GERMAN FIRM WORKING WITH TURKMENISTAN -- ALLEGEDLY

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 000272

SIPDIS

STATE FOR SCA/CEN, EEB
AID/W FOR EE/EA

E.O. 12958: DECL: 02/27/2019
TAGS: PREL ECON TRD SOCI TX
SUBJECT: GERMAN FIRM WORKING WITH TURKMENISTAN -- ALLEGEDLY
AT PRESIDENT'S REQUEST

Classified By: Charge Richard Miles, reasons 1.4 (B) and (D).


1. (SBU) SUMMARY: German consulting firm Goetzpartners is
advising the Government of Turkmenistan on economic
development and strategic planning. Sectors of focus include
tourism, textiles, education, and infrastructure. The German
Ambassador claimed that he doesn't know anything about the
agreement between Goetzpartners and the Government, saying
that it is between them and he doesn't want to be involved.
Various well-connected sources in Ashgabat allege that
Goetzpartners became acquainted with President Berdimuhamedov
through mutual friends in Germany, which may be the source of
the Ambassador's reticence to discuss the subject. END
SUMMARY.


2. (U) According to the January 30 edition of official
Russian-language newspaper, Neytralniy Turkmenistan, Dr.
Stephan Goetz of the German consulting company Goetzpartners
briefed President Berdimuhamedov and members of the Cabinet
of Ministers on January 29 on the progress of the company's
work, which is advising Turkmenistan on economic development
and strategic planning. Some examples discussed in glowing
terms in the Neytralniy Turkmenistan article include:

-- Three short-term projects for airport development and
modernization of Ashgabat International Airport "prepared by
the Goetzpartners in partnership with their colleagues from
other leading German companies;"

-- A whole line of large German companies are prepared to
support the future Turkmen-German University project;

-- Great potential of the tourism sector, centered around the
Avaza free tourist zone, especially with the addition of
casinos to the area;

-- Development of a construction materials industry; and

-- Development of a strategic plan to encourage more German
commercial activity in Turkmenistan.


3. (U) Goetzpartners is a corporate finance/management
consultant/mergers and acquisitions firm based in Munich.
According to the company,s website, the corporate finance
arm has concluded deals for Siemens, Virgin Radio, T Systems
Media & Broadcast, and Frankfurter Rundschau.

GERMAN AMBASSADOR RETICENT TO COMMENT


4. (C) German Ambassador Reiner Morell (please protect) told
Political Officer on February 10 that he was not aware of the
details of the agreement between Goetzpartners and the
Government of Turkmenistan. Morell said, &It,s not good to
be involved as the Embassy because the (Turkmen) President
wanted the company to come. It,s between them, (and has)
nothing to do with the German Embassy or (German) Government
and I don,t want to be attached, if it fails.8
(COMMENT: Morell has some experience with not being involved
in Goetzpartners-Turkmenistan Government interactions.
According to Wintershall General Manager, Kal Sandhu
(protect),Goetzpartners, and not the German Embassy, worked
with the Turkmen on preparations for Berdimuhamedov's visit
to Germany in fall 2007. In fact, Morell told the DCM that
he had tried to meet with FM Meredov in the run-up to the
visit, in order to discuss the trip, but the Minister would
not meet with him. END COMMENT.) Morell did say that
Turkmenistan,s relationship with Goetzpartners grew out of
its desire for a &master plan8 on sector development,
including construction material, textiles, tourism,
infrastructure, and some limited work in education, and
continued to discuss many details that the newspaper article
also included. Morell confirmed that work in the tourism
sector will be focused on Avaza, adding that Goetzpartners
recommended that casinos be included in the plan in order to

ASHGABAT 00000272 002 OF 002


add to tourist attractions. Morell thought that the
Turkmen-German University concept is unlikely to come to
fruition because the German higher education system is based
on provincial-level oversight of culture and education,
whereas the Turkmen system is directed by the central
government. Morell said that the company may also be looking
at the energy sector.


5. (C) According to Morell, the company found that the
quality of Turkmen textiles was good but added that the lack
of marketing, and specifically the fact that Turkish
companies are the sector,s sole customers, is a downside.
Turkmen factories are thinking of making samples to market
their goods to other potential clients. He mentioned the
difficulty of creating master plans on certain portions of
development, such as airports. Morell said that he saw
Goetzpartners,s engagement in Turkmenistan as positive
because it means that the President is taking outside advice
on construction, instead of relying on vendors such as
Bouygues and Polimeks, which usually work up plans based on
the President's wishes and then present a bill. Meanwhile,
the Government isn't double-checking proposals with other
vendors and is leaving itself open to getting taken advantage
of.


6. (C) COMMENT: Various well-connected sources in Ashgabat
allege that Goetzpartners became acquainted with President
Berdimuhamedov through mutual friends in Germany. Morell's
suggestion that Goetzpartners advising role is a good one --
because it cuts out Polimeks and Bouygues -- doesn't hold
water. Goetzpartners' role puts the company in an enviable
position to introduce its favored companies to Turkmenistan.
END COMMENT.
MILES