FEB. 23 2014 (The Conway Bulletin) — The Asian Development Bank (ADB) plans to approve a $45m loan next month to finance the reconstruction of road and bridges along the Georgian border, Azerbaijani media reported. The ADB has been instrumental in pushing ahead plans to rebuild Azerbaijan’s Soviet-era infrastructure.
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(News report from Issue No. 173, published on Feb. 26 2014)
FEB. 24 2014 (The Conway Bulletin) — Turkmenistan has begun constructing a gas chemical complex on the shores of the Caspian Sea, media reported. Turkmenistan has grown wealthy from natural gas sales over the past few years and is trying to boost its domestic industrial base.
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(News report from Issue No. 173, published on Feb. 26 2014)
FEB. 25 2014 (The Conway Bulletin) — Kazakhstan may experience fuel shortages this year, media quoted Sauat Mynbayev, head of Kazmunaigas, as saying. Kazakhstan’s three oil refineries are being upgrading, reducing their capacity and forcing the authorities to import fuel from Russia. The currency devaluation has made fuel imports expensive.
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(News report from Issue No. 173, published on Feb. 26 2014)
FEB. 20 2014 (The Conway Bulletin) — Kaspi Bank’s chairman, Mikhail Lomtadze, said customers withdrew 40b tenge ($216m) from their accounts after SMS messages wrongly claimed the Kazakh bank was going to collapse after the devaluation of the Tenge earlier this month. Mr Lomtadze said this equalled roughly a tenth of all the savings in Kaspi Bank.
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(News report from Issue No. 173, published on Feb. 26 2014)
FEB. 23 2014 (The Conway Bulletin) — Uzbekistan’s government has allocated another $280m to the construction of a railway line linking the Ferghana Valley to the rest of the country, media reported.
The loan from the Uzbek Reconstruction and Development Fund to Uzbekistan Railways is to be specifically spent on mining machinery needed for the project.
It’s an ambitious project designed to allow trains to cross — over and under — the mountains straddling the Ferghana Valley with the rest of the country.
It’s also important, not only for reducing journey times, but also politically. Currently the main road linking the Ferghana Valley to the rest of Uzbekistan is often closed during winter because of snow, forcing people to travel through Tajikistan. Uzbekistan’s relations with Tajikistan are strained.
Although the Uzbek government has offered some cash for the project, much of the funding is coming from China. This is revealing. China has becoming increasingly active in Central Asia through the Shanghai Cooperation Organisation (SCO) military alliance and through funding various projects.
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(News report from Issue No. 173, published on Feb. 26 2014)
FEB. 21 2014 (The Conway Bulletin) — Kazakhstan has banned the sale of Uzbekistan-made GM Daewoo cars, media reported, triggering a potential trade row between the two neighbours.
Officially, Kazakhstan said Customs Union rules stated that imported cars must have at least one front airbag, ABS braking, child safety seat attachment points, daytime running lights and an immobiliser.
Unofficially, the suspicion is that Kazakhstan may be using the Customs Union to protect its own car industry.
The Customs Union has been in existence since 2011. It is led by Russia and so far includes also Kazakhstan and Belarus, although Armenia and Kyrgyzstan plan to join later this year. Uzbekistan has no plans to join.
Its rules and regulations, though, are some-what murky but what we do know is that, by instinct, it is a protectionist organisation.
What is clear is that last year GM-Uzbekistan, which produces its cars at a factory in Andijan in eastern Uzbekistan sold around 23,000 of its cheaper car models in Kazakhstan and around three times that many to Russia.
GM took over the Daewoo factory in Uzbekistan in 2008.
Visitors to Shymkent, a city of 600,000 people in Kazakhstan on the border with Uzbekistan, will notice that many of the cars on the roads being driven there are Daewoo.
Both Uzbekistan and Kazakhstan have been talking up their car industries. Uzbekistan’s main car markets are Russia and Kazakhstan and the GM Daewoo factory is its biggest producer.
Losing Kazakhstan, and Russia, as an export market will be a major blow and have, potentially, far reaching implications.
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(News report from Issue No. 173, published on Feb. 26 2014)
FEB. 24 2014 (The Conway Bulletin) — Looking to boost the flow of oil through its Soviet-era Baku-Novorossiisk pipeline, Russian pipeline monopoly Transneft has offered Azerbaijan a reduced price for using the route, media reported.
Azerbaijan and Russia have been arguing about the price of oil shipments through the Baku-Novorossiisk pipeline over the past few years. Last year, as the row intensified, Russia said it would close the pipeline altogether.
The root cause of the problem is that Azerbaijan has increased the number of export routes it has serving its energy producing fields in and around the Caspian Sea.
Under a 2013 deal Azerbaijan was supposed to pump 5m tonnes of oil through the 1,330km Baku-Novorossiisk pipeline every year at a cost of just under $16/tonne. This volume never happened and the through-flow of oil from Baku to Novorossiisk dropped to about 1.75m tonnes.
At this volume, Transneft had said it would charge $21/tonne of oil, a price the Azerbaijanis quickly rejected.
The row over oil deliveries from Baku to Novorossiisk has strained relations between the two countries. Azerbaijan has still to respond to Russia’s new offer.
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(News report from Issue No. 173, published on Feb. 26 2014)
FEB. 20 2014 (The Conway Bulletin) — Uzbekistan has started the $60m update of its Syrdarya Thermal Power Station, media reported. The Syrdarya Thermal Power Station is one of the biggest in Uzbekistan and is important as ordinary Uzbeks have been complaining of power shortages throughout the year.
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(News report from Issue No. 173, published on Feb. 26 2014)
FEB. 25 2014 (The Conway Bulletin) — In case there was ever any doubt over who is in charge, Armenia’s national gas distributor was renamed Gazprom Armenia from ArmRosGazprom, the company said in a statement. Gazprom, Russia’s gas monopoly, finalised buying the whole of Armenia’s gas network in January.
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(News report from Issue No. 173, published on Feb. 26 2014)
FEB. 17 2014 (The Conway Bulletin) — Azerbaijan’s state oil company SOCAR said that it was expanding its pipeline network in Georgia by 750km. This expansion, the company said, would boost its customer base by 22,000. SOCAR currently operates 1,179km of gas pipeline in Georgia and has 37,500 subscribers.
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(News report from Issue No. 172, published on Feb. 19 2014)