which the second one seems to be of particular interest since it reveals the configuration of the future multi-functional tourist complex.

Visually, it is quite impressive, just as the cost of the project is (more than a trillion tenge which, at today’s exchange rate, constitutes about US$2.3 bln).

Naturally, this begs the question – is this complex going to generate profit?

Unfortunately, one cannot answer this question without having access to the investor’s records located in the UAE. However, we strongly suspect that, even if the project does become profitable, it is only going to happen in a distant future.

Now, if we are correct in our assumption, why then the foreign investor has chosen to invest more than US$2 bln in a project that may be prestigious yet dubious from the business standpoint?

There can be only one answer. Acting as the official investor of the Nur-Sultan multi-functional tourist complex located on the territory of the Astana, the New City special economic zone, Ellington Properties Development LLC is operating with someone else’s money.

Interestingly, we are not the only ones asking questions regarding this project. For instance, here is what blogger Kazbek Beysebayev has written on the subject.

“They will probably build it but nothing is going to come of it.

First, due to the climate conditions and other objective factors, our country is not suitable for tourism. In the north, the best season is summer but it is short. To compare: tourists visit Switzerland all year long, come in the winter to ski and come in the summer to visit the lakes and the mountains.

Second, we’ve got no louvres, colosseums and any other attractions of this kind.   

They say that a UAE company is investing in the project.

For your reference. This is the country the First President has visited more than any other. Here is what’s written on the MFA website. “A firm foundation of the bilateral relations had been laid following the official and working visits of the First President of the Republic of Kazakhstan – the Elbasy N.A. Nazarbayev to the UAE (1998, 2000, 2004, 2005, 2006, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2016, 2017, 2018, 2019) as well as the official return visit of President of the UAE Sheikh Khalifa bin Zayed Al Nahyan to Kazakhstan in 2008 and his frequent visits in 2004, 2006, 2007, 2009, 2010, 2011 и 2013”

Perhaps these tight connections with the Emirates serve as the reason for constructing this large-scale tourist complex…

Well, as long as they don’t spend the public funds on it…

Still, I have an uneasy feeling about this”.

Since we had uneasy feelings too, we had tried to learn more about the UAE investor. Unfortunately, we have found out only few things.

Yes, Ellington Properties Development LLP is known in the UAE as a developer involved in constructing exclusive projects. The company began operating in 2014. It is owned by three physical bodies.

However, we have not been able to find any mention of the investment project in the Kazakh capital worth about US$2.3 bln on the company’s website. So, it looks like either Ellington Properties Development LLC is not investing in it (which means that the information on its involvement in the project is fake) or, for some reason, the company has chosen not to disclose its participation in such grand a matter. Perhaps in order not to scare away potential investors.

On the other hand, there is a third option – the company has been asked to become the official investor in order to help and conceal the true owners of the trillion tenge. Who could ask the company for this favour? The answer is an open secret: everyone knows it but doesn’t risk to tell it.


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