TBILISI/Jan. 9 (The Bulletin) — The Georgian government cancelled a $2.5b contract to build Georgia’s largest deep-water port at Anaklia on the Black Sea because it said that finances for the consortium which had taken on the project were too flimsy.
Critics of the government, though, accused it of turning the country’s biggest infrastructure projects into a political weapon. One of the key consortium partners is TBC Bank which was set up by Mamuka Khazaradze who is currently standing trial, accused of corruption.
“The Anaklia Port Project is owned by the state, it is not owned by any private investors,” Maia Tskitishvili, Georgia’s minister for regional development and infrastructure, said when she announced that the contract, held by the Anaklia Development Consortium (ADC), would be cancelled . “By the end of 2020, we had to have a port in operation but as you can see, we will not get this result.”
She said ADC, led by TBC Bank had failed to replenish capital of $120m or attract a loan of $400m from international banks. ADC disagreed, though, and said that it had secured loan pledges from international banks such as the European Bank for Reconstruction and Development (EBRD). It said that these pledges had been undermined because the government had failed to guarantee to potential investors that they would get their money back is the project collapsed.
ADC said it would take the government to arbitration over the Anaklia contract.
Georgia has framed this project, conceived in 2014 under the current Georgian Dream coalition, as a vital piece of infrastructure needed to boost its status on the east-west transit corridor that China has dubbed the Belt and Road project.
— This story was first published in issue 433 of the Central Asia & South Caucasus Bulletin on Jan. 13 2019