RUSAL Axed From Rogun Power Station

Tajikistan’s break with RUSAL, the Russian company contracted to complete the giant hydroelectric power station at Rogun – and the world’s highest dam - will not damage relations with Moscow or put off potential investors, say NBCentralAsia analysts.



On August 29, the Tajik government tore up its contract with the Russian aluminum company RUSAL and decided to go it alone for the time being.



The government plans to set up a joint-stock company which will have funding of 5.5 million US dollars until the end of this year to keep the construction work going.



Tajikistan and RUSAL signed a contract in 2004 to complete work on the Rogun plant, but the deal was quickly mired in disputes over the size of the dam, the material it was to be made of, and how much of the electricity it would generate should go to the aluminum plants hoped to buy and build in Tajikistan.



RUSAL wanted to build a 285 metre dam out of concrete while the government insisted it should be made of earth and rock to withstand earthquakes, and 335 metre high so as to hold enough water to secure a steady supply of electricity over the winter months.



Construction began in the mid-Seventies when Tajikistan was part of the Soviet Union, but in 1993 a powerful mudslide washed much of the half-completed the dam away. Since then, the station’s main control room and the transformers have been assembled and 42 kilometres of tunnel have been carved out at the site.



Completing the Rogun power station would allow Tajikistan to meet all its own energy needs and export electricity to neighboring countries like China, Afghanistan, and Pakistan.



NBCentralAsia analysts say that the project still has enormous potential and the Tajik government will not find it difficult to bring in suitable new investors.



Political analyst Parviz Mullojanov says Moscow has often played a mediating role between RUSAL and the Tajik government in disputes over Rogun. For this reason, he says, “the break is unlikely to have a serious effect on Tajik-Russian relations”.



Sayfullo Safarov, the deputy director of the Centre for Strategic Studies in Tajikistan, says the falling out is probably most damaging to RUSAL, because it rejected the original project design and “insisted on its own vision for the power station”.



Tajik president Imonali Rahmon is pushing to set up an energy consortium with other members of the Shanghai Cooperation Organisation - China, Russia, Kyrgyzstan, Kazakstan and Uzbekistan.



Kazak president Nursultan Nazarbaev is a strong supporter of the idea, and Safarov suggests that if it goes ahead, the consortium could put up the investment that Tajikistan needs.



Qurbon Giyeyev, an academic and Academy of Sciences member, says the Rogun project looks so profitable that it has already attracted a great deal of interest from potential investors. But he believes the best solution would be to get people in Tajikistan to back the project with their savings.



“The savings held by the public would in principle be enough to finish construction in the time-frame that’s required,” he said. “But that would be hampered by the public’s lack of confidence in local banks.”



Head of international law at the State Institute of Law, Saidumar Rajabov, warns that given the enormous scale of the project, the Tajik government should only deal with other government agencies or companies.



(NBCentralAsia draws comment and analysis from a broad range of political observers across the region.)