Friday, October 29, 2010

Fuel for Manas Transit Center

Manas Transit Center can be a lonely base. Opened with Russian approval after the terrorist attacks of September 11, 2001 to help the United States in its war against al-Qaida in Afghanistan, it has become a bone of contention in the great power rivalry in Central Asia. It is only 40 miles from Manas to the nearest Russian base; at one point, the base commanders had monthly dinners together. More recently, however, the Kyrgyz ordered the base closed after the Kremlin offered it a sweetheart energy deal. But Moscow failed to deliver, and the US upped the base rent, and so Manas remains open - the only American outpost within the territory of the former Soviet Union.

Russia's opposition to an American presence in its sphere of influence, the "Near Abroad" as the Russians refer to it, is well known. Less well-known, however, is Russia's willingness to cooperate with the United States if the stakes are high enough. In September, EurasiaNet ran a story that the fuel supply contract for the transit center was expiring--and that the current supplier (Mina Corporation) was under congressional investigation. Washington wanted a competitive tender plan to find a new supplier.

The government of provisional president Roza Otunbayeva put forward an alternative plan, calling for the creation of a joint venture involving a Kyrgyz state-run entity and Gazprom, owned by the Russian government. Pentagon officials rejected the plan, arguing that "a Russian hand on the fuel spigot needlessly compromises the US mission and US forces." (Washington Backing Manas Tender Plan, Shuns Gazprom JV,"

More recently, EurasiaNet has reported that Gazprom has confirmed that the company could participate in the Kyrgyz state venture. A spokeswoman said one of the company's subsidiaries was "ready to consider proposals from the Kyrgyz Republic for aviation fuel supply at Manas airport." ("Kyrgyzstan: Gazprom Ready to Fill Manas Fuel-Supply Role," ) This is a striking turnaround that could not have been offered without approval from the highest levels of the Russian government. Whether the reason is to gain control of the fuel supply (doubtful, since most of the fuel was already Russian-origin), or an attempt to curry favor with either the Krygyz or the American governments, the symbolic value of Russia actively supporting the American war on terrorism is tremendous--and should not be overlooked.

Washington appears to be reacting well to the latest development. They have developed a compromise plan that would allow the joint enterprise to provide 50% of the Manas fuel. The Defense Logistics Agency has amended the competitive bid solicitation so that 20 percent of the contract could go to a state-owned Kyrgyz enterprise in February, with that share rising to 50% by July. The amendment does not mention Gazprom by name, but is fashioned in such a way that would allow the joint enterprise to enter the process. Many observers believe that Mina Corporation will win the bidding, regardless; but Gazprom has another asset at its command: the new general manger of the Kyrgyz state owned Manas Refueling Complex is Marat Malataev, the deputy director of wholesale fuel sales for Gazprom Neft Asia in Kyrgyzstan ("Washington Hopes Kyrgyzstan Bites on Compromise Manas Fuel-Supply Offer,"

Dr. James J. Coyle is available to speak to your organization or at your event. Please contact him at