UZBEKISTAN COMMERCIAL NEWS UPDATE

Date: December 2006

Author: Jahangir Kakharov, BISNIS Representative, Tashkent, Uzbekistan,

Email: bisnis.Tashkent@bcc.com.uz

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2006. ALL RIGHTS RESERVED FOR USE OUTSIDE OF THE UNITED STATES.

NOTE: THIS COMMERCIAL UPDATE IS DRAWN FROM THE UZBEK PRESS AND OTHER OPEN SOURCES AND SHOULD NOT BE INTERPRETED AS OFFICIAL U.S. GOVERNMENT INFORMATION

Uzbekistan Railways completes railway reconstruction programme

TASHKENT. December 27 (Interfax) – Uzbekiston Temir Yullari State Joint-Stock Railway Company has completed the project on modernization of the Samarkand-Hojidavlet railroad segment worth US$155 million, Interfax reported. According to a source in Uzbekiston Temir Yullari, the reconstruction was conducted on the 341 km long railroad segment, part of the Central Asian trunk-railway, which represents strategic importance for the country's economy. The source added that one of the priority areas of the project was the installment of the fibre-optic communication line, which will allow managing the transportation effectively using information systems. As reported earlier, the financing of the project was provided by the Asian Development Bank (US$70 million) and the OPEC Fund for International Development (US$5 million). The remaining portion of the project budget was financed by the state railway company. The project closes the programme of railway reconstruction in Uzbekistan launched with the financial assistance of the ADB in 1999. In the framework of this programme, a project worth US$126 million on reconstruction of the 320 km long Chingledy-Tashkent-Samarkand railway segment was carried out in 2004. The project was funded through the ADB loan of US$70 million and the company's own funds. It is expected that the implementation of the railway reconstruction programme will raise the efficiency of cargo and passenger transportation, increase the average speed of passenger trains to 100 km/h, and freight trains – to 90 km/h. The total length of Uzbek railway currently makes up 4,126.3km. Approximately 1,000 km of railways are worn out and have exceeded the limit of allowed depreciation. In the next few years Uzbekistan is planning the reconstruction of 600 km of railways.

China's CNPC unit wins oil and gas exploration license in Uzbekistan

TASHKENT. December 28 (Uzreport) - China National Petroleum Corp, the country's largest oil and gas producer, said its wholly-owned unit China National Oil and Gas Exploration and Development Corp (CNODC), has secured a license from state-owned Uzbekneftegaz to undertake oil and gas exploration in Uzbekistan. CNPC said in a statement posted on the website of Ministry of Commerce that CNODC will undertake wildcat oil and gas exploration on five blocks with the agreement running from 22 December, 2006 to 21 December, 2011. Operations will actually start on April 2007. The five blocks are in the Ustyurt Bukhara-Khiva and Farg'ona basins, it said. In June 2004, CNPC signed an agreement with Uzbekneftegaz to boost cooperation in the oil and gas sector. Under the agreement, CNPC plans to invest over 200 mln usd to drill 15 wells in Uzbekistan within five years. CNPC and Uzbekneftegaz will sign a new agreement to set up 50-50 joint venture after commercial viability is established, it added. Uzbekistan is central Asia's second biggest natural gas producer after Turkmenistan.

Uzbekistan to supply 700m cubic metres of gas to Tajikistan in 2007

TASHKENT. December 28 (RIA Novosti) - Uzbekistan will supply 700 million cubic meters of natural gas to its Central Asian neighbor Tajikistan in 2007. Uzbekistan and Tajikistan signed on December 27 an agreement on natural gas supplies in 2007. "Fuel will be supplied to Tajikistan from January 1, 2007 at $100 per 1,000 cubic meters. Similar agreements on natural gas deliveries have been signed with Kazakhstan and Kyrgyzstan," Uztransgaz said. Uzbekistan's estimated natural gas reserves make up 5.9 trillion cubic meters. The country currently produces 60 billion cubic meters of natural gas annually.

Uzbekistan cotton fiber output 1.041m tons in Jan-Nov

TASHKENT. December 28 (Uzreport) - Uzbekistan produced in January-November 1.041 million metric tons of cotton fiber, 2.6% less than in the corresponding period last year, the state statistics committee announced. The state-owned Uzkhlopkoprom association produced during the period 1.033 million tons of cotton fiber, 2.5% less than a year ago, while enterprises with foreign participation produced 7,745 tons, a fall of 3.6% on the year earlier. Uzbekistan has already harvested 3.63 million tons of cotton this year and plans to produce 1.1 million tons of cotton fiber, with 750,000-800,000 tons going for export and the rest for processing in the country. In 2005, Uzbekistan increased its cotton harvest by 6% on the year to 3.749 million tons and cotton fiber output increased by 21.6% to 1.188 million tons. Cotton yarn output in 2005 fell by 8.9% on the year to 140,912 tons and cloth output fell by 26.6% to 246.975 million square meters.

Two Aral project agreements signed

TASHKENT. December 28 (Uzreport) - The members of the Consortium of investors, which includes Uzbekneftegaz, LUKOIL Overseas, Petronas Carigali Overseas, CNPC International Ltd. and KNOC Aral Ltd., signed a Joint Operating Agreement and the Single Operator Agreement in order to implement the Production Sharing Agreement (PSA) concerning the Uzbek sector of the Aral Sea. In late October 2006, the Government of Republic of Uzbekistan adopted a resolution on the measures to implement the project, which provides the signing of the mentioned documents in two months' period. The agreements set the terms and conditions for the establishment of the operating company, identify its functions and cover relations between the parties during the oil and gas operations under the PSA. The effective date of the PSA is expected to come in the third decade of January 2007 when all the conditions precedent of the PSA are met and the protocol bringing the PSA into force is signed by the Government of Uzbekistan and the Consortium of investors. It is planned to complete the preparation of the memorandum of association and the founding documents of the operating company and register it with government authorities of the Republic of Uzbekistan by that time. The tender to select the seismic contractor is planned to be concluded in mid February 2007, with seismic operations starting in March 2007. The PSA was signed on August 30, 2006 in Tashkent. Each member of the Consortium holds an equal share interest in the project. Exploration operations will be carried out in two phases. In the first phase, a 2D seismic survey of 2,300 kilometers will be performed and two exploration wells will be drilled for a minimal financial commitment of US$99.8 million under the minimal program during the first three years. Based on the results of the first phase a feasibility study will be drafted and approved with subsequent approval of the commercial terms of the PSA, including the minimal program of the second phase, rates of taxes and other payments, as well as other parameters. Phase two exploration operations will be undertaken after the commercial terms of the PSA are approved.

Uzbekistan to ban import of used vehicles to transport passengers, cargoes

TASHKENT. December 29 (Uzreport) - President of Uzbekistan Islam Karimov issued a resolution to prohibit import of some vehicles designed to transport passengers and cargoes from March 1, 2007. In line with resolution, Uzbekistan will prohibit to import used buses (three years from production date) of M2 category (up to 5 tons), M3 (over 5 tons) and cargo vehicles of N2 (over 3 tons, but not over 12 tons), as well as new vehicles of above-mentioned category, engine of which do not meet EURO II emission standard. The document said Uzbekistan will also impose a ban to import vehicles of above-mentioned category, engine of which do not meet EURO III emission standard, excluding special vehicles. The resolution was adopted to develop national car industry, in particular Samarkand Car Plant, improve security of passenger and cargo transportation, decrease gas emission to air. The government also was entrusted to develop legal base and adopt action programme to introduce to exploitation of buses and micro buses to transport passengers, operation life of which is over 10 years. From 1 June 2007, Uzbekistan will introduce excise-duty at the volume of 70% plus US$3 to imported used cars, designed to transport passengers and cargoes. Samarkand Car Plant founded in November 2006 on the basis of SamKocAuto, Uzbek-Turkish joint venture. The venture was announced bankrupt in October 2006. UzAvtoProm (Uzbek Car Industry) joint stock company purchased stake of Koc Holding for US$300,000 and signed amicable agreement with creditors. To rehabilitate the plant, the creditors approved contract with Japanese Itochu Corp to supply 3,752 car sets to assemble Isuzu Motors buses within 2006-2008.

Eventis Telecom acquires control over Uzbek ISP - report

TASHKENT. December 29 (ComNews) - Eventis Telecom acquired 50% stake in Uzbek Internet Service Provider (ISP) Sarkor Telecom and plans to re-brand company soon. The report said Eventis Telecom purchased 50% shares in Sarkor Telecom in December 2006 and created joint venture with founders of Uzbek ISP. The sum of the deal was not announced. Eventis Telecom is planning to re-brand Sarkor Telecom to its own name soon and plans to invest US$5 million to its new Uzbek asset. Sarkor Telecom was founded in 1996 by Sarkor Computech. Sarkor Computech is also founder of Sarkor Wireless Communications, which introduces wireless communication technologies in Uzbekistan based on RadioEthernet and 802.11 standards. Dmitriy Ivantar, partner of Eventis Telecom, said Sarkor Telecom will exist as brand for short time. The company seriously is considering to change brand and this issue is under discussion with Uzbek partners. He added that the Uzbek company will change its brand. Mr Ivantar said Sarkor Telecom is good pad [for Eventis Telecom]. The company has over 15,000 dial-up users and about 1,000 ADSL users. Revenue of Sarkor Telecom will make up about US$1.5 million this year, he added. Eventis Telecom is planning to develop also WiMAX and preWiMAX along with fixed access in Uzbekistan. Ivantar said WiMAX and preWiMAX are perspective directions. He said that the company also can render telephone communication services, but the company will need to obtain new licenses. Farkhad Roziev, director of Sarkor Telecom, said the deal is the main event of the year. He said to ComNews that Eventis Telecom acquired control in Sarkor Telecom and become one of its founders. He said that the sides held talks for four months. Mr Roziev said investors seriously consider Uzbek market and Sarkor Telecom received several proposals. Eventis Telecom Holdings Ltd. (Cyprus) is investment company, specializing in development of telecommunication projects in developing countries. The company mainly specializes in construction and management of mobile and fixed telephone communication, data transfer and Internet access.

State Demonopolization Committee offers to decrease list of certified products

TASHKENT. January 3 (Uzreport) - State Committee on demonopolozation, support of competition and entrepreneurship of Uzbekistan developed a draft resolution of the Cabinet of Ministers, envisaging decrease of list of products, which should be certified. The list of products, which should be certified, was approved by the resolution of Cabinet of Ministers No. 318 dated 6 July 2004. The committee said new resolution also envisages transfer some types of products to voluntary certification, which meets requirements of Law "On certification of products and services". The committee added that the draft resolution is result of study of export-import operations of business structures. The study was carried out by the State Demonopolization Committee. The new resolution was agreed with leadership of 14 stat bodies, including State Customs Committee, Health Ministry, Foreign Economic Relations, Investment and Trade Ministry and Justice Ministry. The committee offers to introduce declaration procedures to such products as cigars and cigarettes, tires for trucks, cotton yarn and others. Overall, the declaration procedures will be introduced to 170 products and exclude over 250 positions. It should be noted that products, excluded from list of obligatory certification, can be certified at request of producer.

Tajikistan to import 1.4bn kWt/h of electric power from Uzbekistan in first two quarters of 2007

TASHKENT. January 4 (Uzreport) - Tajikistan imports 600 million kWt/h of electric power from Uzbekistan for three months. The parties agreed on this in the course of the visit of the delegation of energy specialists of Tajikistan to Tashkent, Uzbekistan. Tajik delegation was headed by the Minister of Energy and Industry Sherali Gulov. In August 2006, Tajik and Kyrgyz energy specialists agreed on the supply of electric power for 1.2 cents per kWt, however the issue had not been solved on the transit of energy through the energy system of Uzbekistan. The Minister of Energy and Industry of Tajikistan said the abovementioned agreement was the same as the annual contracts on cooperation between the parties in the energy sphere. Tajikistan will receive 600 million kWt/h of electric energy in the first quarter of the year, and 900 million kWt/h will be exported during the summer period. The Ministry also said that to date, the issue on the import of 1 billion kWt/h of electric energy from Kyrgyzstan has not be solved. According to the State Statistics Committee of Tajikistan, the import of electric power made up 4.6 billion kWt/h in the first 11 months of 2006. This cost the country US$63.1 million. The export of electric power (Tajikistan currently exports its electric power to Afghanistan only) made up 4.02 billion kWt/h (US$46.8 million).

Uzbekistan electricity production up 3.5% in Jan-Nov

TASHKENT. January 5 (Uzreport) - Uzbekistan increased electricity production by 3.5% in the first 11 months of the year to 44.585 billion kilowatt-hours. Heat and power plants produced 38.775 billion kilowatt-hours in the period, up 7% year-on-year, and hydroelectric and block plants produced 5.81 billion kilowatt-hours, down 15.2%, including 513 million kilowatt- hours produced by hydroelectric plants, down 19% year-on-year. Uzbek power stations provided 17.866 million gigacalories of thermal energy to consumers in January-November, down 1%. Uzbekistan has 42 power plants with capacity of 11,580 megawatts.

Uzbekistan produces 5.8m tons of cement - over a half of region's output

TASHKENT. January 8 (Uzreport) - In 2006 Uzbekistan produced 5.8 million tonnes of cement, which is more than a half of the Central Asian region's total output. Uzbekistan's domestic sales exceeded 4.4 million tonnes – the remaining 1.12 million were sold to foreign construction companies, Uzstroymateriali Company said. In the next few years Uzstroymateriali is planning to launch five new cement productions. The construction of plants in Surkhandarya, Jizzakh regions and Karakalpakstan was first announced last year during the spring construction fair.
According to the specialists of Uzstroymateriali, new productions will be based on more efficient dry methods, which will make them more competitive in the domestic and foreign markets. Uzbekistan currently has five major cement producers: Uzstroymateriali includes Ahangarancement, Kuvasaycement, Kyzylkumcement, Bekabadcement, and Angrencement (white cement producer). Four of them operate full technological cycles. The total production capacity currently makes up 5.8 million tonnes a year, which does not fully satisfy the demand of the Uzbek construction industry yet.

Some tax cuts envisaged in state budget for 2007

TASHKENT. January 8 (Uzreport) - The State budget of 2007, approved by the Parliament discusses continuing the course of tax burden decrease for both citizens and organizations. Starting January 1, 2007, tax reductions will be as follows: income tax - from 12% to 10%; single tax - from 13% to 10%; single social fee - from 25% to 24%; average and maximum scale of individuals' tax - from 20% to 18% and from 29% to 25%. People engaged in trade will be subject to a single tax (for commodity turnover) instead of the five kinds of taxes and other mandatory fees they are presently paying. The tax burden for the oil and gas sector will also be decreased.

Uzbekistan to sell assets of Zarafshan-Newmont on 18 January

TASHKENT. January 9 (Uzreport) - Uzbekistan plans to hold an auction on January 18, 2007 to sell the assets of US-Uzbek gold mining joint venture Zarafshan-Newmont, the country's Real Estate Exchange said in advertisement. The starting price for the assets of the joint venture was set at the volume of 172.858 billion soums or about US$139.27 million. The bids for the auction will be accepted until late January 17. As earlier reported, the exchange planned to hold auction on December 18, 2006, but it had to delay auction due to lower number of applications. In early October, Uzbekistan's Arbitration Court for the Navoi Region declared Zarafshan-Newmont bankrupt. In early August, Uzbek tax authorities seized the assets and gold owned by Newmont Mining through its 50% stake in Zarafshan-Newmont, the US company said then. The seizure followed an arbitration court's ruling in favor of Uzbek tax authorities for US$49 million in back tax claims against Zarafshan-Newmont for 2002-2006. Zarafshan-Newmont was established in 1992 on a parity basis between the US Newmont Mining and Uzbekistan's Navoi Ore Mining and Metallurgical Plant, or NGMK. Zarafshan-Newmont develops the Muruntau open-pit gold mine, owned by NGMK. In 2005 Zarafshan-Newmont produced 7.72 tons of gold, down 65% on the year.

Uzbekistan increases export of agricultural products in 2006

TASHKENT. January 10 (Uzreport) - Uzbekistan exported more than 694.000 tons of agricultural products worth US$342 millions in 2006. In 2005, the figure was only about 660,000 tons. Russia remains the main importer of fruits and vegetables from Uzbekistan - the share of Russia in total import of Uzbek agricultural products grew from 50% to 86%. The country exported about 250,000 tons of vegetables (including melons) worth US$83 million and 404,000 tons of fruits, worth US$244 million in 2006. Furthermore, Uzbekistan exported about 32,800 tons of processed fruits and vegetables, and about 7,000 tons of wine in the same period.

Uzbek phosphate plant gets 10 million euro upgrade

TASHKENT. January 10 (Prime-Tass) - German equipment manufacturer Engineering Dobersek GmbH has completed a 10 million euro upgrade of the Kyzylkum phosphate plant in Uzbekistan, a spokesman for Navoi Ore Mining and Metallurgical Plant, or NGMK. The Kyzylkum phosphate plant is part of NGMK. Engineering Dobersek supplied, installed and put into operation equipment for producing chlorides from ground phosphate. NGMK financed the upgrade. The spokesman said that as a result of the upgrade NGMK expects to produce annually 400,000 tons of cleansed roasted phosphate concentrate and 200,000 tons of ground phosphate. The first stage of the Kyzylkum phosphate plant was launched in 1998 and cost US$33 million. After the expansion of the first stage in 2000, the plant's annual capacity doubled to 400,000 tons of unwashed roasted phosphate concentrate and 200,000 tons of crude ground phosphate. The plant's products are used as raw materials by three Uzbek manufacturers of phosphate fertilizers. The raw materials base for the plant is the Jeroy field, which has reserves of 303.6 million tons of phosphate ore and 57.7 million tons of raw phosphate.

CBU raises requirement to minimal charter capital for commercial banks

TASHKENT. January 11 (Uzreport) - Central Bank of Uzbekistan (CBU) raised requirement to minimal charter capital for commercial banks as of January 1, 2007. According to press service of CBU, the Central Bank set minimal size of charter capital for newly created commercial banks at US$5 million against earlier US$4 million. The minimal size of charter capital for private banks increased from US$2 million to US$2.5 million. According to Uzbek legislation, at least 50% of authorized capital of private bank should be formed with funds of individuals. At the same time, the Central Bank kept order, according to which the own capital of the bank in total assets should be at least 10%. The press service said existing commercial bank should increase their authorized capital to newly set minimal requirement. The Central Bank said the commercial banks placed 15 additional emissions of shares with aggregate nominal value of 75 billion soums.

Consortium announces tender for performance of 2D seismic survey in Aral

TASHKENT. January 11 (Uzreport) - International consortium on Aral project announced a tender for the performance of 2D seismic survey on the offshore, transit and onshore area of the Uzbek part of the Aral Sea on January 10, 2007. The work scope is 2300 km (of which about 25% are offshore with the water depth to 40 m, 25% are in the transit area and 50% are onshore). Interested contractors shall send a letter of interest in the participation in this tender before 10:00 (Tashkent time) of January 15, 2007. The letter of interest shall mention the details, including the e-mail address to which the package of tender documents will be sent in electronic format. The consortium of consists of Uzbekneftegas, KNOC Aral Ltd., LUKOIL Overseas Aral Ltd., Petronas Carigali Overseas Sdn Bhd and CNPC International. All five members of the consortium have equal shares. The PSA term is 35 years. The effective date of the PSA is expected to come in the third decade of January 2007 when all the conditions precedent of the PSA are met and the protocol bringing the PSA into force is signed by the Government of Uzbekistan and the Consortium of investors. It is planned to complete the preparation of the memorandum of association and the founding documents of the operating company and register it with government authorities of the Republic of Uzbekistan by that time. The PSA was signed on August 30, 2006 in Tashkent. Each member of the Consortium holds an equal share interest in the project. Exploration operations will be carried out in two phases. In the first phase, a 2D seismic survey of 2,300 kilometers will be performed and two exploration wells will be drilled for a minimal financial commitment of US$99.8 million under the minimal programme during the first three years. The seismic operations will be started in March 2007. Based on the results of the first phase a feasibility study will be drafted and approved with subsequent approval of the commercial terms of the PSA, including the minimal programme of the second phase, rates of taxes and other payments, as well as other parameters. Phase two exploration operations will be undertaken after the commercial terms of the PSA are approved.

Uzbekistan to stop imports of some used vehicles from 1 March

TASHKENT. January 11 (Uzreport) - Starting from 1 March 2007, Uzbekistan forbids import of used vehicles of M2, M3 and N2 categories, new vehicles of these categories equipped with petrol and diesel motors which toxicity level does not meet the requirements of Euro-2 ecological class. Starting from 1 January 2010, import is forbidden of the vehicles with motors not meeting the requirements of Euro-3 ecological class, except for those of special purpose meeting the codes of foreign economic activity commodity nomenclature #8703 and #8705. Presidential Resolution "On measures to develop motor roads in general use for 2007-2010" dated 20 December 2006 approved the Concept of motor roads development for 2007-2010 and long-term perspective, including target programmes of construction and reconstruction of motor roads in general use of international purpose for 2007-2010, as well as reconstruction of motor roads in general use of state purpose for the same period. Starting from 1 January 2007, departments of Uzyolbutlash (Uzbek roads repair), Uzavtoyol (Uzbek automobile roads) are exempted for 4 years from payment of customs duties (except for compulsory customs legalization fees) for imported road-building machinery, equipment and spare parts.

Swiss Verysell to supply computers to Uzbek Central Bank

TASHKENT. January 14 (Uzreport) - Swiss Verysell S.A. has won a tender to supply computer equipment to the Central Bank of Uzbekistan, the bank's announcement said. The bank's tender commission at the end of last year decided to declare Verysell the winner of the international tender, which was announced last August. The winner is to deliver state-of-the-art computer equipment and peripherals to upgrade the existing computer network of the Central Bank and its regional branches to meet modern requirements. The amount of the contract has not been disclosed. Talks are under way with Verysell on the details of the project. The contract is expected to be signed in late January or early February. A consortium consisting of Info System Ltd., Croc Inc. and Croc Tashkent was announced the standby winner until the contract is signed. Established in 1990 Verysell group includes Verysell Distribution, Verysell Telecom, Verysell Projects, Verysell IT Express, Icontry, Enteprise One, Verysell-6 (all registered in Russia) as well as Verysell S.A. (Switzerland) and VS Computer Holdings (Cayman Islands) responsible for procurements from the biggest suppliers and financing the holding respectively.

Over 2.72m people use mobile services in Uzbekistan in 2006

TASHKENT. January 15 (Uzreport) - Number of mobile communication users in Uzbekistan made up 2.72 million as of the end of 2006 and the number of Internet users almost doubled to 1.7 million. Complex on information systems and telecommunications under Cabinet of Ministers held a session to sum up social-economic development of the sector in 2006 and discuss priority tasks in 2007. The session said the sector's enterprises rendered services worth 622.55 billion soums (up 55.6% year-on-year), including in information-communication technologies – 584.1 billion soums, information and print – 38.45 billion soums. The sector attracted US$133.34 million of foreign investments (27.6% up compared to forecast), of which 80% or US$104.12 million were foreign direct investments. It was said that the number of users of fixed communication comprised 2.009 million in the reporting period.

Second stage of Kokdumalak Gas project launched

TASHKENT. January 15 (Uzreport) - Zeromax GmbH of Switzerland, co-founder of Kokdumalak Gas JV in form of LLC, completed the second stage of utilization of associated gas in Kokdumalak field, Kashkardarya region. The Uzbek-Swiss joint venture Kokdumalak Gas was formed in September 2004 by company ZEROMAX and Мubarakneftegaz with equal share holding of each party. The venture principal activity is aimed at realization of the project for delivery of equipment for utilization and compressing of oil-well gas, and execution of building and assembly works in the Kokdumalak oil and gas complex, providing preparation and compression of gas. The duration of joint venture activity and has time limit of 7 years from the date of the beginning of putting the equipment into operation and after liquidation of the venture the equipment and assets will be transferred to Uzbekneftegaz. The launch of the second phase with cost of US$60 million will allow process some 3 billion cubic meters of association gas. The project was financed due to own funds of Zeromax GmbH and foreign credits. Kokdumalak field is one of the largest deposits of oil and gas. The field was opened in 1986 and its reserves make up 55 million tons of oil, 67 million tons of gas condensate and 145 billion cubic meters of gas.

EWI Eastwest Interaction AG to open new firms in Uzbekistan

TASHKENT. January 15 (Uzreport) - EWI Eastwest Interaction AG (Switzerland) is planning to open joint venture on production of disposable syringes with Uzfarmsanoat (Uzbek Pharmaceutical Industry) and a plant on production of medical fabrics in Kashakadarya region. According to Uzfarmsanoat, the sides are developing feasibility study on project on production of disposable syringes. The capacity of the venture and other parameters of the project will be determined after completion of feasibility study development. The sides can sign the agreement on creation of Farmplast joint venture in mid 2007. The project on creation of the venture was included to investment programme of Uzbekistan for 2007. Currently, the sole producer of disposable syringes in Uzbekistan is Mediz JV. The venture's capacity is 250,000 disposable syringes a year. All production of Mediz consumed in internal market and the firm covers 50% demand of Uzbekistan. EWI Eastwest Interaction AG is co-founder of Sayhunmedtex JV (holds 94.73% stake in the venture). The venture was launched in 2004 in Gulistan, Syrdarya region, and produces crocheted fabrics. Total cost of the venture is US$15.64 million euro and the venture's capacity is 2,600 tons of crocheted fabrics a year. Swiss company is developing similar project in Kashkadarya region. It is expected that the plant will produce cotton yarn and medical fabrics. Total cost of the project is 19 million euros.

Uzbekistan to produce 3.15m tonnes of coal in 2007

TASHKENT. January 15 (Uzreport) - Uzbekistan plans to mine over 3.15 million tons of coal in 2007, acting director-general of Uzbekkomir (Uzbek coal) open joint stock company Ulugbek Abdullaev said. According to Ulugbek Abdullaev, the task of the company for 2007 was determined by the governmental decision to increase production of coal by 15 million tons a year. The Uzbek government transferred Angren thermoelectric power station to coal consumption and creation of new and transfer of existing stations [from gas] to coal consumption. Uzbekkomir is the largest enterprise on mining and processing of coal in Central Asia. Uzbekistan mined 3.168 million tons of coal or up 10.1% year-on-year. Sub-units of Uzbekkomir increased production by 9.7% to 2.92 million tons. Uzbekistan's need in coal is 4 million tons a year. According to State Committee on Geology and Mineral Resources, forecasted reserves of coal in Uzbekistan make up 7 billion tons, of which 5.7 billion tons are bituminous coal. Industrial reserves comprise 1.9 billion tons, of which 1.853 billion tons are brown coal and 47 million tons are bituminous coal. Uzbekistan mines coal at three deposits – Angren (Tashkent region), Shargun and Baysun (Surkhandarya region). The country mines coal mainly on open-pit mining method. The government of Uzbekisrtan adopted a programme on development of coal industry in 2002-2010, which envisages the increase of coal output in the country to 9.4 million tons, including 9.29 million tons of brown coal and 110,000 tons of bituminous coal. The programme also stipulates to decrease coal production cost. Uzbek government announced tender to sell 35.55% stake in Uzbekkomir to foreign investors in October 2006. The starting price of the stake is US$30.579 million. The charter capital of Uzbekkomir is 29.421 billion soums.

CNPC unit sells US$200m worth drill rigs to Uzbekneftegaz

TASHKENT. January 15 (Uzreport) - China National Petroleum Corp. announced that its technology unit signed a $200 million deal to sell drilling rigs to Uzbekistan's state oil company Uzbekneftegaz. The deal represents CNPC's largest single contract for exporting drilling equipment in terms of value, the company said in a posting on its web site. Under the deal, signed on 25 December 2006, the unit, China Petroleum Technology and Development Corp., will deliver 23 drilling rigs and related equipment to Uzbekneftegaz over a 15-month period. The statement didn't indicate where the rigs will be used. The deal reflects the latest progress by CNPC in Uzbekistan after it won a license last December from Uzbekneftegaz to explore five onshore oil and gas blocks. CNPC is stepping up its exports of drilling equipment following its expansion of oil and gas exploration overseas, mostly in Africa, Central Asia and South America.

IDB issues US$15m to Uzbek banks to support small businesses

TASHKENT. January 17 (Uzreport) - The Board of Executive Directors of the Islamic Development Bank (IDB), which concluded its 242nd session at the Bank's Headquarters in Jeddah, Saudi Arabia, approved $15 million financing for three Uzbek banks. The web site of IDB said the Uzbek banks will receive $15 within global line of financing. Survey of UzReport.com revealed that the IDB issued financing to Asaka Bank, Ipoteka Bank and Uzpromstroybank. According to officials of these banks, Asaka Bank will receive $8 million, Uzpromstroybank will get $4 million and Ipoteka Bank – $3 million. The credits will be issued in two tranches. The second tranche will be opened after the banks utilize the first tranche. The credits will be used to finance small and private businesses, engaged in industry and agriculture. The credit line cannot be used in production of tobacco and lottery business.

MTS-Uzbekistan has over 1.45m users in 2006

TASHKENT. January 18 (Uzreport) - MTS-Uzbekistan served over 1.45 million subscribers as of December 31, 2006, Russia's Mobile TeleSystems OJSC (MTS) said in its statement on January 17. MTS is the largest mobile phone operator in Russia and the CIS and said its consolidated subscriber base reached 72.86 million users on December 31, 2006. MTS-Uzbekistan, subsidiary of MTS in Uzbekistan, said the number of subscribers increased by 7.5% to 1.45 million compared to the end of November. MTS-Uzbekistan, earlier rendered services under Uzdunrobita brand, founded in August 1991 and it is the first mobile operator in Central Asia. The company also leads on number of subscribers in Uzbekistan.

Uzbekistan fails to sell US-Uzbek gold venture at auction

TASHKENT. January 19 (Prime-Tass) - A liquidation commission has failed to sell assets of bankrupt US-Uzbek gold mining joint venture (JV) Zarafshan-Newmont at an auction due to an absence of bids, Alexander Lolak, the joint venture's court appointed manager. The price for the joint venture was set at $140 million. Lolak said that creditors would meet within 20 days to decide when to hold the next auction and consider decreasing the starting price of the JV. He added that the liquidation period for the joint venture expired on January 29 and that a court would be asked to extend the deadline for at least another month. Zarafshan-Newmont was established in 1992 on a parity basis between the US' Newmont Mining and Uzbekistan's Navoi Ore Mining and Metallurgical Plant, or NGMK. In early October, an Uzbek court declared Zarafshan-Newmont bankrupt. The ruling followed a $49 million back tax claim by the Uzbek government and subsequent seizure of some of the joint venture's assets. Zarafshan-Newmont develops the Muruntau open-pit gold mine, owned by NGMK. In 2005, Zarafshan-Newmont produced 7.72 tons of gold, down 65% on the year. The joint venture is one of three gold producers in Uzbekistan.

UzKTZhM to develop Yakhton, Sautbay tungsten deposits

TASHKENT. January 19 (Uzreport) - Uzbek Refractory and Heatproof Metals Plant (UzKTZhM) will start developing the Yakhton tungsten deposit in Samarkand region, and the Sautbay tungsten deposit in Navoi region, southern Uzbekistan, between 2007 and 2012. The deposits have reserves for producing more than 2,000 tons of tungsten concentrate. Uzbekistan's President Islam Karimov has approved the programme for development of the country's tungsten deposits for the near six years. The programme includes construction of a mining and processing plant between 2007 and 2008 and beginning the development of the North field at the Yakhton deposit in 2009. The deposit will have an annual tungsten concentrate output of 870 tons. The Sautbay deposit will be put into industrial exploitation between 2010 and 2012. The deposit will have an annual tungsten output of 1,260 tons. The financing of the projects will come from the Fund for Reconstruction and Development of Uzbekistan, as well as from other sources.

Uzbek parliament buys ESET NOD32 antivirus software

TASHKENT. January 19 (Uzreport) - Eset, international developer of antivirus software and computer security solutions, said Uzbek parliament bought ESET NOD32 antivirus software to protect its computer network. The company said the supply of software is carried out within strategy of Eset n expansion of presence in CIS region. Eset said the parliament of Uzbekistan purchased 100 sets of NOD32 for Kerio Mail Server and NOD32 for Kerio WinRoute Firewall with license to install to 110 working stations. Kerio MailServer is a secure email server with collaborative features suited for SME corporate environments. It's reliable messaging architecture supports multiple domains and advanced services, such as IMAP, POP and SMTP, using SSL. It is a true antispam mail server combating spam with SMTP authentication, support for public databases of spammers, efficient content filtering, and dynamic limitation of SMTP server capacity. Dmitriy Popovich, head of Eset in Russia, said today information technologies play a great role in activity of state bodies and at the same time, use of information systems have such threats as damage or embezzlement of information. Uzbek parliament adopts measures on effective antivirus protection of information system, which keeps and processes important information. Founded in 1992, ESET is a global provider of security software for enterprises and consumers. ESET's award-winning, anti-threat software system, NOD32, provides real-time protection from known and unknown viruses, spyware and other malware. NOD32 offers the smallest, fastest and most advanced protection available, with more Virus Bulletin 100% Awards than any other antivirus product. ESET has been named in Deloitte's Technology Fast 500 four years running, and has an extensive partner network, including corporations like Canon, Dell and Microsoft. Eset is headquartered in Bratislava, Slovakia and is represented worldwide in more than 100 countries.

Uzbekistan plans to lease 10 medium-range aircrafts by 2010

TASHKENT. January 22 (Uzreport) - Uzbekistan Havo Yollari (Uzbekistan Airways), national air carrier of Uzbekistan, plans to lease ten medium-range aircrafts Boeing-737-800 or Airbus-320, head of Uzbek company said on Monday, January 22. Uzbekistan Havo Yollari marks its 15th anniversary on January 28, 2007 and it is one of the largest airlines in Central Asia. Valeriy Tyan, director-general of Uzbekistan Havo Yollari, said the company will need medium-range aircrafts in near future and he added that the company is working with both Boeing and Airbus on purchase of aircrafts. Mr Tyan said the company will complete negotiations within several months and determine producer as well as terms of commercial leasing of new aircrafts. Two years ago, Uzbekistan Havo Yollari completed to update its fleet and increased number of western aircrafts to 16. Currently, the company uses four Boeing-767-300, six Boeing-757-200, three A-310 and three RJ-85 aircrafts. The company plans to remove morally and physically old Soviet-made aircrafts from exploitation. Currently, the company uses three TU-154M, six An-24 and Yak-40 and one new Il-114-100 aircraft of Tashkent Aircraft Production Plant. Valeriy Tyan said the company will receive three more 64-seat Il-114-100 by the end of 2007 and one in 2008. He said the aircrafts will be equipped with engines of Pratt & Whitney (Canada). Uzbekistan Havo Yollari transported 1.96 million passengers in 2006 compared to 1.66 million in 2005. The company transported over 18,100 tons of cargo in 2006 against 21,550 tons in 2005. Uzbekistan Havo Yollari carries out flights to 22 cities of America, Europe, Middle East, Eastern and Southern Asia and 21 cities of CIS, as well as 11 directions in Uzbekistan.

Japan Isuzu Motors starts producing small buses in Uzbekistan

TASHKENT. January 22 (Uzreport) - Japanese bus and truck maker Isuzu Motors Co has begun producing small buses in Uzbekistan through local car assembler and seller Samarkand Automobile Factory LLC, the Japanese carmaker said on January 22. 2007. Isuzu Motors and Samarkand Automobile Factory signed a contract for the production of the small buses at a plant of Samarkand Automobile Factory. Under the contract, Isuzu Motors will supply chassis of its ELF small truck model to Samarkand Automobile Factory through Japanese trading company Itochu Corp. The Uzbekistan company will assemble small buses based on the imported chassis and will sell them under the company's brand in Uzbekistan. Isuzu Motors forecasts sales of 1,000 buses based on the Isuzu ELF in 2007 and 3,000 units in 2010. The carmaker is considering introducing its buses in other Central Asian countries in the near future.

Lukoil to build unique gas processing plant in Uzbekistan

TASHKENT. January 22 (Uzreport) - Head of Lukoil Overseas in Uzbekistan Andrei Podbolotov commented on Lukoil's gas project in Uzbekistan to corporate newspaper of Russian company "Neftenoy Vedomosti". Podbolotov said Lukoil and Uzbekistan signed product-sharing agreement on Kandym-Khauzak-Shadi-Kungrad and Lukoil Uzbekistan Operating Company is implementing project. The PSA is valid for 35 years till 2039. Currently, the work on drilling of wells is underway in Khauzak deposit, the company is recruiting personal and equipment on preliminary processing of gas, gas collection point, new village and electricity network are constructed, he said. He added that the company will receive first gas next year. The company will invest $150 million in 2006 or twice as much compared to previous year and the total investments reach $300 million. He said the cost of the project was $1 billion during the PSA signing, but there are all grounds to say that the investments will reach $2 billion. This is the largest investment project in Uzbekistan. Head of Lukoil Overseas in Uzbekistan said that the produced gas in Uzbekistan will be supplied to existing pipelines and those sides, which offer good prices. Podbolotov said Lukoil will construct gas processing plant with capacity of 10 billion cubic meters per year in Kandym deposit and the plant will have unique equipment and capacity on gas processing. Lukoil will process 10-12 billion cubic meters of gas annually as of 2012-2013.

Uranium output in Uzbekistan falls 1.8% in 2006

TASHKENT. January 23 (Uzreport) - Navoi Mining and Metallurgical Combine (NGMK) – the main uranium producer in Uzbekistan – reduced uranium output by 1.8%, or 41,000 tons, in 2006. The plant produced 2,260 tons against 2,301 tons of uranium in 2005. NGMK is the largest gold producer and the only low-enriched uranium producer in the country. As one of the largest production objects in Uzbekistan, NGMK is the main Uzbek operator on production, enrichment and export of uranium. Three enterprises in the structure of NGMK carry out raw material extraction by means of underground leaching. At the same time, the plant produces gold in large deposits located in desolate areas of Navoi and Bukhara regions. Specialists of NGMK believe that decrease in production was due to insufficient financing and certain technical problems, including disturbances in the manufacture of sulfuric acid which is used in technological process of uranium enrichment. In the recent years NGMK has been producing 57-59 tons of gold annually, and it is planning to increase production output 1.2 times by 2010. According to Nikolai Kucherskiy, Director of NGMK, priority direction of the combine is industrial exploration of deposits, and the main product is gold (99.99 grade) and uranium. The plant cooperates with 80 foreign companies. It is the leader in the CIS on gold production and covers 100% of the Uzbek uranium processing. Uzbekistan is the 7th in the world on uranium reserves. Uranium is produced in 27 deposits located in Kyzylkum region of Uzbekistan. Total uranium reserves are estimated at nearly 55,000 tons.

UzDaewooAuto's car output up 38.7% year-on-year in 2006

TASHKENT. January 26 (Uzreport) - UzDaewooAuto, Uzbek carmaker, produced 140,080 cars in 2006, up 38.7% on the year, Uzbekistan's State Statistics Committee said. UzDaewooAuto aims to make 200,000 cars in 2008. The carmaker's output rose 44.2% on the year to 101,010 units in 2005. UzDaewooAuto was set up in 1992 on a parity basis by Uzbek state-owned automaker Uzavtoprom and South Korea's Daewoo Motor. Uzavtoprom acquired 50% stake of Korean side in 2005 for undisclosed sum.

UzBAT increases cigarette production by 50% in 2006

TASHKENT. January 26 (Uzreport) - British American Tobacco Uzbekistan (UzBAT), the only producer of tobacco products in Uzbekistan, has increased cigarette production from 5.262 billion cigarettes in 2005 to 7.903 billion in 2006, according to State Statistics Committee. In the reporting year the company also increased the production of fermented tobacco to 5,688 tons, as compared to 4,355 tons in 2005. UzBAT produces 16 different kinds of Pall Mall, Hollywood, Viceroy, Wills, Karvon and Hon cigarette brands in Uzbekistan. The enterprise imports Lucky Strike, Kent and Vogue brands. Since its foundation in 1994, UzBAT has invested some US$280 million in the modernization of the Urgut Fermenting Plant and construction of Samarkand Cigarette Factory, and increased its shareholding in the enterprise to 96.8%.

Tajikistan, Uzbekistan agree on mutual electricity supplies

TASHKENT. January 26 (Uzreport) - Tajikistan and Uzbekistan have at last resolved the issue of Uzbekistan's debt of 5m dollars to the Barq-I Tojik [Tajik electricity] energy company. Tajikistan obtained an opportunity to import and export the necessary volume of electricity via Uzbek power grids at the expense of the debt, Tajik Energy and Industry Minister Sherali Gulov has told the press. Tajik Avesta website reported he also said the sides had managed to reach agreement on mutual electricity deliveries in 2007. In line with the earlier reached agreements, this year Tajikistan will receive 600m kWh of electricity, and will return to Uzbekistan 1.5 times more. Meanwhile, a total of 32m kWh of electricity has been imported from Uzbekistan since the beginning of the year.

Uzbek cotton output drops to 1.17m tonnes

TASHKENT. January 26 (Uzreport) - Uzbekistan, the world's second biggest cotton exporter, produced 1.171 million tons of cotton-fiber in 2006, down from 1.188 million tons a year earlier, the State statistics Committee said. The country had forecast 2006 production of 1.1 million tons of cotton-fiber. The government has said it expected to export 750,000-800,000 tons of fiber in 2006 compared to 880,000 tons in 2005 which made up 19% of total export revenues.

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