AKTAU International Multimodal Transportation and Logistics Center

1. AKTAU International Multimodal Transportation and Logistics Center The biggest Kazakhstan’s seaport at the Caspian sea and a cornerstone at transportation corridors “TRACECA: Europe-Caucasus-Asia” and “NORTH-SOUTH: CIS-China-Middle East-Africa”

2. Project location and goal • Aktau International Multimodal Transportation and Logistics Center (AIMTLC) is located behind the Aktau International Free Trade Sea Port at the Caspian Sea south-eastward from the coastal facilities and Aktau city (residential). • AIMTLC aimed to be a big transportation hub for bulk-loading, storage, re-processing of goods for export-import and transit operations with sea, railroad, car road and airport. • Goods to be engaged with: oil and oil products, metals, dry goods. • Services: “A”, “B”, “C” categories warehousing, customs clearance, brokerage, multi-modal loadings, container terminal, container repair, consign\distributors warehouses, rent, service (bank, hotel, parking, restaurants) covered with high-level IT.

3. International transportation corridors • AIMTLC plays a key role in transportation corridors between Europe, Asia and Middle East: TRACECA and NORTH-SOUTH. • Since 1993 TRACECA supported by EU Technical Assistance program for CIS (TACIS) has included Aktau into several projects in view of development of logistics centers totaling 9500000 Euro. Detailed information can be obtained online at www.traceca-org.org for projects TA58, IP10, TA55 and IP12. • With growth of Russia, India and China as well as the Persian Gulf States and Middle East AIMTLC becomes important on the route at the Caspian Sea.

4. Project area, cost, investment return and capacity • Area of the land plot: 2 000 000 m2 (200 hectares) • Cost approx. of the “key-turn” development: 300 000 000 USD ($1.5 M x 200 Hectares) • Investment return period: approx. 10 years • Project capacity: 2010 – 3 300 000 ton, 2017 – 5 000 000 ton • Operation start date: 2009, after 2 years of construction • Demand growth for warehousing market annual: 20% • Local FMGC market growth annual: 25%

5. Project initiator and investment advantages • Initiator and owner of the project: TSESNA Corporation, Astana, Kazakhstan (www.tsesna.kz) • TSESNA offers to potential investor to bring its own engineering for the Project with Feasibility Study (e.g. Knight Frank). Investment advantages: • strategic location with a key role in TRACECA and NORTH-SOUTH; • absence of other logistics centers in the region; the lowest warehousing coverage (according to EU standards it is five times underdeveloped); • well-suited project for Islamic Financing of infrastructure such as SUKUK. • government support with tax and other incentives for investors (Gov’t has already taken several supporting decrees and acts regarding AIMTLC).

6. Tax Regime at Special Economic Zone “Aktau International Seaport” (Aktau SEZ) • Corporate Income Tax – 0% • Land Tax – 0% • Property Tax – 0% • VAT – 0% • To enjoy tax incentives for Corporate Income, Land and Property a company should operate within the SEZ under certain conditions (Stipulated in the Tax Code of the Republic of Kazakhstan Concerning Taxes and Other Obligatory Payments to the Budget): 1) not less than 90 per cent of whose aggregate annual income is income received (receivable) from selling goods of their own production, including construction objects, relating to the following priority types of activities, approved by the Government of Kazakhstan: chemical industry; manufacturing of resin and plastic goods; manufacturing of other non-metallic mineral products; metallurgy; manufacturing of ready-made metal goods; manufacturing of machines and equipments; 2) are registered by tax office within the territory of the SEZ; 3) do not have subsidiaries out of the SEZ which employ permanent working staff-place, fulfilling functions of a legal entity. A permanent working staff-place is taken as permanent if it is established for the period of more than 1 month.

7. Tax Regime at Aktau SEZ (cont.) • To enjoy tax incentives for Value Added Tax a company should operate within the SEZ under certain conditions (Stipulated in the Tax Code of the Republic of Kazakhstan Concerning Taxes and Other Obligatory Payments to the Budget): It should sell goods within the territory of the SEZ which are fully consumed in the course of construction and putting into operation of facilities of administrative and industrial designation in accordance with project-budget documentation, intended for the performance in the territories of SEZ of the following priority types of activities: projecting, development, implementation, test manufacturing, software manufacturing, data bases and apparatuses; creation of new IT on the basis of artificial immune and neuron systems; running of R&D on establishment of and implementation of projects in IT; manufacturing of machines for processing with texts, copying equipment, calculators, office machines and equipment as well as for addressing and cash-ticketing, computers and other equipment for information processing; manufacturing of electric and radio elements, transmitting machines, sound and picture receivers, recorders and playback machines; manufacturing of household electric appliances; ready-made textile goods, clothes. • New addition into legislation is upcoming: currently Government is enlarging number of priority activities for granting preferences, including transportation and keeping of goods; warehousing; different types of transportation activities of land, air and marine vehicles. • Companies dealing with mining and excise-covered goods (alcohol, gasoline, luxuries, etc) can not enjoy tax preferences.

8. Presentations made and contact point • Up-to-date several meetings regarding AIMTLC were held including with: - Japan International Cooperation Agency (JICA), Japan International Cooperation Organization (JICO), RPI, Katahira Engineers International (for feasibility study) - Scott Wilson (a British company experienced in engineering, consulting, experience in Hong Kong, Jebel Ali. Reg. feasibility study) - Mizuho Corporate Bank (a part of Japan’s Mizuho Financial Group. Reg. financing) - CapitaLand (Singaporean subsidiary of Temasek sovereign fund owns 20% of a Kazakh-Russia development company EurasiaLogistics with plan to establish the biggest net of A-class warehouses in Russia and Kazakhstan, 5 000 000 m2.; its daughter company Ascott-Somerset-Citadines apart hotel operator plans to manage 6 hotels in Kazakhstan jointly with TSESNA. Reg. future sales). - PharmaNiaga (a Malaysian searching for warehouses. Reg. sales) - Punj Lloyd (engineering and warehousing. Reg. sales) - CILT – Chartered Institute of Logistics & Transportation (Reg. staff trainings) • Materials and maps of the AIMTLC can be downloaded at: aktaumultimodaltlc@yahoo.com with password: development Staff in charge: Mr. Zeinolla Kalymbetov, zeinolla.kalymbetov@tsesna.kz, kalymbetov@yahoo.com, 3162541@mail.ru tel: +7 717 2 318130, fax: +7 717 2 318290, mob: +7 701 3162541