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Cablegate: Turkmenistan: Ustda Explores Opportunities

VZCZCXYZ2572
PP RUEHWEB

DE RUEHAH #0303/01 0651139
ZNR UUUUU ZZH
P 051139Z MAR 08
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC PRIORITY 0380
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 3465
RUEHBJ/AMEMBASSY BEIJING 1283
RUEHKO/AMEMBASSY TOKYO 1150
RUEHIT/AMCONSUL ISTANBUL 1719
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEHNSC/NSC WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHINGTON DC
RUEHVEN/USMISSION USOSCE 2287

UNCLAS ASHGABAT 000303

SIPDIS

SENSITIVE
SIPDIS

STATE FOR SCA/CEN, EEB
USTDA FOR DAN STEIN

E.O. 12958: N/A
TAGS: PGOV PREL PINR EAGR ECON EIND ELTN IR TX
SUBJECT: TURKMENISTAN: USTDA EXPLORES OPPORTUNITIES

REF: ASHGABAT 0077

1. (U) Sensitive but unclassified. Not for public Internet.

2. (SBU) SUMMARY: In an effort to explore the potential for
using U.S. Trade and Development Agency (USTDA) programs to
promote U.S. equipment manufacturer sales to Turkmenistan, a
USTDA delegation met with Turkmen Motor Roads State Concern,
the Ministry of Motor Transportation, and the Ministry of
Railway Transportation on February 28 and 29. Ministry
officials discussed upcoming plans for construction, trade,
and industrial development at these introductory meetings,
including some opportunities for U.S. companies to
participate in tenders. USTDA's next step would be to
propose sending a technical specialist to consult with each
ministry's technical staff to assess needs and potential for
assistance. Ministry officials were largely noncommittal,
but as usual, promised to consider all concrete proposals.
END SUMMARY.

3. (SBU) U.S. Trade Development Agency (USTDA) Regional
Director for Europe and Eurasia Dan Stein and Regional
Officer Jamie Merriman conducted a February 27-29 exploratory
visit focused on identifying the potential for using USTDA
programs to promote sales by U.S. equipment manufacturers to
Turkmenistan. On February 28, Stein and Merriman met with
Turkmen Motor Roads Concern Head of International Relations
Nury Taganklychev, Head of Production and Technical Works
Hakim Shamuradov, and Zinaida Sumenkova of the Economic
Department. Shamuradov explained that this agency is
responsible for road construction, as well as repair and
maintenance of existing roads and bridges. Turkmenistan
finances all highway projects internally, at a price of about
four billion manat (approximately $200,000 at the current
commercial exchange rate) per kilometer. Current projects
include the Ashgabat-Turkmenbashy highway (585 kilometers),
the Ashgabat-Karakum-Dashoguz highway (530 kilometers), and
the Ashgabat-Mary-Turkmenabat highway (600 kilometers).
These highways will have three lanes running in each
direction, and will be used primarily to for commercial
transport. Shamuradov explained that factories located in
Dashoguz and Ashgabat manufacture enough asphalt and concrete
to satisfy domestic needs. There are no plans to upgrade
these factories, since they were built recently using German
technology.

4. (SBU) Stein and Merriman met with Ministry of Railway
Transportation officials on February 29: Transportation
Department Head Durdy Chopanov, Economic Department Head
Ahmed Atamammedov, and International Department Head
Shaguliyev. Chopanov asked for details of the USTDA programs
that have been undertaken in Kazakhstan and Uzbekistan, but
made clear that his primary project at hand was the
presidentially decreed international rail line that is to
extend from Western Kazakhstan through Western Turkmenistan
to Iran (reftel). Chopanov noted that the Ministry already
had issued international tenders for its construction, to
include telecommunications work, locomotive equipment,
stations, maintenance, and switching facilities. He said
that the Ministry will build the northernmost two-thirds of
the new rail line. Chinese, Turkish and Russian companies
had expressed interest in bidding on the southernmost third
of the line. Chopanov said that the Ministry is considering
electrification of the railway to get away from diesel
technology. All the information on the Ministry's project
plans is included in the tender announcements, according to
Chopanov.

5. (SBU) Minister of Motor Transportation Gurbanmurat
Hanguliyev said on February 28 that the 300 buses that the
Ministry already purchased from Iran are not enough to fully
stock Turkmenistan's public bus system, and that his priority
is to procure additional buses. Hangulyev noted that only
30% of bus and 20% of taxi services are provided by the
public sector, because many of the vehicles inherited after
the breakup of the Soviet Union were in such disrepair. The
Iranian bus manufacturer is in the process of setting up a
center where its staff will train Turkmen to repair the
buses. The Ministry is negotiating for a fleet of cargo
trucks that will be based in Turkmenbashy. Hanguliyev said
that the Ministry's policy is to purchase vehicles in small
numbers before committing to large purchases to ensure the
equipment is able to operate in Turkmenistan's harsh
conditions. Hanguliyev also mentioned that there is a plan
to construct a major highway parallel to the planned
Kazakhstan-Turkmenistan-Iran rail line. (BIO NOTE:
Hanguliyev was a colleague of President Berdimuhamedov at the
Ministry of Healthcare. END NOTE.)

6. (SBU) COMMENT: The government arranged most of the
meetings on very short notice -- in some cases, with only 15
minutes' lead time -- and most of the officials involved were
clearly unprepared for the discussions. The fact that
officials expressed at least some willingness to consider
USTDA proposals argues in favor of sending a specialist to
conduct a definitional mission. However, construction --
whether of roads, railways, or buildings -- is one of
Turkmenistan's most corruption-ridden sectors, and we may
well find that, even though the president has said he wants
to see U.S. companies enter the construction sector and even
with using USTDA training or development programs as a
sweetener, U.S. companies -- who must operate under rules
that their Turkish, Russian, and Chinese counterparts do not
-- may have a tough time breaking into this already
well-defined market. END COMMENT.

7. (U) Stein did not have an opportunity to clear this cable
but authorized sending it.
HOAGLAND

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