TURKMENISTAN'S AIR NAV FEE PROPOSAL

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001024 SIPDIS STATE FOR SCA/CEN OSD FOR TGUENOV AND KCLEMONS E.O. 12958: DECL: 08/06/2018 TAGS: PREL EAIR MARR MCAP MOPS TX SUBJECT: TURKMENISTAN'S AIR NAV FEE PROPOSAL REF: A. STATE 46001 ¶B. ASHGABAT 552 Classified By: CHARGE SYLVIA REED CURRAN FOR REASONS 1.4 (B) AND (D). ¶1. (U) This is an action request. See para. 9. ¶2. (C) SUMMARY: The Turkmenistan government has proposed an administrative solution to resolve the air navigation fee issue in which bills presented to USG aircraft commanders will now only show a total charge for all ground and other services received at Ashgabat Airport. This proposal appears to be the government's best effort at balancing its internal accounting requirements with our no air nav fee request. END SUMMARY. THE PROPOSAL ¶3. (C) On August 5, MFA Americas Department Director Serdar Bashimov informed the Charge that the DATT was cleared to meet with Turkmenistan State Civil Aviation Service (THY) to receive the Turkmenistan government-approved THY proposal to administratively address the air navigation fee issue. In a meeting later that day with THY Deputy Director Imamberdiyev, Financial Department Chief Durdiyev, and Ground Services Chief Gayyarov, the DATT was presented the proposal to add a new paragraph 7.6 to THY,s agreement with AVCARD, which the Turkmen understand to be currently up for renewal, that states "7.6. For rendered ground services, the Servicing company issues a single (total) bill to the Carrier for rendered services for airport infrastructure usage on the basis of the rendered and received services on Form A." (Comment: Form A is the Airport,s standard bill for ground and other services, including air navigation fee charges, which transiting aircraft commanders sign before departure.) ¶4. (C) As Financial Department Chief Durdiyev explained, the proposal is for the Airport to present aircraft commanders a bill for the use of airport services rendered and received that only lists the overall bill total (with no breakout of sub-charges). He added that this is not in conformity with THY rules and procedures, but the &government leadership8 had decided this would be the government,s proposal. THY would simply have to accept this as a new procedure, if approved by both sides and implemented. While it is a bit unclear how they would derive the total bill amount, he said, in an exception for U.S. aircraft only, there would be no breakdown of sub-charges and therefore no air navigation fee charge. The monies received would then be sent to a single THY fund. He confirmed that they await the USG response and are open to receive USG counter-proposals, comments, or recommended changes to the Turkmen proposed text. OUR ASSESSMENT ¶5. (C) Senior Turkmenistan government officials have made it clear that they understand the importance of this issue. Turkmenistan,s proposal is a clear effort to find a mutually agreeable solution that meets the U.S. government,s bottom line requirement, while not totally disregarding their own laws and regulations. The Turkmen are bending their own rules, in large part, because they highly value the bilateral relationship with the United States. Turkmen officials likely believe that since this is a priority USG issue, the USG aircraft commander,s signature and our ability to compare new bill amounts with past ones would provide reliable confirmation that the U.S. government was being charged fairly for services rendered and received. ¶6. (C) The THY ) AVCARD contract is central to Turkmenistan,s proposal to resolve the air nav fee issue and clarification of the contract,s current and future status appears to be paramount, especially if we are to meet the September 1 deadline. ¶7. (C) Post continues to believe not taking advantage of the flexibility of the Turkmen proposal to reach a mutually beneficial agreement could have a negative impact on our bilateral relationship and jeopardize Turkmenistan's support ASHGABAT 00001024 002 OF 002 for overflights and the Gas-and-Go operation. ¶8. (C) Although THY would welcome our comments, given the slow turning wheels of Turkmen bureaucracy, any major recommended change from our side would result in not getting a resolution prior to our September 1 deadline. Their now fully-blessed proposal appears to be their best effort at balancing their internal accounting requirements with our no air nav fee request. Hopefully, this proposal works for our side. ¶9. (C) ACTION REQUEST: Please provide us with a response to the Turkmenistan proposal. CURRAN