On one of the coldest weekends to hit Bishkek this winter — with a high of 5 degrees Fahrenheit between January 26 and January 28, and a low of minus 16 F — the Kyrgyz capital’s thermal power plant began malfunctioning.
The plant produces not only electricity but pumps out heated water into Bishkek homes. According to local media, Friday night some equipment at the Bishkek Heating and Power Plant failed, leading to a decrease in electrical output and lowering water temperatures. For some in Bishkek this meant lukewarm radiators and for others, a blackout which cut electric heating sources like generators. Bishkek residents took to social media to complain, Nurjamal Djanibekova cited some in her story for Eurasianet on the power plant breakdown. One of the most artful descriptions came from a local journalist, who wrote on Facebook, that the radiators were “like the body of a dying man — all getting colder.”
Djanibekova also noted the potential for political fallout from the power plant problem. The power plant’s director, Nurlan Omurkul uulu, said Saturday at a press conference that he was prepared to resign. But given that former President Almazbek Atambayev attended the official ceremony marking the completion of a modernization project at the plant in August 2017, the plant’s direction is unlikely to be the only political target for public anger.
Work to modernize the plant commenced in 2014, following a 2013 loan agreement between China’s Export-Import Bank and the Kyrgyz government. A Chinese company, Tebian Electric Apparatus Stock Co. Ltd. (TBEA), was granted the contract and modernized the plant for $386 million. Kyrgyzstan has until 2033 to repay the loan.
The loan agreement was signed during Chinese President Xi Jinping’s momentous 2013 Central Asia tour. It was during his stop in Kazakhstan, days before swinging through Bishkek, that Xi unveiled what we now called the Belt and Road Initiative. In Bishkek, Xi and Atambayev upgraded the China-Kyrgyzstan relationship to that of a “strategic partnership.”
The Chinese company is an obvious target for anger, although it’s not clear that the part of the plant involved in the “modernization” is what failed. Indeed, 24.kg reported the failure like this, distinguishing between old boiler units and new:
It was noted that yesterday, on January 26, at 6 pm, the load at the Bishkek Heating and Power Plant was reduced from 340 MW (145 MW at the new unit and 195 MW — at old boiler units) to 154 (134 MW at the new unit and 20 MW — at old boiler units).
Djanibekova noted that the state-run power company, Electric Stations JSC, “said that the accident that caused heating to fail occurred in a part of the plant that was not covered by the modernization initiative.”
Nevertheless, as the plant and the Chinese company are in the news, questions have arisen about the modernization plan and the process to select the company. And this isn’t the first time. In early 2014, just after the Kyrgyz parliament ratified the loan agreement, 24.kg published a lengthy op-ed which called the modernization a “gross mistake” and claimed that the ratification came under pressure from the government. The article called into question the procurement process and noted that other (Chinese) companies, with lower bids, had been bypassed and TBEA selected without a public tender:
…Electric Stations Director General Salaydin Avazov believes [a tender] was impossible. “If we had money for reconstruction, we would have held a tender. And since there is no money, we have agreed to the terms of Eximbank,” he said.
The article makes the case that the Chinese company successfully lobbied Kyrgyz politicians to land the contract. Djanibekova mentions a 2015 Chamber of Audits revelation regarding irregularities in the project, notably the lack of a tender, lack of a feasibility study and inflated costs.
The power plant modernization was not TBEA’s only Kyrgyz project. In 2010, Kyrgyzstan made a $390 million deal with TBEA to construct the 450-kilometer Datka-Kemin power line which was completed in August 2015.
TBEA is not the only Chinese company to come under scrutiny in Kyrgyzstan. In 2016, then-Kyrgyz Prime Minister Temir Sariyev resigned after members of parliament began questioning its role in the awarding of a tender for a $100 million road project to Longhai, a Chinese company. Argynbek Malabayev, then-Minister of Transport and Communication, turned on Sariyev and said that both a Kyrgyz company and a Turkish company had underbid the Chinese company.
And Chinese companies are not the only foreign companies to be accused of shady dealings in Kyrgyzstan.
Let us not forget about the Liglass Trading fiasco last year. The virtually unknown Czech company, Liglass Trading, landed a major deal to finance Upper Naryn Cascade hydropower project or so then-Kyrgyz President Almazbek Atambayev said. The projects were notable not only because hydropower is Kyrgyzstan’s only significant natural resource beyond gold (both products of its gorgeous mountains) but also because the Czech company was to take over financing a project that Russia had been forced to pull back from in late 2015.
Liglass Trading had agreed to essentially buy out the Russian partner, RusHydro’s 50 percent state in the operating company managing the projects — at a cost of $37 million which the Kyrgyz expected to have paid to the Russians by the end of August 2017. That deadline was edged backward to mid-September. The money never arrived and the Kyrgyz dissolved the contract which had become politically toxic after Czech and Kyrgyz media began digging into the company’s finances and capabilities. Liglass threatened international arbitration back in September 2017, but there hasn’t been recent news on that front.
Ultimately, the sum of these scandals should provide ample motivation for Kyrgyz authorities to take a serious look at how the state processes infrastructure development projects. Such introspection seems unlikely, given that all of the projects mentioned above occurred under the leadership of Almazbek Atamabeyv’s Social Democratic Party.
Current President Sooronbay Jeenbekov also doesn’t come off well. On August 15, 2016 as prime minister, he “visited and inspected” the Bishkek power plant and lauded TBEA’s efficiency, according to a TBEA press release.