Tajiks Could Go it Alone on Giant Dam

DUSHANBE, Tajikistan, November 2, 2006 (ENS) - After falling out with Russia’s giant aluminum firm RUSAL, the Tajik government has announced plans to finish the Rogun hydroelectric power station and dam on its own. NBCentralAsia experts say Tajikistan lacks the resources to complete the immense project by itself and will have to bring in some other foreign investor.

On October 31, First Deputy Energy Minister Pulat Muhiddinov told reporters that the first-stage generating units of the Rogun plant would be constructed with domestic funding of US$500 million, to be earmarked from the investment budget.

Work on the Rogun power plant, located on the River Vakhsh, was launched as long ago as 1987, but ground to a halt in 1993 because funding had dried up. In 2004, the aluminium giant RUSAL agreed to fund the first phase.

However, a disagreement has since emerged between the Tajik authorities and RUSAL, centring on the height that the Rogun dam should reach.

River Vakhsh

The River Vakhsh is one of two main tributaries of the Amu Darya, the largest river in Central Asia. (Photo courtesy ICRCTRB)
The government wants it to be 335 metres high, which would create the water capacity to generate 13.1 billion kilowatt hours of electricity annually.

RUSAL cites the risk of earthquakes and has proposed a height of 280 metres, which would cut power output to 8.9 billion kilowatt hours.

One local economist suggested that RUSAL was only interested in generating enough electricity to run its aluminium production projects in Tajikistan, whereas the government needs to satisfy a growing demand for power in the rest of the economy as well.

In response to the dispute, Tajik officials say that the Russian government might step in and fund the project if RUSAL declined Dushanbe’s terms.

According to sources in the Tajik energy ministry, the reason why the authorities have turned against RUSAL is a feasibility study produced by a German consultancy firm, Lahmayer, which the Russians hired to resolve disputes over investment and the size of the dam.

aluminum

Extruded aluminum at RUSAL's Sayanogorsk Aluminium Smelter. RUSAL is one of the top-three world's leading producers of primary aluminium and alloys. (Photo courtesy RUSAL)
The report’s findings have irked the Tajiks, who believe they underestimate the monetary value of previous work done on the Rogun plant, thus bringing down the government’s share in the project.

A ministry official asserted that Tajikistan was in a position to finish the first phase of the plant to the same standard as RUSAL had envisaged. The work would take six or seven years and could be funded out of the national budget, especially as government revenues are growing.

Georgy Petrov, a laboratory head at Tajikistan’s Institute for Water, Hydroelectric Power and the Environment, agrees that Tajikistan would benefit most if it could finish the construction work on its own, but he warns that it could run into serious difficulties because the cost of finishing the first phase could run to a billion dollars.

One of NBCentralAsia’s economic experts similarly believes that the government will need to seek additional sources of funding, notwithstanding the rise in its budget revenues.

The solution, he believes, will be to find another foreign investor. The Tajiks at least have more of a choice, now that increasing numbers of foreign firms and governments are expressing interest in hydroelectric projects in the country.

(Published in cooperation with the Institute for War and Peace Reporting, IWPR.)