The Government of Kyrgyzstan on January 11 signed an investment agreement with the Chinese company Huawei Technologies Co. Ltd. on Smart City project. The total volume of investments in the project is $ 60 million. Co-investors of the project along with Huawei will be the companies Beijing China Veterans Lingxin Capital Management and Aka Minerals and Mining LLC.
However, some of the active Kyrgyz citizens had questions about both the choice of the investor and the plan for implementation of the Smart City project.
24.kg news agency presents the answers of the officials to the most common questions about the implementation of the long-awaited project.
1. Why is it Huawei?
Huawei is one of the world’s leading manufacturers of telecommunications equipment. The staff of the company, which has representative offices in all continents, totals 170,000. According to experts, the company’s products and services are used by a third of the world’s population.
Huawei is one of the most innovative global brands investing a significant part of its profits in research.
In addition, Huawei takes the third place in the world among mobile devices manufacturers. In 2017, the company sold 153 million mobile phones.
In 2013, Huawei successfully implemented a project similar to Smart City in Dushanbe. On the first day of the project, 17,000 traffic rules violations and 10 facts of hooliganism in public places were registered.
Huawei has an extensive experience in implementing GMS and LTE projects in China, Russia, Turkey, Morocco, the UAE, South Africa and Ethiopia.
2. What will Huawei do in Kyrgyzstan?
Within the framework of the agreement, the investor will perform the work on preparation of design estimates, equipment supply, construction, integration, operation and maintenance of the Smart City project for a short period of time.
The project will be implemented on the territory of Bishkek and Osh, as well as on Bishkek-Osh, Bishkek-Cholpon-Ata and Bishkek-Manas Airport roads.
An international company with an impeccable reputation and extensive experience in this field will carry out technical supervision over the implementation of the project.
3. What company will conduct the technical supervision?
The government has not yet decided on this issue. There are consultations with potential candidates so far.
4. Co-investors. Where did they come from?
The Chinese company Huawei itself found the co-investors. The fact is that, according to the organization’s internal policy, it cannot invest itself.
Co-investors, whose policies are based on the support of their own entrepreneurs, as well as on the development of bilateral relations and the promotion of development in other countries, have no financial interest in this project.
For Beijing China Veterans Lingxin Capital Management, an investment fund, managing $ 5 billion, and other co-investors, the Smart City is more image-building project than commercial one.
5. What kind of company Aka Minerals and Mining LLC is?
According to the database of the Ministry of Justice, the founder of Aka Minerals and Mining is AKA Petroleum. AKA Petroleum was established on April 14, 2014 with a headquarters in Munich (Germany). Its main activities are design, preparatory work and extraction of minerals, in particular natural gas and oil, receipt, storage and use of capital investments of all kinds and their management.
AKA Petroleum is a member of AKA Group, a group of companies engaged in investments and developments in international real estate and hotel projects in Dubai, Germany, Great Britain, China and Central Asia.
The company does not receive any financial benefits from the project. Moreover, it invests its own $ 9 million.
The government of Kyrgyzstan has nothing to do with the choice of the company. Huawei attracted it, like Beijing China Veterans Lingxin Capital Management.
6. Why is Kyrgyzstan not able to implement Smart City project on its own?
Within Smart City project, Huawei will install interactive and multifunctional cameras, the software of which includes elements of artificial intelligence. This is a modern and high-tech system. Even if such funds are available in the budget, Kyrgyzstan will not be able to implement it on its own. Currently, the country has no similar experience.
7. Why there was no tender for Smart City project?
The government’s direct investment agreement with Huawei was signed without a tender.
The government has the right to enter into an investment agreement without holding a tender if the investment amount exceeds $ 50 million, and an investor has a positive international reputation and positive experience in implementing such projects.
8. Why the cost of the project is $ 60 million?
The cost of the project was based on a preliminary feasibility study in accordance with the volume and complexity of the work. Part of the work will be done in the highlands.
The project provides for the installation of multi-function cameras that can «read» car number plates and identify people’s faces.
The Smart City project, which is being implemented in Kyrgyzstan, will differ somewhat from similar projects in other countries. It includes just two cities and several large roads. Therefore, the price is higher.
The scope of work in our country is bigger, it is more complex, the installed equipment will be more updated and complex.Press Service of the Government
The amount includes creation of two command, mutually-duplicating monitoring centers, two data centers, and infrastructure where it is needed. These are smart traffic lights, lighting and so on. The platform of the centers provides for the differentiation of access levels, which presents the possibility of connecting utilities, ministries and agencies to monitor the situation within their authority.
Investors will be able to return the invested funds in the amount of $ 60 million only after 5 years, not charging interests. The project itself will be implemented within 1.5 years. Many similar projects were implemented at the expense of loans, and, taking into account the interests paid, turned out to be more expensive.