Tag Archives: business

Editorial: Kyrgyzstan’s hydropower troubles

JAN. 22 2016 (The Conway Bulletin) – For Kyrgyzstan, hydropower represents a genuine export opportunity. With the World Bank-sponsored CASA-1000 project, is is developing a market alongside Tajikistan for its power in Pakistan and Afghanistan.

The problem is that it needs huge capital investment to upgrade and expand upon its mainly Soviet-era hydropower plant network. And the pulling out of Russia from the Kambar-Ata-1 plant represents a real step backwards.

This was the $2b project that would have underscored Kyrgystan’s power exports. Now it needs to find an alternative investor.

Of course, China is always there, ready to help out with infrastructure projects in Central Asia, but its economy has been jittery and it may not fancy taking on such a big project. India has been looking to expand its influence into Central Asia but it has focused on oil and gas projects. That leaves Western financial institutions and, in particular, the World Bank. It has pledged to fund half of the $1.2b CASA-1000 costs. It may now have to help Kyrgyzstan out with Kambar-Ata-1.

ENDS

(Editorial from Issue No. 264, published on Jan. 22 2016)

Kazakhstan orders to pay $25m for ditching building plans

ALMATY, JAN. 18 2016 (The Conway Bulletin) — An arbitration court in Stockholm ordered a Kazakh state- owned company to pay €22.7m ($24.8m) to Estonian construction company Windoor for reneging on a building deal in Astana.

The case is important as more and more infrastructure projects in Kazakhstan grind to a halt with the deepening economic slump.

In the Stockholm case, Windoor, which specialises in glass-aluminium structures, filed a lawsuit against state-owned Diplomat Stroi Servis for €18m ($19.7) after it failed to pay for work it had carried out on a conference centre.

In 2012, Windoor and Baltiiski Dom, a Kazakh construction company, agreed a deal to build a 40,000 square metres diplomatic conference centre behind the Kazakh ministry of foreign affairs.

In an interview via email with The Conway Bulletin, Mailis Lintlom, the Windoor chairman, said: “By early 2014, it became clear that the construction of the project was behind schedule and that Windoor would not be able to start the [installation] work of the facade at the agreed time.” In February 2015, in line with the worsening economy in Kazakhstan, Windoor was told that the project had been “frozen”, triggering Windoor’s arbitration action.

At the end of December 2015, the Stockholm court said Diplomat Stroi Servis, owned by the Economic Department of Kazakhstan’s ministry of foreign affairs, will have to pay a €4.7m premium on Windoor’s court claim.

A Kazakh court will have to enforce the payment and Windoor is still waiting for a judicial confirmation of the award.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Yerevan Jur to improve water supplies in Armenia

JAN. 21 2016 (The Conway Bulletin) — Yerevan Jur, a French company managing the water network in Armenia’s capital, said it has launched a new $21.6m programme to improve water supplies. Veolia, a French utilities company listed in New York and Paris, established Yerevan Jur in 2006. International lenders, including the European Bank for Reconstruction and Development, will finance the water network project.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

China lifts grain barriers for Kazakhstan

JAN. 15 2016 (The Conway Bulletin) – China has lifted administrative barriers that had restricted Kazakhstan’s grain exports to its neighbour, Kazakh first deputy PM Bakytzhan Sagintayev told media. He said that the lifting of the various barriers would make it far easier for Kazakhstan to sell grain to China. Grain has become, over the past decade, an important export commodity for Kazakhstan.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

BP invests in pipeline, Georgian gov. says

JAN. 21 2016 (The Conway Bulletin) — British oil company BP will invest $150m in the renovation of the Baku-Supsa oil pipeline, the Georgian government said. BP did not give further details on the pipeline upgrade. The pipeline runs from the Caspian Sea to the Black Sea. Last year, rebels from the Georgian breakaway region of South Ossetia grabbed a portion of the pipeline.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Centerra- part owned by Kyrgyzstan rows over Mongolia license

JAN. 16 2016 (The Conway Bulletin) — Canadian gold miner Centerra Gold, which is part owned by Kyrgyzstan, said it would apply to the International Court of Arbitration over its dispute with the Mongolian government on the development of a gold mine. Centerra has said that the Mongolian government is taking too long to decide whether or not to give it a licence to exploit the mine.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

VimpelCom bribe fine in Uzbekistan

JAN. 17 2016 (The Conway Bulletin) – Russia’s VimpelCom said that it was prepared to pay a $600m for bribes it paid in Uzbekistan to gain access to mobile phone licences. The row is part of a wider corruption investigation centred around bribes paid by international telecoms companies to gain access to Uzbekistan.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Kazakhstan’s ArcelorMittal increases salaries

JAN. 18 2016 (The Conway Bulletin) — Steel-maker ArcelorMittal Temirtau said it would retroactively increase salaries for its workers by 6.8% from Jan.1, 2016. The company, a subsidiary of India’s ArcelorMittal, operates steel plants and coal mines in the Karaganda region in central Kazakhstan. In 2014 and 2015, the company argued with workers and the government over salaries and VAT refunds.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Kazakh tenge depreciation hits revenues at Air Astana

ALMATY, JAN. 18 2016, (The Conway Bulletin) — Kazakhstan’s national airline Air Astana reported a 21% drop in revenues in 2015, a sign that the economic downturn is hurting state- owned companies.

Air Astana was not explicit about exactly what triggered the sharp drop in revenue. In a press release, Air Astana CEO Peter Foster said: “A sharp fall in revenue was more than compensated for by significant cost savings, including, though not limited to, jet fuel savings.”

Revenue in 2015 dropped to $738m. Net profit rose to $47.4m from $19.5m.

An Air Astana spokesperson told The Bulletin that more explanation on why revenues had fallen so sharply would be given in a full year report to be published over the next few weeks.

The suspicion is that the depreciation of the tenge has hit Air Astana hard. Its income is mainly in tenge and its costs in US dollars or euros. The tenge has lost 50% of its value over the past five months.

Air Astana is supposed to lease 7 aircraft from Netherlands-based AerCap, a deal priced in euros. The fall in the tenge makes the deal expensive.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Gazprom Kyrgyzstan pays debt

JAN. 18 2016 (The Conway Bulletin) – Gazprom Kyrgyzstan, a fully-owned subsidiary of Russia’s Gazprom, paid off a $41.6m debt that the Kyrgyz company has owed to its Kazakh counterparts since 2004. Gazprom bought Kyrgyzgas for $1 in 2014, promising to pay off its debts. This deal appears to underline Gazprom’s drive to make good on this promise.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)