TURKMENISTAN: USTDA EXPLORES OPPORTUNITIES

UNCLAS ASHGABAT 000303 SIPDIS SENSITIVE SIPDIS STATE FOR SCA/CEN, EEB USTDA FOR DAN STEIN E.O. 12958: N/A TAGS: PGOV PREL PINR EAGR ECON EIND ELTN IR TX SUBJECT: TURKMENISTAN: USTDA EXPLORES OPPORTUNITIES REF: ASHGABAT 0077 ¶1. (U) Sensitive but unclassified. Not for public Internet. ¶2. (SBU) SUMMARY: In an effort to explore the potential for using U.S. Trade and Development Agency (USTDA) programs to promote U.S. equipment manufacturer sales to Turkmenistan, a USTDA delegation met with Turkmen Motor Roads State Concern, the Ministry of Motor Transportation, and the Ministry of Railway Transportation on February 28 and 29. Ministry officials discussed upcoming plans for construction, trade, and industrial development at these introductory meetings, including some opportunities for U.S. companies to participate in tenders. USTDA's next step would be to propose sending a technical specialist to consult with each ministry's technical staff to assess needs and potential for assistance. Ministry officials were largely noncommittal, but as usual, promised to consider all concrete proposals. END SUMMARY. ¶3. (SBU) U.S. Trade Development Agency (USTDA) Regional Director for Europe and Eurasia Dan Stein and Regional Officer Jamie Merriman conducted a February 27-29 exploratory visit focused on identifying the potential for using USTDA programs to promote sales by U.S. equipment manufacturers to Turkmenistan. On February 28, Stein and Merriman met with Turkmen Motor Roads Concern Head of International Relations Nury Taganklychev, Head of Production and Technical Works Hakim Shamuradov, and Zinaida Sumenkova of the Economic Department. Shamuradov explained that this agency is responsible for road construction, as well as repair and maintenance of existing roads and bridges. Turkmenistan finances all highway projects internally, at a price of about four billion manat (approximately $200,000 at the current commercial exchange rate) per kilometer. Current projects include the Ashgabat-Turkmenbashy highway (585 kilometers), the Ashgabat-Karakum-Dashoguz highway (530 kilometers),and the Ashgabat-Mary-Turkmenabat highway (600 kilometers). These highways will have three lanes running in each direction, and will be used primarily to for commercial transport. Shamuradov explained that factories located in Dashoguz and Ashgabat manufacture enough asphalt and concrete to satisfy domestic needs. There are no plans to upgrade these factories, since they were built recently using German 
technology. ¶4. (SBU) Stein and Merriman met with Ministry of Railway Transportation officials on February 29: Transportation Department Head Durdy Chopanov, Economic Department Head Ahmed Atamammedov, and International Department Head Shaguliyev. Chopanov asked for details of the USTDA programs that have been undertaken in Kazakhstan and Uzbekistan, but made clear that his primary project at hand was the presidentially decreed international rail line that is to extend from Western Kazakhstan through Western Turkmenistan to Iran (reftel). Chopanov noted that the Ministry already had issued international tenders for its construction, to include telecommunications work, locomotive equipment, stations, maintenance, and switching facilities. He said that the Ministry will build the northernmost two-thirds of the new rail line. Chinese, Turkish and Russian companies had expressed interest in bidding on the southernmost third of the line. Chopanov said that the Ministry is considering electrification of the railway to get away from diesel technology. All the information on the Ministry's project plans is included in the tender announcements, according to Chopanov. ¶5. (SBU) Minister of Motor Transportation Gurbanmurat Hanguliyev said on February 28 that the 300 buses that the Ministry already purchased from Iran are not enough to fully stock Turkmenistan's public bus system, and that his priority is to procure additional buses. Hangulyev noted that only 30% of bus and 20% of taxi services are provided by the public sector, because many of the vehicles inherited after the breakup of the Soviet Union were in such disrepair. The Iranian bus manufacturer is in the process of setting up a center where its staff will train Turkmen to repair the buses. The Ministry is negotiating for a fleet of cargo trucks that will be based in Turkmenbashy. Hanguliyev said that the Ministry's policy is to purchase vehicles in small numbers before committing to large purchases to ensure the equipment is able to operate in Turkmenistan's harsh conditions. Hanguliyev also mentioned that there is a plan to construct a major highway parallel to the planned Kazakhstan-Turkmenistan-Iran rail line. (BIO NOTE: Hanguliyev was a colleague of President Berdimuhamedov at the Ministry of Healthcare. END NOTE.) ¶6. (SBU) COMMENT: The government arranged most of the meetings on very short notice -- in some cases, with only 15 minutes' lead time -- and most of the officials involved were clearly unprepared for the discussions. The fact that officials expressed at least some willingness to consider USTDA proposals argues in favor of sending a specialist to conduct a definitional mission. However, construction -- whether of roads, railways, or buildings -- is one of Turkmenistan's most corruption-ridden sectors, and we may well find that, even though the president has said he wants to see U.S. companies enter the construction sector and even with using USTDA training or development programs as a sweetener, U.S. companies -- who must operate under rules that their Turkish, Russian, and Chinese counterparts do not -- may have a tough time breaking into this already well-defined market. END COMMENT. ¶7. (U) Stein did not have an opportunity to clear this cable but authorized sending it. HOAGLAND