TURKMENISTAN: TURKISH CONSTRUCTION COMPANY

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 000513 SIPDIS SIPDIS STATE FOR SCA/CEN, EEB E.O. 12958: DECL: 07/20/2018 TAGS: PREL ECON TX SUBJECT: TURKMENISTAN: TURKISH CONSTRUCTION COMPANY PROTECTS ITS BUSINESS REF: A. 07 ASHGABAT 0968 ¶B. ASHGABAT 483 Classified By: CDA Sylvia Reed Curran for reasons 1.4 (B) and (D). ¶1. (C) SUMMARY: Selakhattin Yetim (please strictly protect throughout),Deputy General Director of the third-largest Turkish construction company in Turkmenistan, Sehil Inshaat, said that President Berdimuhamedov was justified in his comments criticizing the work of some Turkish construction companies in Turkmenistan. Yetim said that some of these companies, especially the smaller ones, are completing projects well after the deadline, and the president wanted to warn them that Turkmenistan expected adherence to deadlines as well as well-constructed buildings. Companies like Sehil sometimes invest in government pet projects of questionable worth, like Avaza, because they believe it protects their significant volume of business in Turkmenistan. END SUMMARY. MEETING WAS A WARNING TO FINISH ON TIME, AND TO CONSTRUCT QUALITY BUILDINGS ¶2. (C) Selakhattin Yetim said in a meeting with EconOff on April 24 that President Berdimuhamedov did not speak harshly at the April 14 meeting with construction companies (septel). Yetim explained that Berdimuhamedov had recently discussed Turkish businesses active in Turkmenistan when he met with Turkey's President Gul. Yetim insisted that the intention of this "town hall" on construction was to foster commerce between Turkey and Turkmenistan. Yetim added that Berdimuhamedov only meant to "warn" companies that he expects them to complete work on time and to construct quality buildings. "This is a normal request," Yetim said. Furthermore, Yetim said, this was this president's first such meeting with Turkish construction companies since taking office in February 2007. Niyazov held many such meetings during his tenure as president. NO EXCUSE FOR CONSTRUCTION DELAYS ¶3. (C) Yetim explained that work in Turkmenistan's provinces proceeds at a slower pace because companies must always transport building materials to the sites. Nevertheless, Yetim said, projects should be completed on time. Some companies are not taking proper responsibility for their work, and the president found out during his discussions with President Gul that "the situation could be much better." SMALL COMPANIES ARE NOT WORKING RESPONSIBLY ¶4. (C) When asked about the abnormally short deadlines expected by Turkmen government officials, Yetim said that 90 percent of construction projects are not completed on time. He insisted that a company was responsible for helping set a reasonable deadline and defended the president's words, saying that "some companies are not working seriously." He added that some companies -- especially small ones -- are bidding low on contracts in order to win tenders, without having a plan to complete the work. He also pointed his finger at companies that do not start work immediately, claiming that some companies wait several months after winning contracts before embarking on construction. He said that Sehil starts work and preparing documents at the same time, which is the only effective way to do business, because waiting one day wastes a lot of time. WITH 24 PROJECTS IN PROGRESS, SEHIL IS BUSY ¶5. (C) At the end of the meeting, Yetim discussed Sehil's 24 current projects in progress throughout Turkmenistan. The company is building three five-star hotels, one children's camp, and a motel/cottage site at Avaza (Ref. A) -- the first two are government projects, and the last is Sehil's ASHGABAT 00000513 002 OF 002 investment project. In the Ashgabat area, the company is building a factory for metal bars used in construction, several 12-story apartment buildings, a shopping center, and a recycling plant. The company is also working on various projects for the Ministry of Culture including three apartment buildings, a music school, a kindergarten, a high school, and an institute of culture. In Dashoguz, they plan to build a water treatment plant and concert hall seating 2,800 people. In Mary, they will construct an Energy Institute. ¶6. (C) COMMENT: Although the work of smaller Turkish firms may questionable, it appears that larger Turkish construction firms feel threatened by newer players, who they feel may be stealing their business. Companies like Sehil know on which side their bread is buttered, and top executives like Yetim will never, ever criticize the president. On the contrary -- Sehil is even investing in the hopeless Avaza project, a gesture which can be likened to Polimeks' birthday gift of the world's tallest flag pole to President Berdimuhamedov (Ref. B). END COMMENT. CURRAN