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Tajikistan to open railway to the south

DUSHANBE, JULY 25 2016 (The Conway Bulletin) — Tajikistan has finished building a new railway connecting the capital city with the south, that avoids the headache of passing through Uzbekistan.

The Dushanbe- Kurgan Tyube-Kulob route effectively lifts its southern region out of economic isolation and removes Uzbekistan’s ability to close the route at will and use it as a bargaining tool. The Soviet Union had built Tajikistan’s railway through parts of Uzbekistan to avoid the more challenging Pamiri terrain.

Usmon Kalandarov, deputy director of the Tajik Railways company, said that the railway, which will be opened on Aug. 24, was built with the financial support of Chinese Eximbank.

“The construction of five bridges and three tunnels on this road has been financed by the Chinese bank Eximbank with a loan of 72m somoni ($9.2m),” he said at a press conference.

In 2011, in retaliation for plans to build a dam that would divert water away from its cotton crops, Uzbekistan cut the original railway line. Other than a dangerous and unreliable single road that weaved its way through the Pamir mountains, this effectively cut off the south of the country.

Sardor, a 52-years-old local trader, told The Conway Bulletin correspondent in Dushanbe that he has been waiting for the railway to be finished.

“I bring fruits and vegetables from southern towns to Dushanbe and vice-versa. It is inefficient for me to use trucks, they are expensive and take a long time,” Sardor said as he sold melons. “I think the new railway will be good for me because I will pay less to transport goods, which will not have to go through Uzbekistan and be in trouble like before.”

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Stock market: Nostrum Oil and Gas

AUG 1 2016 (The Conway Bulletin) — Amsterdam-based Nostrum Oil & Gas has posted lower revenues and production in H1 2016, but its share price continued to hold at around 300p because of bullish forward forecasts.

The company’s CEO Kai-Uwe Kessel said that in an era of low oil prices, cost-cutting is paramount. He also said that the company was focusing on building a small pipeline that would reduce its transport costs in 2017.

By focusing on cutting costs, however, the company seems to have been unable to regain either its production or its revenue stream from last year. Both were down by 12% and 41% respectively in H1 2016.

In the company’s statement, Mr Kessel remained confident that Nostrum’s production target will be met by the end of the year.

“We look forward to increasing production throughout the second half of the year to achieve our target 2016 production of 40,000 boepd,” he said.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Chinese and European investors to buy Tajik fertiliser

JULY 28 2016 (The Conway Bulletin) — The Tajik government said that Chinese and European investors have shown interest in buying TojikAzot, a debt-ridden fertiliser plant in the southern province of Khatlon. TojikAzot stopped operations in 2008 when it halted gas imports from Uzbekistan. The company was privatised in 2002, when Ukrainian businessman Dmytro Firtash bought a 75% share in the company. Mr Firtash was later accused of illegally buying the plant and a local court invalidated the privatisation in 2014.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

China pursues Tajik gold

JULY 22 2016 (The Conway Bulletin) — Chinese power engineering company TBEA received a licence to develop the Eastern Duoba and Upper Kumarg gold mines. The company, which won a tender to build a thermal power plant in Dushanbe in 2014, completed exploration works at the two mines in June. Chinese investment in Tajikistan has grown significantly in the past decade.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Kyrgyzstan resists pressure to close Gulen-linked schools

BISHKEK, JULY 25 2016 (The Conway Bulletin) — Kyrgyzstan’s foreign minister Yerlan Abdyldayev shrugged off Turkey’s request to shut down Gulen-linked schools and told Ankara not to interfere in domestic Kyrgyz affairs, in what could spiral into a diplomatic spat between the two allies.

Last week, Turkish foreign minister, Mevlut Cavusoglu, sent a note to Kyrgyzstan asking to close 30 high schools and one university in Kyrgyzstan financed by the Gulenist movement, which Turkish President Recep Tayyip Erdogan has accused of masterminding a failed coup in mid- July.

The Kyrgyz side sent a strong reply, that, while stressing the importance of bilateral relations, rejected Turkey’s demands.

“We believe it is wrong that a minister of foreign affairs of one country instructs another country to take certain steps, especially using a language of ultimatums and blackmail,” Mr Abdyldayev said in his official reply.

The view was reflected on the streets of Bishkek.

“Turkey has no right to interfere in our internal affairs, Mr Erdogan’s issues with the opposition are Turkey’s own problems,” Alexander, 34, told The Conway Bulletin.

Kazakhstan gave a similar response to a similar request from Turkey over the weekend.

The Kyrgyz and Kazakh responses suggest a reduced role for Turkey in Central Asia. Turkey’s influence in Central Asia peaked soon after the break up of the Soviet Union in the mid 1990s. Since the turn of the century, though, it has ceded ground to a resurgent Russia and an ambitious China which has been looking to boost influence over what it sees as its near abroad.

Analysts also said Kyrgyzstan may be unwilling to shut down the Gulen- linked institutions because they were considered relatively high quality.

“Gulen’s education system showed how education can look, and there are many excellent graduates who work in state and private sectors,” said political analyst Mars Sariyev.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

IMF considers loan to Tajikistan

JULY 26 1 2016 (The Conway Bulletin) — Negotiations for a $500m IMF loan are continuing, Jamoliddin Nuraliyev, deputy chief of Tajikistan’s Central Bank told local media. The IMF has scheduled a visit to the country in August to lay out details for the loan. Mr Nuraliyev said that the country needs support to see it through a “difficult economic period.”

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Gazprom Kyrgyzstan repairs pipeline

JULY 26 2016 (The Conway Bulletin) — Maintenance work at the Bukhara-Tashkent-Bishkek-Almaty gas pipeline will result in gas cutoffs in several Kyrgyz towns, the press service of Gazprom Kyrgyzstan said. The pipeline is part of a Soviet-designed system pumping Uzbek gas to Kyrgyzstan and Kazakhstan and the repairs and gas cutoffs show just how antiquated the pipeline network has become.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Kazakh foreign ministry fires drunk diplomat

JULY 25 2016 (The Conway Bulletin) — Kazakhstan’s foreign ministry commented on the firing of an embassy worker in London, who was caught drunk driving last year. The ministry clarified that the unnamed person was not a diplomat, but a technician, who was removed from his post and sent back to Kazakhstan.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Business comment: Centerra’s Good, Bad, and Ugly

AUG 1 2016 (The Conway Bulletin) — This month, Canadian miner Centerra Gold received permission from the Kyrgyz government to continue its operations at the Kumtor gold mine in the east of the country, increased its production guidance and said it will pay out dividends for the second quarter of the year.

Kyrgyzaltyn, which owns 32% in Centerra, will receive $2.3m in dividends.

This will be the first time Kyrgyzaltyn has received a dividend from Centerra since 2014, when a Canadian court froze its assets due to a pending court case. Last week, the Canadian court dismissed the case and this week it released Kyrgyzaltyn’s assets.

By only reading official press releases, the month of July must have been excellent for Centerra and Kyrgyzaltyn.

But there’s more, and it looks ugly in the medium term.

Centerra raised cash through loans and new shares to buy a majority stake in Thompson Creek a US-based miner focused on Canadian gold. The whole operation will be worth $1.1b.

But issuing new shares will anger Kyrgyzaltyn, which will see its stake in the company shrink to around 28.8%. This means less direct revenues from the Kumtor gold mine, which is 100% owned by Centerra. Essentially, the Kyrgyz government wants to bring the gold mine back under its control.

If relations between the Candian miner and the Kyrgyz government do worsen, the fate of the Kumtor gold mine, Kyrgyzstan’s largest mining asset, could become more uncertain than ever.

For both Kyrgyzstan’s economic outlook and also for its reputation as a place to do business, this is not good.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Hollande to visit Kyrgyzstan

JULY 27 2016 (The Conway Bulletin) — French President Francois Hollande told the new Kyrgyz ambassador to France that he is considering a visit to the Central Asian country in the near term, official media reported. Earlier this month, German Chancellor Angela Merkel visited Bishkek, her first to Central Asia. Her stopover in Bishkek en route to a conference in Mongolia was seen as a reward for Kyrgyzstan’s relative democracy.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)