Did Kazakhstan’s Digital Economy Stumble Over Public-Private Partnerships?

In Kazakhstan’s IT sector, public-private partnership contracts worth 538.9 billion tenge have been signed, but extra-budgetary investment amounted to only 202 billion, while deputies say the PPP system is not working and is slowing down the digital economy, Orda.kz reports.

In their request, Mazhilis deputies said that there are formal tools — PPPs, consortia, and joint ventures — but in reality they do not work.

PPP procedures take about a year instead of the permitted 90 days, and standard PPP contracts do not provide flexibility and impose a large number of obligations on the private partner. Are we building a partnership between the state and business, or are we simply drawing up another contract through a more complicated procedure? the deputies asked. 

Another problem, they said, is that projects without budget funding are barely used, even though they could help develop the industry without burdening the treasury. As a result, according to the deputies, only eight IT PPP contracts have been signed across the country, despite the high profitability of such projects.

Against this background, business is allegedly looking for workarounds: single-source procurement, narrowly tailored technical specifications, and the mandatory use of separate platforms.

Such systems actually perform state functions, but at the same time they are not integrated into the architecture of digital government, and sometimes they do not even have security certificates. This is a matter not only of the investment climate, but also of security.the deputies said in their request to the minister. 

The deputies proposed changing the approach. In particular, they called for a shift to an investment and partnership model, simpler procedures, equality between the parties, protection of intellectual property, and the development of projects without budget participation.

In a response signed by Minister of National Economy Serik Zhumagarin, the government said reforms are already under way. Over the past three years, the authorities have reportedly updated PPP legislation and introduced new rules for project assessment and risk sharing.

This made it possible to move from quantity to quality in PPP projects, including in IT. In addition, PPP legislation regulates the mandatory transfer of software into state ownership only in cases where investment costs are compensated within the framework of a PPP project. the response says. 

According to the minister, as of now, 1,106 PPP contracts worth a total of 2.7 trillion tenge have been signed in Kazakhstan.

The government also provided separate statistics for the IT sector: as of March 2026, there were 25 PPP agreements worth 538.9 billion tenge, while the total volume of investment amounted to 202 billion. Of these, eight projects operate without budget payments — more than 30% of all IT PPPs. Among them are the electronic diary platform Kundelik, air cargo transportation systems, and systems for collecting air passenger data. According to the authorities, these projects have already saved the budget more than 49 billion tenge.

The government also said that some procedures in the system have already been simplified: the planning stage can now take up to six months.

Thus, the Ministry of Artificial Intelligence and Digital Development will consider the possibility of approving the above documents, including for PPP projects without payments from the budget. the authorities noted. 

The head of the ministry believes these measures will simplify the implementation of PPP projects and help attract investment into the IT sector.

Original author: Saule Abdykamit

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