TAJIKISTAN: AGA KHAN SERENA HOTEL PROBABLY DOWN THE TUBES

C O N F I D E N T I A L SECTION 01 OF 04 DUSHANBE 000402

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E.O. 12958: DECL: 3/1/2016
TAGS: PGOV ECON EINV TI
SUBJECT: TAJIKISTAN: AGA KHAN SERENA HOTEL PROBABLY DOWN THE TUBES
-- "WHO WANTS ON 'OLD-SHOE HOTEL'?"

CLASSIFIED BY: Richard E. Hoagland, Ambassador, EXEC, Embassy
Dushanbe.
REASON: 1.4 (b),(d)




1. (C) SUMMARY: Prince Amyn Aga Khan visited Dushanbe February
24 to break ground for the long-awaited Dushanbe Serena Hotel.
Instead, President Rahmonov and Dushanbe Mayor Obaidulloyev,
improbable allies for once, probably broke the project for good,
on camera. Although this appears to be high-handed,
authoritarian, capricious idiocy at its worst, it may conceal
deeper political and financial intrigues on several levels - as
well as arrogant idiocy. END SUMMARY.

BACKGROUND


2. (C) At least four years ago, Prince Amyn Aga Khan personally
negotiated the purchase of a prime piece of real estate in the
heart of historic downtown Dushanbe (allegedly for at least $1
million) to be retrofitted and rebuilt as Tajikistan's first
international-class hotel. (COMMENT: Four years ago, $1
million in Dushanbe would have been significant money. Now,
it's smaller change. END COMMENT.)


3. (U) The Aga Khan Serena hotels are known internationally for
especially sensitive contextual architecture and first-rate
management and provision of services. The property Prince Amyn
bought was the "Old Shoe Factory," a long-abandoned Soviet
enterprise, the fagade of which is a near-masterpiece of Art
Moderne architecture on the half mile of lower Rudaki Avenue
that has perhaps the finest intact assemblage of restrained
neo-classical and modernist Soviet architecture in the entire
former Soviet Union, a stretch of avenue that would be a prime
candidate for historic-district designation and, thus, a tourist
magnet in any other part of the world. Nearby buildings include
the Soviet neo-classical National Museum, old Central Bank
headquarters, the original National University building, the
National Library, the Opera House, several ministries, the
retrofitted Turkish Embassy, and the Parliament and Foreign
Ministry.


4. (U) During a February 28 introductory call by new Resident
Coordinator of the Aga Khan Development Network Munir Merali,
the Ambassador asked him to comment on the press report (para 14
below) in which President Rahmonov allegedly "expressed
dissatisfaction with the architect's activity" and demanded a
new plan for the hotel.


5. (C) Obviously distressed, Merali explained that renowned
Indian architect Ramish Kosla had, after prolonged debate with
the Dushanbe City Architect's office, produced a design that
would preserve the street-front fagade of the building and plug
in a non-obtrusive mostly low-rise, multi-bloc 180-room hotel
behind the fagade.

"HRUMPH! WHO WANTS AN OLD-SHOE HOTEL?"


6. (C) During the February 24 public ceremony to reveal the
final plan, Dushanbe Mayor Obaidulloyev circled the maquette and
architectural renderings for 15 minutes without saying a word
until President Rahmonov arrived with TV cameras in tow. With
cameras rolling, Obaidulloyev turned to Rahmonov and said,
"Didn't you tell me you wanted all these worthless old buildings
torn down and replaced with modern architecture with a minimum

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of seven stories? Look at this! They want to preserve the Old
Shoe Factory! Why do we want to remember that? Even if they
built it, we'd always call it the 'Old Shoe Hotel'!"

"ARE YOU OUT OF YOUR [BLEEPED] MINDS?"


7. (C) Reportedly, Rahmonov, possibly taken off guard, ad
libbed his diatribe against the plan. Prince Amyn, himself an
architecture aficionado, was scandalized, and began to argue his
vision for the entire avenue from an esthetic viewpoint. Merali
said he whispered to the prince that he shouldn't dispute with
such senior authorities on camera. Merali mused to the
Ambassador, "Why should we build them an anonymous Holiday Inn
piece of crap? That's not what Aga Khan Serena does. It
wouldn't be financially viable, especially with the glut of
international hotels planned for Dushanbe. We'll probably drop
the project and try to sell the land."

COMMENT


8. (C) There are probably multiple layers of political,
financial, and inter-personal intrigue at work here.
Obaidulloyev and Rahmonov, to say the least, are no great
friends or even political-allies-of-convenience. Although once
considered a bitter and dangerous Rahmonov foe, Obaidulloyev has
reportedly lost some of his invincible mafia-don-like clout
since his protector and financial compadre, General Gaffur
Mirzoyev, was arrested in August 2004. To maintain political
stability, Rahmonov may tweak Obaidulloyev in public but has
never been known to out-right contradict him. To do so could be
interpreted as the beginning of the end of Obaidulloyev, and in
a presidential election year Rahmonov probably does not want to
risk that real political struggle.


9. (C) Rahmonov has never before gone on the record against old
Dushanbe's historically significant architecture, especially the
important assemblage along lower Rudaki. But we know that
Obaidulloyev has long harbored a desire to tear down the old and
replace it with the kinds of frou-frou pastiches that pass for
contemporary architecture in Moscow and Astana. The first
example in Dushanbe, now under construction, is the informally
named "Luzhkov Complex" (named for Moscow Mayor Yuriy Luzhkov
who is thought to be financing it) on Rudaki, a block from the
neo-classical parliament building and across the street from the
Bauhaus-style Old Philharmonic, currently retrofitted as the
headquarters for Safina TV, Tajik State TV's new cultural
channel.


10. (C) Some have speculated that Rahmonov may have sided with
Obaidulloyev on this one for an entirely different reason - his
visceral reaction against the power of the Aga Khan Ismailis in
Tajikistan. The eastern half of the country, Gorno Badakhshan
Autonomous Oblast, is historically an Ismaili preserve, and the
Aga Khan is revered there as a sovereign. Tajikistan has
allowed the Aga Khan network almost quasi-governmental status
there because it essentially provides the lion's share of all
development and even basic social support to the Pamiri people
of Badakhshan. In Dushanbe, Aga Khan is building a luxurious
Ismaili Center, one of only two currently under construction in
the world, and has just concluded negotiations to construct an
office tower and "representational complex" adjacent to Oriyon
Bank, the "first-family bank," on Rudaki. The current
conventional political wisdom is that no one dares challenge the
political power of the "Khan of Tajikistan," and Rahmonov
instinctively may have decided to side with Obaidulloyev - not

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to support Obaidulloyev, but to demonstrate his own political
power vis-`-vis the Ismailis.


11. (C) There is yet another possible explanation. The (Basic
Element-RusAl-Russian Hotels) Oleg Deripaska-financed Hyatt
Regency, about to break ground for construction, is widely
believed to be a first-family Oriyon Bank co-project with
Deripaska. Some speculate that the Rahmonov family interests do
not want the internationally recognized Serena chain to compete
with what in a sense will be the first-family five-star hotel.
The intriguing, as-yet-unanswered question is how
Rahmonov-Deripaska got Obaidulloyev to cede the Hyatt building
site in a major city park - nothing happens in Dushanbe without
Obaidulloyev's personal stamp of approval.


12. (C) It is a great shame that a Serena Hotel will now likely
never be built in Dushanbe. But had it been, it would have
faced an irrational glut of competition from current or planned
five-star projects. The ones under construction are an Indian
project on Ayni Avenue (at the site of the former Infectious
Diseases Hospital) that will be a hotel and convention center,
Deripaska-Oriyon Bank's Hyatt Regency Hotel and Spa for which
Obaidulloyev ceded half of Komsomolskiy Park for the complex,
and a rumored Turkish venture that will cover a full city block
on Rudaki across from the Opera House in one direction and the
"Luzhkov Complex" in the other direction.


13. (C) Two and a half years ago when the Ambassador first
advocated in a public forum for an international-class hotel to
accommodate international investors, Obaidulloyev threatened to
sue him if he ever again said such a thing in public. It now
appears that Dushanbe will soon enough have a surfeit of
five-star hotels. Of course, international business is rife
with towering and often eccentric egos, like Obaidulloyev and
Rahmonov. However, bottom-line analysts and squint-eyed
business sense usually temper the most irrational excesses.
But, apparently, not yet in Dushanbe. END COMMENT.


14. (U) BEGIN TEXT OF PRESS REPORT:

[Headline] Rahmonov criticizes SERENA hotel construction project
DUSHANBE, 24 Feb - Avesta /N. Pirnazarov/. - SERENA hotel
construction project was presented Friday in Dushanbe. Tajik
President Emomali Rahmonov, Dushanbe Mayor Mahmadsaid
Ubaidullaev and Prince Amin Aga-Khan have attended the ceremony.
Architects from Aga-Khan Foundation have presented the project
and a model of the future hotel to the president. According to
the project, the future hotel will consist of three buildings:
one two-story, one four-story and one nine-story building. There
will be a banquet hall, business-center and three conference
halls in the hotel. Several cafes will be built around the
periphery of the building. Presidential apartments and
first-class rooms will be located at the second floor.
According to the project, the construction will be launched this
year. The first stage of the project will last till 2008. On the
completion of the first stage the hotel will seat 90 guests and
the number of seats is expected to be increased up to 150 in the
future. The project costs $25 million.
Tajik President has expressed dissatisfaction with architects'
activity and terms of the project.
"You have to elaborate a project that would be suitable for us,"
he said. "The first building should have seven floors. This is
our position."
There is a mistaken belief that Dushanbe located in seismically
dangerous area, he said. This is not true and we are going to

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build several 26-storey houses in the city.
Rahmonov expressed dissatisfaction with the elevation of the
third building of the future hotel.
"Two years ago we allocated a very good land for the
construction of the hotel in central Dushanbe," he said. "The
terms are too long. This should be a hotel, not a king's palace."
The construction of another two hotels, both will seat 450 and
250 guests, will be launched in Dushanbe in March. Both hotels
are expected to be commissioned within one year, Rahmonov said.

END TEXT.
HOAGLAND