POLIMEKS IN TURKMENISTAN WOULD BE A HARD ACT FOR

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 000197 SIPDIS STATE FOR SCA/CEN, EEB E.O. 12958: DECL: 02/08/2019 TAGS: PREL EIND EAID ETRD SOCI ECON TX TU SUBJECT: POLIMEKS IN TURKMENISTAN WOULD BE A HARD ACT FOR U.S. FIRMS TO FOLLOW REF: A. ASHGABAT 138 ¶B. ASHGABAT 86 Classified By: Charge Richard Miles, per reasons 1.4 (B) and (D). ¶1. (SBU) SUMMARY: The largest Turkish construction firm active in Turkmenistan, Polimeks, has set up a communications subsidiary -- Policom. The company's General Manager said that these companies begin work on projects without contracts, and made it clear that this is possible because Polimeks and Turkmen officials enjoy a close relationship based on "trust." He advised that a good marketing strategy with the Turkmen Government is to justify projects based on the intrinsic good that they could do for the country. He also advised that projects should not be pushed on the Government -- and that proposals should not include budgets. Policom and Polimeks have several "social responsibility" projects as well, including scholarships to study abroad and the development of Microsoft Windows and Office software in the Turkmen language. He suggested travel to the U.S. by key Turkmen government officials would be one way of invigorating the commercial relationship and of whetting the appetite for more cooperation with U.S. industry, noting that this is a technique that Polimeks uses. The statement, "We believed in the former President, and we believe in this President ...," says it all about Polimeks in Turkmenistan. END SUMMARY. ¶2. (C) Bora Uygun (please protect) is the General Manager of Policom, the communications subsidiary of the largest Turkish construction firm active in Turkmenistan -- Polimeks. Policom provided a state-of-the-art television broadcast transmission system for Turkmenistan's new music channel using equipment from the U.S. company, Harris. In a meeting on February 4, he discussed his observations on doing business in Turkmenistan and what factors he thinks have contributed to Polimeks' success. FOREIGN COMPANIES SHOULD EXPECT TO BEGIN PROJECTS WITHOUT CONTRACTS ¶3. (C) Uygun said that "Turkmen are honest -- they mean it when they give you their word, and it's as good as a contract." However, he added, companies should know that they have to be flexible because Turkmen officials are not used to international standards of doing business. On a practical level for Polimeks, this means that the company will break ground on a project before the contract is signed -- which may take up to six months. (NOTE: Polimeks' website states that "client satisfaction (is) achieved in an amicable business style based on trust." END NOTE.) Uygun said that some U.S. companies prefer to employ Polimeks as their middleman in order to avoid having to deal directly with the Turkmen Government and engage in such business practices. (COMMENT: One resident Amcit businessman told us that he prefers to partner with Turkish companies in order to avoid the legal problems of an american dealing with Turkmenistan's corrupt business environment. He added that he does not ask his Turkish partners how they obtain contracts, and they do not volunteer the information. END COMMENT.) MARKETING TIP: "ALL PROJECTS SHOULD HELP THE COUNTRY" ¶4. (C) Uygun also said that "all projects should help the country" in a very direct way, because the Turkmen need a lot, and therefore, you should give them a "painkiller, not a vitamin." Uygun said that "you should not come to sell. Bring a prepared idea or concept -- leave out a budget" -- and then see what happens, but don't push any project. POLIMEKS AND SOCIAL RESPONSIBILITY: MICROSOFT PROJECT ¶5. (C) As part of the company's "social responsibility" agenda, Policom is supporting development of Windows and ASHGABAT 00000197 002 OF 002 Office software in the Turkmen language -- which also entails developing a 300,000 word dictionary (Ref A). Policom will discuss sponsorship of Microsoft's "IT Academy" in May, which would train provincial teachers in information technology. FULL SCHOLARSHIPS AND FREE RENOVATION PROJECTS, TOO ¶6. (C) Uygun said that Polimeks sends a certain number of students abroad for full university educations in electrical and construction engineering and architecture. In addition, Polimeks paid for the recent renovation of the Supreme Council for Science and Technology building because Polimeks wanted to encourage the Supreme Council's development of Turkmenistan's educational system with a financial show of its support. Uygun declined to reveal the cost of the renovation of the Supreme Council's building. POTENTIAL AREAS FOR PARTNERSHIP WITH U.S. COMPANIES ¶7. (C) Uygun said that Polimeks is looking for partners in industrial solutions that are experienced with equipment and system integration, and new technologies or facilities that would help create industry in Turkmenistan. He said that this is another area for potential growth since the Turkmen like the idea of creating more industry in the country and take pride in the feeling that Turkmenistan is growing and thriving. IDEAS TO HELP THE U.S.-TURKMEN BUSINESS RELATIONSHIP MOVE FORWARD ¶8. (C) Citing the many business deals that were concluded following President Berdimuhamedov's visits abroad -- including in China and Korea -- Uygun suggested inviting Berdimuhamedov to the U.S. in order to show U.S. intentions of forming a good relationship. He added that this would be a good time to ask in which areas Turkmenistan would like to further develop its industrial base. ¶9. (C) Uygun stated that Polimeks prefers to work in Central Asia and Turkey -- but not Europe, because of the rules that companies have to follow in Europe. Nonetheless, Polimeks does have projects in Cyprus. According to EU-Tacis Turkmenistan Advisor, Michael Wilson (please protect), Polimeks sponsored a trip for Turkmen officials to study advanced airport construction technology in Cyprus, visiting Polimeks' airport renovation projects on January 25-27. The Turkmen officials who traveled included Deputy Chairman for Transportation and Communications, Nazarguly Shagulyev; Deputy Chairman for Energy, Industry, Construction, and Motor Transportation, Deryageldi Orazov; Minister of Construction, Shamuhammet Durdylyev; and Chairman of Turkmenistan Airlines, Gurbanyaz Tirkishov. ¶10. (C) COMMENT: Although Uygun maintained that he did not know about Polimeks' construction activities, he mentioned that the company also renovated the Cabinet of Ministers building and that it is building a new cement factory in Jebel. He said several times that Polimeks does not have any secrets, but it is clear that he keeps his cards close to his vest. He demurred to say how much the Olympic Village project is worth, how many students receive scholarships, and how much the company spent to renovate the Supreme Council for Science and Technology building. He mentioned that Polimeks does not communicate with the other prolific builder of high-profile government buildings, the French firm, Bouygues (Ref. B) -- which is even more private than Polimeks. He also said that, "we believe in this President ... we believed in the former President, and we believe in this President," which sums up one secret to the success of this company. END COMMENT. MILES