Asset Zeinullin, Director General of the SilkNetCom LLP, despite his seemingly young age, actively implements and popularizes socially important projects in Kazakhstan. For example, providing broadband Internet access to more than 400 villages of the Republic under the technology of fiber-optic communication lines. To implement the project, the company attracted borrowed funds from Development Bank of Kazakhstan JSC (DBK, a subsidiary of Baiterek Holding) in the amount of 13.3 billion tenge for a period of 12 years, the total project cost amounted to 16.8 billion tenge.
The digital divide is one of the types of social discrimination
The development of digital technologies today opens up enormous opportunities for millions of people, allowing them to significantly improve their quality of life. However, we should not forget that the digital revolution has also made way for huge difficulties for humanity, such as digital inequality. The availability of digital technologies varies from region to region, and the least developed countries still lag behind in terms of Internet users. A similar pattern can be seen in Kazakhstan, in terms of regional make-up. For example, the inhabitants of some villages and auls are still cut off from the world wide web, which limits their ability to find work, improve economic conditions, improve social relations, cultural exchange, level of education, etc.
What is the essence of the project, and why did you choose DBK to finance it?
- It is no secret that the Development Bank is one of the main financial operators in the context of financing infrastructure projects of national scale, it is characterized by low-interest rates in a number of national projects, so the other options are off the table. As for the project, we are implementing it within the framework of the Digital Kazakhstan program, in the format of public-private partnerships. It is aimed at the construction of fiber-optic communication lines in rural areas, and as a result local government agencies, such as hospitals, akimats, schools, healthcare facilities, etc., will receive the Internet. The essence of the project is the elimination of digital inequality between the city and the village. In other words, people in rural areas will get the same digital opportunities as people in the city. At the moment, digitalization and the Internet are the determining factors in any industry, the whole market is moving in this direction, and in this regard, our project serves as the so-called infrastructure base or foundation for the implementation of other sub-projects. I will give an example: thanks to the infrastructure provided by us in rural areas, the same paramedic, obstetrical stations or other bodies subordinated to the Ministry of Health will be able to introduce such services as telemedicine and online consultations with colleagues from the cities if they will not have the competence to assess the patient's condition. Rural schools will be able to provide access to foreign educational resources, and exactly the same conditions receive children in the cities. Similarly, for the internal affairs bodies, local police officer stations will be able to maintain online databases, process and analyze information in a timely manner.
When planning the project, did you take into account the level of urbanization, the increase in the share of the population in rural areas?
-Yes, during the development of the tender documentation by the state partner, then it was the Ministry of Information and Communication, and now it is the Ministry of Digital Development, Innovation and the Aerospace Industry, a list of priority and promising villages selected by the Ministry of National Economy was considered. We took into account the outflow and increase of population, the very number of inhabitants in the village, the standard of living, remoteness and so on. The priority, of course, was to provide the centers of rural districts, priority areas, so that then it did not turn out that the Internet came to the village, and it was abolished. According to my observations, all the villages under construction are residential.
What will be the cost of the Internet? And the speed? Have the relevant contracts with the state authorities already been signed?
-The quality of services in rural areas will be similar to the city, but the price will not be higher in any case. The cost of the Internet will be as per the average market, weighted. At the moment, our partner Transtelecom JSC has already connected 100 houses in the East Kazakhstan region and the village of Suykbulak to our fiber-optic communication lines. All of them get the Internet speed of 10 Mbit/sec, worth about 4 thousand tenge, while the residents themselves chose this speed of the Internet, they wrote a letter to the akim, considering that 10 Mbit/sec would be enough for them. This suggests that we can provide more if desired by local residents.
The PPP contract was signed with our government partner, the Ministry of Digital Development, Innovation and Aerospace. It is responsible for the rural public authorities that will use the Internet, and we, as a private partner of the project, are committed to providing this Internet service. This is the essence of PPP projects and convenience for business: we do not need to go to every school or akimat, only one contract was signed instead, where the Ministry acts on behalf of the state.
When is it planned to put the project into operation, when the villagers will have full access to the Internet?
-As for our lot, we have already put into operation a number of government agencies, and connected them to the Internet: in 2018: 150 organizations in South Kazakhstan, Zhambyl, Pavlodar, East Kazakhstan and Atyrau regions, in 2019: 567, and in 2020 we will introduce 505 state bodies. At the moment, we have fulfilled all our obligations, and next year we will fully connect all the remaining facilities to the Internet. Eventually, 421 villages will be provided with fiber-optic communication lines, and 1.222 of them are the state bodies.
It's 2019 - the age of digitalization. How did it happen that in most villages of Kazakhstan there is still no Internet?
-Probably, the reason is that digitalization itself can not take place without infrastructure, without this base, which we are now preparing. First and foremost, large capital expenditures are required. Secondly, in order to implement such a project, we need special financing facilities. For example, thanks to the PPP facility, which is now actively used, we signed the first Republican contract, and the state specifically reserved funds for this project. We have gone through a long process of development together with the curator – in a word, such a capital-intensive design is difficult to prepare, it is impossible to issue the entire amount for implementation all at once. Funding to us, for example, was broken until the end of the contract in 2031. From 2018 to 2021, we have an investment phase, construction is underway, and from 2021 to 2031-the period of service is planned. This facility is convenient, both for the state, so as not to create a burden on the budget, and for business, in order to receive income under the government guarantee for the use of services. For the implementation of the project, borrowed funds of the Development Bank in the amount of 13.3 billion tenge for a period of 12 years were attracted. Our project for DBK is the first PPP project. Now the Bank is interested in developing this financing facility. And we, as representatives of the business, are attracted to this fact.
