Business boom for Turkish contractors in Turkmenistan

Business boom for Turkish contractors in Turkmenistan

Turkmenistan’s openness to Turkish investment grows with an increasing number of construction contracts.

The Turkish press published reports in December 2013 detailing new projects to be undertaken by the Turkish business consortium Çalık Holding in Turkmenistan. The wholesale modernization of Turkmenistan’s energy infrastructure as well as the construction of a variety of new facilities for the country’s health ministry were among the plans discussed by Çalık  founder, Ahmet Çalık, and Gurbanguli Berdimuhammedov, Turkmenistan’s head of state.

The new projects to be undertaken by the consortium represent a fitting end to a successful year for its operations in Turkmenistan. In July 2013, two new complexes constructed by the Çalık group were opened in Aşkabat, Turkmenistan’s capital. One of the projects, a massive state-of-the-art dentistry center, attracted international attention after it won the 2013 International Property Award for “Best Public Service Infrastructure” in the Asia-Pacific region.

These completed construction projects were outdone by the consortium’s current project, the Türkmenbaşı International Seaport. In November 2013, Turkish Prime Minister Tayyip Erdoğan and Ahmet Çalık joined Gurbanguli Berdimuhammedov at a ceremony marking the beginning of construction on a $1.5 billion, 1.2 million square meter port on the Caspian Sea that would serve to facilitate trade between Europe and Asia.

GAP İnşaat, a subsidiary of the Çalık group, carries out the construction. The joint appearance of the three figures illustrated the close ties both between Erdoğan and the Çalık group, which is now directed by Berat Albayrak, the prime minister’s son-in-law, and between the two Turkic states themselves.

The Turkish business consortium now controls much of Turkmenistan’s telecommunications sector and owns a number of large textile production facilities. Almost $11 billion in contracts have been awarded to Çalık group for projects within Turkmenistan since the 1990s. Ahmet Çalık was also given directorship of the ministry of textiles while serving as an adviser to Türkmenbaşı.

The Çalık group is only the most prominent example of Turkish businesses that have been granted access to Turkmenistan’s economy by the republic’s often capricious political elite. Nata Holding, an Ankara-based contractor, won a $1 billion contract to replace and modernize transportation infrastructure in the Turkmen capital of Aşkabat.  The firm had previously carried out a number of projects aimed at modernizing the country’s transportation infrastructure, including a $100 million train station in the Balkan province of Turkmenistan.

In addition to construction contracts granted to Turkish firms, Ankara also benefits from close economic ties with Turkmenistan in the field of energy. A visit by Turkish President Abdullah Gül to the Central Asian republic last summer was marked by the inking of new deals for the supply of gas from energy-rich Turkmenistan. The Türkmenbaşı International Seaport will also serve as an important conduit for energy supplies.

As long as relations between the two Turkic countries remain warm and Turkmenistan continues to modernize its Soviet-era infrastructure, Turkish businesses will continue to benefit from their privileged access to the Turkmenistan, despite the country’s reputation for cronyism and state control over the economy.

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Luke Rodeheffer

Luke Rodeheffer is a cyberthreat researcher at Flashpoint in New York City. He holds an MA from Stanford University, where he was a FLAS Fellow for Turkish. Luke was previously a Fulbright Fellow in Ukraine and a research assistant at Koç University in Istanbul. You can follow him on Twitter @LukeRodeheffer