Russia, Uzbekistan light flame

Tashkent – Russia’s LUKOIL officially started up output from a major gas field in Uzbekistan in a project expected to contribute one fifth of the Central Asian state’s gas output. Russia’s First Deputy Prime Minister Sergey Ivanov and top Uzbek and LUKOIL officials toured the Khauzak deposit, tucked in a barren Uzbek steppe near the Silk Road town of Bukhara, after lighting a symbolic torch at the site.

Russia, the world’s largest natural gas producer and a major supplier to Europe, depends on gas imports from Central Asia where it pays below-market prices. The two nations used the opportunity to reaffirm their close connection with one another after years of chilly relations. 

“Uzbekistan’s President once again reassured us that Uzbekistan’s long-term foreign policy, both in politics and business, is closely tied to Russia, and that this policy is not susceptible to sudden changes,” Ivanov told reporters in Tashkent on the eve of the Bukhara ceremony.

Khauzak is part of the wider Kandym-Khauzak-Shady-Kungrad project, developed jointly by LUKOIL, with a 90% stake, and Uzbek state energy company UzbekNefteGaz, which controls the rest. A 2004 production sharing agreement will last 35 years.

Partners in Khauzak, near the Turkmen border in south-western Uzbekistan, share output on a parity basis. Khauzak is due to reach maximum capacity by 2012-2013 and produce more than 11 billion cubic meters of gas, or about one fifth of Uzbekistan’s current total natural gas output.  LUKOIL said Khauzak is the biggest investment project in Uzbekistan with a total of USD 350 million already committed. Total investments are expected to exceed USD 3 billion, it said.

Operators plan to drill over 160 production wells at the field and build over 930 miles of pipelines, as well as a gas processing plant with a capacity of 8 bcm per year. A year ago, Uzbekistan produced 62 bcm of gas and exported 12.6 bcm, including 9 bcm to Gazprom. Central Asia’s top natural gas producer, Turkmenistan, expects to produce about 80 bcm of gas this year. Russia is the main export destination for Uzbekistan, whose pipelines are controlled by Gazprom. Uzbekistan is researching new exporting routes and made an agreed to build a new pipeline to China at an unspecified date.

Oxus Gold says Amantaytau gets Uzbekistan nod for AGF project

Oxus Gold PLC said its 50%-owned joint venture Amantaytau Goldfields has received approval from the government of Uzbekistan to proceed with the AGF phase 2 underground sulphides project, according to Thomson Financial. The company said it plans to increase sulphide plant capacity to 1.2 million tons per year by 2012 from the original design tonnage of 750 000 tons per year in 2009. It expects first gold production from the Phase 2 project in mid-2009, and estimates an additional

86 000 ounces of gold to be extracted from the expanded Centralny pit at a cost of USD 9.6 million. First gold production from the underground Severny mine is expected in mid-2010, and the pre-production cost for the underground development and plant modification is estimated at USD 139 million. The new base case is expected to produce about 246 000 ounces of gold annually from the existing JORC compliant Severny measured and indicated underground resources over an initial 7 year period.

Initially, a total of 1.43 million ounces of gold will be produced at an estimated cash cost of USD 197 per ounce, excluding taxes. The combined Severny and Centralny sulphide underground ore reserves are 9.71 million tons at an average grade of 7.71 grams per ton, containing 2.41 million ounces of gold.

Chairman Douglas Sutherland said over 80% of the Oxus’ resources have been directed to the Amantaytau Goldfields project and there is significant potential to increase it further and to continue mining in excess of 300 000 ounces a year for over a decade.

Motorola and Winncom Technologies hold joint presentation

Motorola and Winncom Technologies held a joint presentation at Dedeman Silk Road Tashkent Hotel. Motorola’s Regional Manager for C.I.S., Baltic, Central Asia, and Kazakhstan Thomas Bergman also made presentations of the MOTO Wi4 platforms, Mesh technologies, Motorola canopy and BPL.

“Although the use of technologically sophisticated systems is promoted as one of the main advantages of the WiMAX standard, today the market is observing substantial demand for simple communication systems,” Thomas Bergman said. “Our ultra-light 802.16e system will allow the operators to render inexpensive fixed wideband access services in places where they are most needed.”

During the presentation, the representatives of the Winncom Technologies Company spoke of the Motorola’s plans to abandon the use of operating communication networks and implement new generation technological solutions that would help operators keep their competitive positions in a fast-developing Uzbek market. During the presentation, the company’s manager also spoke of the MOTOwi4 wireless wideband communication solutions, including wi4 WiMAX, wi4 Mesh, wi4 Canopy, and wi4 Broadband over Power Line systems. These are intended to help the providers extend high-speed access services to customers using both fixed and mobile communication networks.

The main purpose of the MOTOwi4 WiMAX system is to provide inexpensive communication services to stationary and moving subscribers in developing countries and areas poorly covered by communication networks. The system operates in the 3.5 GHz frequency range available in the majority of the countries of the world. Although among the majority of users the IEEE 802.16e WiMAX standard is associated with mobile systems, Motorola believes that the standard’s potential as a wireless technology of fixed access should not be underestimated. According to engineers, the most convenient and reliable standard is the 802.16-2004, which is also perfectly suitable for joint operation with the wire networks. MOTOMESH can work simultaneously within one network as both a non-licensed WiFi-terminal and communication equipment intended for emergency services functioning within the licensed frequency range of 4.9 GHz. 

Motorola’s solutions are intended for the use within a single IP-based carrier network. At the same time, operators rendering the services of wideband communication and IP-telephony to new territories may use Motorola’s other solutions, such as WiMAX or MetroWiFi, on licensed and conditionally non-licensed frequencies.

Unlike traditionally cellular base station installed on the floor, MOTOwi4 WiMAX’ UltraLight Access Point may be installed wherever desired. Motorola thinks it will find high demand among the operators in the developing countries and rural areas of the developed countries, particularly the regions of Eastern Europe, Middle East, and Central Asia.

MOTOwi4 family includes wideband solutions for fixed and mobile devices of subscriber– end equipment, PC-cards, as well as devices installed in vehicles of public security services.

Winncom Technologies Company has a developed business infrastructure. Headquartered in the United States, it has offices in Russia, Ukraine, Kazakhstan, Uzbekistan, Hungary, and Poland, each of which employs high-quality experienced staff. Over the years of its operation, Winncom Technologies has taken part in many successful projects. Today, Winncom provides complex solutions involving the creation of network infrastructure to operators and corporate clients in Russia, Kazakhstan, and Uzbekistan. Among its clients are major companies, such as KazakhTelecom, a division of Golden Telecom, Vnukovo Airport, and others.

ADB extends USD 3 million grant to facilitate trade in Central Asia

The Asian Development Bank (ADB) is providing a USD 3 million grant to facilitate trade among member-nations of the Central Asia Regional Economic Cooperation (CAREC) as a part of its efforts to promote sustained economic progress across the region.

The Integrated Trade Facilitation Support for CAREC will receive an additional USD 600 000 from the governments of CAREC countries to complete the funding requirement.

“The outcome of the project is greater volume of trade that is the direct result of time and cost savings achieved through coordinated cross-border regulations, procedures and standards, as well as improved trade logistics,” said Ying Qian, Principal Economist of ADB’s East Asia Department.

The project supports the implementation of the trade facilitation component of the Transport and Trade Facilitation Strategy endorsed by the sixth Ministerial Conference on CAREC in November 2007. CAREC is composed of Azerbaijan, the People’s Republic of China, Kazakhstan, Kyrgyz Republic, Mongolia, Tajikistan, Uzbekistan, and Afghanistan. Turkmenistan also participates in CAREC’s trade facilitation work.

Strengthened customs cooperation is the core program of the trade facilitation strategy. The project will also expand the scope of the program to address broader issues of trade facilitation, focus on trade facilitation efforts on the CAREC transport routes, adopt a results-based approach in monitoring time and cost savings as the key indicators of the program, and support logistics assessments and planning, focusing on priority routes and developing national and regional implementation strategies to facilitate trade.

The project will also support bilateral initiatives among CAREC countries and enhance partnership between CAREC’s participating multilateral institutions and key international agencies supporting customs reform, trade facilitation, and logistics development in the region. It will also promote the dialogue and cooperation with the private sector, which would help formulate and utilize trade facilitation measures, and undertake capacity building in areas of integrated trade facilitation and in broader areas related to trade and transport. The project will also involve analytical policy research.

Trade facilitation plays a vital role for CAREC countries, especially in expanding intra– and interregional trade, which spur investments and economic growth in the long term. Trade facilitation refers to a wide range of activities, such as import and export procedures, transit protocols, payments, insurance, and other financial requirements.

Despite years of reform and intensified regional cooperation efforts, the participation of Central Asian states in international trade remains limited mainly due to the high costs of transit that can be attributed to the countries’ landlocked geographic position.

At most borders, it is necessary to comply with a range of procedures in addition to customs, including animal quarantine, inspection of plants, and other agricultural materials, checking of drivers’ licenses, axle loads, and compliance with other traffic rules.

Simplification and harmonization of such procedures are integral to trade facilitation. The key requirement is to shift policy to place more emphasis on trade facilitation rather than trade control.

ADB funds upgrade of key ‘Silk Road’ highway in Uzbekistan

The Asian Development Bank (ADB) will provide Uzbekistan a USD 75.3 million loan to upgrade a key highway that is an integral part of a regional transport corridor across Central Asia.

The move came shortly after eight countries in and around Central Asia agreed to a USD 18 billion strategy to improve roads, airports, railways, and ports to make the region a vital transit route for trade between Europe and Asia, a modern-day equivalent of the ancient Silk Road.

The new loan will be used to upgrade two sections of the A-380 highway, a 750-mile road that runs from the Kazakh border in Uzbekistan’s north toward Afghanistan and Turkmenistan in the south.

The first road section to be reconstructed is the 25-mile-long segment in the Kungrad district of the republic of Karakalpakstan. The second is the 55-mile-long section in the Khazarsp district of the Khorezm province and the Tortkul district of the republic of Karakalpakstan. International competitive bidding for civil engineering projects will be used for the first time.

“Upgrading the road will cut travel times and reduce transport costs,” said Olly Norojono, a Transport Economist with ADB. “This highway is essential for enhancing regional integration and economic growth in Central Asia.”

Part of the loan will also be used to help the Government of Uzbekistan strengthen the operation and maintenance of the country’s road network by improving road-sector institutions, planning, and budgeting, as well as the provision of road-building equipment. Insufficient maintenance in the past has led to the deterioration of roads. While the government has made progress in fixing the problem, the budget for maintaining primary roads hasn’t been fully adequate.

The total cost of repairing the highway is USD 173.5 million. In addition to the USD 75.3 million provided by ADB, Uzbekistan’s government is investing USD 98.2 million.

The strategy to invest in transportation routes in and around Central Asia was agreed upon at a meeting in Dushanbe of the Central Asia Regional Economic Cooperation Program in November of 2007. Alongside Uzbekistan, Afghanistan, Azerbaijan, the People’s Republic of China, Kazakhstan, Kyrgyz Republic, Mongolia, and Tajikistan have agreed to the strategy.

ADB provides USD 2 million grant to combat land degradation, climate change woes

The Asian Development Bank (ADB) is providing a USD 2 million grant for the formulation, adoption, and implementation of land degradation policies and strategies. Another purpose of the project is to reduce the vulnerability of target developing member-countries to climate change.

The 12th Agriculture and Natural Resources Research at International Agricultural Research Centers is estimated to cost USD 2.863 million.

Syria-based International Center for Agricultural Research in Dry Areas (ICARDA) and India-based International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) will provide USD 227 000 and USD 260 000 respectively to support the project.

Both ICARDA and ICRISAT are parts of a consultative group on International Agricultural Research, which is a strategic partnership of countries, international and regional organizations, and private foundations supporting the work of 15 international agricultural research centers.

The governments of participating developing member-countries will cover the balance to complete the funding requirement for the project through their national agricultural research systems.

“Investing in agriculture and natural resource research is an essential means of reducing poverty and stimulating agricultural and economic growth, through improvements in productivity. In Asia, one of the most urgent and rewarding areas for research is to develop effective technologies, institutions, and policies to deal with environmental changes due to land degradation and climate change,” said Tun Lin, natural resources economist of ADB’s East Asia Department.

The project has three components, each targeting a select group of developing member-countries. The first component will be for the People’s Republic of China (PRC), Kazakhstan, Kyrgyz Republic, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan. The component will involve analyzing existing land use policy, as well as institutional and environmental factors that influence land degradation. It will also identify policy options to support the adoption of improved sustainable land management technologies that combat land degradation and promote enhanced productivity. It will make policy and strategy recommendations to promote better development pathways and livelihoods based on sustainable land management.

The second component targets Bangladesh, PRC, India, Pakistan, and Sri Lanka. It will involve analyzing climate variability and its impact on cropping patterns, structures of income and employment, adaptation-coping strategies for the rural poor, and identification of the best practices and institutional innovations to lessen the effects of climate change. It will also involve recommending strategies to address socioeconomic problems relating to weather patterns.

All developing member-countries will be covered by the final component, which will focus on strengthening the capacity of ADB to coordinate, supervise, monitor, and evaluate agriculture and natural resources activities.

The assistance provided by ADB to support its agriculture and natural resources research policy, which was adopted in 1995, has played an integral role in addressing the Bank’s overall objective of poverty reduction and related priorities, such as regional cooperation and sustainable environmental management.

Despite recent economic progress, the Asian and Pacific region remains home to two-thirds of the world’s poor. Some 600 million people in the region live on less than one dollar a day. With the majority of poor people living in rural areas that rely heavily on crop cultivation, the agricultural sector continues to determine the extent of economic progress that can be achieved within the framework of the Millennium Development Goals program.

Millennium Development Goals serve as a blueprint for nations and development institutions in fighting poverty and improving lives. The first goal seeks to eradicate extreme poverty and hunger by cutting in half the percentage of people living on less than a dollar a day between 1990 and 2015.

Number of mobile users in Uzbekistan grows twofold every year

The mobile communication is a dynamically-developing field of the Uzbek telecommunication sector. Today, there are five mobile operators (three of GSM standard and two of CDMA) that service more than 4 million subscribers. Thus, the mobile penetration throughout the country is over 15%, and the number of mobile users is growing by almost 100% every year.  According to the results of a study conducted recently by the State De-monopolization Committee of Uzbekistan, three large mobile operators Uzdunrobita (MTS-Uzbekistan), Unitel (Beeline) and Coscomcover account for 95% of the market. The leading operator Uzdunrobita holds 50% of the market alone.

Analysis of the growth of subscribers by regions showed that the majority of mobile users reside in Tashkent the Tashkent region (44%). The penetration level in this region is the highest, standing at 25%.

At the same time, in some regions the level of penetration does not exceed 1-2%. With the increasing number of mobile users in the regions, the mobile communication imarket n Uzbekistan will expand substantially in the future.

The main factors for mobile users increase were the affordability of service, as well as the expansion of the range of services and the coverage zones provided by mobile operators.

Foreign experts have recently analyzed the prices for mobile communication worldwide and showed that Uzbekistan has some of the cheapest rates. The cost of the average package of mobile services (25 calls and 30 short text messages monthly) was taken as the criterion for evaluation. The package cost was USD 12.25. The countries where standard package costs over USD 20 per month formed the top ten with Kuwait (USD 75.18) occupying the leading position. Sierra-Leone and Georgia with the cost of services of USD 72 and USD 44 respectively were the second and the third on the list. Mobile subscribers in French Polynesia and France pay less than USD 40 per month. The luckiest of all are the people living in Uzbekistan, Sri Lanka, and Venezuela, as mobile services in these countries cost less than USD 2 per month.