TURKEY-IRAQ HABUR GATE - WHERE TO GO FROM HERE?

C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 006952 SIPDIS USDOC FOR 4212/ITA/MAC/OEURA/CPD/CRUSNAK DOE FOR CHUCK WASHINGTON E.O. 12958: DECL: 11/23/2015 TAGS: EPET PREL ETRD TU IZ SUBJECT: TURKEY-IRAQ HABUR GATE - WHERE TO GO FROM HERE? REF: A. BAGHDAD 4524 AND PREVIOUS ¶B. ANKARA 6870 ¶C. ANKARA 4880 AND PREVIOUS ¶D. ADANA 205 Classified By: CHARGE NANCY MCELDOWNEY FOR REASONS 1.4 (B) AND (D) ¶1. (C) Summary. Geographical and political realities make Turkey the only neighbor of Iraq with the potential to meet Iraq's growing civilian and military needs for imported fossil fuels and consumer goods. While there are certain short and medium term fixes that can increase the capacity of the single existing border facility, these improvements will be far from sufficient to meet the critical needs in Iraq, including those of Coalition forces. Political engagement on the part of the United States will be needed to break the current logjam in Turkish-Iraqi discussions of building a second facility, the only solution that will meet Iraqi, Turkish, and U.S. interests. End Summary. ¶2. (C) Mission Turkey has read with interest and concern Baghdad's recent reporting on growing shortages of fuel products in Iraq and the impact this will have on domestic Iraqi stability and security and U.S. interests. As Baghdad points out, these shortages are likely to create additional demand for the already substantial imports of fuel products via Turkey at the same time as the fuel requirements of U.S. forces in Iraq continue to grow. Improving economic conditions in Iraq will result in increased demands on land transport via Turkey, which offers the only land route between Iraq and Europe. ¶3. (C) We understand that Turkish companies currently engaged in the oil products trade believe they have the capacity to increase supplies to Iraq by as much as 50% with the appropriate financing (RefB). However, neither Iraq's nor the U.S. Military,s growing fuel needs, not to mention growing needs for other imported goods, can be met via Turkey with the current border infrastructure. In addition, and very importantly, relying on a single border crossing creates a major vulnerability should that crossing be closed by a calamitous event such as a terrorist attack or natural disaster. -------------- Single Gate Bottleneck -------------- ¶4. (C) Habur Gate has long been identified as a bottleneck to increased trade with Iraq. There are ebbs and flows based on many factors, but each day customs officials process an average 1000 to 1500 vehicles in each direction (for a combined flow of 2000 to 3000 daily). Turkish customs officials generally process vehicles efficiently, maintaining appropriate security checks. Customs officials have informally agreed to prioritize southbound tanker passage at about 50% of total trucks. The majority of tankers crossing carry fuel for humanitarian or commercial needs on behalf of SOMO (State Oil Marketing Organization of Iraq). Tankers carrying fuel to U.S. forces amount to 10-15% of total tanker numbers. ¶5. (C) Repeated visits by Mission personnel, including a U.S. Military Liaison Officer who spends most of his time at or near the border, indicate that the Habur facility is operating near its maximum physical capacity. A complex, organic balance of many competing factors and forces has developed over time. We have learned -- the hard way -- that attempts to micro-manage or blatantly prioritize specific categories often create unintended consequences, including violence or strikes by drivers. For example, attempts to expedite fuel flow to U.S. military depots created shortages of the SOMO-provided fuels used to power the tanker trucks themselves. -------------- Short and Medium Term Fixes -------------- ¶6. (C) While we believe that the Habur facility is operating near its capacity, there could be marginal short-term improvements in the facility's ability to put through additional trucks. USG logistical specialists should be able to engage Turkish border officials on more efficient traffic management practices -- bearing in mind the risk of meddling with the current equilibrium (especially when angry, impatient truck drivers abound). Sirnak Province has constructed a new holding yard that should increase flexibility with potential for improved management of processing and/or prioritization of certain categories of goods of USG interest. For the moment, however, the yard is unpaved and operating procedures are ad hoc and unclear. ¶7. (C) A medium term measure that could lead to a noticeable improvement in cross-border capacity would be to build one or more short, cross-border pipelines. This would allow fuel to pass from the Turkish side of the border to the Iraqi side without having to be carried in a vehicle. Such pipelines could be built in conjunction with "bag farms" (i.e. collapsible containers for holding fuels) on the Iraq side. This concept could be applied both to civilian and military shipments. We understand that the Turkish supplier TPIC has proposed, and indeed constructed as far as the border, such a pipeline. However, TPIC and SOMO have apparently not been able to agree on the operation of a pipeline. Agreement with SOMO could replace approximately 60 tanker loads of fuel per day. A similar facility could facilitate transport fuel to the U.S. military. U.S. officials should explore the alternatives of construction of such a pipeline by a private company and by the U.S. Army Corps of Engineers. The Turkish authorities would have to be fully involved in any such enterprise. -------------- Longer Term Solutions -------------- ¶8. (C) It is clear however that the short and medium term fixes described above will not be sufficient to meet growing needs in Iraq. Given the ongoing requirement for security controls on both sides of the border, we are of the opinion that substantially increased trade and military needs can only be accommodated by the building of one or more additional border crossing facilities on both sides. Since new facilities would require the construction of supporting road networks in both Turkey and Iraq, this would be an expensive project that would likely take two years or so to complete. At the same time, U.S. and Iraqi interests will continue to suffer from the limitations of the single Habur facility. Delay in starting such a project only lengthens the hardships, especially understanding that U.S. policy recognizes that our engagement in Iraq should also continue for many years. ¶9. (C) The USG has engaged the GOT and the ITG on a second border gate, offering a TDA economic feasibility study as a way to facilitate an agreement on economic grounds, but has otherwise said that creation of a new crossing point is for the Iraqis and Turks to agree. Yet, due to mutual suspicions that are deep and of very long standing, the Turks and Iraqis have been unable to agree on a location for the gate despite the compelling need. In the meantime, our political, security, and military interests in Iraq are bearing the cost of the inability of the Turks and Iraqis to agree. ¶10. (C) From our perspective, there is little chance that the two countries will be able to gather the political will to find an agreement without a substantive engagement by the United States. Such an engagement would have to offer support for assurances to be given by both the Turkish and Iraqi (including the KRG) sides. For example, the Turks have offered to assure the GOI and KRG that imports through Habur would not be replaced by flows through a new gate. The Turks would welcome this role. Understanding that a more assertive U.S. role may complicate U.S. relationships in Iraq, we see no alternative. MCELDOWNEY