TURKISH BUSINESSMEN DESCRIBE THREAT TO WORK IN

UNCLAS SECTION 01 OF 03 ANKARA 004893 SIPDIS SENSITIVE STATE FOR EUR/SE, AND NEA/I NSC FOR MBRYZA ALSO FOR MNF-I AND MNF-NORTH E.O. 12958: N/A TAGS: PTER ETRD ECON IZ TU SUBJECT: TURKISH BUSINESSMEN DESCRIBE THREAT TO WORK IN IRAQ, REQUEST US HELP REF: A. ANKARA 4529 ¶B. ANKARA 4600 ¶C. ANKARA 4713 ¶1. (Sbu) Summary: In recent days the head of the Turkish Chamber of Commerce, as well as executives of two leading Turkish USG contractors in Iraq (Tepe and Yuksel) have all met with the Ambassador to press for US consideration of additional security measures to enhance security for Turkish truckers and contractors in Iraq. The businessmen,s proposals dovetail with those in the GOT non-paper (ref b) but are significant in that these are credible contacts, struggling to continue to do business in Iraq, including significant work for the USG. Post reiterates its request for guidance in Ref B. End Summary. Meeting with Chamber of Commerce and Truckers, Association: -------------- 2.(Sbu) The President of the Turkish Chamber of Commerce (TOBB) Rifat Hisarciklioglu and the President of the International Transporters Association of Turkey (UND) Cetin Nuhoglu met with the Ambassador August 23 to discuss security of Turkish truckers in Iraq. Hisarciklioglu claimed that 41 Turkish drivers have been killed, are missing or have been kidnapped. (Of the 41, two kidnapped drivers have since been released and 8 of the missing drivers have been found.) He cautioned that some Turkish businesses are "re-thinking" working in Iraq. Hisarciklioglu said TOBB still hoped the U.S. would help implement recommendations it made in a February 2004 report. In particular, Hisarciklioglu emphasized the need for insurance. He said TOBB recently updated its proposals to improve security for Turkish truckers and other workers and urged that Turkish and U.S. officials work together to report on these issues to Washington and Baghdad. ¶3. (Sbu) TOBB,s new proposals include 1) designating secure routes from the border to the major destination points (Mosul, Kirkuk, Baghdad); 2) enhancing security at the transshipment depots; 3) providing security for all convoys (not just those supplying U.S. programs; 4) enhancing communication among drivers (most of whom carry cell phones) by establishing a GSM network in northern Iraq; 5) establishing secure accommodation facilities on the route, where drivers can safely rest; and 6) providing investment incentives for construction of logistical warehouses in Iraq. ¶4. (Sbu) The Ambassador thanked Hisarciklioglu for the proposals and TOBB,s support, adding that the U.S. has a strong interest in finding solutions. He noted that the Turkish truckers are essential in providing supplies to U.S. forces and Turkish companies are playing an important role in reconstruction. However, since the transfer of sovereignty, the U.S. has less ability to implement the proposals ) most decisions must be made by the IIG in Baghdad. The Ambassador undertook to pass the proposals to Baghdad and Washington. ¶5. (Sbu) Hisarciklioglu said that TOBB is close to concluding a contract with the GOT,s Customs Undersecretariat to begin the long-delayed modernization of the current border infrastructure at Habur Gate. However, he warned that the issue of the second border crossing &will play a role.8 The Ambassador reminded Hisarciklioglu that the U.S. supports a second crossing and even offered a TDA financed feasibility study on the best possible route, but political problems on both sides have stalled any progress. TEPE: -------------- ¶6. (Sbu) On August 19, CEO Ali Kantur and Deputy General Manager Suleyman Son, of Tepe Group, a large Turkish construction company with substantial USG subcontracts in Iraq, met the Ambassador. Kantur said that Tepe has completed fifteen projects in Iraq (mostly prefab buildings for camps for the U.S. military) and continues to work on three others. Kantur described how security problems are impairing its ability to peform under the contracts. As reported in ref A, terrorists kidnapped two employees of Tepe,s subsidiary, Bilintur. The terrorists murdered one hostage, Murat Yuce, on the Internet, and have threatened to kill the other unless Tepe pulls out of Iraq. ¶7. (Sbu) Kantur and Son, explained that one of their biggest problems now is how to transport prefabricated housing to the Falluja area under a subcontract with KBR. Though they used to transport through Syria and switch to Iraqi drivers on the Iraq side of the border, that route has now become too insecure to use. After four months at the border, Tepe has brought the goods back up through Turkey to the Habur Gate and actually buried them on the Iraqi side, near Zahko, but still lacks a secure way to get them to Falluja. ¶8. (Sbu) More broadly, Kantur said Tepe has lost 15 trucks worth of goods, worth millions of dollars. Nearly all of these losses have occurred since the beginning of 2004, when*according to Kantur*the security situation in Iraq became much worse. Sometimes KBR has been able to arrange US military escort, but usually not. When escort has been provided, sometimes it requires trucks to wait for weeks. Now Tepe is simply unable to deliver the goods. Because of the kidnappings near Falluja, Tepe has had to pull out of the area and even in Baghdad it is moving its people to the Green Zone or evacuating them. Son said that now even Iraqi drivers will not go to Falluja. Yuksel: -------------- ¶9. (Sbu) Also on August 19, Emin Sazak, and Hakan Ferhatoglu, senior executives from the Turkish construction company Yuksel, came in to see the Ambassador. Yuksel, like Tepe, is a significant USG contractor in Iraq and in Afghanistan, where it is building the new U.S. Embassy. Yuksel has subcontracts with both KBR and Fluor in Iraq. Sazak and Ferhatoglu described problems in Iraq similar to Tepe,s. ¶10. (Sbu) Sazak said Yuksel brings all its goods to Zakho, where it changes to Iraqi drivers. Now it has trouble finding Iraqi drivers willing to take the goods south. Sazak went into some detail about the convoy escort provided by MNF-I. He said there is usually one US military vehicle in front and one in the rear, going about 60-70 km/hr. Sazak echoed a concern raised by the GOT MFA: If a truck has a problem and needs to stop, the military escort will only stop briefly, often leaving the truck behind. Sazak said Yuksel has had at least one case of its people killed in an escorted convoy, and in one case had to leave a truck behind. ¶11. (Sbu) Sazak said that in addition to the loss of life, insurance is a big problem since Yuksel cannot document losses. It would be very helpful, he added, if the US military escort would be willing to provide a report of an attack, or a truck lost to attackers. Sazak also wondered whether the US military could not consider some sort of air patrol, since the truck route in Northern Iraq is a flat area and surveillance from the air might have a deterrent effect. Near Fellujah, where the camp Yuksel employees were working in came under mortar attack, Sazak wondered whether the insurgents weren,t getting inside information since they seemed to be finding their range as though someone was spotting the efficacy of the rounds. ¶12. (Sbu) Sazak also passed on a problem specific to Camp Anaconda. Whereas in every other camp in Iraq*and previously in Anaconda itself*Yuksel employees had been able to circulate in the camp with a green badge, a new US commander in Anaconda has taken away these badges, inhibiting the Yuksel people,s movements. Sazak claimed that the commander,s reasoning is that Turkey is not part of the coalition. ¶13. (Sbu) Sazak said that Yuksel is the largest Turkish contractor in Iraq, with eight hundred employees and is struggling not to pull out. He pointed out that a Yuksel pullout would be a &big deal8 but did not imply that they were close to any such decision. Comment and Action Request: -------------- ¶14. (Sbu) While post has no independent means to verify the Turkish businessmen,s reports, in many ways their accounts*particularly Kantur and Sazak,s*are more credible than those of the MFA. Kantur and Sazak are well known to the Embassy and both have extensive ties to*and business with*the U.S. They genuinely seem to be struggling to stay engaged in Iraq. Post reiterates its request in ref A for Washington guidance on how to respond to Turkish proposals on transport security into Northern Iraq. ¶15. (U) Baghdad minimize considered. EDELMAN