APRIL 27 2017 (The Conway Bulletin) — Foreign investment in Kazakhstan jumped 40% to $20.6b in 2016, compared to 2015, investment and development minister Zhenis Kassymbek told media. The jump was mainly linked to major infrastructure projects in the energy and mining sectors, such as the expansion of the CPC Pipeline.
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(News report from Issue No. 327, published on May 5 2017)
APRIL 28 2017 (The Conway Bulletin) — Kazakhstan’s state-run drug purchasing company SK Pharmacia paid nearly four times more than it needed to for various medicines in 2015 in a corruption scheme that cost the Kazakh taxpayer millions, the state’s anti-corruption unit said. SK Pharmacia has been the focus of a major corruption investigation since the end of last year.
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(News report from Issue No. 327, published on May 5 2017)
APRIL 25 2017 (The Conway Bulletin) — The parliament of the Czech Republic voted to recognise and condemn the killings of Armenians in eastern Turkey at the end of WWI as a genocide, drawing praise from Armenia and scorn from Turkey. Pushing for more countries to recognise the killings as a genocide is a key plank of Armenian foreign policy. Turkey has always denied the killings were genocide and has instead said that they were the result of chaos at the end end of WWI as the Ottoman Empire collapsed.
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(News report from Issue No. 326, published on April 28 2017)
DUSHANBE, APRIL 26 2017 (The Conway Bulletin) — Telia, the Swedish telecoms company, sold its 60% stake in Tajik mobile operator Tcell to the Aga Khan for $27.7m, the first in a series of sales which it plans to extract itself from Central Asia and the South Caucasus.
The final sale price was lower than the $39 agreed in September but for Telia it will be a relief to be rid of a company that it had come to see as a burden.
Last month it accused the Tajik government of effectively blocking the deal after it failed to meet a deadline to give its approval and in January, too, Telia said Tajikistan’s tax authorities had slapped a bogus tax claim against Tcell.
But the main relief for Telia will be in agreeing its first deal to sell out of one of the five companies it part- owns in the region after declaring in February 2016 that the reputational and corruption risk of business in Central Asia and the South Caucasus was too high.
Telia CEO Johan Dennelind underlined this point in a statement. “By divesting Tcell we have now taken a second step in our strategy to leave region Eurasia and we maintain the ambition to complete our exit in 2017,” he said.
Tcell is the biggest mobile network in Tajikistan. The Aga Khan, a major investor in Tajikistan, already owned 40% of Tcell.
Telia is the subject of one of the biggest bribery cases in Western corporate history after admitting that its executives paid hundreds of millions of dollars in 2007 to the daughter of then-president Islam Karimov for access to Uzbekistan’s mobile market.
Swedish media uncovered the bribe, and others paid by Russia’s Vimpelcom, in a series of investigations from 2012, causing major reputational damage to Telia’s brand.
The US and Dutch authorities prosecuting Telia had agreed a $1.45b fine for corruption but Jonas Bengtsson, the company’s General Counsel, also said on April 26 that this was likely to be cut to $1b.
“We have made progress and as a result of our discussions and in light of recent developments to date, we have adjusted our estimate of the most likely outcome and we are therefore changing our provision to reflect the best estimate,” he said.
“The new provision amounts to $1b.”
Telia’s other companies in the region are Ucell in Uzbekistan, Kcell in Kazakhstan, Azercell in Azerbaijan and Geocell in Georgia. It owns these stakes with Turkey’s Turkcell through the Netherlands-registered holding company Fintur.
Telia is in talks to sell its 58.5% stake in Fintur to Turkcell.
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(News report from Issue No. 326, published on April 28 2017)
APRIL 26 2017 (The Conway Bulletin) — Uzbekistan has taken delivery of a second train from Spain’s Patentes Talgo, media reported, scheduled to run along the recently modernised Tashkent to Bukhara route. The first train was delivered in March under a contract worth 38m euro. Each train carries 287 passengers. The Tashkent to Bukhara route is the second major route in Uzbekistan to deploy high- speed trains. Two similar trains have operated along the Tashkent- Samarkand-Karshi route since 2009. New president Shavkat Mirziyoyev has promised to continue his predecessor’s investment in major infrastructure projects such as high-speed railway.
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(News report from Issue No. 326, published on April 28 2017)
APRIL 26 2017 (The Conway Bulletin) — VPS Healthcare, a Dubai-based company, is to team up with the state-run Azerbaijan Investment Company to build a pharmaceuticals plant near Baku, media reported. The plant will be one of three new pharmaceutical plants being built in Azerbaijan. Russian investors started construction of pharmaceuticals plant in 2016 and Iranian investors in January.
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(News report from Issue No. 326, published on April 28 2017)
APRIL 28 2017 (The Conway Bulletin) — Looking to attract investors, Kazakhstan’s deputy health minister Alexey Tsoi travelled to Seoul to talk to healthcare companies about the government’s privatisation plans, media reported (April 18). At the meeting on April 14, Mr Tsoi said that the government planned to privatise large chunks of Kazakhstan’s healthcare system in what he described as a “third wave” of economic modernisation. Kazakhstan’s health system is routinely criticised as underfunded. Mr Tsoi also said that South Korea was one of the biggest destinations for Kazakhs looking for private medical treatment.
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(News report from Issue No. 326, published on April 28 2017)
APRIL 26 2017 (The Conway Bulletin) — On a trip to Tashkent, Turkish foreign minister Mevlut Cavusoglu said that he wanted to see improved ties with Uzbekistan, a boost to new president Shavkat Mirziyoyev who has been trying to woo his neighbours . Relations between Uzbekistan and Turkish had been strained under Mr Mirziyoyev’s predecessor, Islam Karimov, with the Turkish business community in Tashkent, a sizable and influential group, complaining of being unfairly targeted by the authorities.
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(News report from Issue No. 326, published on April 28 2017)
APRIL 25 2017 (The Conway Bulletin) — Surrounded by burly bodyguards, Kazakh president Nursultan Nazarbayev went for a rare walkabout around the area close to Astana’s train station. Official media showed pictures of a relaxed looking Mr Nazarbayev talking to people. Unusually, Mr Nazarbayev decided to go for a dressed-down tie-less look. The 76- year-old likes to portray himself as a man of the people.
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(News report from Issue No. 326, published on April 28 2017)
ALMATY, APRIL 24 2017 (The Conway Bulletin) — Swedish mobile operator Tele2 said that its joint venture in Kazakhstan with Altel in February last year was working out with revenues rising 14% in Q1 2017 versus Q1 2016 on a like-for-like basis.
Tele2 said that a 3% rise in its customer base and an increase in the average spend per user, a key indicator that the Kazakh economy is improving, had driven up revenues. Tele2 owns a 49% stake in its joint venture with Altel, which has around 6.5m subscribers – a 22% market share.
“Although still competitive, the market continued to benefit from higher pricing levels. The JV continued to replace old products with new offerings that offer better support for ASPU growth over time,” Tele2 said in its statement.
Altel is owned by state-run Kazakhtelecom. The joint-venture with Tele2 is seen as a challenger brand to the more established Kcell, part-owned by Sweden’s Telia, and Beeline, the brand name operated by Russia’s Vimpelcom.
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(News report from Issue No. 326, published on April 28 2017)
