UZBEKISTAN'S "TAPOICH" AVIATION PLANT REQUESTS

C O N F I D E N T I A L TASHKENT 000116 SIPDIS SIPDIS DEPT FOR SCA/CEN E.O. 12958: DECL: 01/29/2018 TAGS: MASS ECON PGOV PREL US UZ SUBJECT: UZBEKISTAN'S "TAPOICH" AVIATION PLANT REQUESTS U.S. ASSISTANCE REF: A. 07 TASHKENT 1324 ¶B. 07 TASHKENT 2121 ¶C. 07 TASHKENT 438 Classified By: Poloff Steven Prohaska for reasons 1.4 (b, d). ¶1. (C) Summary: On January 23, the Ambassador visited the Chkalov Tashkent Aircraft Production Company (TAPOiCh) and met with officials including Director-General Sultanov. Sultanov requested U.S. assistance in facilitating the transfer of U.S.-made auxiliary power units to TAPOiCh, as these parts are critical to the sale of the factory's Il-114 aircraft and current export control regulations are apparently preventing TAPOiCh from procuring these. Not receiving these parts would be financially disastrous to TAPOiCh, he said. He assured the Ambassador that if these parts could be recategorized as dual-use rather than military items, they would be used for their intended, peaceful purpose. Moreover, the Embassy could conduct end-use monitoring to ensure that this is the case. Post believes this request warrants serious consideration; a number of U.S. companies benefit from cooperation with TAPOiCh, and providing assistance to the factory could yield further positive results in our bilateral relationship. End summary. ¶2. (C) On January 23, the Ambassador visited the Chkalov Tashkent Aircraft Production Company (TAPOiCh)--the largest aircraft production facility in Central Asia--on the outskirts of Tashkent where he met with Director-General Sultanov and other TAPOiCh officials. Over the course of a tour of the plant, Sultanov explained that responsibility for the assembly of Il-76 transport aircraft would eventually be transferred from TAPOiCh to Ulyanovsk in Russia. He was skeptical of Russian claims that Ulyanovsk could start production of these in 2010, claiming that Russia could not pull this off until at least 2015. Russia was putting pressure on the company to produce only Il-114 regional commuter and cargo aircraft, he said. (Comment: Uzbekistan probably will in fact have to stop production of Il-76 transport aircraft when Russia is ready to take over, as Uzbekistan depends on Russia to sell it needed parts for these aircraft. This will end the historic production run in which all of the world's approximately 1000 Il-76s were assembled in Tashkent. End comment.) ¶3. (C) Sultanov had two pressing, related requests for the U.S. Government, which also were enumerated in a draft letter he provided addressed to the Director of Defense Trade Controls in the State Department's Bureau of Political-Military Affairs. First, he hoped that the U.S. Government could help facilitate the sale of eight auxiliary power units (APUs) for the Il-114s from the U.S. firm Honeywell (formerly known as Allied Signal) to TAPOiCh, so TAPOiCh could fulfill its contract to deliver eight more Il-114 aircraft to Uzbekistan Airways by the end of 2008. Second, he asked that the U.S. help to redesignate the generator and associated parts from military items on the U.S. Munitions List to dual-use items. The problem, he said, is that there are export restrictions on these parts, which it turns out (the firm learned recently) appear on the International Trafficking in Arms Regulations (ITAR) as items requiring an export license. Recategorizing these items would allow Honeywell to supply this power unit to Uzbekistan over the long term. He assured the Ambassador that the components would not be separated from the APUs, that they would be used only for their intended purpose (the letter said that the government would provide guarantees of this), and that they would have no objection if State asked the Embassy to conduct end-use verification. Not being able to use these power units in their Il-114s would be disastrous for TAPOiCh, he said. ¶4. (C) Sultanov spoke highly of the equipment, noting that TAPOiCh's efforts to find a comparable power unit from other U.S. and European firms had been fruitless. Sultanov provided booklets on the Il-114 aircraft, with Western parts cited prominently. These include U.S.-made avionics, propellers, seats, and the auxiliary power unit, and Canadian-made Pratt and Whitney engines. Sultanov also noted that TAPOiCh would not be able to have these aircraft certified by the International Civil Aviation Organization--he was concerned about an upcoming audit in April--without Western equipment, particularly the Pratt and Whitney engines. (Comment: While Russia manufactures an engine for the Il-114, it has a shorter lifespan and is of poor quality. Uzbekistan Airways refused to purchase these aircraft in the 1990s with the Russian-made engines because they were so unreliable. End comment.) ¶5. (C) Comment: TAPOiCh's formal request will probably arrive via a diplomatic note from the Ministry of Foreign Affairs, possibly to the Uzbek Embassy in Washington in the near future. Post recommends serious consideration of TAPOiCh's request, as allowing the export of these U.S.-made engines to TAPOiCh--while taking steps to ensure that the parts are used for their intended, peaceful purpose--would appear to be mutually beneficial. First, several American companies--Hamilton Sundstrand, Weber Aircraft, Honeywell International, and Rockwell Collins among others--benefit from cooperation with TAPOiCh. Second, allowing these transfers to take place could foster goodwill in our bilateral relationship and keep the plant's thousands of employees from being thrown out of work. Uzbekistan prides itself on its aviation achievements and President Karimov himself was an engineer at TAPOiCh for several years in the 1960s. NORLAND