Government Gives ‘Last Chance’ to Anaklia Development Consortium

The Government of Georgia has decided not to terminate the contract between itself and the Anaklia Development Consortium which outlines the construction of potentially, Georgia’s first deep water port. The government’s decision not to terminate the contract gives the Anaklia Development Consortium till the end of this year to fulfill its obligations.

Speaking with reporters on October 16, Minister of Regional Development and Infrastructure, Maia Tskitishvili noted that “it will be the last chance” for the Consortium, as the government has already extended the deadline for the contract six times.

Commenting on the allegations leveled against the government made by Levan Akhvlediani, director of the Anaklia Development Consortium earlier this week, that the government was guilty of sabotaging the project, Minister Tskitishvili said that it was “a feeble attempt to shift the blame for non-fulfillment of its own obligations on the government.”

The Infrastructure Minister also focused on reports according to which she allegedly expelled potential Kazakh investors in favor of a potential American investor. In this context, Tskitishvili also commented on the recent interview of Mamuka Khazaradze, one of the founders of the Anaklia Development Consortium, with Mtavari Arkhi TV. According to Khazaradze, Bidzina Ivanishvili, chairman of the ruling Georgian Dream party, asked him in an earlier conversation of 2017 ” what Americans needed in the Black Sea”. Tskitishvili stated that she finds these two allegations to be contradictory.

The Infrastructure Minister also touched upon the letter sent by the Anaklia Development Consortium to the Ministry of Infrastructure on October 10th, saying that it does not include an outline of the plan for the project and vision about the project development, as stated by the Consortium representatives. She cited the Consortium’s request to keep the contents of the plan confidential as the reason behind not unveiling the letter. Tskhitishvili called on the Consortium to publish it.

The director of the Anaklia Development Consortium welcomed the government’s decision not to terminate the contract, saying that “there are particular obstacles” in the project implementation process, which should be solved by joint efforts.

“We need to use all resources at our disposal to successfully complete the project. The Anaklia Development Consortium will not be able to implement the project unilaterally; without the government’s full support and cooperation in jointly addressing [potential] obstacles, the project cannot be implemented successfully,” he told reporters.

Commenting on the letter sent to the Infrastructure Ministry, Akhvlediani stressed that “it precisely describes all actions and steps needed to advance the project.”

Earlier developments

On Tuesday, Minister Tskitishvili held a news briefing where she explained that according to the interim terms of the contract, the Anaklia Development Consortium had to fulfill two of its obligations by October 15. In particular, the Consortium had to submit to the Ministry the agreement with potential investor on capital mobilization (USD 120 million) and prior agreements with international banks on obtaining loans worth USD 400 million.

Tskitishvili also noted that the Georgian government had the right to terminate the contract if the Consortium did not fulfil its interim obligations by October 15, 2019.

The Anaklia Development Consortium also held a news briefing the following day in response to the Infrastructure Minister, accusing the government of “sabotaging” the Anaklia deep sea port project. Akhvlediani then said that while facing “the most difficult situation” in recent months, the consortium has still managed to find two investors – one, a group of investors from Kazakhstan and Hong Kong; and other one from the U.S.

He also said that during the meeting with the Kazakh-Hong Kong investors, the Infrastructure Minister stressed that the government did not welcome their investments. Moreover, Akhvlediani noted, the government did not send a letter to the American foundation, that would welcome their participation in the project.

“There were a lot of facts of sabotage in recent months. For example, legal persecution of our main sponsors, a permit issued in May in favor of the Poti port, which seriously harmed the attitude of our investors and raised big question marks concerning the government’s support for the project,” Akhvlediani said, adding that government officials were reportedly discussing the project’s unprofitability with the interested parties, hinting that it was not “commercially justified.”

Speaking at the same news briefing, Ted Jonas, member of the Consortium’s supervisory board, accused the Infrastructure Minister of “negative reaction, negative treatment” of the project’s potential investors.

“This project is a public-private partnership. The government needs to act like a partner and not like an enemy,” he said, calling on the government “to sit down with us and remove these obstacles so that we do not lose the chance to do this project which is of incredible importance to Georgia.”

In the interview with Mtavari Arkhi on October 15, Mamuka Khazaradze accused Bidzina Ivanishvili of hampering the implementation of the project objectives and hinted at Russian influence in this context. He also recollected an earlier conversation of his with Ivanishvili held in 2017, when the latter asked him “what do the Americans need in the Black Sea?”

“I am saying with full responsibility that the country faces a huge threat; the country loses its perspective, because Anaklia is our future, our turning point, our security point; it means thousands of jobs and a worthy place in our neighborhood,” Mamuka Khazaradze said.

Read also:

This post is also available in: ქართული (Georgian) Русский (Russian)