ANOTHER DAM CABLE FROM TAJIKISTAN

C O N F I D E N T I A L SECTION 01 OF 02 DUSHANBE 002225 SIPDIS SIPDIS E.O. 12958: DECL: 12/19/2016 TAGS: PGOV PREL ECON ENRG EFIN TI SUBJECT: ANOTHER DAM CABLE FROM TAJIKISTAN CLASSIFIED BY: Tracey Ann Jacobson, Ambassador, U.S. Embassy, Dushanbe, State. REASON: 1.4 (d) ¶1. (U) Boom!! After four hours of waiting for Tajik President Rahmonov and Russian energy utility RAO UES head Anatoli Chubais to arrive by car, when thick fog prevented helicopter travel, observers witnessed a single explosion block the mighty Vaksh River at Sangtuda. The river was diverted through two tunnels to a point 500 meters further down the bank, enabling RAO UES to begin constructing a dam and a 670 megawatt hydropower station. The first of three turbines is expected to go online in March 2008 although press reports indicate that Rahmonov asked, and Chubais agreed, to speed up construction and start production by the end of 2007. The December 15 event was only the second river diversion in Tajikistan's history; in 1966, the Vaksh was first blocked to build the Nurek dam and a 3200 MW power station, still Tajikistan's largest. ¶2. (C) Hundreds of schoolchildren danced along the roads leading to two pavilions for spectators of the largely bilateral event, with Tajik and Russian leaders the only official guests and no diplomatic or donor representatives in sight. The RAO UES Sangtuda General Director Vasily Cherneshenko invited the SIPDIS Ambassador to attend the event as a private observer, and gave her a quick tour of the construction site. Supervising the bulldozers frantically moving boulders away from the diversion tunnels was Deputy Prime Minister Asadullo Ghulomov, dressed in mud boots and a hard hat. "I'm a real construction worker again!" he laughed to the Ambassador. Looking less at home among the heavy machinery and mud was the new Minister of Energy and Industry Sherali Gulov, wearing a suit and dress shoes. ¶3. (C) While killing time, Cherneshenko took the Ambassador to see the Sangtuda-II site, the 220 MW hydropower station 15 kilometers downstream to be constructed with Iranian funding. He observed that although Russia and Iran had agreed to finance and build the Sangtuda stations at the same time, the Iranians were trying to "outsmart" the Tajiks, and vice versa, which had led the Sangtuda-II project to stall, while Sangtuda-I progressed as scheduled. ¶4. (U) The actual demolition took place shortly after Rahmonov's motorcade rolled in from Dushanbe. Rahmonov made public remarks about the need to develop other hydropower stations along the Vaksh, and stated that he asked RAO UES to intensify work so that the first Sangtuda-I unit would generate electricity in December 2007, four months earlier than planned. ¶5. (U) In an unusual turn of events, Tajikistan did not experience the nationwide blackout authorities had warned of weeks in advance. Officials feared that if the diversion tunnels did not regulate the flow of water right away, they would have to turn off the water upstream at Nurek, and had publicly announced a three-day power cut after the diversion. However, central Dushanbe remained electrified through the weekend. (NOTE: Most rural parts of Tajikistan have been entirely without power since mid-November END NOTE.) AS GOES SANGTUDA~? ¶6. (C) Sangtuda-I has become a test case for Tajikistan's hydropower sector, with developers, donor and investors waiting to see how the Tajik government handles the construction and financing of the project. Unlike the hotly contested Roghun project, Sangtuda-I has remained on track, even as RAO UES appeals to the World Bank and other international financial institutions for funding. ¶7. (C) "Great progress!" Deputy Prime Minister Ghulomov described Sangtuda-I to the Ambassador December 13-ironically, in a meeting requested to discuss how cement diverted to Sangtuda-I may potentially delay construction of the U.S. funded bridge at Nizhniy Pyanj. Government sources had reported that Ghulomov personally ordered all cement produced by Tajikistan's single cement factory be sent to Sangtuda-I to finish lining the water diversion tunnels. ¶8. (C) Ghulomov acknowledged that he made all decisions concerning cement, but brushed off the idea that a lack of cement could hinder future construction of hydropower stations, and suggested that some of the cement was being siphoned for sale in Afghanistan. Plans by a Czech company to build an additional cement plant in southern Tajikistan remain in the preliminary stages. ¶9. (C) COMMENT: It's not every day one sees a major river bed DUSHANBE 00002225 002 OF 002 dry up in a few hours. The success of the diversion should buoy the spirits of the already confident Tajik government about its hydropower future. But in order to convince international investors that Tajikistan's energy sector is a safe bet, the Tajik government will need Sangtuda-I to stay on track. Given Ghulomov's micromanagement of cement deliveries, we can assume that Tajikistan's top officials will do everything in their power to see the project succeed. However, this kind of effort and attention does nothing to make the investment climate better, and only reinforces the bad habits of Tajiks who rely on personal relationships, not functioning systems, to get anything done. ¶10. (C) The lack of a power outage in Dushanbe, despite repeated warnings, also demonstrates that the government does not fully know its own technical capacity in the energy sector. Lights in the capital provided little cheer or confidence in the government in the many parts of Tajikistan that will remain in the dark until spring. END COMMENT. JACOBSON