GOOD SIGNS AND BAD AT SOUTH OSSETIA DONORS'

C O N F I D E N T I A L SECTION 01 OF 02 TBILISI 001619

SIPDIS

SIPDIS

DEPT FOR EUR DAS BRYZA AND EUR/CARC

E.O. 12958: DECL: 07/06/2017
TAGS: PREL PGOV EAID OSCE GG
SUBJECT: GOOD SIGNS AND BAD AT SOUTH OSSETIA DONORS'
STEERING COMMITTEE MEETING

REF: A. TBILISI 1573


B. TBILISI 1563

C. TBILISI 1540

Classified By: Ambassador John F. Tefft for reasons 1.4(b)&(d).

Summary
--------------

1. (C) A July 2 meeting in Tskhinvali of the Steering
Committee for the donors' South Ossetia economic
rehabilitation projects was marked by confrontations between
the Georgian and South Ossetian sides -- including over
whether the Georgian delegation would be allowed into South
Ossetia for the meeting, and over proposals for inspection of
the regions' contested drinking water pipeline. In between
these disputes, however, the sides managed to agree to
authorize contracting for the first three school
reconstruction projects, and endorsed moving ahead in other
areas as well. End Summary.

Difficult Entry, Difficult Exit
--------------

2. (C) The meeting, which had been delayed several weeks
because of Georgian concerns about a lack of information on
the projects (ref C),started over two hours late, in part
because South Ossetian officials initially refused to allow
the Georgian delegation to enter the separatist region.
South Ossetian officials explained to donor representatives
during the wait that they had told the Georgians each side
would be limited to two participants, but the Georgians
showed up with four officials of the State Ministry of
Conflict Resolution. After considerable negotiation the
South Ossetians relented and allowed all four Georgians in
for the meeting. Donors would later find it difficult to
exit South Ossetia as well; by the time the meeting was over
Georgian farmers protesting the South Ossetians' closure of
an irrigation canal had blocked and partially dug up the
Transcaucasian Highway just inside Georgian-controlled
territory south of Tskhinvali. Donors took another route
back to Tbilisi.

Impasse over Pipe Inspection
--------------

3. (SBU) Although it was not an item on the meeting's agenda,
the sides spent much time sparring over proposals for a joint
inspection of the drinking water pipeline that runs from the
separatist-controlled north, through a Georgian enclave, to
Tskhinvali (ref B). The Georgians proposed that, after the

SIPDIS
meeting, participants travel to Java in the separatist area,
and proceed from there to conduct a full inspection of the
pipe, including in Georgian areas. The South Ossetians
refused, insisting that an inspection begin in Kheiti, where
the Georgians repaired a damaged section of pipe in early
June, and proceed elsewhere from there. No agreement was
reached (ref A),and each side expressed certainty that any
problems affecting water volume were caused in the other
side's area. DCM noted that the donors' projects were
intended to help solve problems such as this, and urged the
sides to use the opportunity to improve the water network
rather than arguing about where to start an inspection.

And Yet...Some Progress
--------------

4. (SBU) Despite all the difficulties, the two sides agreed
to all the items OSCE had put on the meeting's official
agenda, most notably authorizing OSCE to contract for the
reconstruction of three schools. OSCE agreed that it would
share with the sides by July 3 full documentation about all
bids for the projects, with the understanding that if neither
side objected by July 5 OSCE could go ahead. (OSCE confirmed
to us July 6 that both sides had received the materials and
neither had voiced objections.) Participants also endorsed
OSCE's proposal to plan for constructing a combined clinic
and school in Sveri, a modification of the originally agreed
project that was only a clinic. The sides also expressed
support for OSCE's approach on several water-related
projects, three of which are nearing the conclusion of the
bidding process, and responded positively to OSCE's
suggestion of another Steering Committee meeting in the near
feature to focus on water issues. OSCE briefed on ongoing
agricultural and business development trainings and other
activities, and the Georgians expressed concerns about South
Ossetian efforts to limit participation in certain activities.

Comment
--------------

5. (C) While this meeting contained more than the usual
amount of confrontation between the sides, in the end it
achieved everything OSCE had hoped it would, permitting the
first school re-construction projects to get underway. Since

TBILISI 00001619 002 OF 002


the meeting, the Georgians have taken at least two steps
designed to lower tensions: seeking agreement for an OSCE
team to inspect the drinking water pipe, and proposing a
meeting of the Joint Control Commission (JCC) without a set
agenda (although the South Ossetians subsequently announced
they could not accept the Georgians' proposed site, Tbilisi).
Nevertheless, as a sudden standoff between the sides in
Avnevi July 6 demonstrates, the potential for a major
escalation in tensions remains.

TEFFT