GE is making tracks in Kazakhstan with the signing of two landmark agreements today that dramatically expand its locomotive presence in the country. One deal — valued at nearly half a billion dollars — is the largest service agreement outside of North America in GE Transportation’s history. The other is the signing of a Memorandum of Understanding to jointly build a locomotive assembly plant in Astana, Kazakhstan for GE’s Evolution Series locomotives — which are made from components and kits manufactured in Grove City and Erie, Pennsylvania.GE is making tracks in Kazakhstan with the signing of two landmark agreements today that dramatically expand its locomotive presence in the country. One deal — valued at nearly half a billion dollars — is the largest service agreement outside of North America in GE Transportation’s history. The other is the signing of a Memorandum of Understanding to jointly build a locomotive assembly plant in Astana, Kazakhstan for GE’s Evolution Series locomotives — which are made from components and kits manufactured in Grove City and Erie, Pennsylvania.
Local hero: GE Transportation recently delivered the 3,000th Evolution Series locomotive, like this one above, to Kazakhstan’s state-owned railroad company, Kazakhstan Temir Zholy (KTZ). The Evolution series, which represents a $400 million investment by GE over eight years, is equipped with a 12-cylinder diesel engine that produces the same 4,400 horsepower as its 16-cylinder predecessor. The smaller engine uses up to 5% less fuel, or approximately 1.1 million fewer liters of fuel over the life of the locomotive, while reducing emissions by approximately 40%.
Under the 15-year “customized service agreement,” which is GE’s first in Kazakhstan, GE will provide maintenance and overhauls for the country’s 404 GE-modernized locomotives. Since 2005, GE has helped modernize the fleet using a package that includes a new microprocessor, electronic fuel injection and an improved cooling system. Modernization can extend the revenue-generating life of a locomotive by up to twenty years.
The deal covers locomotive availability and reliability, the supply of material and components, inventory and logistics, and shared training to ensure that local personnel have the right know-how. GE has customized service agreements around the world in countries such as Australia, China, Poland and Russia.
At the official signing ceremony in Astana, GE’s chairman and CEO Jeff Immelt said the deals allow GE to continue to expand its global service base while simultaneously helping “Kazakhstan create sustainable growth through manufacturing capacity and a world class rail system.”
The announcement comes two months after GE delivered to Kazakhstan the first 10 Evolution Series locomotives in a total order of 310 units. The three hundred additional locomotives will be assembled in Kazakhstan at the new plant starting at the end of 2009 from U.S.-produced kits and parts. At full capacity, the facility will be capable of assembling approximately 100 locomotives per year for the country and the region while employing more than 600 people.
“Since 1995, GE and KTZ have collaborated to drive Kazakhstan’s economic development,” said Lorenzo Simonelli, President and CEO of GE Transportation. “These agreements are a natural extension of our existing strategic partnership with KTZ and mark an important milestone in Kazakhstan” as both the plant and service deals will allow the country to maintain its railways for years to come.
All aboard! Kairat Kelimbetov, CEO, National Welfare Fund Samruk-Kazyna, which overseas Kazakhstan’s state-owned railroad company (left), and Jeff Immelt, GE Chairman and CEO, seal the deals while standing in front of a GE Evolution Series locomotive in Astana, Kazakhstan today.
* Read the announcement
* Read “Kazakhstan takes the A-Train”
* Watch a video of the Evolution being made and the 3,000th Evo dedication ceremony
* Learn more about GE’s Evolution Series Locomotive
* Read about the newest Evolution model for North America
