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. Last Updated: 07/27/2016

Tajikistan Cancels Hydropower Venture With RusAl

DUSHANBE, Tajikistan -- Tajikistan on Wednesday canceled a contract with RusAl for the completion of a giant hydroelectricity project seen as a substantial boon to the impoverished Central Asian country.

Tajikistan and RusAl signed a $1 billion contract in 2004 for the completion of the Rogun project, which is to include the world's highest dam. The project was begun when Tajikistan was part of the Soviet Union but stalled in the economic chaos that followed the Soviet collapse.

But the contract became mired in disputes between Tajikistan and RusAl, including over the size of the dam, the materials used in it and how much of the electricity generated by the project would be sold to RusAl's energy-hungry aluminum plants.

The office of Tajik President Emomali Rakhmon, which announced the cancellation of the contract, said the government had decided to create an open-stock company to undertake its completion. A RusAl representative in Tajikistan, Konstantin Zagrebelny, said he had not been informed of the decision and could not comment.

The country's fast-flowing mountain rivers have a potential hydropower capacity of 527 billion kilowatt-hours per year, among the largest in the world, international experts say. Energy sales would bring a substantial boon to the country, which is racked by rampant unemployment and problems caused by increasing amounts of drugs being smuggled from neighboring Afghanistan. The project could substantially increase sales of electricity to neighboring China, as well as to Pakistan and Afghanistan.

RusAl wanted to build a 280-meter concrete dam to generate electricity primarily for its own use. The government wants the dam to be 55 meters higher and built out of earth and rock, just as the original Soviet plans specified, saying that would be safer and generate more electricity.