‘Ak-Keme’ will generate $60,000 a month for the state

The ‘Ak-Keme’ hotel in Bishkek has been leased to an investor for 15 years. The state will receive $60,000 per month. President Sadyr Zhaparov announced this at the opening of the refurbished facility, speaking about the legal proceedings that had left Kyrgyzstan facing potential claims amounting to tens of millions of dollars.

According to the head of state, the hotel was built by Turkish entrepreneurs during Askar Akayev’s presidency. The property was subsequently unlawfully seized from them, after which the investors took the case to court in New York and won.

Initially, Kyrgyzstan was required to pay $16.5 million or return the hotel. However, a daily penalty of $15,000 was imposed for failure to comply with the ruling. By 2020, the amount claimed had risen to approximately $30 million.

Sadyr Japarov noted that the claimants had considered seeking the seizure of Kyrgyz assets abroad, including the National Bank’s gold reserves held in Switzerland.

“After we took office, we began negotiations with Turkish businessmen and agreed to settle the dispute through an out-of-court settlement. We managed to reduce the amount to $6.5 million,” the President said.

The negotiations continued from 2021 to 2023. Once the legal claims had been withdrawn, the hotel was transferred to the administration of the Presidential Affairs Office and subsequently leased to a private investor for 15 years.

Under the terms of the agreement, the investor was required to renovate the property at their own expense, bring it up to five-star hotel standards and, upon expiry of the lease, return it in full to the state.

“Starting today, they will pay the state $60,000 in rent each month,” said Zhaparov.

This will generate annual revenue of $720,000, totalling $10.8 million over 15 years.

The President also emphasised that, at the time the hotel was transferred to the state in 2023, its outstanding debts on various obligations, including utility bills, amounted to around 30 million KGS.

The refurbished ‘Ak-Keme’ will feature 74 rooms, conference halls, business meeting facilities, restaurants, sports facilities and leisure areas. The amount of the investor’s contribution to the refurbishment has not been disclosed.