7 November 2018
The Head of State chairs the Security Council meeting

The meeting discussed setting up applicable tariffs for electricity and heat, as well as the government affairs on maintaining control over the energy services market.

Taking the chair, the Head of State updated those present on the findings of verifying tariff setting as for electricity and heat from the General Prosecutor's Office.

- Shortly before voicing this year’s Address, we have conducted a special survey among citizens to determine the most pressing challenge. This social research made it clear that high cost of utilities is in the foreground. Therefore, the General Prosecutor's Office was instructed to carry out an inspection in this area. The audit results made it necessary to consider this issue at a meeting of the Security Council, the President of Kazakhstan said.

Nursultan Nazarbayev has placed focus on the fact that in the current Address there is a special order to restore order in the tariffs for housing and communal services and natural monopolies.

The Head of State dwelled on actualizing Tariff in Return for Investments program and spoke about violations identified as a result of checking its implementation.

- For a specific purpose, in due course we adopted Tariff in Return for Investment Program. Since 2009, it has allowed the monopolists to earn billions of money to modernize production for 7 years. It was to improve the entire fund of generating capacity; we went towards a twofold increase in tariffs. Instead of upgrading capacities with this money, the energy giants illegally enriched themselves at the expense of consumers, including premiums, bonuses to their employees, and unreasonably overestimated production costs at the cost of services, the President of Kazakhstan said.

Nursultan Nazarbayev noted that the damage to the population from such actions of energy transmission companies amounted to KZT14 billion, illegal income of energy supplying companies - KZT15 billion. The audit also revealed the inefficient use of subsidies allocated by local executive bodies to reduce tariffs.

- This state of business can arise for a couple of reasons: either it is a conscious opposition to the President’s Address, or it is poor management, which is the result of irresponsibility and misunderstanding of the role. Both reasons I consider a crime. Just one example from the town of Kapchagai. For the Program period, the tariff has doubled. Power wear increased from 53% to 77%. All violations became possible due to inaction and lack of control by the ministries of the national economy, energy and local executive bodies, the Head of State stressed.

In addition, the President of Kazakhstan instructed to check the authorized state bodies for price collusion and corruption offenses in this area.

- Costs for housing and communal services, including payment for heat, electricity occupy a significant share in the total expenditures of the population. The higher the tariffs, the greater is the burden on the family budget. The growth of tariffs should not be carried out without a real economic justification, Nursultan Nazarbayev said.

Further, in accordance with the agenda, the meeting heard the report of K. Kozhamzharov, the Prosecutor General. During the meeting, there were speeches of the heads of central and local executive institutions.


Taking into account the reports voiced at the meeting, Nursultan Nazarbayev gave a number of specific instructions.

In particular, the Head of State pointed out the poor work of the Anti-Monopoly Committee of the National Economy Ministry and instructed the Prime Minister to bring order to its work and assess the effectiveness at the level of all regional anti-monopoly agencies.

- The Energy Ministry should be responsible for every tiyn paid by consumers. This money should work on our economy’s development. Taking each time the decision to raise tariffs, first of all, it is necessary to take into account the population’s solvency. There is no public discussion of all planned tariff changes or it is formal. It is necessary to change the existing mechanism, providing for the wide involvement of the public, non-governmental organizations and the media, the President of Kazakhstan instructed.

The Head of State pointed out the lack of the effective “feedback” system for the Committee for the Regulation of Natural Monopolies, Protection of Competition and Consumer Rights with Citizens.

Nursultan Nazarbayev also noted the need for the Energy Ministry’s measures to reduce the cost of electricity for the population.

The President of Kazakhstan demanded from the Government and the General Prosecutor's Office of the appropriate execution of all legal acts in relation to persons involved in the unreasonable overstatement of tariffs.

- Electricity and heat tariffs are a part of the problem. There are other monopoly companies. This applies to providing the population with water and gas supply, sewage, telephone and Internet services. The antimonopoly committee should get to the bottom of these issues as well, the Head of State stressed.

Nursultan Nazarbayev has also tasked a comprehensive analysis of targeted spending of funds allocated from the budget as subsidies.

- All these measures should not be a single-time campaign. I demand maximum publicity, regular reporting, and effective activity of the competent state bodies. The population should be informed of the measures taken to return funds that have been misappropriated, the President of Kazakhstan said.

In conclusion, the Head of State addressed all managers and owners of energy supplying companies.

- The population should know: where, for what purpose money is spent. It is necessary to restructure work, to feel social responsibility, to be open and to earn people's trust, Nursultan Nazarbayev concluded.

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