Since the beginning of the 1990s, the Turkmen capital Ashgabat, regarded as a new Dubai, has been being remodelled in line with the first president’s, Saparmurat Niyazov’s, taste for giant-scale projects. If there is one area in which Gurbanguly Berdymukhammedov’s policies have not changed from his predecessor but have actually magnified them, it is precisely in the construction sector. The economic stakes of this boom are important, and have provoked a growing competitiveness between French company Bouygues and Turkish firms. The capital is not the only town to be impacted: through the immense Avaza project in Turkmenbashi, the main Turkmen port in the Caspian, the construction boom has also reached provincial towns.

BACKGROUND : The hotels and offices constructed in Ashgabat under Niyazov in the 1990s, which have remained empty, are today little by little being resold by the municipality to western embassies and international institutions. The representation of the European Union, for example, moved into one of these buildings in April. However, more hotels and offices are already under construction in the city center and the southern districts. At the foot of the mountains rising above the outlying residential areas of Arshabil and Ruhabat, a series of ‘resort’-type complexes (with swimming pools, tennis courts, etc.) are either being built or are already finished, as are several leisure centers for children which take soviet-era pioneer camps as their model. Here, too, the establishments are only running at a third of their capacity in the best of cases, and some of them indeed appear closed.

In the city center, expropriations are continuing as former Soviet quarters are razed to make way for grand, green esplanades and new building-lined avenues. Apart from administrative buildings, dozens of residential buildings with marble facades have also materialized. These have been commissioned by ministries and are intended for sale at commodity rates to their functionaries. However, they still remain largely empty, since even at such rates, they are too expensive. At the city’s southern edges, toward the Iranian border, the “green belt” stretching for 200 km is designed to be the capital’s lungs. But Niyazov’s decision, which has not yet been re-evaluated, to plant only pine-trees and not broad-leaved trees has proven counter-productive, since the pines wither during the summer.

Ashgabat is today divided into several new districts, primarily constructed by the French company Bouygues and by Turkish firms. Bouygues has constructed the Presidential Palace, an immense mosque in Niyazov’s native town, the Bank of Foreign Trade, the Academy of National Security, the Administration Center for Agriculture, the Exposition Palace, and so on. It is currently in charge of renovating the premises of Turkmen television, of constructing buildings for Magtymguly University and the Gas and Oil Institute, of renovating and extending the Ashgabat International Airport, as well as building the ministries of Foreign Affairs and Education, the National Carpet Company, and the Capital Carpet Museum. The president has also asked the French company to construct a new memorial complex which is to be finished for the jubilee of the 20th anniversary of independence in 2011, and has commissioned a new thirteen-storey high, five-star hotel of 95,000 m² which will be the most luxurious in the country, at a cost of U$270 million. However, it seems unrealistic that the construction will be able to be properly completed by 2011, even though Bouygues has planned to double the number of French workers present on site (300 instead of the usual 150 stationed there). The French company nevertheless lacks qualified Turkmen workers in the building and civil engineering sector and currently only employs 3,000 persons.

IMPLICATIONS: Competition between Bouygues and Turkish companies is gaining in intensity. Between February 2007 and February 2008, the French company landed contracts worth about a billion euros, but Turkish companies have reached levels of between 1.3 and 1.5 billion euros. Though Bouygues is largely ahead in the building of administrative buildings, it faces stiff competition from Turkish enterprises, which have been awarded many contracts to construct residential buildings and are very present in the provinces. The Turkish company Polimeks, for example, has won a bid to construct several medical buildings in Ashgabat for a sum of US$103 million. Another Turkish company, Belda Insaat ve Taahhut, has been awarded contracts to renovate the Ashgabat Railway Station and to construct the State Commerce Bank at Turkmenbashi. The Sehil Insaat company, for its part, has won a tender to construct a cultural complex that will house the Institute of Culture and a music boarding school, as well as three twelve-story residential buildings, all for a sum of US$130 million. Another company, Tema Muhendislik, has been entrusted with constructing a complex of 36 luxury apartments for a cost of US$10 million. The Gök-Tepe Mosque, which Niyazov had built in the 1990s, is to be renovated by SUR Turizm Insaat Ticaret ve Sanayi. Lastly, businessman Ahmet Çalik, who was a close advisor to former president Niayzov, has been awarded a contract to construct a complex that includes a mosque, a hotel, and a congress center at the Mausoleum of the Sufi Saint Sheikh Nejmuddin Kubra in the Dashoguz province.

The real estate boom is also starting to reach the port city of Turkmenbashi, formerly Krasnovodsk. An immense project for a tourist area has recently been launched. This seaside station, called Avaza, is the site for an immense complex that will include sixty hotels, as well as restaurants, shopping centers, activities and leisure centers, an artificial river, and also a free trade zone to encourage foreign firms to set up there. The total cost of the complex is estimated at US$5 billion, four billion of which are to be financed by foreign companies including Bouygues, companies from Turkey, Iran, and Russia, as well as South Korean firms such as Samsung and LG. The supposed Turkmenistani “Tourism Mecca” nevertheless does not pertain to commercial logics: the area is not favorable to tourist development (the sea there is cold and polluted); it has minimal road and railway infrastructures and air connections; quality service will be in shortage given the country’s lack of training facilities in the tourism sector. Instead, the objective lies elsewhere: at issue is to increase the country’s international prestige at a time when its Kazakh neighbor is massively developing similar projects in the port towns of Atyrau and Aktau. The foreign companies involved in the Avaza project have signaled that their participation in the venture was meant as a gesture to Turkmenistan’s political authorities, designed to win further construction contracts. However, none of them want to be involved in the management of the hotel complexes, for they are unlikely to be profitable.

CONCLUSIONS: President Gurbanguli Berdymukhammedov’s keen interest in the agricultural sector has spread the benefits of this construction boom to rural areas. Many projects have been launched including the construction of several grain silos in the provinces of Ahal, Dashoguz and Mary to increase the storage capacity of flour; the construction of a factory for potassium fertilizer in the Lebap province; the enlargement of the Shasenem canal in the Dashoguz province, with the aim of making 10,000 hectares of virgin lands cultivable; the construction of a 400 km (300 miles) long gas pipeline between Gumdag and Ashgabat; the construction of several health centers, such as maternity hospitals, in provincial towns; and the purchase of several thousand sowers, harrows, and rotary cultivators from the United Kingdom. The authorities thus seem determined to address some of the country’s most glaring problems, in particular in the sectors of health and food, and concerned about the development of rural areas.

AUTHOR’S BIO: Sebastien Peyrouse is a Senior Research Fellow with the Central Asia-Caucasus Institute & Silk Road Studies Program Joint Center. He is the author of Turkménistan, un destin au carrefour des empires (Paris, 2007, in French).