Polimeks stops building Ashgabat-Turkmenbashi highway amid Turkmen budget woes

Polimeks stops building Ashgabat-Turkmenbashi highway amid Turkmen budget woes
Turkmenistan's oil and gas wealth funded exotic monuments like the entrance to the Caspian city of Turkmenbashi, but now the funds are drying up.
By bne IntelliNews March 1, 2018

Turkmenistan’s budget woes have hit a new low with Turkish construction company Polimeks deciding to halt the construction of a toll road from the Turkmen capital Ashgabat to the Caspian port city of Turkmenbashi, a report by opposition-run news website Chronicles of Turkmenistan said on February 27.

The company no longer felt it necessary to follow through with its end of a contractual obligation when the Turkmen government tried to convince CEO of the Turkish company Erol Tabanсa that he should build the road with his own funds in return for later reimbursement by the government based on toll-revenues expected in the future, the report said.

Tabanca has reportedly decided to halt his cooperation with Turkmenistan and leave the Central Asian country. Turkmen officials apparently attempted to prevent him from boarding a plane out of Turkmenistan, accusing him of a failure to fulfill contractual obligations and “fleeing” the country, the report said. That led to a brief fight between his bodyguards and the Turkmen side, which ended after the Ashgabat mayor Shamukhammet Durdyliyev interfered and Tabanca promised to return to Turkmenistan "in the near future".

Given the drying up of Turkmenistan’s budget revenues amid a low hydrocarbon-prices-driven economic crisis, Polimex and other subcontractors have not received payments for construction works already commissioned, Chronicles of Turkmenistan’s reporters discovered. Payments on a new $2.3bn airport and several facilities built in the run-up to the $10bn Asian Games have not materialised.

The report also lends credence to suspicions by some analysts that the Turkmen segment of the $10bn Turkmenistan-Afghanistan-Pakistan-India natural gas pipeline might not be under construction and may not yet have actually reached the Afghan border from the giant Galkynysh gas field.

The Turkmen government has adopted multiple desperate measures to rescue the country’s budget including completely suspending Visa cards; ending the era of discounted gas, water and electricity prices for citizens in Turkmenistan; making contributions to Turkmenistan’s Pension Fund by business owners mandatory from 1 January; and even imposing more fines on car owners and Turkmen fortune tellers, whose occult services are popular in Turkmenistan.

The dubious spending habits of Turkmen President Gurbanguly Berdimuhamedov do not help address the economic difficulties. The president cleared the recent launch of the first golf course in Turkmenistan, which opened as a designer 18-hole attraction in a country where golf is virtually unheard of. However, seeing Polimex’s situation, it is doubtful that the company that built the golf course managed to receive full payment for its work.