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GE Transportation Announces Two Milestone Agreements with its Railway Partners in Kazakhstan

Posted on May 29, 2009

GE Transportation, a unit of GE, announced that it has signed two landmark agreements with its partners in Kazakhstan. The first, a 15-year customized service agreement (CSA) valued at nearly US$500 million, is the largest service agreement outside North America in GE Transportation’s history. GE will provide maintenance and overhauls for Joint Stock Company (JSC) Lokomotiv’s fleet of 404 GE-modernized locomotives. JSC Lokomotiv, a subsidiary of Kazakhstan’s state-owned railroad company, Kazakhstan Temir Zholy (KTZ), manages KTZ’s locomotive fleet. In the second agreement, outlined in a Memorandum of Understanding signed by both parties, GE Transportation and KTZ will jointly invest in a GE Evolution Series locomotive assembly plant in Astana, Kazakhstan.

“The ongoing cooperation between GE and the Republic of Kazakhstan is proof that a strategic partnership can help fuel long-term economic growth,” GE Chairman and CEO Jeff Immelt said at an official signing ceremony in Astana. “Today’s announcements ensure that Kazakhstan’s critical rail infrastructure remains modern and efficient in the future while expanding GE’s global service base. GE not only continues to supply industry-leading products and services, but also helps Kazakhstan create sustainable growth through manufacturing capacity and a world class rail system.”

This 15-year service contract is GE Transportation’s largest for locomotive maintenance outside North America and its first in Kazakhstan. Under the terms of the agreement, GE has teamed up with Kamkor Repair Corporation (Kamkor) to further improve performance of KTZ’s fleet of 2TE10 locomotives. Kamkor will provide the facilities, labor and the remaining legacy equipment for the 404 locomotives.

Construction of the 54 000 square meter plant is nearing completion and is scheduled to begin production of GE’s Evolution Series locomotives by the end of 2009. At full capacity, the facility would be capable of assembling approximately 100 locomotives per year while employing more than 600 people. In 2006, KTZ ordered 310 GE Evolution Series locomotives and the first ten units are already in operation in Kazakhstan. The 300 other locomotives will be assembled in the Astana plant from components and kits manufactured in Grove City and Erie, Pennsylvania, U.S.A.

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