Tag Archives: business

Japanese-Turkish consortium completes chemical factory in Turkmenistan

JULY 8 2016 (The Conway Bulletin) — A Japanese-Turkish consortium said it completed construction at a petrochemical plant in Turkmenistan’s north-eastern Lebap province. Japan’s Mitsui Engineering Shipbuilding, Sojitz Corporation and Turkey’s Renaissance Holding completed the plant, which will have an annual production capacity of 500,000 tonnes of sulphuric acid, used for fertilisers, detergents and synthetic fibres. Most of the plant’s production is earmarked for exports.

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(News report from Issue No. 289, published on July 15 2016)

Kyrgyzstan defends shares in Centerra Gold

BISHKEK, JULY 11 2016 (The Conway Bulletin) — A court in Canada dismissed a notion put forward by three companies and a businessman locked in legal disputes with the Kyrgyz government that would have threatened state-owned Kyrgyzaltyn’s ownership of shares in Toronto-listed Centerra Gold.

The decision is a major victory, after years of wrangling, for Kyrgyzstan which wanted to ringfence a 32.7% stake in Toronto-listed Centerra Gold owned by state gold company Kyrgyzaltyn. It’s also a relief for Centerra Gold, which owns the Kumtor gold mine — Kyrgyzstan’s single largest industrial asset.

The claimants — Canadian miner Stans Energy, Turkish construction companies Sistem and Entes and the Latvian citizen Valeri Belokon — had said that the Canadian court should freeze and seize the stake to enforce other arbitration rulings involving Kyrgyzstan. They said that the shares may be officially owned by Kyrgyzaltyn but that the Kyrgyz state was the beneficial owner.

The judge, Justice Conway, disagreed, though, and ruled that Kyrgyzaltyn and Kyrgyzstan could not be treated as the same entity.

The ruling means that the claimants will have to find other jurisdictions to pursue their legal claims against Kyrgyzstan.

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(News report from Issue No. 289, published on July 15 2016)

Briefing: Tajikistan’s Rogun dam project

JULY 15 2016 (The Conway Bulletin) — >>Right. Let’s get started. The Rogun Dam. What is it and what is it all about?

>>For Tajikistan and President Rakhmon, the Rogun dam project is vitally important. If it is ever built, and the plans have been knocking around since the Soviet era, the Rogun dam will be the tallest dam in the world at up to 335 m. It will also double Tajikistan’s power generation capacity. The problem is that the dam has proved highly controversial, domestically and internationally, and is also expensive to build.

>>Hang on. Slow down. This is a lot take on. So, Rogun is massive but why is it controversial?

>>It’s controversial because human rights group have accused the government of forcibly moving thousands of people away from the Vakhsh River valley, the area that will be dammed and flooded. The government has also imposed a Rogun dam tax on people to pay for the project. This has gone down badly with human rights groups. Externally, Uzbekistan, Tajikistan’s neighbour, hates the idea of the Rogun dam. It worries that the dam will divert water from irrigating its cotton fields.

>>How serious are Uzbekistan’s concerns?

>>Central Asia is a fragile region. If Uzbekistan is making threatening noises
towards Tajikistan, people need to take notice. Analysts and diplomats have spoken of water wars in Central Asia. I’m not saying that the Rogun dam is going to trigger a war but it is another pressure point that people need to watch.

>>Got it. So with all these obstacles and problems why is Tajikistan pushing for problems?

>>It’s become Rakhmon’s pet project. He probably has another five or ten years left in office and it really feels like he wants and needs the Rogun dam to be his legacy. It’s also become vitally important for Tajikistan’s electricity generation sector. Electricity is becoming an important export commodity for Tajikistan as it has signed up to be the main power generator for the so-called CASA-1000 project.

>>CASA-1000? What is that?

>>It’s the World Bank-backed project to build a power transmission network from Tajikistan to Pakistan. It will cost around $1.2b, cross Afghanistan and be operational, if it all goes to plan, by 2019. The challenge is both security and power generation.CurrentlyTajikistan, and to a lesser extent Kyrgyzstan, doesn’t have the capacity to generate enough power to meet its CASA- 1000 commitments. That’s where Rogun comes in.

>>And the financing? This seems to be an expensive project just when the region is trying to deal with a financial crisis. Where is the finance coming from?

>>Good question. We’re not entirely clear. We’ve only been told that it is a mix of government funds and private investment. Who the private investors are and what their motives are is unknown.

>>I see. So what next?

>>Well, the Tajik government awarded a $3.9b contract to Italian builder Salini Impregilo to start construction work on the dam. We’re still waiting for work to begin but Salini Impregilo has said it will kick off soon. This has been a stop-start project so actually seeing the diggers go in and the workers start to build the dam is important. If this does happen, it’ll dominate news headlines for years to come.

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(News report from Issue No. 289, published on July 15 2016)

World Bank denies Uzbek forced-labour accusations

JULY 8 2016 (The Conway Bulletin) — The World Bank denied allegations that it was fuelling forced labour in Uzbekistan after local human rights campaigners complained about the indirect consequences of a loan from the World Bank’s financial arm to an Uzbek-Indonesian textile joint venture.

The complaint targets a $40m loan approved in December 2015 by the International Finance Corporation (IFC) to Indorama Kokand Textile (IKT), the Uzbek subsidiary of Indorama TBK, a Jakarta-based textile company.

The IFC said that it gave the loan to IKT because it has verified the company’s labour practices.

“[IKT] can trace its cotton supply to ensure it sources only from areas covered by third-party monitoring against child and forced labor,” IFC spokeswoman Elizabeth Price told Reuters.

IKT also refuted the allegations.

“Indorama Corporation has a strict policy of zero tolerance on use of any form of forced labor,” IKT spokesman Prakash Kejriwal said.

The claimants are three local human rights campaigners and one Uzbek alleged victim of forced labour. They said that this loan would reinforce the system of forced labour in the country.

“The IFC loan to IKT and support to commercial banks in Uzbekistan risks perpetuating the forced labor system,” the claimants said in their statement filed with the IFC.

The loan was issued to finance the expansion of the company’s textile plant in Kokand, east Uzbekistan.

The claim highlights the reputational problems of doing business in Uzbekistan for foreign countries. It will likely direct international attention to the issue of forced labour in the country’s cotton picking industry. Uzpahtasanoateksport, the state owned company responsible for the collection and the sale of cotton, is IKT’s sole supplier.

Since 2009, the United States has banned imports of Uzbek cotton and in 2013 it blocked a shipment of IKT cotton at the port of Los Angeles.

Indorama TBK owns 89.26% of IKT, while Uzbekistan’s Central Bank owns the rest.

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(News report from Issue No. 289, published on July 15 2016)

Georgia-Russia road link closure hurts Tbilisi tourism

TBILISI, JULY 23 2016 (The Conway Bulletin) — The closure of a road that threads through the Caucasus mountains and connects Georgia to Russia for three weeks because of a landslide has hit tourism in Tbilisi, highlighting the importance of the neighbours’ only direct overland link.

Russian tourism in Georgia has increased steadily over the past eight years since a Georgia-Russia war over the breakaway region of South Ossetia. Many Russians drive to Georgia along the only road directly linking the two countries at the Kazbegi border.

The other two roads linking Georgia and Russia run through South Ossetia and Abkhazia, another breakaway region in Georgia. Both routes are closed off to Georgia.

Giorgi Bregadze, head of the research department at the Georgian National Tourism Administration, told the Bulletin that there had been a fall in the number of Russians crossing into Georgia through the Kazbegi border this year.

“Many Russians have changed their holiday plans because the road was closed,” he told the Bulletin.

And the impact in Tbilisi has been felt immediately.

Bariiat from Dagestan in Russia’s North Caucasus, said that scores of reservations at her guesthouse had been cancelled.

“Our neighbours are all complaining that Russian tourists are not arriving as usual”, she said.

For Russians looking to drive to Georgia for their annual summer holiday the only route is on a long detour via Azerbaijan.

After a two-week vacation in Georgia with his wife, Pasha had to drive back to Lermontov in the Stavropol region of southern Russia.

“Our return journey to Russia through Baku will be 1,000km longer than our outward journey,” he said.

The closure of the Upper Lars checkpoint has not only hit Georgia. Armenia has also complained that goods from Russia have been unable to get through because of the landslide.

Emergency workers have said that they expect the landslide to be cleared next week and the road re-opened.

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(News report from Issue No. 289, published on July 15 2016)

Coriant signs deal with Turkmenistan

JULY 12 2016 (The Conway Bulletin) — US and Germany-based telecoms network provider Coriant said it signed a deal with Turkmenistan’s ministry of communications to provide a new national backbone network for the country. The new network will connect all Turkmen cities and neighbouring countries. In the past, Coriant has also worked in Kazakhstan in partnership with Kazakhtelecom.

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(News report from Issue No. 289, published on July 15 2016)

Power production falls in Azerbaijan

JULY 8 2016 (The Conway Bulletin) — Electricity generation fell by 6% in H1 2016, compared to the same period last year Azerlight, the country’s main producer, said in a statement. The company did not justify the cut in production, which stood at 10.8b kWh. Should this trend continue, it could erode Azerbaijan’s electricity surplus. According to official statistics, consumption, on the other hand, continued to grow exponentially since 2010 at annual rates of 5-9%.

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(News report from Issue No. 289, published on July 15 2016)

Skyland says finds gas in Georgia

JULY 8 2016 (The Conway Bulletin) — Australia’s Skyland Petroleum said it started production at Block XIG, a gas field 10km south of Tbilisi. Skyland owns 20% of the project, Georgia Oil and Gas (GOG) owns 60% and state-owned Georgian Oil and Gas holds the rest. Last month, Skyland said it started operations at its first well at the Kyzyl-Tumshuk oil and gas field in southern Tajikistan.

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(News report from Issue No. 289, published on July 15 2016)

Kalashnikov opens store in Georgian capital

TBILISI, JULY 11 2016 (The Conway Bulletin) — Russian arms manufacturer Kalashnikov has opened its first shop outside Russia in a Tbilisi shopping mall, selling guns and accessories from both the Kalashnikov range and the Baikal hunting range.

Kalashnikov, which is 51% owned by Rostec, a Russian defence sector state holding, had not sold civilian firearms to Georgia in a decade, the company said.

“In the next five years, we are looking to boost deliveries of civil arms to Georgia,” Kalashnikov’s marketing director, Vladimir Dmitriyev said in a press release.

Relations between Russia and Georgia have slowly improved since former President Mikheil Saakashvili lost power in 2013 and the new government moved towards reconciliation after a war in 2008 exacerbated tensions in the breakaway regions of South Ossetia and Abkhazia.

The new store said it will sell hunting and sports arms. The company is looking to brush off the old Soviet-era heritage and build a more modern, branded look. Last year, it opened 20 new shops across Russia and plans to enter Kazakhstan in 2017. Kalashnikov is one of Russia’s most recognisable brands.

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(News report from Issue No. 289, published on July 15 2016)

ADB agrees $750m loan to update Azeri power

JULY 12 2016 (The Conway Bulletin) — The Asian Development Bank (ADB) said it will lend $750m to Azerbaijan to co-fund improvements to the country’s outdated regional power distribution systems.

The project, worth around $1b, aims to refurbish the distribution network and the efficiency of Azerishiq (Azerlight), the state-owned power distribution company.

Azerbaijan’s government will invest the remaining $250m. The ADB said that it will send its $750m loan in three tranches of $250m.

“This ADB program will help address the bottleneck in electricity supply and provide round-the-clock and reliable electricity to households and entities in secondary cities and rural areas in Azerbaijan,” Sean O’Sullivan, director general in ADB’s Central Asia Department, said.

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(News report from Issue No. 289, published on July 15 2016)