Kyrgyzstan is facing a big scandal: the opposition has accused the government of treason and insists on a detailed inquiry into the latter’s contract with Liglass Trading CZ, SRO, a Czech company that has undertaken to build the Upper Naryn HPP Cascade and to repay a $37mn debt to the former investor, RusHydro of Russia. The oppositionists claim that the Czech company is a bankrupt and that the contract is a fake. They add that this incident will spoil the presidential campaign of the ruling Social-Democratic Party.
In early July, Kyrgyz President Almazbek Atambayev said that despite pessimistic forecasts, Kyrgyzstan had found a new investor for the Upper Naryn HPP Cascade project. The successor of RusHydro is Liglass Trading CZ, SRO.
The search of the investor lasted for two years and ended in the Czech company’s victory in a tender in May 2017. The deal was signed by Michael Smelik and Chairman of the State Committee on Industry, Energy and Subsoil Management Duyshenbek Zilaliyev. The Czechs have promised to finish Akbulun and Naryn-1 HPP and to build the other two HPPs.
Atambayev said that the Czechs’ victory would be a signal for potential investors all over the world that Kyrgyzstan is ready for effective business projects. That statement gave him more points in the presidential race but it was a shot-lived success.
Shortly afterwards, Czech mass media reported that Liglass Trading was a bankrupt and had nothing to do with hydropower engineering. According to the sources, that company has submitted no reports over the last years and has faked confirmations of its involvement in HPP projects.
“Our first reaction was regret but then we flared up. We want to know why Kyrgyzstan has been made a laughing-stock all over the world and who is to blame for this,” oppositionist Edil Baysalov said on Facebook. “Atambayev was too quick in approving the deal. He believed the head of his administration Sapar Isakov and Duyshebek Zilaliyev. As a result, the whole world is laughing at us. We have given our future to impostors!” Baysalov added.
He believes that this deal must be investigated by the national security service. “Here we are dealing with criminal negligence. Hydropower engineering is a vital sphere for our country, so, this may even be qualified as treason! It was an act of economic sabotage, an attempt to impose on us some shell company,” Baysalov said.
According to energy expert Zulfiya Marat, Zilaliyev has refused to comment on the Czechs’ former activities but it is a fact that they have never built hydropower plants before. “So, how can we trust them? Zilaliyev sees nothing disastrous here but this scandal will have a negative effect on the Social-Democrats’ presidential campaign,” Marat said.
In his turn, Zilaliyev has asked journalists not to politicize the deal with Liglass Trading because it is just an economic contract, where Kyrgyzstan’s interests are fully protected. “We have no information about their bankruptcy. They have paid the guarantee deposit of $1.2mn. They also paid 200,000 KGS for the package of tender documents and filled all necessary documents. They are also committed to repay the $37mn debt so as to prove that their intentions are serious,” Zilaliyev said.
According to public activist Toktayim Umetaliyeva, such a project requires an open tender. “Such projects must be given to companies offering the best terms. As far as I know, that was not the case with the past tender. When the row blew out, Zilaliyev said that in May they announced a tender for fourteen lots. Some six companies bid for eleven lots. The Czechs bid for ten lots. Kyrgyz Kaganat for one lot. Liglass Trading suggested building two HPPs at Upper Naryn, a garbage recycling plant and a solar power plant in Issyk Kul region. And since Upper Naryn is a priority for our country, the government gave preference to the Czechs,” Umetaliyeva told EADaily.
She believes that this case requires a public inquiry. “We need to know if the Czech company is a bankrupt or not and if it has any experience in the sphere. We have listened to the party of charge and now we need to listen to the investor. The media reports made so far may have been ordered by the opposition. Had they been true, our authorities would have reacted to them but they have not. It seems that somebody is trying to make a big row and to attack Prime Minister Sooronbay Jeenbekov, who is supposed to run for presidency as the Social-Democrats’ candidate,” Umetaliyev said.
The Czech director of the Upper Naryn HPP Cascade project Jiří Vojtěchovský tried to disprove the accusations. Kabar.kg quotes him as saying that his company is ready to invest $500mn with no guarantees required from the Kyrgyz government. “If we make a mistake and fail to meet our obligations, we promise to stop the construction and to leave $57mn for the project. We are playing all the taxes and are enjoying no preferences,” Vojtěchovský said.
But it seems that his promise has not convinced the Kyrgyz opposition.
EADaily’s Central Asian Bureau