Traces hidden in the water, or fishing grain in muddy water

Новость на Казах-зерно:

As you know, Kazakhstan is holding a campaign to fight corruption and reduce administrative barriers for business, led by the Head of State Nursultan Nazarbayev and the party “Nur Otan”. Unfortunately, some state agencies manage to spit on these positive developments, staying those very quiet pools, in the muddy water of which is going shady business. A very good example of such pool is a grain terminal of international port of Aktau International JSC “Ak biday terminal.”

The gray scheme

Any lawyer would call a lack of clear and understandable rules of the game that make government services available for all market participants – the first sign of corruption scheme.

In the absence of such rules, obviously, there is a need for personal meetings with the inhabitants of cabinets, who has power to resolve your issue. And what happens in these quiet cabinets and what are the terms on which issues are solved there – none of the businessmen do not have to be explained. They can tell you many examples by themselves.

In short – the civil servant, on whose whims depends the fate of your business, should be interested and pleased by you. In the absence of clear rules of the game the other option is not possible – your oxygen will be blocked, and you will drown in the still waters. But the official will not be upset – he will continue to catch fish in that muddy water. Of course, not for the good of the state, granted to him his office and authority, but for the sake of their own pockets.

But let’s get back to the JSC “Ak biday terminal”. This company can rightly be considered as the gateway to paradise for all grain traders in Kazakhstan. It’s very simple: in the domestic market grain costs $100 per ton, in the international – $300. Do you see the difference? And in order not just to feel this difference, but to feel the pleasant weight in his pocket, the trader needs the services of JSC “Ak biday terminal” on the handling of grain.

Since it is the only one in all Kazakhstan, so it has strategic importance. And is a government property, as a subsidiary of the “Prodorporation”. In principle, government subordination must protect the interests of all the country’s entrepreneurs, giving them equal access to maritime transport. In fact, any entrepreneur who decides to ship the grain by sea, immediately faced with that very first sign of corruption scheme, which we discussed above – the lack of clear rules of the game.

Attempts to clarify the principles of work of JSC “Ak biday terminal” could drag on for years, but did not succeed. Grain Company from Northern Kazakhstan convinced at this on its own example.

For the third consecutive year, the company is trying to answer a simple question – how to get in a list of companies eligible for the shipment of grain through the port of Aktau. And they cannot get the answer for this question for those three years. And all because the ends are securely tucked away in the water by the administration of JSC “Ak biday Terminal” and the leadership of the owner of the terminal – “Prodcorporation”.

Since 2009, a great number of requests have accumulated in the JSC “Ak biday terminal” and “Prodcorporation”. Their content is simple: “Please provide the information on the organization of shipments through the port of Aktau, i.e. working conditions, the procedure for concluding agreements, tariffs, the minimum batch size”. In response – either silence or formal replies. At the same time permanent refusal for the shipment, motivated very simply – the capacity of the grain terminal is very small, not more than 50,000 tons per month. All these volumes have already been distributed between some companies. And so was three years in a row! What are these companies that are always in front of the queue, and after all, how other entrepreneurs can get in the queue and realize their right for equal access to the services of the government (!) port – is not clear.

Vicious cycle

And here does help neither phone calls nor personal meetings.

In order to provide proofs, we present selected passages from conversations of entrepreneurs with various officials, involved in the organization of work for grain handling by sea. Let’s start with the main man in this tangled chain, Rafael Galyamov, Chairman of the Board of JSC “Ak biday Terminal”:

“Grain grower”: We want to know the result of consideration of our application for grain  handling through the port of Aktau to Iran.

Новость на Казах-зерно:Galyamov: Before the new year the terminal is fully loaded. And it has been going for a long time, since August – all is occupied.

“Grain grower”: Ok.Then is it possible to obtain information for further work, how shippers are chosen. Is there an order of priorities for consideration of applications?
Galyamov: Of course. All people write letters to the Prodcorporation. And Prodcorporation in turn writes to me; it is the founder of the terminal.

“Grain grower”: The fact is that we have many times appealed to the “Prodcorporation”. The answer was the following: even though you are their subsidiary company, only you are making decisions on handling of grain …

Galyamov: I’ll tell you, there is a certain order. You wrote a letter to the Chairman of the Board of “Prodorporation” Beibuthan Kabdrahmanov. He is forwarding it to someone for making a decision. He can send it to me, Galyamov. Once we get this letter, we immediately begin to think something. Or maybe they will give you a waiver, they will say – not to consider. That is, there is a certain order.

“Grain grower”: I see. Then another question – when can we hope to ship through the terminal?

Galyamov: How could I know? There are a lot of things you should look at. There are companies that have contracts signed incorrectly. There are nuances of the work. We do better to work with large companies that already have shipped. They sow a million and a half hectares of land. Can you imagine how many people are their employees? And of course we must help them – all that matters.

“Grain grower”: And for our company, what do we need to do to ship yet?

Galyamov: You wrote a letter and are waiting for an answer. And we wait. Let’s wait.

“Grain grower”: But we put in an application to the “Prodcorporation” so long ago. It’s been forever…

Galyamov: “Prodcorporation” is the owner of the terminal.And I am only a hired director. And we will act the way they tell me to do. And I have already expressed my opinion as a director – until January 1, everything is occupied. We have a schedule.

As we can see, Rafael Galyamov strongly denies its role as the main component in making decisions about the shipment and lays the blame on the founder – “Prodcorporation”. Interestingly, the “Prodcorporation”, in turn, does the same thing – lays the blame on Rafael Galyamov! Here is a quote from a conversation at once with two responsible persons of “Prodcorporation”. And both say the same thing: all his work Rafael Galyamov builds himself:

Kapay Imashev, an expert of “Prodcorporation”:

“Grain grower”: Can we ask a couple of questions for the planning of our work for the future? What method you use to select applications from shippers?
Imashev: You have already received an official response from the terminal. They are our subsidiary company, but we do not interfere with their work.

“Grain grower”: Why, then, the terminal recommended us to address in the “Prodcorporation”?

Imashev: Ask them. They are a subsidiary company, but we do not interfere with their work.
Marat Seisenov, the head of commercial department of “Prodcorporation”:

“Grain grower”: Our company has several times appealed to “Prodcorporation” on agreement of the application for handling grain at “Ak biday Terminal”. But we still have not received the answer.

Seisenov: Currently, port of Aktau is occupied with applications until January. The port is very small, its throughput is limited. We will see after January. And how they define the priority, I cannot say – the Chairman of the Board of JSC “Ak biday terminal” Rafael Galyamov decides it by himself. We are not interfering. They have their own management, which controls and regulates it. Yes, we do shipping by rail road, but through the port – only they can tell you all these details.

“Grain grower”: Our company has several times appealed to “Ak biday Terminal”; they send for agreement to you, because they are your subsidiary company.
Seisenov: We have a lot of subsidiary companies, and they regulate their inner work themselves. Similarly, the JSC “Ak biday terminal” – we are not interfering.

Back door

Новость на Казах-зерно:It turns out a paradoxical situation, a real vicious circle from which there is no escape. But this situation seems strange only at first glance. Again, any lawyer will tell you that such “vicious circles” are indispensable elements of corruption schemes in state institutions. And again the pyxis opens very simply: the fact is that the tariffs for the services of governmental organizations are fixed. The officials do not receive any benefits from them. But they are not accustomed to work for us without self-interest – they simply cannot exist just on a salary! Here appears the saving way out the vicious circle in the form of a certain private company affiliated with one of the key links in the chain.

In the case of JSC “Ak biday terminal” a forwarding company is this life-saving solution. Its services are imposed in every way on businesses, who decided to use capacities of the port of Aktau. Accessing it solves all the problems of shipment. The terminal immediately finds opportunities and capacity to transport grain anywhere and without waiting in line. That is to say, from the back door. But why? Because a forwarding company takes a lot of money for their services. And they, unlike the fixed state tariffs, did not go to the state budget, but ends up in the right pockets…

Grain producers familiar with this scheme do not want to put up with lawlessness. They continue to seek the truth and the realization of their legitimate rights. Only the forces are not equal in this battle, and many entrepreneurs are more inclined to conclude that the grain terminal “Ak Biday” must be sold into private hands. Why two hundred of its employees should receive the salary from the state budget, if they do not provide the public interest? A private property also has its disadvantages, but one advantage outweighs all of them – a private owner will put an end to the corruption and corruptive officials in the JSC “Ak biday terminal”. Private firm will be interested in setting clear rules to attract customers. Also, private traders will be keen to expand their capacity by increasing the volume of transshipment. For now officials are interested in exactly the opposite – as long as there is a queue of interested persons, government officials control the situation, receiving benefits from a shortage of capacities. When this will be over – they will not have the mechanism of personal gain from catching a golden fish in troubled waters.

Anti-corruption reforms

One of the entrepreneurs voiced the proposal that adoption of which could bring some order to the shipment of grain through the port of Aktau:

– It’s no secret that today “Ak biday Terminal” on a regular basis provides grain handling only for three companies. Why do they have priority? Apparently, this question will be answered only by the management of “Prodcorporation” and of the terminal itself. Well, the authorities will probably find the answer to this very intriguing question, if conduct a comprehensive audit of the current working scheme of the grain terminal. Whatever the results of this investigation (if, of course, it will take place), it is obvious that it is high time for the government to transfer the terminal into private hands. Handling of grain is a profitable business. Now the situation is paradoxical: the state has a huge staff for the budget bill. And the entire staff works for the benefit of those very three companies! Why? Let them spend their profits to upkeep the port, invest in its development, but do not let them receive profits at the expense of the state.

Another way to restraint the current gray scheme of work of grain terminal, which offers entrepreneurs – holding open tenders for the right to use the services of the port. Quite simply, a certain quota for grain transportation by sea in a transparent basis is declared every month, entrepreneurs make their price offers. The winner pays the money that goes to the state and fills the budget, but not the deep pockets of officials.

Public voice

By the way, current work of the grain terminal in the port of Aktau is being discussed on the site of the Information Agency “Kazakh-Zerno” for a long time. Businessmen, who personally faced with the problems in cooperation with JSC “Ak biday terminal», are expressing their opinions.
To be continued…

Leah Strick

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