Belarus Balks at Prospect of Big Investments in Turkmenistan

Turkmenistan’s investment climate is so poor that even companies in one of its closest ally nations decline the opportunity to work there.

A senior executive at Belaruskali, a Belarus-owned global player on the potash fertilizer market, announced on September 7 that his company will not be bidding to build a new mining and processing plant in Turkmenistan.

This would be a marginal item of corporate news were it not for the troubled history endured by the Belarusian company in Turkmenistan.

In 2010, Belarus and Turkmenistan reached a deal for Belaruskali’s daughter company Belgorkhimprom to build the Garlyk potash mining and processing plant at a cost of around $1 billion. The undertaking was promising all around — a big contract for a Belarusian industrial enterprise and a chance for Turkmenistan to exploit mineral riches other than its vast natural gas deposits.

Work was supposed to be completed in 2015, but was serially delayed. Independent Belarusian media described a project scourged by Turkmenistan’s chronic failure to keep up with payments for work and systematic bureaucratic complications — the latter likely being a euphemism for out-of-control demands for bribes.

“In the end, the plant was built, but only at the cost of incredible efforts, the mobilization of thousands of specialists, the loss of the contractor’s economic independence, losses worth tens of millions of dollars and the ratcheting up of a multi-million-dollar debt,” noted one article in weekly news magazine BelGazeta.

Belarusian leader Alexander Lukashenko traveled to Turkmenistan in March to take part in the official inauguration of the Garlyk complex, although there has been speculation this was merely a face-saving exercise and that it will take several more years before the plant reaches full output capacity.

Later, on May 10, Belarusian deputy prime minister Anatoly Kalinin told reporters that the government in Minsk was still waiting to be paid.

“Belarus has fulfilled all its obligations in bringing the plant into operation, and now we are awaiting definitive settlement of bills, so that we in turn can pay subcontractors and suppliers,” he said.

Remarkably undaunted by this whole episode, Turkmenistan in April launched a bidding process for yet another potash plant, costing $1.4 billion, for its Karabil deposit. Lukashenko at some stage expressed interest in Belarus filing a bid. But Belaruskali general director Ivan Golovaty confirmed this week that this idea was being dropped, saying that the terms being offered by Turkmenistan did not appeal.

It is not immediately apparent that there are any alternative suitors on the horizon, so another potentially valuable industrial project in Turkmenistan may remain indefinitely undeveloped.

Belarus Balks at Prospect of Big Investments in Turkmenistan

1 / 1
> <