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RR RUEHAG RUEHAST RUEHBI RUEHCI RUEHDF RUEHIK RUEHLH RUEHLN RUEHLZ
RUEHNEH RUEHPW RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHAH #0115/01 0231223
ZNR UUUUU ZZH
R 231223Z JAN 09
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC 2199
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 4741
RUEHBJ/AMEMBASSY BEIJING 2539
RUEHKO/AMEMBASSY TOKYO 2404
RUEHIT/AMCONSUL ISTANBUL 2989
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHVEN/USMISSION USOSCE 3274
RUEAIIA/CIA WASHDC
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RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RUEKJCS/JOINT STAFF WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 ASHGABAT 000115 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN; EEB 
PLEASE PASS TO USTDA DAN STEIN 
COMMERCE FOR PAUL HUEPER 
 
E.O. 12958: N/A 
TAGS: EIND EINV ETRD PGOV LE TU TX
SUBJECT: TURKMENISTAN: INTENSE PACE OF CONSTRUCTION CONTINUES 
 
REF:  (A) 08 ASHGABAT 1399 (B) 08 ASHGABAT 1370 
 
¶1. (U) Sensitive but unclassified.  Not for public internet. 
 
¶2. (SBU) SUMMARY: In 2008, President Berdimuhamedov approved more 
than $1 billion in new construction projects across the country.  In 
the course of the year, foreign construction companies signed 
contracts for a massive Olympic village complex, an ambitious 
cultural complex for the arts, and a variety of other more standard 
residential and infrastructure projects.  There is little doubt that 
construction will continue to be a dominant sector in Turkmenistan's 
economy.  END SUMMARY. 
 
CONSTRUCTION FRENZY TO CONTINUE IN 2009 
 
¶3. (SBU) During 2008, the Turkmen government saw the completion of a 
variety of construction projects across the country.  This included, 
nineteen elite residential apartment buildings, schools and 
kindergartens with multimedia facilities, a kaolin plant, the State 
Commodity and Raw Materials Exchange and a velvet factory.  Most of 
the contracts signed in 2008, including those for the construction 
of residential apartments, a large "oriental market" facility, 
sports complexes, cement plants, museums and cultural centers, 
altogether worth more than USD one billion, will be built in 
Turkmenistan in 2009-2010.  Throughout 2008, President 
Berdimuhamedov appeared to closely monitor the progress of 
construction projects, and made a practice of conducting ad hoc 
review sessions with project managers, occasionally criticizing them 
publicly for failing to meet quality standards and deadlines.  Some 
local residents, observing the pace and breadth of the work, wish 
the government would prioritize infrastructure projects that would 
improve socioeconomic conditions for the population over the less 
relevant sport and recreational projects. 
 
PROJECTS TO PROMOTE A SPORTS CULTURE 
 
¶4. (SBU) "We need to play a bigger role in professional sports, so 
we will build over 200 sports schools for 75,000 pupils, along with 
100 sports facilities in rural areas," Berdimuhamedov said during 
the unveiling of his Olympic village project in October 2008. 
Russian, Turkish and Lebanese companies will build five 10,000-seat 
stadiums each worth $20 million, as well as five modern horse racing 
facilities that hold 3,000 spectators and cost $49 million each. 
The racing tracks will be equipped with amphitheatres, 500-seat 
restaurants and stables for 200 horses. 
 
BERDIMUHAMEDOV'S OLYMPIC DREAM 
 
¶5. (SBU) The idea of creating an Olympic village in Ashgabat was the 
President's own, emerging after his visit to Beijing during the 
summer Olympic Games.  The planned complex will occupy 150 hectares 
in central Ashgabat to include an Olympic stadium, a 
10,000-spectator hockey rink, a special athletic training school for 
350 students and a dormitory for 300 students.  The project 
envisions the refurbishment of the existing Olympic stadium in order 
to boost its capacity from 33,000 to 60,000 people.  The Turkish 
construction company Polimeks, dominant in the local market, 
designed and will oversee this ambitious project, although the 
Lebanese Consolidated Contractors Company will also be involved in 
some of its construction.  The total cost of the village has not 
been published. 
 
SLOW PROGRESS ON AVAZA 
 
¶6. (SBU) Although Berdimuhamedov's ongoing determination to 
establish a national tourism zone on the Caspian coast has been 
progressing very slowly, Turkish companies did begin several new 
projects on the Avaza site and in Turkmenbashy city.  These projects 
include a USD 67 million water desalination plant, a USD 189 million 
water supply facility and a sewage system that will serve Avaza and 
Turkmenbashy city.  A seven-kilometer, USD 180 million recreational 
 
ASHGABAT 00000115  002 OF 002 
 
 
canal that will wind through the tourism zone is 90 percent 
complete.  In 2008, the President established a new Committee on the 
Avaza National Tourism Zone to speed up the pace of its development. 
(NOTE:  On January 16, the committee's chair was fired for 
"shortcomings in his work."  END NOTE.)  Berdimuhamedov recently 
instructed the committee to incorporate the new state yacht 
"Galkynysh" (ref A) into the larger Avaza plan.  He is continuing to 
urge foreign companies to invest in Avaza and has noted that 
Turkmenistan intends to invest nearly USD one billion in the near 
future. 
 
FINE ARTS COMPLEX PLANNED 
 
¶7. (SBU) In January 2008, the Turkish company Sehil won a USD 130 
million contract to build a culture and fine arts complex in 
Ashgabat.  A State Institute of Culture, a special music boarding 
school, a kindergarten for 200 children, a public school for 600 
pupils and three 12-story elite residential buildings are all to be 
completed for the Ministry of Culture and Broadcasting by August 
¶2009. 
 
¶8. (SBU) COMMENT:  The sheer number of construction contracts signed 
in 2008 and the expense of this work leave little doubt that 
construction will continue to play a prominent role in 
Turkmenistan's economy.  Although a significant portion of the work 
will positively impact the general population, there seems to be 
less popular support for expensive prestige projects geared more 
towards the government's idea of boosting Turkmenistan's 
international image.  Since the construction activity relies 
entirely on the continued health of gas export revenues, any slow 
down or curtailment of these prestige construction projects could be 
an indicator of problems elsewhere in the economy.  But for now at 
least, it appears that the construction boom continues unabated. 
END COMMENT. 
 
MILES