VZCZCXRO6882
PP RUEHAG RUEHAST RUEHBI RUEHCI RUEHDBU RUEHDF RUEHIK RUEHLH RUEHLN
RUEHLZ RUEHPW RUEHROV RUEHVK RUEHYG
DE RUEHAH #1147/01 2961147
ZNR UUUUU ZZH
P 231147Z OCT 07
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC PRIORITY 9587
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 2905
RUEHBJ/AMEMBASSY BEIJING 0726
RUEHKO/AMEMBASSY TOKYO 0602
RUEHIT/AMCONSUL ISTANBUL 1178
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/SECDEF WASHDC
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC
RHEFDIA/DIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHVEN/USMISSION USOSCE 1836

UNCLAS SECTION 01 OF 02 ASHGABAT 001147 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EINV SOCI TU TX
SUBJECT:  MORE CHANGES TO THE FACE OF ASHGABAT, AND TURKMENISTAN 
 
REF: A) Ashgabat 843 
     B) ASHGABAT 1126 
 C) Ashgabat 1064 
     D  Ashgabat 968 
     E) Ashgabat 970 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2. (SBU) SUMMARY:  President Berdimuhamedov has approved $1.8 
billion in construction projects since he became president in 
February.  As additional projects are constructed outside of 
Ashgabat, provincial residents say that infrastructure projects 
should be prioritized over building projects.  Fewer people purchase 
elite apartments due to corruption, even as the number of completed 
apartments increases.  The profile of Turkish company Polimeks, the 
government's new favorite, is rising in the void left by Gap 
Inshaat.  END SUMMARY. 
 
MORE CONSTRUCTION TAKING PLACE 
 
¶3. (SBU) Immediately before departing for New York on September 23, 
President Berdimuhamedov approved 17 construction projects worth 
$216 million that should be completed by the end of 2009.  All 
together, the president has approved nearly $1.8 billion in 
contracts since taking office in February 2007.  Most of the newly 
approved projects, such as four 10,000-person stadiums, four 50-room 
hotels, four 600-person schools, and four 160-person kindergartens, 
are to be built in the provinces.  These projects, in addition to 
previously announced provincial construction projects (Ref A), 
reflect the promises Berdimuhamedov made during his election 
campaign.  However, according to a farmer from Dashoguz province, 
these multi-million dollar projects are built in main towns and are 
not accessible to villagers.  Instead, "building roads and supplying 
families with water would be the best help the government could 
provide us," he said. 
 
TEMPTATION IS TOO HARD TO RESIST 
 
¶4. (SBU) Construction continues booming in Ashgabat.  More than ten 
projects have been completed in honor of the 16th anniversary of 
Turkmenistan's independence.  On October 17, the president 
officially opened the Ministry of Culture and Broadcasting's new 
building.  Although Berdimuhamedov requested a decrease in the level 
of exuberant festivities for these types of events in the first 
months of his presidency, he seems to enjoy them now.  This 
particular opening was an over-the-top extravagance that included 
thousands of students in their best clothes lining the street 
outside the ministry and an exceptional laser light show and 
fireworks display. 
 
POLIMEKS IS A RISING STAR 
 
¶5. (SBU) The Turkish company Polimeks built both the new 
Presidential Apparat building (scheduled to open soon) and the 
Ministry of Culture and Broadcasting.  The construction company for 
numerous buildings in Turkmenistan, Polimeks has the reputation of 
being a steady and reliable partner.  Polimeks seems to have become 
the government's favorite just as another Turkish company, Gap 
Inshaat, no longer holds a key role in the construction industry 
(Ref B).  As a result of a strengthened relationship with the 
president the company's business has expanded:  since February 2007, 
Polimeks has received contracts for nearly $260 million in projects 
in Ashgabat, including a drinking water factory, a high-rise 
oncology medical center (next to the U.S. Embassy housing compound), 
apartment buildings, and another fountain complex (Ref C).  Most 
recently, the company secured a contract for a $68 million 
oil-expeller plant in the model village of Turkmenistan, Ruhabat. 
(NOTE:  Ruhabat is also the home village of the late president, 
Niyazov.  END NOTE.) 
 
¶6.  (U) In addition, Polimeks won on October 20 the first three 
projects of the "Avaza" national tourist zone (Refs D and E) in 
 
ASHGABAT 00001147  002 OF 002 
 
 
Turkmenbashy city, totaling over $510 million.  These projects are a 
$67 million water desalination plant, a $189 million water supply 
and sewage system for the entire city, and a $254 million 
7-kilometer recreational canal winding through the tourist complex. 
Polimeks and Ickale, another Turkish company, will work on the 
latter project jointly. 
 
 
"ELITE APARTMENTS:" NOT FOR EVERYBODY 
 
¶7. (SBU) Various ministries and agencies are to take delivery of 
eight "elite" apartment buildings this month.  On October 19, 
PolEcon assistant attended the opening of an elite apartment 
building for the Ministry of Energy and Industry.  In contrast to 
the high-quality, Western-standard apartments built in recent years, 
the ceilings were lower, the wooden doors were artificial, and room 
layout was awkward.  The building that PolEcon assistant toured 
contained 60 apartments.  If all eight buildings have on average 60 
apartments, this would mean housing for 480 families.  In reality, 
the number of people who can afford these apartments is limited. 
 
¶8. (SBU) One can purchase an elite apartment if he/she has been an 
employee of a particular ministry for five years or longer. 
Ministry employment also entitles a person to a 50-70 percent 
discount and a 15-year 3 percent interest mortgage to cover the 
remaining cost.  Those not employed by a ministry can purchase elite 
building housing by paying the full price, plus so-called 
"overhead."  An Embassy employee's relative, who gave up after three 
years of trying to buy an elite apartment, said: "not only can an 
average family not buy, but it cannot even approach them [elite 
apartments], since they are way too expensive."  Regardless of 
employer, the middle man and bribes are de facto prerequisites for 
anyone wishing to experience life in an elite apartment.  We have 
heard that the well-heeled and well-connected are buying large 
blocks of apartments for investment and speculation. 
 
 
¶9. (SBU) COMMENT: The nearly $1.8 billion in construction projects 
signed during the nine-month period Berdimuhamedov has been in 
office only evidences that more marble is expected to be laid and 
cities in Turkmenistan will become whiter.  Although the 
desalination plant, water supply, and sewage system are 
fundamentally necessary for Turkmenbashy city, the $254 million 
artificial canal is too high of a price to beautify what may be one 
of the white-elephant projects of the century.  Turkish companies 
continue driving the construction industry in Turkmenistan at the 
expense of the development of local construction companies.  Elite 
apartments are unapproachable, unless you have money and good 
connections or lots and lots of money.  END COMMENT. 
 
HOAGLAND