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C O N F I D E N T I A L SECTION 01 OF 04 DUSHANBE 000402 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR SCA/CEN, EB 
NSC FOR MILLARD, MERKEL 
 
E.O. 12958: DECL:  3/1/2016 
TAGS: PGOV ECON EINV TI
SUBJECT: TAJIKISTAN:  AGA KHAN SERENA HOTEL PROBABLY DOWN THE TUBES 
-- "WHO WANTS ON 'OLD-SHOE HOTEL'?" 
 
CLASSIFIED BY: Richard E. Hoagland, Ambassador, EXEC, Embassy 
Dushanbe. 
REASON: 1.4 (b), (d) 
 
 
 
¶1.  (C) SUMMARY:  Prince Amyn Aga Khan visited Dushanbe February 
24 to break ground for the long-awaited Dushanbe Serena Hotel. 
Instead, President Rahmonov and Dushanbe Mayor Obaidulloyev, 
improbable allies for once, probably broke the project for good, 
on camera.  Although this appears to be high-handed, 
authoritarian, capricious idiocy at its worst, it may conceal 
deeper political and financial intrigues on several levels - as 
well as arrogant idiocy.  END SUMMARY. 
 
BACKGROUND 
 
¶2.  (C) At least four years ago, Prince Amyn Aga Khan personally 
negotiated the purchase of a prime piece of real estate in the 
heart of historic downtown Dushanbe (allegedly for at least $1 
million) to be retrofitted and rebuilt as Tajikistan's first 
international-class hotel.  (COMMENT:  Four years ago, $1 
million in Dushanbe would have been significant money.  Now, 
it's smaller change.  END COMMENT.) 
 
¶3.  (U) The Aga Khan Serena hotels are known internationally for 
especially sensitive contextual architecture and first-rate 
management and provision of services.  The property Prince Amyn 
bought was the "Old Shoe Factory," a long-abandoned Soviet 
enterprise, the fagade of which is a near-masterpiece of Art 
Moderne architecture on the half mile of lower Rudaki Avenue 
that has perhaps the finest intact assemblage of restrained 
neo-classical and modernist Soviet architecture in the entire 
former Soviet Union, a stretch of avenue that would be a prime 
candidate for historic-district designation and, thus, a tourist 
magnet in any other part of the world.  Nearby buildings include 
the Soviet neo-classical National Museum, old Central Bank 
headquarters, the original National University building, the 
National Library, the Opera House, several ministries, the 
retrofitted Turkish Embassy, and the Parliament and Foreign 
Ministry. 
 
¶4.  (U) During a February 28 introductory call by new Resident 
Coordinator of the Aga Khan Development Network Munir Merali, 
the Ambassador asked him to comment on the press report (para 14 
below) in which President Rahmonov allegedly "expressed 
dissatisfaction with the architect's activity" and demanded a 
new plan for the hotel. 
 
¶5.  (C) Obviously distressed, Merali explained that renowned 
Indian architect Ramish Kosla had, after prolonged debate with 
the Dushanbe City Architect's office, produced a design that 
would preserve the street-front fagade of the building and plug 
in a non-obtrusive mostly low-rise, multi-bloc 180-room hotel 
behind the fagade. 
 
"HRUMPH!  WHO WANTS AN OLD-SHOE HOTEL?" 
 
¶6.  (C) During the February 24 public ceremony to reveal the 
final plan, Dushanbe Mayor Obaidulloyev circled the maquette and 
architectural renderings for 15 minutes without saying a word 
until President Rahmonov arrived with TV cameras in tow.  With 
cameras rolling, Obaidulloyev turned to Rahmonov and said, 
"Didn't you tell me you wanted all these worthless old buildings 
torn down and replaced with modern architecture with a minimum 
 
DUSHANBE 00000402  002 OF 004 
 
 
of seven stories?  Look at this!  They want to preserve the Old 
Shoe Factory!  Why do we want to remember that?  Even if they 
built it, we'd always call it the 'Old Shoe Hotel'!" 
 
"ARE YOU OUT OF YOUR [BLEEPED] MINDS?" 
 
¶7.  (C) Reportedly, Rahmonov, possibly taken off guard, ad 
libbed his diatribe against the plan.  Prince Amyn, himself an 
architecture aficionado, was scandalized, and began to argue his 
vision for the entire avenue from an esthetic viewpoint.  Merali 
said he whispered to the prince that he shouldn't dispute with 
such senior authorities on camera.  Merali mused to the 
Ambassador, "Why should we build them an anonymous Holiday Inn 
piece of crap?  That's not what Aga Khan Serena does.  It 
wouldn't be financially viable, especially with the glut of 
international hotels planned for Dushanbe.  We'll probably drop 
the project and try to sell the land." 
 
COMMENT 
 
¶8.  (C) There are probably multiple layers of political, 
financial, and inter-personal intrigue at work here. 
Obaidulloyev and Rahmonov, to say the least, are no great 
friends or even political-allies-of-convenience.  Although once 
considered a bitter and dangerous Rahmonov foe, Obaidulloyev has 
reportedly lost some of his invincible mafia-don-like clout 
since his protector and financial compadre, General Gaffur 
Mirzoyev, was arrested in August 2004.  To maintain political 
stability, Rahmonov may tweak Obaidulloyev in public but has 
never been known to out-right contradict him.  To do so could be 
interpreted as the beginning of the end of Obaidulloyev, and in 
a presidential election year Rahmonov probably does not want to 
risk that real political struggle. 
 
¶9.  (C) Rahmonov has never before gone on the record against old 
Dushanbe's historically significant architecture, especially the 
important assemblage along lower Rudaki.  But we know that 
Obaidulloyev has long harbored a desire to tear down the old and 
replace it with the kinds of frou-frou pastiches that pass for 
contemporary architecture in Moscow and Astana.  The first 
example in Dushanbe, now under construction, is the informally 
named "Luzhkov Complex" (named for Moscow Mayor Yuriy Luzhkov 
who is thought to be financing it) on Rudaki, a block from the 
neo-classical parliament building and across the street from the 
Bauhaus-style Old Philharmonic, currently retrofitted as the 
headquarters for Safina TV, Tajik State TV's new cultural 
channel. 
 
¶10.  (C) Some have speculated that Rahmonov may have sided with 
Obaidulloyev on this one for an entirely different reason - his 
visceral reaction against the power of the Aga Khan Ismailis in 
Tajikistan.  The eastern half of the country, Gorno Badakhshan 
Autonomous Oblast, is historically an Ismaili preserve, and the 
Aga Khan is revered there as a sovereign.  Tajikistan has 
allowed the Aga Khan network almost quasi-governmental status 
there because it essentially provides the lion's share of all 
development and even basic social support to the Pamiri people 
of Badakhshan.  In Dushanbe, Aga Khan is building a luxurious 
Ismaili Center, one of only two currently under construction in 
the world, and has just concluded negotiations to construct an 
office tower and "representational complex" adjacent to Oriyon 
Bank, the "first-family bank," on Rudaki.  The current 
conventional political wisdom is that no one dares challenge the 
political power of the "Khan of Tajikistan," and Rahmonov 
instinctively may have decided to side with Obaidulloyev - not 
 
DUSHANBE 00000402  003 OF 004 
 
 
to support Obaidulloyev, but to demonstrate his own political 
power vis-`-vis the Ismailis. 
 
¶11.  (C) There is yet another possible explanation.  The (Basic 
Element-RusAl-Russian Hotels) Oleg Deripaska-financed Hyatt 
Regency, about to break ground for construction, is widely 
believed to be a first-family Oriyon Bank co-project with 
Deripaska.  Some speculate that the Rahmonov family interests do 
not want the internationally recognized Serena chain to compete 
with what in a sense will be the first-family five-star hotel. 
The intriguing, as-yet-unanswered question is how 
Rahmonov-Deripaska got Obaidulloyev to cede the Hyatt building 
site in a major city park - nothing happens in Dushanbe without 
Obaidulloyev's personal stamp of approval. 
 
¶12.  (C) It is a great shame that a Serena Hotel will now likely 
never be built in Dushanbe.  But had it been, it would have 
faced an irrational glut of competition from current or planned 
five-star projects.  The ones under construction are an Indian 
project on Ayni Avenue (at the site of the former Infectious 
Diseases Hospital) that will be a hotel and convention center, 
Deripaska-Oriyon Bank's Hyatt Regency Hotel and Spa for which 
Obaidulloyev ceded half of Komsomolskiy Park for the complex, 
and a rumored Turkish venture that will cover a full city block 
on Rudaki across from the Opera House in one direction and the 
"Luzhkov Complex" in the other direction. 
 
¶13.  (C) Two and a half years ago when the Ambassador first 
advocated in a public forum for an international-class hotel to 
accommodate international investors, Obaidulloyev threatened to 
sue him if he ever again said such a thing in public.  It now 
appears that Dushanbe will soon enough have a surfeit of 
five-star hotels.  Of course, international business is rife 
with towering and often eccentric egos, like Obaidulloyev and 
Rahmonov.  However, bottom-line analysts and squint-eyed 
business sense usually temper the most irrational excesses. 
But, apparently, not yet in Dushanbe.  END COMMENT. 
 
¶14.  (U) BEGIN TEXT OF PRESS REPORT: 
 
[Headline] Rahmonov criticizes SERENA hotel construction project 
DUSHANBE, 24 Feb - Avesta /N. Pirnazarov/. - SERENA hotel 
construction project was presented Friday in Dushanbe. Tajik 
President Emomali Rahmonov, Dushanbe Mayor Mahmadsaid 
Ubaidullaev and Prince Amin Aga-Khan have attended the ceremony. 
Architects from Aga-Khan Foundation have presented the project 
and a model of the future hotel to the president. According to 
the project, the future hotel will consist of three buildings: 
one two-story, one four-story and one nine-story building. There 
will be a banquet hall, business-center and three conference 
halls in the hotel. Several cafes will be built around the 
periphery of the building. Presidential apartments and 
first-class rooms will be located at the second floor. 
According to the project, the construction will be launched this 
year. The first stage of the project will last till 2008. On the 
completion of the first stage the hotel will seat 90 guests and 
the number of seats is expected to be increased up to 150 in the 
future. The project costs $25 million. 
Tajik President has expressed dissatisfaction with architects' 
activity and terms of the project. 
"You have to elaborate a project that would be suitable for us," 
he said. "The first building should have seven floors. This is 
our position." 
There is a mistaken belief that Dushanbe located in seismically 
dangerous area, he said. This is not true and we are going to 
 
DUSHANBE 00000402  004 OF 004 
 
 
build several 26-storey houses in the city. 
Rahmonov expressed dissatisfaction with the elevation of the 
third building of the future hotel. 
"Two years ago we allocated a very good land for the 
construction of the hotel in central Dushanbe," he said. "The 
terms are too long. This should be a hotel, not a king's palace." 
The construction of another two hotels, both will seat 450 and 
250 guests, will be launched in Dushanbe in March. Both hotels 
are expected to be commissioned within one year, Rahmonov said. 
 
END TEXT. 
HOAGLAND