An Assessment of Financial Stability of Artificial Intelligence-based Monitoring Project in Kazakhstan
https://doi.org/10.47703/ejebs.v69i2.507
Abstract
Today, public-private partnership (hereinafter – PPP) projects, which apply digital technologies and artificial intelligence (hereinafter – AI), are becoming essential for improving infrastructure delivery and transparency. This study aims to assess the financial stability and risks of the Sergek project, an AI-based traffic video monitoring system in Almaty implemented under the PPP model with fixed government payments. The study examines the macroeconomic and operational risks of the project using system dynamics (SD) modeling. The data inputs for the SD model were collected from project documentation, national economic statistics, and expert interviews. In the baseline scenario, with a stable exchange rate (0.1% growth per year) and timely government payments, the internal rate of return (hereinafter – IRR) increases from -1.0% in 2021 to 0.37% by 2026. In an alternative scenario with an annual devaluation of 20%, the IRR only reaches 0.3%, and the break-even point is delayed by one year. However, the return significantly declined under scenarios simulating currency depreciation, underscoring the AI project’s sensitivity to external economic risks. This study provides methodological and practical contributions to the field, specifically within the contracts of availability-payment mechanisms in emerging economies like Kazakhstan. The proposed simulation model is an adaptable tool for stakeholders to forecast investment outcomes and enhance project monitoring and control based on AI applications in PPPs.
Keywords
Artificial Intelligence,
Public-Private Partnerships,
Digital Business,
Sergek,
Financial Stability,
Project Financing,
Investment Risk
Supporting agencies: This research was funded by the Science Committee of the Ministry of Science and Higher Education of the Republic of Kazakhstan (grant No. AP23488488).
About the Authors
Timur Narbaev
Kazakh-British Technical University, Almaty, Kazakhstan.
Kazakhstan
Kazakhstan
PhD, Email: timur.narbaev@gmail.com
Bauyrzhan Aitkhozha
Andrey Samoilov
Institute of Advanced Research and Sustainable Development, Almaty, Kazakhstan.
Kazakhstan
Kazakhstan
PhD candidate, Email: an_samoilov@kbtu.kz
Gabriel Castelblanco
References
1. Benito, J., & Gonzalez-Benito, O. (2005). An analysis of the relationship between environmental motivations and ISO 14001 certification. British Journal of Management, 16(2), 133-148. https://doi.org/10.1111/j.1467-8551.2005.00436.x
2. Akorda. (2012). Address by the President of the Republic of Kazakhstan, Leader of the Nation N. Nazarbayev – Strategy Kazakhstan 2050: New political course of the established state. Official Website of the President of the Republic of Kazakhstan. Retrieved March 10, 2025 from https://adilet.zan.kz/rus/docs/K1200002050
3. Assaf, G., & Assaad, R. H. (2024). A Data-Driven Decision-Support Tool for Selecting the Optimal Project Delivery Method for Bundled Projects: Integrating Machine Learning and Expert Domain Knowledge. Journal of Construction Engineering and Management, 150(12). https://doi.org/10.1061/JCEMD4.COENG-15116
4. Barlas, Y. (1994). Formal aspects of model validity and validation in system dynamics. System dynamics review, Autumn (Fall). https://doi.org/10.1002/(SICI)1099-1727(199623)12:3%3C183::AID-SDR103%3E3.0.CO;2-4
5. Bing, L., Akintoye, A., Edwards, P. J., & Hardcastle, C. (2005). The allocation of risk in PPP/PFI construction projects in the UK. International Journal of project management, 23(1), 25-35. https://doi.org/10.1016/j.ijproman.2004.04.006
6. Biziorek, S., De Marco, A., Guevara, J., & Castelblanco, G. (2023). Enhancing the Public Investment in Public-Private Partnerships Using System Dynamics Modeling. Proceedings - Winter Simulation Conference, 2777–2788. https://doi.org/10.1109/WSC60868.2023.10407708
7. Castelblanco, G., Narbaev, T., Mamyrbayev, A., Samoilov, A., & Guevara, J. (2024). Improving public investment in Kazakh PPPs from a portfolio perspective: A system dynamics approach. Proceedings of the 44th Eurasia Business and Economics Society Conference, Istanbul 2023 (253-265). Cham: Springer Nature Switzerland. Retrieved March 10, 2025 from https://link.springer.com/chapter/10.1007/978-3-031-69237-6_14
8. Castelblanco, G., Mangano, G., Zenezini, G., & De Marco, A. (2025). Once concessioned, twice shy? Asymmetries of “reconcession” in national PPP programs. Construction Management and Economics, 43(6), 405-427. https://doi.org/10.1080/01446193.2024.2448975
9. Chileshe, N., Njau, C. W., Kibichii, B. K., Macharia, L. N., & Kavishe, N. (2022). Critical success factors for Public-Private Partnership (PPP) infrastructure and housing projects in Kenya. International Journal of Construction Management, 22(9), 1606–1617. https://doi.org/10.1080/15623599.2020.1736835
10. De Marco, A., & Narbaev, T. (2021). Factors of Schedule and Cost Performance of Tunnel Construction Megaprojects. The Open Civil Engineering Journal, 15(1), 38-49. https://doi.org/10.2174/1874149502115010038
11. Haraldsson, H. V, & Ab, M. (2004). Introduction to System Thinking and Causal Loop Diagrams. Retrieved March 10, 2025 from www.planteco.lu.se
12. Kazakhstan Public-Private Partnership Center. (2025). Project database. Retrieved March 10, 2025 from https://kzppp.kz/en/development-of-ppp-in-kazakhstan/
13. Khallaf, R., Guevara, J., Mendez-Gonzalez, P., & Castelblanco, G. (2024). A System Dynamics Model for a National PPP Program: The Egyptian Project Portfolio. Construction Research Congress 2024, CRC 2024, 3, 507–516. https://doi.org/10.1061/9780784485286.051
14. Kozhakhmetova, A., Mamyrbayev, A., Zhidebekkyzy, A., & Bilan, S. (2024). Assessing the impact of artificial intelligence on project efficiency enhancement. Knowledge and Performance Management, 8(2), 109–126. https://doi.org/10.21511/kpm.08(2).2024.09
15. Levine, S., McCasland, W., & Smalley, D. (1993). Development of a freeway traffic management project through a public-private partnership. 26–31. Retrieved March 10, 2025 from http://onlinepubs.trb.org/Onlinepubs/trr/1993/1394/1394-004.pdf
16. Mangano, G., Castelblanco, G., De Marco, A., & Ottaviani, F. M. (2025). Exploring the drivers of concession period in transport public–private partnerships. Built Environment Project and Asset Management, 15(2), 193-210. https://doi.org/10.1108/bepam-04-2024-0095
17. Mendybayev, B. (2022). Imbalances in Kazakhstan’s Smart Cities Development. Environment and Urbanization ASIA, 13(1), 144–152. https://doi.org/10.1177/09754253221083198
18. Mouraviev, N., & Kakabadse, N.K. (2017). Public-private partnerships. Policy and Governance. Challenges Facing Kazakhstan and Russia. Corporate Governance: the International Journal of Business in Society, 14(5), 653 – 669. https://doi.org/10.1108/CG-03-2014-0037
19. Narbaev T., Karimov O., Samoilov A., Ottaviani F. (2025). Success analysis of public-private partnership infrastructure project in Kazakhstan: a case of the big Almaty ring road (BAKAD). Herald of the Kazakh-British technical university, 22(1), 380-391. https://doi.org/10.55452/1998-6688-2025-22-1-380-391
20. Narbaev, T. (2022). A meta-analysis of the public-private partnership literature reviews: Exploring the identity of the field. International Journal of Strategic Property Management, 26(4), 318-331. https://doi.org/10.3846/ijspm.2022.17860
21. Narbaev, T., & Charman, K. (2017). The formation and management of Public-Private Partnerships in Kazakhstan. Retrieved March 10, 2025 from https://www.researchgate.net/publication/337136999
22. Nurbatsin, A., Kireyeva, A., Gamidullaeva, L., & Abdykadyr, T. (2023). Spatial analysis and technological influences on smart city development in Kazakhstan. Journal of Infrastructure, Policy and Development, 8(2). https://doi.org/10.24294/jipd.v8i2.3012
23. Osei-Kyei, R., Jin, X., Nnaji, C., Akomea-Frimpong, I., & Wuni, I. Y. (2023). Review of risk management studies in public-private partnerships: A scientometric analysis. International Journal of Construction Management, 23(14), 2419-2430. https://doi.org/10.1080/15623599.2022.2063013
24. Saltelli, A., Tarantola, S., Campolongo, F., & Ratto, M. (2004). Sensitivity Analysis in Practice: A Guide to Assessing Scientific Models. John Wiley & Sons. http://dx.doi.org/10.1002/0470870958
25. Samoilov, A., Narbaev, T., Castelblanco, G., & Mukashev, Y. (2024a). Evaluating Public-Private Partnership Dynamics: the Kazakhstan Toll Road Case. Eurasian Journal of Economic and Business Studies, 68(1), 131–142. https://doi.org/10.47703/ejebs.v68i1.374
26. Samoilov, A., Osei-Kyei, R., Kussaiyn, M., Mamyrbayev, A., & Mukashev, Y. (2024b). Cross-Country Comparison of Risk Factors in Public–Private Partnerships in Infrastructure Development: Evidence from Colombia, Kazakhstan, and Ghana. Sustainability (Switzerland), 16(13), 5712. https://doi.org/10.3390/su16135712
27. Sterman, J. (2000). Business Dynamics: System Thinking and Modeling for a Complex World. McGraw-Hill Europe. Retrieved March 10, 2025 from https://industri.fatek.unpatti.ac.id/wp-content/uploads/2019/03/007-Business-Dynamics-Systems-Thinking-and-Modeling-for-a-Complex-World-John-D.-Sterman-Edisi-1-2000.pdf
28. Turner, S. M. (1995). Advanced techniques for travel time data collection. Pacific Rim TransTech Conference. 1995 Vehicle Navigation and Information Systems Conference Proceedings. 6th International VNIS. A Ride into the Future, 40–47. https://doi.org/10.1109/VNIS.1995.518816
29. Wibowo, A. (2024). Ex ante required rates of return and related factors in Indonesian PPP infrastructure projects. Built Environment Project and Asset Management, 14(2), 228-243. https://doi.org/10.1108/BEPAM-06-2023-0113
30. Xu, Y., Sun, C., Skibniewski, M. J., Chan, A. P. C., Yeung, J. F. Y., & Cheng, H. (2012). System Dynamics (SD)-based concession pricing model for PPP highway projects. International Journal of Project Management, 30(2), 240–251. https://doi.org/10.1016/j.ijproman.2011.06.001
Review
For citations:
Narbaev T., Aitkhozha B., Samoilov A., Castelblanco G. An Assessment of Financial Stability of Artificial Intelligence-based Monitoring Project in Kazakhstan. Eurasian Journal of Economic and Business Studies. 2025;69(2):95–108. https://doi.org/10.47703/ejebs.v69i2.507
Views:
101
JATS XML
Email this article 