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RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
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DE RUEHSL #0112/01 0541615
ZNR UUUUU ZZH
R 231615Z FEB 07
FM AMEMBASSY BRATISLAVA
TO RUEHC/SECSTATE WASHDC 0707
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 BRATISLAVA 000112 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM PREL ETRD ENRG LY LO
SUBJECT: FICO'S LIBYA TRIP A COMMERCIAL SUCCESS 
 
¶1. (SBU) Summary. Prime Minister Robert Fico's February 20-22 
delegation to Libya focused on commercial objectives, 
primarily gaining Slovak military and infrastructure 
contracts in Libya as repayment for Libya's debt to Slovakia. 
 Initial press reports indicate that Libya and Slovakia 
reached preliminary agreements on aircraft repair contracts, 
and made promises of much greater investments down the road. 
Commercial aspects of Fico's visit have received less 
international press attention that the PM's comments on 
Bulgarian nurses (see reftel), but the delegation's 
composition and interests (profiled here) provide insight 
into motives for Fico's comments and his broader foreign 
policy objectives.  End Summary. 
 
Official Side 
------------- 
 
¶2. (SBU) Prime Minister Fico's visit to Libya was officially 
designed to find a means of repayment for Libya's 
communist-era debt to Slovakia, which is estimated at 130 
million USD.  Fico hopes to restructure the debt by securing 
infrastructure and military sales contracts, in many cases 
renewing old Czechoslovak business relationships from 1970s 
and 1980s.  To meet these objectives, he assembled an 
unusually large and high-profile delegation led by Minister 
of Economy Lubomir Jahnatek (to press for new contracts) and 
Ministry of Finance State Secretary Peter Kazimir (to 
renegotiate foreign debt).  The Ministry of Foreign Affairs 
was represented by State Secretary for Economic Affairs Olga 
Algayerova. 
 
Business Side 
------------- 
 
¶3. (SBU) The private business component of the delegation was 
perhaps even more high-powered, representing a range of 
interests including Slovak oil, gas, aircraft repair, general 
military/arms sales, boiler production, water purification, 
and the spa industry.  Aircraft repair companies came hoping 
to secure contracts in return for payment of Libya's debt to 
the GOS; the same might be said for Slovak boiler production, 
water purification, and military sales companies.  The role 
of Slovakia's oil and gas company representatives is more 
nebulous and seemingly political in nature.  Slovak spas have 
been offered as a carrot for Libyan investment.  In any case, 
Slovak companies are eager to access the Libyan market. 
Sources at SARIO (the Slovak government investment agency) 
and the trade company EBD told Emboff that they see Libya as 
Slovakia's strongest growth market in the Middle East for the 
immediate future.  The delegation members are listed below: 
 
- Miroslav Vyboh is General Director and owner of Willing, a 
Zvolen-based military material company specializing in 
anti-tank and anti-aircraft systems, spare parts for ground 
combat vehicles, ammunition and small arms sales, aircraft 
repair, and testing/repair of missiles and rockets.  Willing 
has contracts in over 50 countries, including several with 
Slovakia's Ministries of Defense and Interior.  The company 
also procures materials for the Slovak Ministry of Defense, 
including three rockets from Russia in 2006.  Media sources 
indicate that Willing has already been trading with the 
Libyan government since 2004, but we don't know what it might 
be selling.  Closely connected with Smer, media reports 
indicated that Vyboh needed intervention by Minister of 
Interior Robert Kalinak to pass emergency legislation so that 
he could get a security clearance for the Libya trip.  He had 
been denied clearance twice in the past two years for 
undisclosed reasons. 
 
- Ozskar Vilagi, CEO of Slovnaft, is the most powerful 
businessman in the delegation.  Slovnaft announced prior to 
the trip that it "hopes to partner with Libyan businesses in 
the oil industry," but media speculation suggests that Vilagi 
is accompanying Fico in order to curry favor with the new 
government.  An ethnic Hungarian and executive board member 
of Slovnaft's Hungarian parent company, MOL, Vilagi is 
considered the primary financial backer of the SMK party. 
With SMK out of power, Vilagi has been removed from boards of 
two state industries and a wide range of his private business 
interests are under pressure.  In January, Vilagi struck a 
deal with primary Smer financier Juraj Siroky to sponsor 
Slovakia's hockey leagues.  This trip ban be seen as more of 
the same political maneuvering, but also as a serious attempt 
to seek opportunities to diversify Slovnaft/MOL oil interests 
away from Russia. 
 
- Milan Filo accompanied the delegation as Chairman of 
Eco-Invest, a Slovak holding company owning everything from 
Slovak banks to paper mills to meatpacking.  A business 
partner of Vilagi, in the past year Filo has placed many of 
his associaties on the board of Slovakia's state gas 
distribution company SPP, and was likely really representing 
SPP on this trip.  Strongly connected to Smer party backers, 
 
BRATISLAVA 00000112  002 OF 002 
 
 
Eco-Invest announced it would construct a new pulp factory in 
Russia one week after Jahnatek visited Moscow.  The partial 
owner of 17 Slovak companies, including Markiza TV, Filo is 
increasingly perceived as one of PM Fico's primary 
benefactors.  It is in unclear what SPP or Eco-Invest 
interest in Libya might be. 
 
- Dusan Rychtarik is General Director of Letecke Opravovne 
Trencin, an aircraft repair and manufacturing company which, 
in its pre-1989 form, held long-term contracts with the 
Libyan government.  (Many Slovak air force officers were also 
instructor pilots in Tripoli until the mid-1990s).  LOT would 
like to revive contracts both for repair of aging aircraft 
and for sales of new equipment. 
 
- Jan Brandner is Director of the Letecke Opravovne Banska 
Bystrica branch. 
 
- Stanislav Elias is Director and reportedly partial owner of 
Kupele Bojnice, a Slovak spa.  Embassy sources indicate that 
the GOS has been courting Middle Eastern investment in its 
spa industry as part of the Slovak government's outreach to 
the region's governments and businesses.  In January, the 
Ministry of Economy made a similar sales pitch to a visiting 
Saudi prince.  Historically, Slovak spas have attracted 
clients from Middle Eastern countries, but fewer in recent 
years.  Slovak spa (and sports team) owners are often 
co-owners of other companies, so spa (or sports team) 
ownership can be offered on investor-friendly terms in 
exchange for other business favors. 
 
- Jan Kukucka is a board member for SES Tlmace, Slovak's top 
designer and producer of steam boilers for power and heating 
plants using fossil, liquid and gas fuels.  SES Tlmace 
recently won a major construction contract for building 
boilers in the Chinese Shen Tou Power plant, which is being 
built for Beijing in anticipation of the 2008 Olympics.  SES 
Tlmace is looking for similar contracts in Iraq.  Kukucka 
also accompanied Fico on his recent China trip. 
 
- Milan Spano serves as CEO of EBD, a contracting firm 
appointed by the GOS to coordinate terms of Slovak company 
sales to Middle Eastern companies, particularly Iraq.  EBD 
has had some recent success in identifying Slovak water 
treatment  companies of interest to the Iraqi government and 
related firms.  Spano believes these and other Slovak 
companies have greater potential in Libya, based on the 
country's needs, finances, and security situation.  EBD is 
actually a Florida-based firm and Spano is an American 
citizen, despite his poor English skills. 
 
- Milan Michalik is a Board Member of BEZ Group, a 
diversified Slovak company that purchased a water 
purification system manufacturer in 2006.  BEZ Group has been 
trying to break into the Middle Eastern market for municipal 
water purification, but has not had any visible success thus 
far. 
 
Commercial Results 
------------------ 
 
¶4. (SBU) According to initial Slovak press reports, Libyan 
Prime Minister El Babdadi Ali Mahmudi confirmed on February 
23 that Slovakia and Libya reached preliminary agreement that 
Slovak companies would obtain contracts for repairing Libyan 
airplanes.  The details will be negotiated by experts on both 
sides, and no connection to debt repayment was specified. 
Mahmudi also confirmed Libya's interest in investing up to 50 
billion USD in Slovakia over the next 20 years in the form of 
real estate, tourism/spas, construction and the oil industry. 
 In addition, Libya offered Slovakia the opportunity to bid 
on tenders for various government contracts that reportedly 
total over 30 billion USD.  The specific contracting 
opportunities were not specified. 
 
¶5. (SBU) Comment.  Given the range of Slovak business 
interests who see dollar signs in Libya and the massive 
hypothetical sums being casually discussed, it is not 
surprising that Fico commented on the Bulgarian nurse 
situation as he did.  He wanted to send a message to both 
Kaddafi and Slovak businesses that commercial interests are 
the most important component of his foreign policy, then 
clean up any potential messes with the international 
community afterward.  Since Fico appears to walk away from 
Libya with significant preliminary agreements in hand, it 
will likely strengthen Fico's inclination to believe that 
potential commercial opportunity trumps even rhetorical 
attention to human rights issues during his foreign visits. 
In any case, Slovakia and Libya will likely draw closer 
economically based on Fico's visit.  End Comment. 
 
VALLEE