On 14 October a giant Trans-Eurasian optical fibre line (TAE) connecting 20 countries went into operation. This was confirmed at a video conference held on that day between the participant countries; China, Kazakhstan, Kyrgyzstan, Uzbekistan, Tadjikistan, Turkmenistan, Iran, Turkey, Ukraine, Belorussia, Poland, Romania, Hungary, Austria, Germany, Georgia, Azerbaijan, Armenia, Pakistan, and Afghanistan. According to Kazakhtelecom, the total length of line stretching between Frankfurt and Shanghai is 27,000 km of which 1,750 km run across Kazakhstan. Each of the 20 countries tackled the financing and construction of its section of the line. The cost of Kazakhstan's section is estimated at USD 25m. Of this amount, Siemens provided DM 18.7m to the Kazakh party in a 5-year loan (at 3.16%+2% on signing the agreement). Kazakhtelecom expects the Kazakh segment to be paying back in 4-5 years.(Interfax)

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According to Reuters, Germany's Siemens AG intends to build two plants in Kazakhstan to manufacture computers and optical fibre cables. The computer plant will be based at a radio electronic plant in Almaty and will have a capacity of 40,000 computers per year. The cost of the first phase of the project is estimated at around DM 1m. The cable plant will cost about DM 3-5m in the first stage.

Aktubinsk-based (western Kazakhstan) ferroalloy plant Ferrochrome is planning to start producing commercial metal chrome in December. The metal will be used for Boeing aircraft and space equipment. The information was released by the general director of the plant, Valerii Grinenko. He said that the initial metal chrome output would be 300-500 tonnes per month and will be increased to 10-12,000 tonnes per year in the future. The metal will be exported to Europe and the U.S. where the management is currently negotiating with engine and jet producers. According to Grinenko, the plant will start the production of pure chromium in June 1999 and is now introducing new technology. To this end, Kazchrome, a holding company and a major shareholder of Ferrochrome, is expected to provide USD 500,000 in investment. (Interfax)

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Kazzinc starts the reconstruction of its concentrating plant in Zyrianovsk on 20 October and expects that the operating section of the plant will be finished in late 1999. According to the chairman, Gennadii Zilberberg, the reconstruction project is estimated at USD 15-17m. The investment will come from Kazzinc's major shareholder, Glencore International AG. After the reconstruction, the capacity of the plant will increase to 2-2.5 million tonnes of ore from the present 1.2 million tonnes. The production of ore at Kazzinc's mines will, accordingly, increase from 550,000 tonnes to 1.5 million tonnes by November 1999. The chairman said that 40% of the concentrating plant equipment would be manufactured at Kazzinc's machinery plant while the remaining equipment will be imported. (Interfax)

Standard & Poor's has lowered its long-term counterparty credit rating on Halyk Savings Bank of Kazakhstan (HSBK) to 'B' from 'B+'. The short-term counterparty credit rating is confirmed at 'B'. The rating agency has also downgraded its long-term counterparty rating on Kazkommertsbank to 'B-' from 'B+' and its short-term counterparty credit rating to 'C' from 'B.' The senior unsecured rating on Kazkommerts International BN's USD 100m notes due 2001, guaranteed by Kazkommertsbank, has also been lowered to 'B' from 'B+'. The outlook on both banks remains negative.

A press release of S & P says that the lowering of the ratings reflects a number of factors, including the effect of the Russian economic and political crisis. (Reuters)