VZCZCXRO4680
PP RUEHDBU
DE RUEHNT #0828/01 1160323
ZNY CCCCC ZZH
P 260323Z APR 06
FM AMEMBASSY TASHKENT
TO RUEHC/SECSTATE WASHDC PRIORITY 5634
INFO RUEHTA/AMEMBASSY ALMATY 7843
RUEHAH/AMEMBASSY ASHGABAT 1933
RUEHEK/AMEMBASSY BISHKEK 2458
RUEHDBU/AMEMBASSY DUSHANBE 2361
RUEHBUL/AMEMBASSY KABUL 1438
RUEHML/AMEMBASSY MANILA 0427

C O N F I D E N T I A L SECTION 01 OF 02 TASHKENT 000828 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR SCA/CEN; MANILA FOR AMBASSADOR SPELTZ 
 
E.O. 12958: DECL: 04/24/2016 
TAGS: AF ECON EFIN PGOV PREL UZ EINV
SUBJECT: ADB COUNTRY DIRECTOR ON FUTURE PROJECTS 
 
 
Classified By: CLASSIFIED BY AMB. JON R. PURNELL FOR REASONS 1.4 (B, D) 
. 
 
¶1. (C) Summary: The Asian Development Bank (ADB)released its 
strategy for Uzbekistan that cites difficulties with the GOU 
as a reason for the failure of certain projects.  ADB will 
focus its program funds on technical assistance and 
education.  ADB Country Director told DCM that ADB will 
become the largest donor in Uzbekistan as a result of the 
World Bank's decision to limit its activity in Uzbekistan. 
Systemic conflicts between the GOU and ADB/World Bank on 
procurement regulations have complicated cooperation. 
Uzbekistan has shown interest in developing transportation 
infrastructure in northern Afghanistan, but has failed to 
submit contract bids.  End summary. 
¶2. (C) ADB recently released its Uzbekistan country strategy 
for 2006-2010.  The strategy is based primarily on the 
Country Assistance Program Evaluation (CAPE) report concluded 
in December 2005.  In its evaluation, the ADB found that 
programs in primary education and agriculture were the most 
successful, while vocational and credit line projects were 
the least. 
¶3. (C) In January, ADB held a meeting to discuss the CAPE 
with local embassies and development NGOs.  The overall 
conclusion expressed at the meeting was that the GOU exerts a 
large amount of influence over a project's level of success. 
Not surprisingly, the ADB presenters reported that the GOU 
selects programs for overwhelmingly political reasons. 
Personalities are also key.  For example, the Minister of 
Transportation disliked a particular railway project and thus 
sabotaged it by consistently delaying decisions. 
Representatives of ADB stated that while a regional focus is 
important, the GOU is less likely to sanction trans-border 
projects.  ADB cited the failure of a trans-border energy 
project due to poor Uzbek-Tajik relations.  ADB 
representatives argued development organizations should work 
through their regional offices to coordinate trans-border 
projects, making such processes less transparent to the GOU 
by giving the appearance of a regional focus. 
 
¶4. (C) In speaking with the DCM on April 10, ADB's Country 
Director, Sean O'Sullivan, echoed much of what was said in 
January.  He added that the ADB has a good relationship with 
the GOU and that it should become even better with the recent 
World Bank decision to stop all new lending.  The ADB will 
thus become the largest multinational donor in town.  He said 
that ADB's work with the GOU is simplified by the fact that 
ADB has a strictly economic mandate, not a particularly 
political one such as that of the EBRD.  ADB plans to invest 
300 million USD over the next three years: 100 million USD in 
loans and 200 million USD in technical assistance. 
 
¶5. (C) The DCM asked O'Sullivan if ADB has had problems with 
employees' accreditation or automobiles.  O'Sullivan replied 
negatively.  He mentioned, though, that a GOU employee 
responsible for procurements under an ADB project had 
recently been jailed.  O'Sullivan explained that the World 
Bank and ADB have certain prescribed regulations to assure 
transparency and guard against corruption in procurement 
activities.  Sometimes their procurement regulations appear 
to come into conflict with GOU rules in the same sphere. 
This GOU employee apparently got caught in between trying to 
follow ADB procurement rules, which it seems his bosses felt 
contradicted GOU rules.  O'Sullivan said this is a systemic 
issue that he and the World Bank Country Director have been 
trying, at the policy-level, to work on with several GOU 
ministries.  With the World Bank's recent decision to limit 
its activities to technical assistance, there will be only 
ADB's projects and procurement requests in the pipeline. 
O'Sullivan believes it may become even more difficult to 
persuade the GOU to modify its rules in accordance with the 
ADB's and World Bank's procurement rules, with only him as 
the advocate. 
 
¶6. (C) Asked about ADB efforts to encourage Uzbek-Afghan 
economic and development initiatives, the ADB Country 
Director told DCM about efforts to implement and facilitate 
Uzbek assistance and investment in developing infrastructure, 
particularly the road system of northern Afghanistan.  He 
explained that ADB has the lead in 
constructing/rehabilitating the Mazar-i-Sharif to Sheberghan 
to Herat links of the ring road.  O'Sullivan himself had 
traveled to northern Afghanistan to learn about the project 
to assist him in enlisting Uzbek support.  The Uzbekistan 
road authority had been interested and active in assisting 
 
TASHKENT 00000828  002 OF 002 
 
 
early feasibility studies for parts of this road, including 
bridges.  However, in the end it could not get its act 
together to submit a competitive bid.  The project was bid 
out to others.  O'Sullivan made a point of noting that he had 
bowed out of further involvement in the project for conflict 
of interest reasons, when it looked like the GOU road 
authority might bid.  DCM noted that from time to time we 
hear second-hand of Uzbek interest in assisting feasibility 
studies for extending the rail network in Afghanistan from 
the 12 km railhead at Haireton, which links up with Termez in 
Uzbekistan across the "Friendship Bridge."  O'Sullivan said 
he knew nothing about GOU interest or activity in this area. 
 
¶7.  (C) Comment: The recent WB decision to stop new lending 
to Uzbekistan will in effect make the ADB the only game in 
town.  The ADB already enjoyed a good relationship with the 
government, mainly due to the Bank's willingness to focus on 
GOU priorities while avoiding political discussions.  This 
relationship will likely improve. 
PURNELL