Tag Archives: business

Bomdardier-Azerbaijan corruption trial begins

SEPT. 5 2017 (The Conway Bulletin) — The trial started in Stockholm of Evegny Pavlov, a 37-year-old Russian national, who is accused of bribing Azerbaijani officials in 2013 to win a $340m contract for Canadian train maker Bombardier.

Mr Pavlov was head of the Baku office of Bombardier, reporting to the company’s Europe office in Stockholm when it won a contract to replace and install train signals across Azerbaijan.

It had partnered with an unknown Azerbaijani company called Trans-Signal-Rabita to win the contract. Trans-Signal-Rabita was owned by employees of the Azerbaijani ministry of transport awarding the contract.

His lawyers have argued that he was too junior to influence the process and that any corruption issues lie higher up. Bombardier has denied any wrongdoing.

Five other Bombardier employees have been described as suspects, including Peter Cedervall, a senior official in the Stockholm office.

ENDS

(News report from Issue No. 342, published on Sept. 7 2017)

THE BRIEFING: Kazakhstan opens nuclear fuel bank

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SEPT. 7 2017 (The Conway Bulletin) — >> Kazakh President Nazarbayev opened a nuclear fuel bank this week. What is this and what does it mean?

>> A nuclear fuel bank is a secure building that holds low-enriched uranium that can be used to make power. The nuclear fuel bank that has just been opened by Nazarbayev is run by the International Atomic Energy Agency (IAEA). This means that it is different from others around the world as it is supposedly run by a neutral agency and not by single country.

>> Okay. But why is this important?

>> Nuclear power is a highly politicised form of energy. Nation states have their own agendas and the IAEA-controlled nuclear fuel bank is an attempt to reassure smaller nations that there is an independent supply of low–enriched uranium that they can access if they need to. The IAEA wants to promote nuclear power but it also wants to limit the number of countries that have the capability to enrich uranium. Low-enriched uranium can be used to produce electricity but high-enriched uranium can be used to produce weapons.

>> So what has Kazakhstan got to do with all this?

>> Nazarbayev wants to place Kazakhstan at the vanguard of a drive to make nuclear power around the world safer. He gave up an arsenal of nuclear weapons left over by the Soviet Union when it collapsed in 1991. Since then he has also encouraged Kazakhstan to become the world’s biggest producer of raw uranium. Offering Kazakhstan as a location for an IAEA-controlled nuclear fuel bank was a logical step for him. The fuel bank is located in the east of the country near to the USSR’s former nuclear test site.

>> Who paid for this and should we expect a queue of countries looking to access the low-enriched uranium held in the IAEA’s fuel bank?

>> US billionaire Warren Buffett put in $50 million, the US put up nearly $50 million, the EU around $29 million, Kuwait and the UAE $10m and Norway $5m. Kazakhstan paid in $400,000. It’ll take a year to fill with low-enriched uranium, there is nothing in it at the moment, but even when it is operating don’t expect a queue of countries looking to access it. It is considered a reserve of last resort if a country can’t buy low-enriched uranium on the market. It still has to pass various safety protocols, though. Other nuclear fuel banks, including one next door in Russia that opened in 2010 with IAEA backing, have never been used.
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(News report from Issue No. 342, published on Sept. 7 2017)

Oil shipments through Georgia’s Batumi port fall

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SEPT. 1 2017 (The Conway Bulletin) — Oil shipments through the Georgian Black Sea port of Batumi have fallen by a third this year, a port official told Reuters. The port is a major hub for the region’s economy and a large drop in oil shipments, most arrive on trains from Baku, could suggest a slowdown. The port is operated by Kazakh oil and gas company Kazmunaigas. In total, Batumi port processed 1.472m tonnes of crude and refined oil in the first eight months of the year, down from 2.227m tonnes.

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(News report from Issue No. 342, published on Sept. 7 2017)

Explosion kills three Kazakh coal miners

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ALMATY, AUG. 31 2017 (The Conway Bulletin) — — A methane gas leak triggered an explosion at a mine in central Kazakhstan, killing three coal miners in the worst Kazakh mining accident since 2008 when 30 people died in a blast.

The Kazakhstanstkaya mine is located near the city of Karaganda and is reportedly owned by the steel works at nearby Timirtau. The steel factory is owned by Luxembourg-based ArcelorMittal.

The reputation of ArcelorMittal’s factory has fallen over the last few years as it cut jobs. This was partly linked to a global economic downturn and partly a result of international sanctions on Iran, a core client.

The factory now employs around 12,000 workers, down from 15,000 only a few years ago. It had also tried to cut staff salaries, although this effort was rebuked.

Kazakhstan has a patchy record for coal mining safety. As well as the 2008 accident, a monorail accident last year also killed three miners at another coal mine owned by ArcelorMittal. In 2006, 41 miners in Kazakhstan died in a methane blast.

ENDS

(News report from Issue No. 342, published on Sept. 7 2017)

International Bank of Azerbaijan issues debt 3 months after default

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SEPT. 1 2017 (The Conway Bulletin) — Azerbaijan’s troubled IBA bank issued several new Eurobonds, the final part of a restructuring plan for $3.3b of debt that has angered its foreign creditors.

Reuters reported that IBA had issued a $1b Eurobond due in 2024 with a 3.5% coupon and that it had issued seven other new Eurobonds, due between December 2017 and September 2032, with an additional total value of $2.266b.

The reaction to the debt issue from foreign buyers was mixed with some welcoming IBA’s return to the market but others warning that there has been little structural changes in the Azerbaijani banking sector and that a repeat of the debt default was a real possibility.

In a statement, Khalid Ahadov, Chairman of IBA, said: “The successful closing of the restructuring process earlier today is a key step in the Bank’s plan to ensure its long-term viability.”

He also said that the bank planned to transfer bad assets to the state’s bad debt vehicle Aqrarkredit. “The combination of these two transactions will restore the Bank’s capital position, provide the Bank with the necessary financial strength to implement its business plan,” he said.

Traders in London told Reuters that demand for the IBA Eurobonds had been strong. In May, IBA had suddenly said that it was going to default on debt repayments. It pushed through a restructuring plan that effectively forced its creditors to take a 20% cut in their investments. At the time, debt holders said the restructuring plan had caused massive damage to Azerbaijan’s reputation as a place to invest.

ENDS

(News report from Issue No. 342, published on Sept. 7 2017)

Starbuks opening in Ashgabat is fake news

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AUG. 25 2017 (The Conway Bulletin) — Hundreds of people were taken in by images that appeared to show that Starbucks, the US coffee shop chain, had opened up its first store in Turkmenistan (Aug. 25).
Various pictures showed young Turkmen drinking coffee at what looked like a Starbucks coffee shop in Ashgabat.
The fake news appears to have been spread initially by a little-known website called http://www.atavatan-turkmenistan.com.
The original post said that Starbucks had opened in a shopping mall ahead of the Asian Indoor and Martial Arts Games which opens later this month.
Starbucks has only just opened its first stores in Kazakhstan, Central Asia’s economic powerhouse, and has not announced any plans to open in Turkmenistan or anywhere else across the region.
Neither the Turkmen government nor Starbucks have commented on the fake news.

ENDS

(News report from Issue No. 342, published on Sept. 7 2017

Nazarbayev opens nuclear fuel bank

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ALMATY, AUG. 29 2017 (The Conway Bulletin) — Kazakh President Nursultan Nazarbayev opened the first nuclear fuel bank owned and managed by the International Atomic Energy Agency (IAEA).

The low-enriched uranium fuel bank based at the Ulba Metallurgical Plant in Oskemen will be the first independently-managed supply of fuel for nuclear power stations. It will take a year to stock the plant with low-enriched uranium.

For Mr Nazarbayev the opening of the IAEA’s nuclear fuel bank has important inferences, including cementing Kazakhstan’s self-made image as a centre for peaceful nuclear energy.

At the opening ceremony in Astana, Mr Nazarbayev said that the nuclear fuel bank should reduce the risk of nuclear war.

“We are the largest producer of uranium and are ready to play an important role in the world energy,” he was quoted by a government press release as saying.

Over the past 25 years, Mr Nazarbayev has carefully crafted an image for himself as a pioneer of nuclear safety. He voluntarily surrendered an arsenal of nuclear weapons, left over by the Soviet Union after its collapse in 1991, and has pushed Kazakhstan to become the biggest producer of raw uranium in the world. It now has a market share of around 40%.

Some have even suggested that Mr Nazarbayev views the nuclear route as a way of securing a Nobel Peace Prize.

The low-enriched uranium nuclear fuel bank is seen as a resource of last resort for countries that need to secure supplies for nuclear power stations.

ENDS

(News report from Issue No. 342, published on Sept. 7 2017)

Fire destroys chemical factory in Armenia

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AUG. 29 2017 (The Conway Bulletin) — An explosion at a chemical manufacturing plant in Nairit, Armenia, ignited a fire that raged for at least two days. The chemicals plant has been on the verge of bankruptcy for several years, with management sacking two-thirds of the staff en mass in 2015. The plant is currently owned by Samvel Karapetyan, one of Armenia’s richest men, through his company Electric Networks of Armenia. It is unclear if anybody was hurt in the explosion and what caused it.

ENDS

(News report from Issue No. 342, published on Sept. 7 2017)

Workers fight at Astana tower

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SEPT. 2 2017 (The Conway Bulletin) — Kazakh riot police intervened in a fight between foreign workers, identified as Indian by Twitter users, and security guards at the Abu Dhabi Plaza construction site in Astana. It is the second major incident at the site, set to be the tallest building in Central Asia, after a fire earlier this year. The fight also shows the tension between foreign workers brought into Kazakhstan to build major infrastructure projects and locals. Kazakhstan has become something of a magnet for migrant workers in the region.

ENDS

(News report from Issue No. 342, published on Sept. 7 2017)

EBRD extends financing in Armenia

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SEPT. 5 2017 (The Conway Bulletin) — On a trip to Armenia, the European Bank for Reconstruction and Development (EBRD) said it was extending its scheme aimed at boosting lending to women and small and medium-sized businesses. It will lend Araratbank, one of the larger banks in the country, the equivalent of $10m in local dram currency, media reported.

ENDS

(News report from Issue No. 342, published on Sept. 7 2017)