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Country Commercial Guides for FY 2000: TurkmenistanReport prepared by U.S. Embassy Ashgabat, Released July 1999 Note* |
Chapter V: Leading Sectors for U.S. Exports and Investment
Part I: Best Prospects for Non-Agricultural Products
A. Sector Rank: 1
Sector Name: Oil and Gas Industry: Exploration, Development, Services, and Equipment
ITA Industry Code: OGS, OGMTurkmenistan has the world's fourth largest known natural gas reserves, after Russia, the U.S. and Iran, with estimated reserves totaling 13 to 21 trillion cubic meters of gas. In 1992, Turkmenistan produced 84 billion cubic meters of gas, but only half of that amount was produced in 1996. Faced with limited export pipeline options and non-paying customers, gas production fell even further in 1997 to 13,284 billion cubic meters. A new but small gas pipeline to Iran built in 1997 currently allows Turkmenistan to export around 3 billion cubic meters of gas per year (although the throughput capacity of the line is 8 billion cubic meters per year). Turkmenistan is actively pursuing a project to construct a pipeline to Turkey via the Caspian Sea, Azerbaijan and Georgia. In February 1999, the Government chose Pipeline Solution Group International (PSG), a joint venture between two U.S. companies, Bechtel and GE Capital, to lead a consortium on development, construction, and management of the Trans-Caspian pipeline. An agreement concerning the sale/purchase of Turkmen natural gas has been signed between the Turkmenistan and Turkey. Turkmenistan is also exploring options for exporting gas to China and Pakistan.
Turkmenistan has significant oil reserves amounting to 6 to 8 billion tons. Turkmenistan produced 6,280 thousand tons of oil in 1998 and around 3,500 thousand tons of oil during the first six months of 1999. There are two oil refineries in the country: the Turkmenbashi refinery and the Seidi refinery. The Turkmenbashi refinery, where most Turkmen oil is being refined to meet domestic needs in petroleum products, is currently being upgraded. The Seidi refinery, which is currently running at from 6% to 8% of capacity, will also be reconstructed.
The GOTX is looking for foreign investment to explore and develop its oil and gas industry and export routes to hard currency markets. Eight oil and gas resource areas have been made available for joint venture projects and production sharing. The Government has enacted a hydrocarbons law and a program on licensing projects on exploration and production of hydrocarbon resources in Turkmenistan; both contain guidelines for licensing oil and gas investment projects, production sharing agreements, and joint ventures with foreign companies.
The Government is also interested in developing offshore oil fields in the Caspian Sea. An international tender for bidding on Caspian Sea offshore oil field development was held in 1997. However, unresolved dispute with Azerbaijan on the Serdar oil field has discouraged the winners of the tender from developing their concessions. Currently, Western Atlas does a geological study of the shallow water area and the Karabogazgol gulf in the Caspian Sea. An international tender on the right to explore and produce oil in the Caspian Sea is expected to be announced by the Government at the end of 1999.
B. Sector Rank: 2
Sector Name: Electrical Energy: Development, Equipment and Services
ITA Industry Code: PGETurkmenistan is self-sufficient in electricity. In 1996, production of electrical power amounted to 10.1 billion kilowatts of electricity; in 1998, Turkmenistan produced 9.28 billion kilowatt-hours. (Reportedly, present capacity is 14 to 17 billion kilowatts annually.) Approximately 15% to 17% of the electrical power produced in Turkmenistan is exported to its neighbors, often in barter arrangements. A new transmission line of 320 kilometers with a capacity of 200 to 500 megawatt-hours stretching to northern Iran (Nebitdag-Aliabad) will be put into operation this year. As part of the energy grid system connecting neighboring countries, the line will permit the export of Turkmen electrical energy to such countries as Turkey, Armenia, Azerbaijan and Georgia.
Turkmenistan has to import its electrical power equipment. The Ministry of Energy and Industry is interested in increasing the capacity and improving the efficiency of electricity production. Also, to expand its electrical power export opportunities, the GOTX is interested in constructing an electrical power line across Afghanistan to Pakistan. Production of electrical equipment, cables, electric bulbs and other products has been planned by the GOTX as well.
C. Sector Rank: 3
Sector Name: Chemical/Mining Industry: Development, Equipment and Services
ITA Industry Code: CHM, MINTurkmenistan possesses significant mineral resources, most of which have not been fully developed. There are 10 chemical enterprises involved in the production of mineral fertilizers, iodine and bromine, carbon, sulfites, gypsum, and other minerals. Most of the chemical production facilities are in need of rehabilitation. The Government considers the upgrade and increase of iodine production and the expansion of carbomide and defoliant production as priority projects.
Mining and other types of chemical manufacturing industries have not been developed in Turkmenistan. To meet domestic needs in various metals and expand export opportunities for domestically processed chemicals and minerals, the GOTX would like to develop such industries as magnesium oxide, aluminum, and mineral fiber production.
D. Sector Rank: 4
Sector Name: Transportation: Infrastructure Construction, Distribution and Services
ITA Industry Code: AUT, APS, CON, TRNThe GOTX has embarked on a large-scale program to upgrade its air, rail and road transportation networks. Since independence, Turkmenistan has built a modern international airport and purchased six Boeing aircraft to service international routes. A second runway designed for heavy aircraft was completed in 1998. Thompson, a French company, has completed installation of air traffic control system at the Ashgabat International airport and was granted a second contract for the installation of air traffic control system in the Turkmenbashi airport by the year 2000.
In 1996, the 300-kilometer Tedjen-Serakhs-Meshed railroad opened, linking the Central Asian states to the Persian Gulf. The 215 kilometer Turkmenabad-Kerki-Kerkichi railway, which will connect the right bank of Amudarya with the national railway network and will end Turkmenistan's dependence on the Uzbek railroad, is being laid by the State Turkmendemiryollary company. As part of this project, the new Kerki railway bridge via the Amudarya river will be erected by May 2000 by the Ukrainian company "Ukrtransstroy". Construction of two more rail connections (Kazanjik-Kizylatrek-Bender Turkmen (Iran) and Turkmenbashi-Yeraliyevo (Kazakhstan)) to link other CIS countries with the Persian Gulf has begun. The governments of Turkmenistan, Uzbekistan, Azerbaijan and Georgia have signed an agreement to upgrade a rail link to the Black Sea. Preparatory work has been done to upgrade the road system including the Ashgabat-Mary and Ashgabat-Turkmenbashi highways, and the Turkmenbashi sea port is planned to be reconstructed.
In 1994, the Government auctioned its late-model public taxicabs, encouraging development of private taxi services. The next step in the privatization of transportation enterprises will include privatization of small enterprises engaged in transportation and repair services. Besides investment in the infrastructure of transportation, the GOTX foresees increased investment in locomotives, aircraft, trucks, and cars into the next century.
E. Sector Rank: 5
Sector Name: Communications: Equipment and Services
ITA Industry Code: TEL, TESTurkmenistan inherited an archaic, deteriorating telecommunications network. In 1994, a U.S. telecommunications consulting firm with funding from TDA developed a 10-year Master Plan for Turkmenistan's telecommunications sector. Based on the plan, the Government has started gradual upgrading of its old communications system by building new digital telephone stations in Ashgabat, Turkmenabad, Nebitdag and Dashoguz. Two German companies, Siemens and Alcatel, are involved in implementation of these projects. These companies have been awarded contracts to construct two more digital telephone stations in Ashgabat, one station in Mary and another in Turkmenbashi.
The Government is also interested in upgrading its telecommunications infrastructure in rural localities, seeking low-interest financing.
Turkmenistan is the site of a 708-kilometer portion of the Transasian-European fiber optic telecommunications line initiated by the European Union. The line extends from Frankfurt, Germany, to Shanghai, China. The Turkmen portion of this line was built by the Iranian Telecommunications Company in 1998.
Development of a telecommunications infrastructure in this country has provided the basis for the development of Internet and other information services. The State Turkmentelecom Company and MCI (USA) have signed an agreement to provide Turkmenistan with direct access to the Internet and a direct telephone connection between the U.S. and Turkmenistan.
F. Sector Rank: 6
Sector Name: Environmental Technology and Services
ITA Industry Code: POLTurkmenistan possesses about 25 billion cubic meters of water resources of which 98 percent is surface water. The Amudarya River supplies 22 billion cubic meters of water annually. Other major rivers are the Murgab, Tedjen and Atrek rivers -- all which dry up during the summer months. All the rivers flow along borders with neighboring countries with which Turkmenistan has signed water sharing agreements.
The Karakum Canal (1,300 kilometers in length) connects the Amudarya River with the western areas of Turkmenistan and provides irrigation water for 1 million hectares of Turkmenistan's estimated 1.77 million hectares of arable land.
Inefficient flood irrigation techniques, heavily silted water and high evaporation rates from the open canal result in widespread salinization and hamper efforts to maximize agricultural production. The Government has expanded acreage under cultivation for wheat production and plans to increase irrigation water supply through the Karakum Canal. To do that, repair of the Karakum Canal is needed. Irrigation pumping systems along the river also need major upgrading.
The Amudarya River is also a primary source of potable water for the most of Turkmenistan. Due to the overuse of chemical and mineral fertilizers in agricultural production and imperfect water collection and drainage system, this river supplies very poor quality potable water. The Dashoguz region is the most vulnerable region of Turkmenistan, suffering ecologically unsafe irrigation and potable water problems due to its proximity to the Aral Sea as well as to the extremely contaminated water of the lower Amudarya.
The significant rise in recent years of the water level in the Caspian Sea has heightened environmental concerns about the oil fields and pipelines in western Turkmenistan.
The Caspian Sea has expanded by as much as 150 meters inland, flooding oil terminals, ports and oil fields, although the GOTX says the Caspian began to recede in 1997.
Non-environmentally friendly drilling techniques and storage facilities used by local enterprises are threatening the area with potential environmental disasters in the coming years. Water and waste treatment are areas where the GOTX sees a significant need for improvement.
G. Sector Rank: 7
Sector Name: Health Care and Medical Industry
ITA Industry Code: MEDAfter the collapse of the Soviet Union, Turkmenistan inherited a health care system which included just one pharmaceutical plant in Ashgabat that produced a few medicines (primarily iodine and analgetic pills) and several clinics and hospitals providing very poor medical services.
The Turkmenderman-Adjanta pharmaceutical plant, a Turkmen-Indian joint venture, was built last year to produce annually up to 75 million capsules for 20 million injections, various ointments, medical salts, and toothpaste.
A mini-plant for infusion solution production was recently commissioned and the Ashgabat pharmaceutical plant has been upgraded. The National Institute of Medicaments was recently created to develop new technology for medicament production based on raw materials available in Turkmenistan. The Institute will be fitted with laboratory equipment and other medical tools to conduct scientific research.
Siemens, a German company, built the International Medical Center in Ashgabat. Almost all other medical cure and treatment facilities existing in Turkmenistan, especially those located out of Ashgabat, require renovation and upgrading. The Government plans to build new clinics and diagnostic medical centers in each province.
Part II: Best Prospects for Agricultural Products, Equipment and Services
Agriculture, especially cotton production, has historically been the country's second largest source of foreign exchange earnings after the oil and gas sector. Turkmenistan used to produce as much as 1.2 million tons of cotton annually. Despite unfavorable weather conditions, outdated equipment, and lack of a water supply, manpower, and key inputs, the 1997 cotton harvest increased to 630,200 tons in comparison with 436,000 tons of cotton harvested in 1996. The Government intends to become self-sufficient in wheat production. In 1997, Turkmenistan produced 707,000 tons of wheat, well below the state production target of 1.2 million tons. 1998 figures state that production reached 1.24 million tons of wheat and 1.5 million tons in 1999. Current consumption is estimated at 1.2 million tons.
Although Turkmenistan produces seasonal fruits, vegetables, rice, wheat and maize, it imports many of its foodstuffs. The food processing industry is extremely underdeveloped. A shortage of modern storage facilities aggravates existing procurement system problems in agriculture.
The Government took its first steps toward agricultural privatization in December 1996. Private farmers were allowed to lease land, and will be able to acquire ownership if they keep using the land for agricultural production and meet output targets. However, these "private landowners" will have no right to sell, exchange or give away the land. Foreigners can only lease land. Various state agricultural associations are gradually transforming their relationships with farmers from state orders to a contract-based system. The government is also interested in distributing plots of land not currently under cultivation to private farmers to develop crop production.
A. Sector Rank: 1
Sector Name: Agricultural Equipment and Services;
Irrigation Equipment and Technology; Dry Land Farming
Technology and Seeds- Harvesting machinery
- Haying and mowing machinery
- Wheel tractors
- Dairy equipment
- Poultry equipment
- Other machinery and partsAmerican companies have already established a strong presence supplying farm machinery, tractors, combines and cotton pickers to replace outdated equipment. These contracts also include provisions for service and spare parts centers. This area will continue to be a promising market.
- Sprayers-agricultural
- Pumps and equipmentOut of 48.8 million hectares of Turkmenistan's territory, 0.04% constitutes arable land of which 70% is irrigated. Inefficient irrigation techniques and equipment have limited Turkmenistan's ability to expand its arable land to increase agricultural production and yields. The Karakum Canal connects the Amudarya River with southern and western Turkmenistan and has been the only source of irrigation water for those regions. There are three water reservoirs built along the Karakum Canal, as well as 115 pumps, dams, dikes and other facilities. Most of the facilities require reconstruction. The Government also plans to implement several projects in irrigation area:
- construction of a new Shorkelskiy water reservoir and two canals in the Zeidskiy water reservoir,
- extend the Karakum Canal to the Kizylkay water reservoir in the Kizylatrek district and beyond to Turkmenbashi, and
- reconstruct the Ozyorniy and Daryalykskiy water collectors.These projects generate opportunities for investment in and sales of pumping equipment, and of irrigation systems and services.
- Planting and fertilizing machinery
- Plows and cultivatorsTurkmenistan has the lowest level of agricultural productivity among all the countries of Central Asia. The necessary investments to develop dry land farming technology and create sound seed stocks have not been made in the past. Now, the country is experiencing a shortage of seeds and modern technologies. The inexperience of private farmers in land cultivation also leads to a failure to increase crop harvests.
In addition, Turkmenistan requires an infusion of new cotton seed stock to ensure the continued quality of its cotton harvest and wheat seeds which will increase yield and be resistant to extended periods of drought. The potential exists for American technology and research to address these needs.
B. Sector Rank: 2
Sector Name: Food Processing and Packaging Equipment- Packaging equipment
- Processing equipmentThe Government wants to develop its agricultural processing facilities to reduce dependence on imported food. The Government has been involved in numerous construction contracts in agriculture and food processing in the past, some of which have not been completed because of financial difficulties. Several projects have been stopped and, as a result, the equipment delivered to Turkmenistan has not been put into operation.
The Government welcomes proposals that include the entire construction/production process for food processing -- from the construction of a manufacturing facility to production to marketing. SAFI would prefer to consider proposals that use local raw materials in the following projects:
- Dairy processing and packaging
- Meat processing and canning
- Sausage production
- Cheese production
- Chicken production and processing
- Fruit and vegetable processing and canning
- Spice production
- Beer production
- Beverage production
- Wine production
- Agricultural waste processing.Part III: Potential Investment Opportunities
Implementation of the projects from the extensive list below will depend on project feasibility and the availability of budgetary resources or private investment:
1. Oil and Gas Ministry
a) Construction of oil and gas pipelines to transport Turkmen natural gas to Turkey, and, eventually, to Europe, Pakistan and China.
- Trans-Caspian gas pipeline construction project (1,800 km) to transport natural gas from eastern Turkmenistan via the Caspian Sea, Azerbaijan and Georgia to Turkey (Erzurum). The projected capacity of the pipeline is 16 to 30 billion cm of gas per year and estimated cost is USD 2 to 3 billion.
- Turkmenistan-China-Japan gas pipeline construction project with a capacity of 30 billion cm of gas per year and estimated cost of USD 11 billion.
- Turkmenistan-Afghanistan-Pakistan gas pipeline construction project is planned to carry up to 20 billion cm of gas per year; estimated cost is around USD 2 billion.
b) Upgrading the Seidi oil refinery to an overall annual capacity of 6 million tons of oil, including diesel fuel hydroprocessing with an annual capacity of 2,000 tons of fuel and utilization of 100,000 tons of gas annually; project estimated cost is USD 300 million.
c) Construction of a gas and chemical production complex in Seidi with an annual capacity of 200,000 tons of polyethylene; project estimated cost is USD 800 million.
d) The GOTX conducted a tender for the development of offshore oil fields in the Caspian Sea. An opportunity for an increase in the export of U.S. oil and gas equipment and services exists.
e) Installation of gas collector at the 94 kilometer Beshkyzyl-Yelkui-Uchadji route; estimated cost is USD 50 million.
f) Rehabilitation of the 42 kilometer Vyshka-Belek trunk oil Pipeline; estimated cost is USD 3 million.
g) Construction of the 135 kilometer Okarem-Vyshka trunk oil Pipeline; estimated cost is USD 11,5 million.
h) Construction of a production facility for the Administration on Capital Repair of Wells under the State Turkmenoil Company; estimated cost is USD 700,000.
i) Development of oil fields at Eastern Cheleken, Northern Erdekli, and Southern Kamyshldja; estimated cost is USD 30 million for each oil field.
j) Rehabilitation of the Shatut, Ekerem, and Nebitlidje oil Fields; estimated cost is USD 50-60 million.
2. Ministry of Energy and Industry
Electrical Energy Projects:
a) Construction of a 1,150 kilometer electrical line across Afghanistan to Pakistan (Mary-Mazari Sharif-Kabul-Peshawar) with a carrying capacity of 500 kilovolts; estimated cost is USD 288 million.
b) Construction of a 220 kilovolt electrical substation in Nebitdag with a capacity of 2x63 megawatts; estimated cost is USD 2 million.
c) Upgrade of the Seidi thermoelectric power generation plant to a capacity of 1x80 megawatts to meet regional demand for electricity; estimated cost is USD 35 million.
d) Construction of a 500 megawatt capacity thermoelectric plant in Kyzylatrek; estimated cost is USD 350 million.
e) Construction of a thermoelectrical plant in Dashoguz with a capacity of 2x125 megawatts; estimated cost is USD 175 million.
f) Construction of three 220 kilovolt substations in Serakhs, Kerki, and Farab with a capacity of 2x63 megawatts; estimated cost is USD 2 million for each substation.
g) Construction of two 500 kilovolt substations in Dashoguz and Seidi with a capacity of 2x167 megawatts; estimated cost is USD 3.5 million.
h) Reconstruction of the Turkmenbashi thermoelectrical plant with a capacity of 1x125 megawatts; estimated cost is USD 62 million.
h) Reconstruction of the Ashgabat electrical cable production plant with a capacity of 5,000 kilometers of cable a year; estimated cost is USD 30 million.
Chemical Production Projects:
a) Construction of an iodine and bromine production plant at the Boyadag field located 55 kilometers from Nebitdag is estimated at USD 15 million. The concentration of iodine is 35 grams per cubic meter and bromine is 380 grams per cubic meter. The projected annual capacity of the plant is from 100 to 250 tons of iodine and 2,000 tons of bromine.
b) Turnkey construction of the Turkmenabad carbomide production plant near the Turkmenabad chemical plant with a capacity of 350,000 tons of carbomide and 333,000 tons of ammonia annually; estimated cost is USD 250 million.
c) Construction of the Mary carbomide production plant with an annual capacity of 1.5 million tons of mineral fertilizers; estimated cost is USD 390 million.
d) Construction of chemical production facilities at the Karabogazsulfate enterprise in Bekdash including:
- magnesium and magnesium oxide production with annual capacities of 5,000 tons of magnesium and 25,000 tons of magnesium oxide;
- epsomite production with annual capacity of 75,000 tons of epsomite;
- caustic soda and chlorine production with annual capacity of 10,000 tons of caustic soda and 9,000 tons of chlorine;
- sulphite and sodium sulphide production with annual capacity of 2,000 tons of each product;
- chemical reagent production with annual capacity of 5,000 tons of reagents;
- non-chlorine potash magnesium production or shenit fertilizer production with annual capacity of 70,000 tons of fertilizers; - lithium carbonate production with annual capacity of 5,000 tons;
- boron magnesium concentrate production with annual capacity of 10,000 tons;
- potassium sulphate production with annual capacity of 50,000 tons;
- magnesium sulphate production with annual capacity of 2,000 tons; and
- sodium sulphate production with annual capacity of 50,000 tons.e) Construction of a potash fertilizer production plant in Gaurdak in Lebap Velayat. Projected annual capacity of the plant will be 150,000 tons of calcinated soda, 50,000 tons of caustic soda, and 30,000 tons of sodium bicarbonate. Project estimated cost is n/a.
f) Construction of a strontium carbonate production plant in the village of Gaurdak, Lebap Velayat, that will produce 20,000 tons. Project estimated cost is n/a.
g) Construction of a methanol, formaldehyde and urea-formaldehyde resin production facility with annual capacity of 100,000 tons of methanol. Project estimated cost is n/a.
i) Construction of the "Extra" salt production facility at the Turkmenabad chemical plant with a capacity of 10,000 tons of salt; estimated cost is USD 2.5 million.
j) Construction of a calcium bromide production facility at the Cheleken chemical plant with a capacity of 1,000 tons; estimated cost is USD 500,000.
Other Industrial Projects:
a) Construction of a pulp and paper production plant in Bezmein with a capacity of 40,000 tons of each product; estimated cost is USD 136 million.
b) Construction of an aluminum production complex in the Mary Velayat includes the following three projects: an alunite mining facility with an annual capacity of 2 million tons of alunite (USD 100 million project cost); an alumina production facility with an annual capacity of 300,000 tons of alumina (USD 250 million project cost); and an aluminum smelter with an annual capacity of 150,000 tons of aluminum (USD 350 million project cost).
c) Construction of a paint production plant in Turkmenabad with an annual capacity of 5,000 tons; estimated cost is USD 7 million.
d) Construction of a ruberoid production plant with an annual capacity of one million square meters of ruberoid; estimated cost is USD 1.5 million.
e) Construction of a school appliance production facility with an annual capacity of 50 conditional sets; estimated cost is USD 16 million.
f) Construction of an immersing pump (ECV-8 and ECV-12 types) production facility at the Mary machine building plant with an annual capacity of 2,000 units; estimated cost is USD 1 million.
g) Construction of a rubber and technical item production facility in Ashgabat with an annual capacity of 50 tons; estimated cost is USD 500,000.
h) Construction of a technological line for assembling washing machines at the Arzuv plant in Ashgabat with an annual capacity of 10,000 units; estimated cost is USD 600,000.
i) Construction of a computer production plant with an annual capacity of 12,000 computers; estimated cost is USD 25 million.
3. State Association for Food Production and Processing
a) Reconstruction of vegetable oil production plants in Bayramali, Turkmenabad and Dashoguz; estimated cost is USD 268 million.
b) Reconstruction of the Ashgabat confectionary factory "Gundogar" to expand production capacity of biscuits and cakes up to 9,600 tons and chocolate up to 5,600 tons; estimated cost is USD 15.6 million.
c) Construction of a margarine and mayonnaise production Facility in Ahal Velayat with an annual capacity of 3,000 tons of margarine and 2,000 tons of mayonnaise; estimated cost is n/a.
d) Construction of a cardboard production facility for meat, dairy and other food products in Ashgabat with an annual capacity of 5,000 tons; estimated cost is USD 10 million.
4. State Association for Bread Production
a) Construction of a grain mill complex in Mary with a daily capacity of 200 tons of grain; estimated capacity is USD 15 million.
b) Construction of an elevator for a raw rice storage in Dashoguz with a daily capacity of 50,000 tons; estimated cost is USD 5 million.
c) Reconstruction of the flour mills with elevators in Turkmenabad and Mary each with a daily capacity of 250 tons of grain; estimated cost is USD 30 million for each mill with elevator.
d) Reconstruction of a mill with an elevator in Dashoguz with a daily capacity of 500 tons of grain; estimated cost is USD 30 million.
e) Construction of a bread production plant in Ashgabat with a daily capacity of 30 tons of bread; estimated cost is USD 10 million.
f) Reconstruction of the Ashgabat Bread Enterprise with a daily capacity of 25 tons of bread; estimated cost is USD 5 million.
5. Ministry of Communications
a) The project on the development of the National Data Transfer Network and reconstruction of the telegraphic net system will cover Ashgabat and the four other velayat capitals; estimated cost is USD 3 million.
b) Development of the 280 kilometer Turkmenabad-Kerki-Gaurdak communications line; estimated cost is USD 3 million.
c) Development of the 260 kilometer Bayramali-Kushka communications line; estimated cost is USD 3 million.
d) Construction of the 130 kilometer Tedjen-Serakhs radio relay line; estimated cost is USD 700,000.
e) Reconstruction of Turkmenistan's radio and television broadcasting stations and ultra-short wave frequency transformers; estimated cost is USD 12 million.
f) Reconstruction and modernization of the postal mail network; estimated cost is USD 5 million.
g) Development of the second phase of the 653 kilometer Ashgabat-Turkmenbashi fiber-optic communications line; estimated cost is USD 24 million.
6. State Company "Turkmenautoyollary" (highway construction)
a) Rehabilitation and expansion of the highway from Turkmenabad to Mary to Ashgabat to Turkmenbashi:
- Ashgabat-Turkmenbashi length: 560 km.
- Ashgabat-Mary length: 352 km. The European Bank for Reconstruction and Development (EBRD) has approved a loan to finance this project; estimated cost is $75 million.
- Mary-Turkmenabad length: 230 km.
b) Construction of a bridge for trains and motor vehicles over the Amudarya River in Kerki.
c) Reconstruction of the Turkmenabad bridge for trains and motor vehicles.
7. State Railway Administration
Construction of four railway lines: Kazanjik-Kizylatrek: length 245 km; Kazanjik-Kizylkaya: length 170 km; Turkmenbashi-Kuulisol-Bekdash: length 400 km.
8. State Steamship Administration
a) Reconstruction of the seaport at Turkmenbashi and moorings at Kuulisol and Ufra. The TDA has funded a feasibility study for a seaport modernization project, and EBRD has approved financing for this estimated USD 30 million project.
b) Construction of a tanker is estimated at USD 11 million.
c) Construction of an oil pier with 235 berths is estimated at USD 700,000.
d) Construction of a floating dock with a capacity of 5,000 tons is estimated at USD 5 million.
9. Khakimlik of Balkan Velayat
Due to GOTX plans to expand oil and gas and other industries' operations in the Balkan Velayat, the issue of improving the water supply has become vital for this region. Caspian Sea water desalinization and purification is considered a high priority for Turkmenistan. To receive detailed information on this project, companies should also approach SAFI.
10. Ministry of Transportation
a) International cargo delivery development (resulting from the agreement to develop transit trade between the ECO member-states). This project will include the purchase of about 200 heavy trucks and service infrastructure development worth $20 million. The extension of a credit line or truck leasing are the financing options being considered.
b) Expansion of Turkmenistan's fleet of dump trucks (resulting from Turkmenistan's need for highway construction and development). The GOTX is interested in purchasing or leasing dump trucks.
c) Construction of automobile service facilities (called Caravan-Sarai) along highways throughout Turkmenistan. This project includes construction of motels, service stations and automobile spare parts stores and the provision of telephone and fax communications, insurance and medical services.
d) Conversion of gasoline-powered vehicles to natural gas with the construction of a natural gas conversion facility with a monthly capacity of 100 to 5,000 vehicles.
e) Construction of a chassis production facility that can assemble vehicles and trucks using universal chassis. The projected annual capacity of the plant is 1,000 to 5,000 light trucks and 500 to 900 medium capacity trucks.
f) Tire rehabilitation facility designed to help meet the country's annual demand for 2 million tires. The Ashgabat automobile repair plant will house a tire rehabilitation shop with an annual capacity of 100,000 tires.
g) Storage battery production development will require purchase of storage battery production technology and equipment to be installed in the Mary automobile repair plant. The projected annual capacity of the equipment is 80,000 batteries. h) Production of automobile spare parts, including windshields, belts and other parts.
11. Ministry of Textile Industry
a) Reconstruction of the Ashgabat silk production plant to increase annual production capacity to 60 tons of raw silk.
b) Reconstruction of the Ashgabat shoe production factory to expand annual shoe production to 3 million pairs.
c) Reconstruction of the Bezmein carpet production plant to increase the annual production capacity to 2.45 million square meters of carpet. A wool washing shop is also needed to process 2,000 tons of wool.
d) Reconstruction of the Nebitdag hosiery factory to increase the annual production capacity to 30 million hosiery items.
e) Reconstruction of the Turkmenabad knitted goods factory to increase the annual production capacity to 12.7 million pieces. The factory plans to produce fabric made of synthetic thread, curtains and laces.
f) Completion of construction of the Seidi cotton fabric factory to produce up to 7,000 tons of cotton fabric annually.
g) Completion of construction of the Yolotan cotton fabric factory to produce annually up to 5,000 tons of fabric annually.
12. State Tourist Corporation
Plans to develop tours, tourist services and recreational facilities are part of the state's program for tourism development. Foreign investments are expected to be the catalyst for this sector. Starwood Hotels and Resorts, Inc., a U.S. company, has become a ten year operator of the Grand Hotel "Turkmen" which includes the Sheraton Grand Turkmen Hotel and the Four Points Ak Altyn Plaza Hotel.
Potential exists for developing a recreational zone on the Turkmen side of the Caspian Sea.
It should be noted that, to date, Turkish construction companies have been the primary competitors for most hotel construction projects implemented in Turkmenistan.
13. Ministry of Health Care and Medical Industry
a) Construction of a medical item production plant in Ashgabat with an annual capacity of 2,300 tons of cotton, 240 tons of tampons, and 470 tons of children's padding; estimated cost is USD 19 million.
b) Reconstruction of liquorice root processing facility at the Turkmenabad liquorice production enterprise "Buyan" with an annual capacity of 300 tons of extract, 50 tons of glycerin, and 100 tons of flavinoids; estimated cost is USD 6 million.
c) Construction of a mini-plant for the production of medical tablets and pills in Dashoguz, Mary, Nebitdag, and Turkmenabad with an annual capacity of 50 million tablets and pills; estimated cost is USD 2 million for each mini-plant.
d) Reconstruction of the Ashgabat chemical and pharmaceutical plant "Saglyk" with an annual capacity of 300 million tablets and 18 million bottles; estimated cost is USD 8 million.
e) Construction of clinics with diagnostic centers in Ashgabat, Dashoguz, Mary, Nebitdag, and Turkmenabad with a capacity of 25 beds in each clinic; estimated cost is USD 20 million.
f) Construction of the Scientific and Research Institute of Oncology in Ashgabat with 250 beds and 300 visiting patients per shift; estimated cost is USD 35 million.
g) Construction of a tuberculosis clinic with 200 beds and a polyclinic for 300 visiting patients per shift in Ashgabat; estimated cost is USD 25 million.
h) Construction of a catgut production facility in Ashgabat with an annual capacity of 2 million ampoules; estimated cost is USD 7 million.
There is considerable foreign competition from the German firm Siemens in the medical equipment and services sector.
U.S. companies interested in the opportunity to export American medical supplies to Turkmenistan should contact the Ministry of Health Care and Medical Industry at the following address:
Mr. Kurbankuli Berdymukhamedov, Minister
Ministry of Health Care and Medical Industry
90 Makhtumkuli Street,
Ashgabat, Turkmenistan 744000
Tel:(993)(12) 35-10-63, 35-58-33, or 35-45-21
Fax:(993)(12) 35-50-3214. Ministry of Agriculture and Water Resources
a) Construction of the Zeid water reservoir with an annual capacity of 2,520 million cubic meters of water; estimated cost is USD 144.7 million.
b) Reconstruction of the Karakum Canal to extend it up to 1,100 kilometers in length and to increase its annual capacity up to 610 cubic meters of water; estimated cost is USD 26.8 million.
c) Construction of the Madau water reservoir in Kizylatrek etrap with an annual capacity of 250 million cubic meters; estimated cost is USD 119.5 million.
d) Reconstruction of pumping station No. 7 at the Karakum Canal for 5,100 hectares with an annual capacity of 6 cubic meters of water per second; estimated cost is USD 80 million.
e) Reconstruction of the Ozyorniy and Daryalykskiy collectors in Dashoguz Velayat at 442,200 hectares; estimated cost is USD 80 million.
f) Construction of a 785 kilometer Trans-Turkmen water collector; estimated cost is USD 427 million.
g) Construction of a pumping station at the Zahmet-Turkmengala machine canal with an annual capacity of 50 cubic meters of water per second; estimated cost is USD 5 million.
h) Installation of a divider unit at the 15th kilometer of the Karakum Canal and the SK-2 canal with an annual capacity of from 400 to 500 cubic meters of water per second; estimated cost is USD 3 million.
i) Construction of the basic structure of the Karakum Canal with an annual capacity of 980 cubic meters of water per second; estimated cost is USD 37.2 million.
j) Construction of two partitioning units at the 326th and 456th kilometers of the Karakum Canal with the capacity of 727 and 580 cubic meters of water per second, respectively; estimated cost is USD 35.4 million and USD 31.9 million, respectively.
k) Project cost for irrigation of 34,000 hectares of land in southwest Turkmenistan; estimated cost is USD 425 million.
l) Reconstruction of the pumping station No. 21 at the Karakum Canal with a capacity of 11 cubic meters of water per second; estimated cost is USD 7.8 million.
m) Reconstruction of the pumping station at the 672nd kilometer of the Karakum Canal with a capacity of 6.7 cubic meters of water per second; estimated cost is USD 12.4 million.
n) Reconstruction of the 270 kilometer south-western branch line of the Karakum Canal with a capacity of 30 cubic meters of water per second; estimated cost is USD 83.7 million.
o) Construction of the Serakhs machine canal in Ahal Velayat with a capacity of 15 cubic meters of water per second; estimated cost is USD 39 million.
p) Construction of pumping stations "Gaurdak-1" and Gaurdak-2" in Lebap Velayat, each with a capacity of 16 cubic meters of water per second; estimated cost is USD 21.6 million.
q) Construction of the Meana-Chacha pumping station with a capacity of 2.25 cubic meters of water per second; estimated cost is USD 31.5 million.
r) Construction of the Bis pumping station with a capacity of 3.45 cubic meters of water per second; estimated cost is USD 15 million.
s) Construction of four pumping stations in Lebap Velayat and two pumping stations in Dashoguz Velayat each with a capacity of 45 cubic meters of water per second; estimated cost is USD 15 million.
t) Strengthening the Murgap and the Tedjen Rivers to prevent flash flooding; estimated cost is USD 35 million.
Comment
The above mentioned projects reflect the GOTX's thinking concerning priority areas. Implementation will be determined by availability of internal budgetary resources and external financing. Nevertheless, U.S. investors should seriously consider appropriate projects in Turkmenistan. The Government of the United States acknowledges the contribution that outward foreign direct investment can make to the U.S. economy. U.S. foreign direct investment is increasingly viewed as a complement or even a necessary component of trade. Nearly sixty percent of total U.S. exports originate with American firms with investments abroad. Recognizing the benefits that U.S. outward investment brings to the U.S. economy, the Government of the United States undertakes initiatives, such as Overseas Private Investment Corporation (OPIC) programs, bilateral investment treaty negotiations and business facilitation programs, that support U.S. investors.
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