Kazakhstani Engineering Needs the State Support
Kadyr Baykenov, the President of the Engineering Companies Union of the Republic of Kazakhstan answers the questions of the Kazakhstan magazine.
In 2012, the Engineering Companies Union is celebrating its tenth anniversary. Could you summarize the results of activities of the Union in that period?
Indeed, in early October of this year, we will hold a meeting of the Engineering Companies Union, dedicated to the 10th anniversary of its establishment. Union was established on the basis of engineering companies operating in the oil and gas sector, as a number of projects with foreign investors started in the early 2000s in this industry. All of these projects envisaged the design of high-tech facilities, but our organizations had not that experience. This led to the fact that foreign engineering companies attracted as subcontractors only some domestic design institutes, and even then only to bind projects to the existing infrastructure. This situation did not meet our views, but we understood that without advanced training of design engineers our institutions will remain playing the second fiddle.
In this context, we elaborated a strategy of development of our Union, according to which its main task is to ensure coordination of design organizations’ activity, as well as integration of the positions of engineering services market participants on the key industry issues.
If we talk about the results already achieved, at the present time the number of members of the Union has grown from 9 to 36. Among them are organizations from Kazakhstan, Russia, Ukraine and non-CIS countries, working mainly in oil and gas sector, power industry and environmental protection. They specialize in providing design, research and development, consulting, construction and other engineering services.
Attracting foreign companies to the Union, we strive to learn from their experiences and collaborate in projects on oil and gas fields’ development, in the processing and chemical complex, where Kazakh institutions yet have not sufficient engineering capacity. The latter is connected with the fact that after the collapse of the USSR, many design institutes ceased their operations, and as a result, we have lost qualified engineering personnel. But without the development of our own engineering it is impossible to develop the country's economy and to transfer it to the track of diversification.
We are trying to strengthen the role of the companies – members of the Union – in the engineering of subsoil use projects and infrastructure, using the mechanism of Kazakhstani content. This process is quite difficult. However, there are positive results as well. For example, close cooperation of the Caspi Meruerty Operating Company with the Union let our five organizations to receive the order to perform services under the project of the Pearl field development in the Caspian. We also actively cooperate with Kazakhstan Petrochemical Industries Inc., which is engaged in the project of the construction of the first stage of the gas chemical complex in Atyrau region.
As part of the development of Kazakhstani content the Engineering Companies Union and JSC National Company KazMunayGas signed a memorandum on cooperation in the service market of subsoil use in Kazakhstan. In addition, we signed memoranda on cooperation with Contract Agency, a branch of the JSC Central Dispatching Board of Oil and Gas Industry and JSC National Agency for the development of local content of the Ministry of Industry and New Technologies of RoK.
Not everything planned has so far been implemented, but we want our Union to be not only a service club, but organization which is able to really influence the engineering services sphere.
What factors currently have a restraining influence on the further development of engineering services by Kazakhstani companies?
Unfortunately, there were no deep qualitative changes in the market over the last 10 years in our country. The lack of a coherent system of engineering personnel training, public policy in the field of engineering development, obligations on the part of foreign investors to attract Kazakhstani organizations to collaboration led to the fact that our engineering companies have not achieved a high professional level yet.
At present, there is a significant increase in volume of engineering services in oil and gas industry, while the lion's share continues to be performed by foreign organizations. If you noticed, now international engineering companies are engaged in the reconstruction of our refineries. The same is observed in other major oil and gas projects.
The main factor here is the lack of qualified staff in our engineering structures, which does not allow to engage them in the projects of high processing complexity. The downfall in prestige of engineering profession, which began in the mid 90's and continues today, has created some difficulties in providing our design institutes with engineering personnel. Older professionals leave, and young are not willing to replace them.
The current situation gives serious ground for thinking both for the Union and our design institutes and relevant governmental authorities.
Could you identify ways to resolve these problems? What kind of support do you expect from the government in this regard?
I would split the problems in the development of engineering in Kazakhstan into three levels. First – is a low level of problems which engineering companies should solve themselves, and there are a lot of them. Medium level - these are issues that go beyond the competence of the companies which they cannot solve alone. These include ensuring interaction in the implementation of particular projects; personnel training issues, pricing, licensing, information exchange, relations with public authorities; the organization of joint participation in tenders through establishing consortia and other activities, which must be conducted by us, that is the Engineering companies union. And the third level is the problems of the macro level, with which the state should deal through the adoption of solutions aimed at the development of engineering in Kazakhstan. Unfortunately, we do not have a real progress in this direction on the part of the government.
What objectives the Union sets itself in the near future?
The first task is to take measures aimed at the skill development of our engineering companies. The second is the activating of their involvement in high-tech projects through joint participation with foreign contractors. Third one is the improvement of legislative and regulatory instruments designed to improve the operating efficiency of our members.
There are also a number of other tasks that are outlined in our foundation documents, but perhaps the most important of them is still to bring Kazakhstani organizations to the international level of engineering and project management.