Kazakhstan Temir Zholy (KTZ) Signing Ceremony
Fred P. Hochberg
Nov 26, 2012 – Washington, D.C.
I'm delighted to host this important signing ceremony in the company of our distinguished guests from GE Transportation and Kazakhstan.
Shortly before then-Ambassador Erlan Idrissov became foreign minister he and I met to discuss how we could move forward - the U.S. and Kazakhstan - to increase trade and jobs in both our countries.
Today's announcement does just that - create and sustain jobs in both the U.S. and Kazakhstan.
The transaction we are about to sign is important on many levels.I want to highlight four in particular.
First, the KTZ is a primary driver of the economy in a strategically located nation nearly four times the size of Texas.I know that Texans don't like the idea of anything larger than Texas . . .
As the largest private employer in Kazakhstan - 143,000 workers in 2008 - KTZ has a central role to help integrate the nation's economy with the rest of the world.
These GE locomotives do just that.They integrate the economy and put more people to work in the formal sector of the Kazakh economy.
Distances in Kazakhstan are very long, but linking the economic and population centers can unlock tremendous potential.
This enhances the production of crops, minerals and oil and gas - establishes your nation as the center of development in Central Asia - and forges a crucial link in the transportation corridor between Asia and Europe and beyond.
Second, this Ex-Im Bank Direct Loan for KTZ, in the amount of almost $425 million, represents the largest single financing that Ex-Im Bank has approved for any railroad anywhere in the world.
Together with the three prior Ex-Im Bank financings for KTZ and its subsidiaries, this brings the total amount that we provided to KTZ and Lokomotiv to just under $600 million.
This is the most financing that Ex-Im Bank has provided to any railroad anywhere in the world during the past 15 years.
This financing is a strong vote of confidence in the management of KTZ.
Third, not only does this advance the economy of Kazakhstan, it helps us advance the goals of President Obama's National Export Initiative, our coordinated effort to double U.S. exports by the end of 2014.
I saw this firsthand when I toured the Erie, PA, plant last December with Lorenzo Simonelli, president of GE Transportation.
The Evolution Series units being purchased with this transaction enables GE to remain on top of world markets with its most successful global locomotive platform ever.
Just this summer, GE delivered the 5,000th Evolution Series locomotive.This transaction alone helps support about 5,000 U.S. jobs and expands our export economy.
Over 50 percent of GE's locomotive sales go to overseas buyers.
And no wonder - they are truly impressive machines.Each new Evolution Series engine can pull twice the load of KTZ's existing locomotives - with big savings for fuel and maintenance.
The fourth reason for the importance is a personal one for us at the Bank.
It began unhappily, when GE and KTZ told senior management how long this transaction languished in our in-box under our old procedures - 525 days and counting.
For the last four years, we've worked to make Ex-Im more customer-focused - by homing in on outcomes.If financing is the stumbling block to a U.S. export, we will do everything possible to remove it - and help make the sale and create jobs here at home.
Your comments shocked us into doing something fast.We changed our way of doing businesses, streamlined our procedures, and established new benchmarks.
As a result, 98 percent of our transactions are processed in 100 days or fewer.In fact, 90 percent take only 30 days or fewer.And we are working to do better in 2013.
Only 78 transactions now in process have been in house more than 100 days.
This required a top-to-bottom management audit of the application process, review procedures and follow-up to ensure both speed and thoroughness.It inspired us to adopt a Total Enterprise Modernization initiative now underway.
So we owe you both apologies and thanks - and today can celebrate our success.
This transaction represents a continuation of the good working relationship among KTZ, Lokomotiv, GE Transportation and Ex-Im Bank that began in late 2003 and 2004.
Back then, Ex-Im Bank financed GE-manufactured modernization kits to refurbish KTZ's fleet.The new fleet will be more powerful, more reliable and more cost effective to operate.
Today, this new Ex-Im Bank financing will support 196 GE Evolution Series locomotives and locomotive kits - the next step in Lokomotiv's and KTZ's fleet renewal and modernization plan.
We're helping to meet other Kazakh infrastructure challenges, as well.
We recently approved a preliminary commitment for Air Astana's purchase of four Boeing 767 aircraft, for delivery next year.
Ex-Im Bank is therefore pleased to support this financing and proud of our excellent partnership with KTZ, Lokomotiv, and GE Transportation.
I want to commend KTZ, Lokomotiv, GE - and counsel at VedderPrice in New York, Grata in Kazakhstan, VSB Partners in Kazakhstan, Chapman and Cutler in Chicago - as well as David Fiore and Bob Morin of Ex-Im's Transportation Division - and Isaac Lyumkis in our General Counsel's Office.
All of you worked very hard to bring this important financing transaction to completion.