Kazakhstan Sleeping Coaches

AIL advised Stadler on the structuring and implementation of a tailor-made insurance package to cover manufacturing, payment and warranty risks in connection with a very long-term contract to supply sleeping cars to the State Railways of Kazakhstan (KTZ).

The project, with an order volume of > EUR 2 billion, comprises the manufacturing and delivery of 537 sleeping cars in various designs from 2025 to 2030 as well as full maintenance of the cars for 20 years. According to the project requirements, Stadler is obliged to carry out certain production steps (in particular the final assembly) of the sleeping cars in an existing local production facility in Kazakhstan.

Due to the complexity of the coaches’ procurement contract with respect to the relatively long delivery phase over several years until 2030, the long lead-time (including ramp-up of the local production capacity and establishment of the procurement process) until first coach deliveries, the contract currency denominated in local Kazakh Tenge (KZT), a complex price variation clause and the large bonding volume, Stadler asked AIL to structure and implement a tailor-made security package based on the support of the Swiss Export Risk Insurance (SERV) in terms of cover for pre-shipment, payment and guarantee risks. AIL supported and advised Stadler throughout the entire risk mitigation structuring process including SERV application and preparation of the supporting documentation (project presentation, financial planning). The solution enabled Stadler to mitigate the main political and commercial risks of the project over the entire delivery period until 2030, which ultimately helped Stadler to conclude the delivery contract.

The new sleeping coaches are designed to operate day and night on electrified and non-electrified parts of domestic and international passenger lines in the Republic of Kazakhstan and other CIS countries. The gauge is 1’520 mm and coaches can reach a maximum speed of 160 km/h.