THE SECOND IRAQ-TURKEY BORDER CROSSING; ANKARA'S

C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 001840 SIPDIS STATE FOR U/S GROSSMAN NSC FOR FRANK MILLER E.O. 12958: DECL: 03/24/2014 TAGS: ECIN ETRD IZ PREL TU SUBJECT: THE SECOND IRAQ-TURKEY BORDER CROSSING; ANKARA'S THOUGHTS ON A WAY FORWARD REF: A. ANKARA 1788 ¶B. ANKARA 1653 Classified by Ambassador Eric Edelman for reasons 1.5 (b) and (d). ¶1. (U) Summary: Iraq and Turkey agreed in December 2003 to build a second border crossing; however, they have not been able to reach agreement on the location and associated issues, such as the connecting road in Iraq and financing (ref b). Although the backlog at the border has improved somewhat of late, we are concerned that traffic will increase significantly as normal trade increases and as material and equipment is delivered to Iraq for large infrastructure projects. We recommend that Washington consider funding a feasibility study to help Iraq and Turkey reach agreement on the second border. End Summary. Border Talks Stalled ¶2. (C) Although political/security concerns are a significant factor, both sides use economic arguments to promote their competing proposals. The Turks say that their proposal to build a second crossing to the west with a 50 km road to Mosul would diversify routes (reduce potential bottlenecks) and avoid the rough terrain of the current route through Zakho. The Iraqis counter that a crossing nearer to the present Habur Gate would be cheaper and would not require bridges across the Tigris or significant new roads. These arguments have not been resolved because neither side has done the necessary feasibility studies to examine the costs and benefits of the competing proposals. Although the political/security concerns will need to be worked out by the Turks and Iraqis, we think that we can help them resolve the economic issues by funding a feasibility study of the proposals. We recommend that State Department officials discuss this proposal with TDA. Next Steps ¶3. (SBU) We have discussed this idea with local TDA rep. Jennifer Snyder, who explained that a feasibility study would require at least 6 months to complete. She said the Turkish government and an entity in Iraq must request the study, and there must be adequate potential financing to complete the project. Turkish officials offered to finance the entire project but were not clear about the details. The first step would be for TDA to hire a consultant to examine the sites and prepare the terms of reference and budget for the feasibility study. It may be possible, Snyder noted, for TDA to hire the consultant even before receiving a formal request from the Turkish government. She said the consultant could prepare a preliminary cost estimate of the competing sites. ¶4. (U) If Washington agrees, we will approach Turkish authorities about the proposal and ask them to submit a formal request to TDA. We will consult with TDA and CPA about a corresponding request from an Iraqi entity. Potential Problems ¶5. (C) Although we hope the GOT will endorse our offer, Turkish officials may be somewhat reluctant to agree to an independent examination of the cost/benefits of the two proposals. On the political side, Turkey is extremely sensitive about issues in Iraq, especially concerning the Kurds and Turkmen (ref a). The Turkish-proposed route would skirt the Kurdish-majority territory in northern Iraq and connect to the Turkmen city of Tal Afar. Turkish officials on the margins of the February talks in Ankara confided that the site of the crossing was of secondary importance; what mattered to them was the road through Tal Afar. In addition, an independent study would highlight the higher cost of the Turkish proposal and might reveal some cost padding by the Turks. In January, Turkish officials on the margins of the talks in Cizre estimated the cost of their proposal at about $80 million and offered to take care of the financing. One option they floated was to swap Iraqi crude to cover the construction costs, which we suspect would not turn out to be a great deal for Iraq. Comment: A More Ambitious Vision ¶6. (SBU) The recommendation for a TDA study would help to address an important near-term need to enlarge the capacity at the border to process needed supplies and growing bilateral trade. However, we think that Washington should also begin to think about the medium and long term opportunities presented by the growing commercial relationship between Iraq and Turkey. Our experience with Turkish cooperation on our Caspian policy may provide a model for using Turkey as a hub for Iraq's energy and commercial ties to the West. Turkey has been a committed partner in our initiative to bring Caspian energy resources to world markets and bolster the independence and development of the Caspian countries. Some Turkish officials have suggested that we build on that model of Turkey as a energy hub -- in this case Turkey would provide the corridor for Middle Eastern (primarily Iraqi) energy to Europe and other world markets, helping us achieve our goal of greater diversity and security of energy supply routes. Separately, Turkish officials have been eager to take advantage of the liberation and reconstruction of Iraq to build a strong commercial relationship with Iraq. These Turkish initiatives can help to promote U.S. policy goals for Iraq and the Greater Middle East. And as Turkey moves closer to the EU, its success as a progressive, predominantly Moslem country can be a compelling model for the aspirations of Iraq and others to emulate. We propose that Washington consider additional TDA infrastructure studies of projects using Turkey as an energy, commercial and transportation corridor linking Iraq and the Greater Middle East to Europe. End Comment. EDELMAN