PAYMENT OF AIR NAVIGATION AND OTHER FEES BY U.S.

C O N F I D E N T I A L SECTION 01 OF 03 ASHGABAT 000552 SIPDIS SIPDIS STATE FOR SCA/CEN OSD FOR JKLUG E.O. 12958: DECL: 05/01/2018 TAGS: PREL EAIR MARR MCAP MOPS US TX SUBJECT: PAYMENT OF AIR NAVIGATION AND OTHER FEES BY U.S. MILITARY AIRCRAFT - TURKMENISTAN PROPOSES A WAY FORWARD REF: STATE 46001 Classified By: CHARGE SYLVIA REED CURRAN FOR 1.4 (B) AND (D). ¶1. (U) This is an action request. See para. 6. (C) SUMMARY: The Turkmenistan government informed us that it will stop charging air navigation fees to USG aircraft, as long as the Turkmenistan National Civil Aviation Service (Turkmenhowayollary - THY) continues to receive the same amount of income annually from the U.S. Government's use of Ashgabat Airport. The details of how this would occur were not important to the Turkmenistan government. END SUMMARY. THE PROPOSAL ¶2. (C) On May 1, MFA Americas Department Director Serdar Bashimov requested that Charge meet with him to discuss the issue of payment of air navigation and other fees by U.S. military aircraft in Turkmenistan. DATT had met with National Civil Aviation Service officials on April 24 to explain U.S. policy with respect to the non-payment of air navigation fees. Bashimov said the Turkmenistan government is willing to cease charging air navigation fees to U.S. military aircraft. However, in order to do that, Turkmenistan would want an official guarantee from the U.S. Government (could be conveyed by diplomatic note) that it would continue to receive the same amount of payment annually as previously for U.S. military aircraft usage of Ashgabat Airport. As soon as that guarantee is received, the order would be given to end charging air navigation fees. Regarding the charging of any other fee, Bashimov said that Turkmenistan would not charge any fees to humanitarian aircraft. Therefore, any aircraft that the United States declared as "humanitarian" would not be assessed a fee of any kind. Bashimov said that the only issue for the Turkmen side is continued payment at the same amount as before. He said Turkmenistan is willing to find an accommodation that is acceptable to both sides. OUR ASSESSMENT ¶3. (C) The Turkmenistan government wants to be practical and accommodating. It is willing and able to waive air navigation (and landing and parking fees, if needed). However, it does not want a loss in income, and therefore, wants to be reimbursed at an equivalent rate for an equivalent amount of airport usage. As a self-financing entity, THY needs the money to operate. DAO Ashgabat estimates USG aircraft total air navigation fees in 2008 will be $250,000 (based on roughly 225 USG aircraft landings at Ashgabat Airport annually in 2006 and 2007.) Total landing and parking fees for 2008 are projected to be $430,000 (based on payments from January - March 2008.) ¶4. (C) In addition, the following points should be taken into consideration: -- Post believes this is the best offer the Turkmenistan government is willing to make. It is flexible and practical. They only care that we "show them the money." And they no doubt feel they should be compensated for usage of their airport. -- Post believes 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 for overflights and the Gas-and-Go operation. -- Former President Niyazov's Decree is still in force, but is not being applied by THY because they are unable to verify the contents of any USG aircraft that overfly or refuel in Ashgabat. Politically, both the USG and Turkmenistan government do not want to discuss this issue because greater scrutiny will likely open up the possibility of an even more restricted overflight agreement if the focus became the contents of U.S. aircraft. The current liberal interpretation of "humanitarian" is in the USG's interest to maintain. And the Turkmen willingness to have an even broader interpretation of "humanitarian" is even more so. Reopening this issue with the new government would be a ASHGABAT 00000552 002 OF 003 further distraction from achieving the USG goals of not paying air navigation or other fees and having access to Turkmen airspace and ground facilities. -- The restricted blanket overflight and Gas-and-Go team agreements are in effect upon the basis of an exchange of diplomatic notes between our two governments. President Berdimuhamedov could change or end these agreements with little warning, much like we experienced in late 2007 when the Turkmenistan government initially refused to renew the overflight agreement in its existing form for 2008. As experienced with the loss of the use of Karshi-Khanabad, autocratic Central Asian leaders are sometimes willing to end a mutually beneficial arrangement with the United States if they do not feel they are being dealt with fairly and their economic interests are not taken into consideration. -- At no charge, for years the USAF Gas-and-Go team has occupied a single story structure on the Ashgabat Airport grounds adjacent to the fuel facility and tarmac where USAF aircraft stop for services. USAF personnel store USG communications equipment and other critical supplies in the structure. No Turkmen are allowed in the structure unless escorted by USG personnel. -- The USAF team has constructed a permanent shade structure on the concrete tarmac adjacent to taxiway where USAF aircraft approach for services. The structure is used solely by USG personnel to protect approximately 1.8 million dollars in aircraft ground handling equipment from the harsh environment. -- The Turkmenistan government provides 24/7 security of our Gas-and Go team facility, equipment, and refueling operation by means of static guards at a gated checkpoint supplemented by roving patrols. -- THY and the Ashgabat Airport permit two USAF support vehicles to operate within the airport perimeter. These are the only foreign vehicles permanently positioned and operated on the airport property. Turkish Air recently was forced to remove its vehicle. -- The USAF team is allowed to operate its refueling operation in a restricted area of Ashgabat Airport. The only other aircraft allowed in that area is Turkmenistan's presidential aircraft. DETERMINATION OF AIRPORT STATUS ¶5. (C) Post provides the following responses to aid in the determination of Ashgabat Airport as a commercial or government operated airport for purposes of paying landing and parking fees: a. Is Ashgabat Airport operated by the Government of Turkmenistan or an agency of the Government of Turkmenistan? Yes and No, the Turkmenistan National Civil Aviation Service (Turkmenhowayollary) is a national government-regulated commercial agency that operates on a for-profit basis as a unique, self-financing entity - unlike probably any other connected to the Turkmen government. THY determines its own fees and rates based on the principles of making money, solvency, and self-financing. As a government-related entity, these fees and rates are coordinated with the Ministry of Economy and Finance and approved by the Cabinet of Ministers. No Turkmenistan military aircraft operate out of Ashgabat International Airport. There are no private or local government-run (such as provincial or city) airports in Turkmenistan. b. Does the Government of Turkmenistan fund day-to-day operations at Ashgabat Airport? As a unique entity, it is self-funding and does not receive additional funding from the national government for day-to-day operations. c. What portion of Ashgabat Airport's revenue (if any) is given to the Government of Turkmenistan? THY pays zero percent of its revenues (not including taxes) to the central government. It does pay an unspecified amount of taxes to the central government like all businesses in Turkmenistan. ASHGABAT 00000552 003 OF 003 d. Is Ashgabat Airport subject to day-to-day operational guidance from the Government of Turkmenistan? No, except for following government rules and regulations. Much like all airports, it must obey local, regional, and central government rules, laws, and regulations. ¶6. (C) ACTION REQUEST: Please provide us with a response to the Turkmenistan proposal. CURRAN