VZCZCXRO3042
RR RUEHLN RUEHVK RUEHYG
DE RUEHDBU #0950/01 2040918
ZNR UUUUU ZZH
R 220918Z JUL 08
FM AMEMBASSY DUSHANBE
TO RUEHC/SECSTATE WASHDC 0810
INFO RUCNCIS/CIS COLLECTIVE
RUEHIL/AMEMBASSY ISLAMABAD 0177
RUEHBUL/AMEMBASSY KABUL 0211
RUEHNE/AMEMBASSY NEW DELHI 0146

UNCLAS SECTION 01 OF 02 DUSHANBE 000950 
 
SIPDIS 
SENSITIVE 
 
DEPARTMENT FOR SCA/CEN 
 
E.O. 12958: N/A 
TAGS: EFIN ECON EAID PGOV PREL TI
SUBJECT: TAJIKISTAN - IMPLEMENTATION OF ENERGY EMERGENCY PLAN IN 
DOUBT 
 
¶1. (U) This message is sensitive but unclassified.  Please protect 
accordingly. 
 
¶2. (SBU) Summary: Recent discussions with the World Bank Dushanbe 
office, and with various government ministries, have revealed that 
the Government of Tajikistan is not implementing plans to avoid 
another winter power emergency in a coordinated fashion, slowing 
progress on an issue which is key to Tajikistan's stability.  End 
Summary. 
 
¶3. (SBU) PolEcon Chief spoke with Jariya Hoffman, World Bank acting 
resident representative on July 18, concerning progress on the 
Government of Tajikistan's Energy Emergency Mitigation Action Plan 
(EEMAP), supported by the World Bank and designed to avoid a 
repetition of last winter's severe energy shortages.  Hoffman said 
the World Bank had not had a resident specialist to monitor 
implementation of EEMAP since April, and was looking for a new 
person to fill this position.  She said she worried that procurement 
of fuel oil, and of electrical distribution equipment to repair 
Tajikistan's dilapidated infrastructure was lagging, and that the 
Government was generally making little progress on implementation of 
EEMAP. 
 
¶4. (SBU) Key elements of EEMAP include stockpiling 30,000 tons of 
"mazut" fuel oil, purchase and installation of a myriad of new 
electrical distribution equipment around the country to reduce 
losses and lower the incidence of system breakdowns experienced last 
winter, improvements to gas distribution to reduce losses, and 
payment of outstanding debts to Uzbekistan for gas, to ensure future 
deliveries of gas from them if needed.  The plan, approved by the 
Prime Minister in February 2008, estimates costs for these measures 
at $20 million.  The World Bank has provided $6.6 million, while 
other donors and the state owned power and gas monopolies are to 
provide the rest.  The Minister of Economic Development and Trade 
was named Chairman of the interministerial commission to oversee 
implementation of EEMAP. 
 
¶5. (SBU) On July 21 PolEcon Chief also met with Deputy Ministry of 
Energy Pulod Muhiddinov, to discuss progress on EEMAP.  Muhiddinov 
said he was largely ignorant of the status of the project, as the 
Ministry of Energy had been cut out of implementation of the plan. 
He said the Ministry of Finance was the authorized government 
structure to handle a $6.5 million World Bank grant to support the 
EEMAP, and that World Bank grant money would be used for fuel oil 
purchase, spare parts for electric networks and switchboards, and 
natural gas purchase.  The Ministry of Finance was responsible for 
conducting tenders for all purchases, but Muhiddinov believed that 
the fuel oil purchase agreement the Finance Ministry had concluded 
was significantly higher than prices the Ministry of Energy could 
find.  He said Finance was agreeing to pay up to $500 per ton of 
fuel oil, when Energy could buy for around $400 per ton [Note: both 
prices much higher than the $300 per ton envisaged in the EEMAP 
document itself]. 
 
ELECTRICITY RATIONING COMING SOON 
 
¶6. (SBU) Muhiddinov said that electricity rationing in Tajikistan 
would begin September 10 or 15, and would apply to the whole country 
except Dushanbe.  When Emboff asked about rationing in Khujand, 
Tajikistan's second city which experienced severe shortages for 
months last winter and spring.  Muhiddinov said the Government would 
try to allow more electricity there than it did last winter.  He 
said that the Tajik Aluminum Company (TALCO), which accounts for 40 
Qsaid that the Tajik Aluminum Company (TALCO), which accounts for 40 
percent of all electricity consumption in Tajikistan, would buy 
electricity from Turkmenistan to avoid having its massive needs 
impact on supplies for the general population.  He predicted the 
next winter would not see a power crisis of the seriousness of last 
winter, noting that the Sangtuda-1 hydropower station was now partly 
operational, and after completion would provide 2.7 Billion Kilowatt 
Hours (KWH) per year, and that water conservation in other 
reservoirs would yield an additional 300-400 million KWH. 
Muhiddinov further predicted that regions outside Dushanbe would 
receive 5 hours per day of additional electricity this upcoming 
winter. 
 
¶7. (SBU) Emboff next called on Deputy Minister of Finance Shavkat 
Sohibov, the Ministry's coordinator for the World Bank grant to 
support EEMAP implementation.  He was bemused to hear that his 
ministry had concluded any procurement deals related to EEMAP, 
whether for fuel oil or otherwise.  Sohibov said the Ministry had 
made no deals, and had just a few days earlier announced tenders for 
procurement of fuel oil, electrical distribution equipment, and 
equipment to improve gas distribution.  He said the three 
beneficiary organizations of the World Bank grant, electrical 
monopoly Barki Tojik, gas monopoly TajikGaz, and Kommunalnoye 
Hoziastvo (communal services), would have to pay the Ministry of 
 
DUSHANBE 00000950  002 OF 002 
 
 
Finance back for their portions of the grant, at no interest and 
over a period of 5-6 years, "so that they don't treat this like a 
present from Santa Claus."  Shibov said the Ministry of Finance 
became the implementing partner of the World Bank because the World 
Bank did not trust Barki Tojik and TajikGaz, but trusted the 
Ministry of Finance to handle the project in a transparent manner. 
He complained that he lacked specialists in procurement and 
engineering to advise him, and said he could not ask for help from 
Barki Tojik and TajikGaz because of conflicts of interest. 
 
¶8. (SBU) Sohibov said he believed that other donors, including Saudi 
Arabia, Kuwait, and Russia, had provided about $4 million to support 
EEMAP, but he did not know what other financing there might be from 
Barki Tojik or TajikGaz.  Sohibov said he had had no contact with 
the interministerial commission chaired by the Minister of Economy 
and Trade to oversee implementation of EEMAP, and was unsure whether 
the commission even still existed. 
 
NO INFORMATION, ALL AROUND 
 
¶9. (SBU) Neither Muhiddinov nor Sohibov could offer any information 
on the repayment of gas debts to Uzbekistan, advising us to ask 
Barki Tojik and TajikGaz for that information.  On July 21 news 
services reported that Uzbekistan had reduced gas supplies to 
Tajikistan from 30,000-40,000 cubic meters per hour to 22,000 cubic 
meters per hour because of non-payment of TajikGaz' $7 million debt 
to Uzbek suppliers. 
 
¶10. (SBU) Embassy contacted the Ministry of Economic Development and 
Trade on July 21 to inquire about their efforts to oversee 
implementation of EEMAP.  Chief of the Department of State Purchases 
 Odina Odinaev told embassy staff that the Government of Tajikistan 
had sent a letter to "the international community" through the local 
UNDP office requesting $25 million for EEMAP.  He said that as of 
April 30, 2008 Tajikistan had received $9 million from various 
donors, including contributions of fuel oil from Iran and 
Kazakhstan.  He said the last meeting the Minister of Economic 
Development and Trade had with the interministerial working group on 
the energy crisis was on May 8, 2008.  Mr. Odinaev professed to be 
unaware of the World Bank's $6.5 million grant to support EEMAP, 
despite its central place in EEMAP planning documents. 
 
¶11. (SBU) Embassy Staff also spoke on July 21 with the First Deputy 
Chairman of Barki Tojik, Mr. Alexei Silantiev.  Silantiev said the 
World Bank and Ministry of Finance were slow to make any decisions 
on procurements for EEMAP.  He said that Barki Tojik had 5,800 tons 
of Kazakh and Iranian mazut, but did not have the money to buy the 
30,000 tons called for in EEMAP, nor the electrical distribution 
equipment called for in the plan.  He opined that since February 
2008 nothing had been done in Tajikistan to get ready for the next 
winter. 
 
¶12. (SBU) Embassy then contacted Abdullo Yorov, Chief Adviser to the 
President on Energy Issues and a former Minister of Energy.  He told 
Embassy staff that he was not aware of the status of implementation 
of EEMAP, and suggested we contact the Ministry of Economic 
Development and Trade. 
 
¶13. (SBU) Comment: That the Government will soon implement power 
rationing to conserve water in hydropower reservoirs is a good sign. 
 But the local World Bank Acting Representative is right to be 
concerned that the Government is not effectively implementing EEMAP. 
 While the World Bank's share of the plan seems to be moving along, 
Q While the World Bank's share of the plan seems to be moving along, 
if slowly, we could get no straight answer from anyone in government 
about the overall status of EEMAP.  Despite the harsh experience of 
last winter, Tajik officialdom's winter emergency planning seems 
based on hope rather than on coordinated preparation.  As matters 
appear now, we are headed for another appeal for a massive bailout 
from the GOTI when things get rough this winter.  End Comment. 
 
Jacobson