Tuesday, 27 August 2013

Turkmenistan and Turkey Launch Construction of International Port

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by Tavus Rejepova (the 08/21/13 issue of the CACI Analyst)

On August 15, the Turkey’s Prime Minister Recep Tayyip Erdogan paid a one-day visit to Turkmenistan to promote Turkmen-Turkish cooperation and development of the trade and tourism industry. Alongside the visit, Prime Minister Erdogan and President Gurbanguly Berdimuhamedov participated in a symbolic groundbreaking ceremony of the construction of the new international port of Turkmenbashi on Turkmenistan’s Caspian Sea coast.

A government delegation consisting of Turkey’s Economy Minister Zafer Caglayan, Minister of Energy and Natural Resources Taner Yildiz, as well as representatives of major Turkish businesses accompanied the Prime Minister during the visit. Prior to his arrival in Ankara, Erdogan was quoted as saying that the volume of projects carried out by Turkish companies in Turkmenistan has reached US$ 35 billion in total.

Turkey’s Gap Insaat Company, owned by Calik Group, was announced as the general contractor for the design and construction of the new international port in Turkmenbashi. Ahmet Calik, owner of Calik Group presented the sketches and video slides of the estimated US$ 2 billion international port to President Berdimuhamedov and Prime Minister Erdogan. Turkmen media reported that Gap Insaat was selected out of six other major companies bidding for the project. The new international port includes a construction of ferry, passenger and container terminals. In addition, the port complex will have a general loading terminal and a bulk cargo terminal, as well as a ship building and repair facility in accordance with International Association Classification Societies regulations. The total area of the seaport is over 1.2 million square meters. The new port’s territory will also include several coastal lines for transportation services, such as 2,200-meter long highways and 5,300-meter long railway lines. The passenger terminal is going to have a port hotel, trade and entertainment centers as well as the local offices of state migration and passport control services. In order to protect the environment of the Caspian Sea, bio-treatment equipment will be installed in each terminal as per the so-called “Green port” international standards and requirements. 

The project is expected to be completed by the end of 2017 and its implementation is in line with President Berdimuhamedov’s general development plan of the Turkmenbashi international seaport and national merchant marine fleet by 2020. Once completed, the annual freight turnover at the port is expected to grow to 25 million tons by 2020, compared to the current estimated 10 million tons. Gap Insaat is planning to train the local specialists and operators in how to manage and operate the new port by international standards. President Berdimuhamedov authorized the State Service of Maritime and River Transport of Turkmenistan to sign a separate contract with a German company “Inros Lackner AG” for overseeing the progress of work on the conceptual design and construction of the Turkmenbashi seaport.

Prime Minister Erdogan’s visit follows Turkish President Abdullah Gul’s trip to Turkmenistan on May 29-31 when the two countries signed 12 bilateral agreements in the fields of energy, agriculture, sports and tourism. “We show much interest in modernizing the Turkmenbashi seaport,” Abdullah Gul was quoted as saying during this visit in May. Turkey and Turkmenistan had then struck deals to deliver Turkmen gas to Europe via Turkey, and also to export 600 million kW/h of Turkmen electricity to Turkey through Iran annually starting from July 1, 2013 to July 1, 2016. Granting such a major project to a Turkish company is also connected with President Berdimuhamedov’s last visit to Turkey in August 2012 when he got closely acquainted with the Turkish port-construction know-how and service infrastructure during tours of the ports in Istanbul and Izmir.

Turkmenistan remains a leading market for Turkish companies abroad in many areas including the oil and gas sector, transport and communications, power generation, textile industry and construction of apartment buildings, plants, roads, bridges and resort areas. Polimeks, Turkey’s leading construction company in Turkmenistan signed a US$ 2.2 billion contract in early 2013 to build a new modern airport in the capital city Ashgabat and it is also building a three phase, US$ 5 billion Olympic sports complex in Ashgabat to be completed before the 2017 Asian Indoor and Martial Art Games. Currently, over 600 Turkish companies are registered in Turkmenistan and the trade turnover between two countries in 2011 reached over US$ 3.5 billion. Turkish companies also hope that the Turkmen government will let them participate in other major projects such as the construction of the Turkmenistan-Afghanistan-Tajikistan railway.  

Following the official ceremony over the seaport, Berdimuhamedov and Erdogan gave long speeches stressing that the new Turkmenbashi seaport on the Caspian Sea will become an important transportation link fostering economic and commercial ties between Asia and Europe. However, while this project may seem to be a major investment into the country’s transportation sector, it will be difficult to turn it into a busy transportation hub in the future unless there a sustainable service infrastructure is developed on the ground. 

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