Page 3 of
3 Tajikistan struggles for
power By John Helmer
point between every promise to
invest, and the delivery of the cash.
Norsk Hydro, the Norwegian
state-controlled aluminum producer, finds itself
painfully caught in this fork. On the one hand,
executives of the company, professional aluminum
makers and traders, have been saying among
themselves that they fear a resumption of contract
relations with Rahmon and Talco, because
of
the broken promises that litter the recent past.
In 2005, Hydro sued Talco in London for
contract violations and default on
aluminum-delivery obligations; it won an award of
$150 million in costs and loss recovery. That
award by an arbitration tribunal was then endorsed
by appellate rulings of the High Court in Britain
last year, which condemned Talco and its
management as frauds.
Despite the two
years of bitter recriminations, 2005-06, Norsk
Hydro signed a new scheme of arrangement with
Talco last December. Details of this deal have not
been disclosed to Hydro's shareholders, and the
company management has repeatedly refused to
answer questions about the terms from this
reporter, and others.
Sources inside the
company in Oslo have revealed, however, that the
$150 million in cash which Talco was ordered to
pay, in compensation for the corrupt takeover of
the plant by Deripaska, will not be paid at all.
Instead, Rahmon has arranged for a family-run
trading company, based in the Caribbean, to join
with Hydro in supplying alumina to the plant, and
to share the aluminum for export trade abroad.
Hydro executives realize that if the
details were better known, they would raise
questions in Oslo about the management's
compliance with the company code, and with
Norwegian law. The company sources have also
revealed that it is the state shareholder, the
Norwegian government, which has been pressing them
to accept the risks of doing new business with
Rahmon.
These risks now include a promise
of $90 million in fresh money from Hydro.
According to an announcement from Talco on
September 28, a recent visit to Dushanbe by Hydro
executives resulted in the following commitment.
"They will invest $60 million to reconstruct two
out of 12 facilities at Talco which will help
raise production at least by 10-15%," the company
was quoted as saying, adding that a further $30
million will go to other modernization projects.
Not only have Norsk Hydro company reports
failed to disclose what happened to the $150
million; they have not admitted the promise to
throw new shareholder money after it, making a
total of $240 million in Norwegian funds at risk
in Tajikistan.
The payoff appears to be a
promise of a bigger slice of the offshore aluminum
trade proceeds. According to the Talco
announcement, "Because of these investments Norsk
[Hydro] will get priority in supplying Talco with
alumina and also in buying a certain share of our
aluminum."
In the hydroelectric business,
this is small beer, but the reluctance to spend it
in Tajikistan is somewhat greater than the
Norwegians have been showing. Hydro's internal
misgivings are reverberating among other
international companies contemplating exploration
and mining in the Tajik resource sector, not to
mention the much bigger investments Rahmon is
calling for in the hydropower sector. The Russians
included.
The Russian government is
quietly unwilling to back Deripaska's tactics in
Dushanbe, nor complain about his fate. Rusal, it
is acknowledged in Moscow, operated the Tajik
smelter undisturbed for two years, producing more
than 800,000 tonnes of primary aluminum. At the
London Metal Exchange price for the metal,
discounted for Talco quality, it has fetched more
than $1.5 billion. The plant, and the Tajik
Treasury, report receiving a great deal less.
In Russian business circles, the
assessment of Rahmon is that, his public
statements notwithstanding, he dare not go too far
towards antagonizing the Kremlin. Pro-Russian
sentiment is also reported to be pervasive among
the ministers in charge of the economy.
In
recent days, ahead of Putin's trip to Dushanbe,
there have been fresh signs in Moscow of growing
negative sentiment towards Rahmon; and possibly of
warnings to the president not to overreach
himself. A lengthy recital of the year's water and
electricity problems between Tajikistan and
Uzbekistan, published in Kommersant's Vlast
magazine last week, focuses on Rahmon's "obvious
aspiration to rapprochement with the West", and
the dangers posed for the region by his
"grandiose" hydroelectric generation plans.
Rahmon's hydropower schemes threaten regional war,
the article by Vladimir Soloviev and Boris
Volkhovsky concludes.
A direct attack on
Rahmon is unusual in the Russian media, and it is
unclear why Zavtra (Tomorrow), a strongly
nationalist but minor periodical, produced a
stinging report, dated September 27, claiming that
the Tajik president is considering stepping down
and handing his powers to his brother-in-law,
Hasan Saduloev.
"President Emomali
Rahmon's resignation under some set of
circumstances or other remains the talk of the day
in Tajikistan," the article attributed to Valentin
Prusakov reports. "Well-informed sources of Zavtra
say that Rahmon himself sees his wife's brother,
Hasan Saduloev, as his successor. Saduloev is
Orientbank CEO [chief executive officer of
Orientbank, the largest bank in Tajikistan] and
the head of CDH, an offshore company and exclusive
trader for the Tajik Aluminum Factory. Off the
record, sources say that Saduloev is also the
wallet for the presidential family and its closest
associates. Needless to say, Saduloev has the
money to challenge any other claimant for the
throne."
Zavtra concedes its sources
"refuse to corroborate their claims". But it goes
on to suggest that "the feeling that the wind of
changes is about to start blowing gets stronger
and stronger, and very many people in Tajikistan
will welcome it because the regime that only
thinks of its own pockets cannot be stable".
On that score, Zavtra repeats the World
Bank's view that, without political stability,
Tajikistan's hydropower future is as risky and
investment-unfriendly as its aluminum future.
John Helmer has been a
Moscow-based correspondent since 1989,
specializing in the coverage of Russian business.
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