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• DETAILS RELEASED OF GEORGIAN GOVERNMENT’S CAMPAIGN TO STRANGLE ANAKLIA PORT PROJECT

  Ruling Georgian Dream Party Reversed its Support for Vital Project,

  Wiping Out Economic Benefits for Georgia

  TBILISI, GEORGIA, 9 September, 2020 – The Anaklia Development Consortium (ADC), the company originally selected by the Government of Georgia to develop the strategic Anaklia Port Project, today shared additional details of the Government’s campaign, directed by the ruling Georgian Dream party, to undermine the project by dissuading potential project investors, lenders, contractors and suppliers from joining the project in order to kill it.

  The following statement is issued on behalf of the ADC Supervisory Board:

  “All infrastructure projects of such scale require government support; namely the encouragement of lenders and investors, the assistance in permitting, regulatory approvals and a favorable tax regime, and providing any ancillary support; in this instance, the provision of land and the construction of road and rail infrastructure.  For a government to actually oppose an infrastructure project that it had itself approved is highly unusual in the global economy. 

  “The Georgian Government’s campaign to strangle ADC’s ability to develop the Anaklia Port Project represents a self-inflicted wound for itself and considerable injury to Georgia’s economy and its role in the region.

  “Taken together, the Georgian Government's specific actions are part of a deliberate and well-orchestrated campaign to destroy a project which the Government itself originally sponsored and endorsed, but subsequently chose to destroy as a result of what appear to be the political and economic self-interests of the Georgian Dream Party and its principals.

  “The Government manufactured all sorts of excuses for not wanting to see various investors, lenders and partners involved in the project, but the Government really only had one purpose:  to choke the project to death by scaring away everybody who might have an interest in supporting it.

  “Also, is it beyond coincidence that government ministers – including two Prime Ministers -- who voiced support for the project or otherwise expressed concern about the growing controversy with the project were tendering their resignations shortly after such comments were made?  

  “The damage to Georgia caused by the Government goes well beyond the potential loss of the Anaklia Port and the associated Special Economic Zone.  The conduct of the Government is scaring away investors at a time when Georgia cannot afford to lose any more foreign investment.  According to the National Statistics Office of Georgia, the amount of foreign direct investment in Georgia has fallen from nearly US$  2 billion in 2017 to just over US$ 1.3 billion in 2019, and in the first quarter of 2020, stood at only US$ 171.8 million[1] - a catastrophic decrease even before the Covid crisis began to take effect.  As Retired U.S. Lt. Gen. Ben Hodges of the Center for European Policy Analysis said, ‘the government only has itself to blame.’[2]”

  Some examples of the Government’s efforts to strangle ADC and the Anaklia Port Project include:

  November, 2017

  • Georgian Dream party leader Bidzina Ivanishvili requested to meet with ADC to discuss the Anaklia Port Project and asserted that the expansion of Poti Port could achieve the same objectives of the Anaklia Port at a far lower cost. 

  June 2018

  • During a June 12 meeting of the Georgian Dream party, attended by more than 100 party officials, Party Leader Bidzina Ivanishvili personally blamed Prime Minister Giorgi Kvirikashvili for his actions in support of the Anaklia project and for having close ties to ADC investor Mamuka Khazaradze.  Mr. Kvirikashvili resigned the day after that meeting.

  October 2018

  • In February 2019 ADC learned that during an October 2018 meeting with senior U.S. State Department officials in Tbilisi, Mr. Giorgi Gakharia  (then Minister of Interior) advised the U.S. officials that the Anaklia Port project was not in Georgia’s interests.

  January 2019

  • SSA Marine, which was selected as the Anaklia Port operator and was a potential investor, alerted ADC of its concerns about what seemed to be the Government’s support of an expansion of the Poti Port.  (Following detailed studies sponsored by the Government back in 2013-14, it had been determined that Poti Port could never meet Georgia’s needs for a Deepwater Port, which is why the government itself selected Anaklia for development at that time.  The Government’s subsequent expressions of support for expansion at Poti was a clear signal to the lending and investment community that the Government was no longer supportive of Anaklia.)

  February 2019

  • A sovereign European development bank advised ADC that it had decided against supporting the project because of the negative actions of the Georgian Government, and the possible shift of support to the Poti Port.

  February 2019

  • Another sovereign European development bank advised ADC that it was withdrawing its support because one of its counterparts had just done so (above) due to the state’s apparent shift of support from Anaklia to Poti.

  March 2019

  • It has been reported that Infrastructure Minister Maya Tskitishvili, in ministerial hearings before Parliament, undermined SSA Marine as a potential investor and as the port operator, claiming the company lacked experience and financial capacity.  These assertions were not true. In the process of her speech, the minister also breached legal obligations of confidentiality that were associated with the investment agreement.

  April 2019

  • SSA Marine advised ADC that it was suspending its activities related to the Anaklia Port project.

  April 2019

  • Mr. Giorgi Kobulia, Minister of Economy and Sustainable Development, told “Forbes Week” that the negative public discussions and media reports of the Anaklia project were having a negative impact on the business climate within Georgia.  He subsequently resigned within days of the interview.

  May 2019

  • A major U.S. private equity firm which was in advanced negotiations with ADC to join the project revealed to ADC that Government officials warned the firm to stay away from the project.

  June 2019

  • Prime Minister Mamuka Bakhtadze, in a trade visit to the U.S., met separately with SSA Marine, the leadership of the U.S. private equity firm that were interested in investing in the project, and with U.S. Secretary of State Mike Pompeo in Washington, D.C.  Secretary Pompeo expressed support for the Anaklia project with the prime minister standing next to him, saying it would “strengthen Georgia’s ties with free economies and not allow Georgia to be under the economic influence of Russia or China.”  Upon his return to Georgia, Mr. Bakhtadze resigned, and this again put the project in unchartered waters.

  September 2019

  • At a meeting in Tbilisi, a large Hong Kong-based private equity group with significant Central Asian transportation synergies that was considering joining the project was told bluntly by Infrastructure Minister Tskitishvili that the Government did not desire their participation in the project.  At this same meeting Ms. Tskitishvili reaffirmed the Government’s seeming opposition to SSA Marine’s involvement in the project.

  September 2019

  • Giorgi Volski, Vice Speaker of Parliament, falsely claimed that the Hong Kong private equity group mentioned above is a “Russian” company,  with the intention either of disparaging it or sowing further confusion about the government's position in respect of the project.

  September 2019

  • In a meeting between Prime Minister Gakharia and an Anaklia Supervisory Board member, Mr. Gakharia stated that “things had to get quiet” before he could reassure the major potential U.S. investor of the state’s support for the Anaklia Project, which the board member understood to be a condition that ADC and Mr. Khazaradze stop criticizing the government publicly on its opposition to the Anaklia Project, and the government would stop criticizing ADC.  
  • Also, the Supervisory Board was promised a letter of support to a U.S. investor from the highest levels of the Government, but this never materialized, even though ADC did comply with the Government’s request.

  September 2019

  • A delegation from the U.S. (in Tbilisi to participate in the 5^th annual Tbilisi International Conference sponsored by the McCain Institute) met with new Prime Minister Giorgi Gakharia, and subsequently with Mamuka Khazaradze.  Representatives of the delegation told Mr. Khazaradze that Prime Minister Gakharia told them the Anaklia project was not commercially viable when this was patently not the case.

  October 2019:

  • Fadi Asly, chairman of the International Chamber of Commerce in Georgia, is quoted in the media saying, “No one will invest in Anaklia project as long as Bidzina Ivanishvili wants to destroy it.”

  Taken together, these are only a selection of the instances where the Government of Georgia actively undermined the project in an effort to prevent ADC from developing the project.  ADC intends to present evidence during the upcoming arbitration proceedings to demonstrate the degree to which the Government took such steps.

  Further details of the Anaklia Port project and ADC can be found at http://anakliadevelopment.com

   

  [1] https://www.geostat.ge/en/modules/categories/191/foreign-direct-investments

   

  [2] https://thehill.com/opinion/international/513432-the-curtain-could-fall-on-belarus-but-georgia-may-take-its-place

   

• Prime Minister of Georgia Congratulates Azerbaijanis with 100th Anniversary of First Democratic Republic

  "It is my honor to cordially congratulate this most important national holiday of the Republic Day personally to you, Ambassador and to the friendly nation of Azerbaijan. This date has a special significance this year. Our countries celebrate a centenary jubilee from the creation of the first democratic republic. It is symbolic that we have gathered today within the historic walls that served as a venue for our nations to choose their path of progress and prosperity a hundred years ago. Exactly one century ago, on May 28th 1918 National Council of Azerbaijan announced the independence of the First Democratic Republic of Azerbaijan right in this building. Two days prior, National Council of GGiorgieorgia unanimously endorsed the Independence Act in the same building" stated Giorgi Kvirikashvili, Prime Minister of Georgia in his address to the guests gathered at the 100th Anniversary of the First Democratic Republic of Azerbaijan.

  Head of Government noted that it is unfortunate that in the beginning of 20th century independence of Georgia and Azerbaijan turned out to be short-lived, though these spells of liberty left an irremovable trace in the history of statehood of both countries.

  "Recently, on 26th May we celebrated the Jubilee of our Republic together with Mr. Ogtay Asadov, Speaker of the Parliament of Azerbaijan. Unfortunately, our independence turned out to be short-lived. Democratic Republic of Azerbaijan existed for only 23 months, while Georgian - almost 3 years, though these spells of liberty left an irremovable trace in the history of our statehood. Within these hundred years, our countries overcame many obstacles and challenges. Friendship of our people and kind neighborhood counts many hundreds of years. Today we are building a better region with shared efforts to create more peace, stability and prosperity for all. Peaceful and stable region is the primary aim of all of us nowadays" noted the Head of Government in his address.

  According to Giorgi Kvirikashvili, peaceful and stable region is most important for the strategic projects that are jointly implemented by Georgia and Azerbaijan. Prime Minister focused on the Baku-Tbilisi-Kars Railway project and Trans-Anatolian Gas Pipeline (TANAP). According to him, relationship between the two countries is an outstanding example of the kind neighborhood.

  "Azerbaijan is one of the largest investors and trade partners of Georgia. This trend is constantly rising. Close economic and cultural links further solidify the foundation of our cooperation. Today our countries are working together on implementing large scale and ambitious transit and energy projects, which will completely change the dynamics in the region and its international significance. We officially launched the Baku-Tbilisi-Kars Railway last August in Baku. Trans-Anatolian Gas Pipeline (TANAP) will be launched in June this year, which also evidences our regional cooperation this time between Azerbaijan, Georgia and Turkey. Friendship existing between our countries is priceless and we take a special care of it. Azerbaijan was always standing by Georgia, be that during energy challenges over decades, as the Ambassador has mentioned in his address or - massive fire-led natural disaster last year. Georgia will never forget this support. I believe that our links will further strengthen and deepen to serve as a basis of a far wider and successful regional cooperation with the active engagement of other participants and partners" noted the Prime Minister of Georgia.

  Head of Government congratulated Ilham Aliyev, President of Azerbaijan and his family, as well as the people of Azerbaijan with 95th Jubilee of late Heidar Aliyev. Giorgi Kvirikashvili wished peace, prosperity and success to Azerbaijan.

  "I hope that with shared efforts and engagement we will manage to carry out this greatest mission and leave a peaceful, stable and affluent region to future generations. When we talk about building the state of Azerbaijan, we forget the name of Heydar Aliyev, whose contribution in this mission is tremendous. Recently, 95 years were celebrated from his birth on May 10. I wish to use this opportunity and express my slightly belated, but most cordial congratulations to Ilham Aliyev, President of Azerbaijan, his family and the people of Azerbaijan. I want to wish a much greater success to the President of Azerbaijan in the building of statehood. Once again please accept my congratulations with 100th Anniversary of the First Republic of Azerbaijan and I wish peace, prosperity and success to the people of Azerbaijan" concluded Giorgi Kvirikashvili.

  Jubilee reception held at the Youth Palace of Georgia marking the 100th Anniversary of the Democratic Republic of Azerbaijan was attended by the Government Members, representatives of the diplomatic corps and other invitees, who were also addressed by Dursun Hasanov, the Ambassador Extraordinary and Plenipotentiary of the Republic of Azerbaijan to Georgia.
  Prime Minister's Press Office

• Stadler Rail AG to Build Rolling Stock Manufacturing and Repair Facility in Tbilisi

  Swiss Stadler Rail AG, a global leader in rolling stock manufacturing, will build a rolling stock manufacturing and repair facility in Tbilisi. Today, Stadler's President Peter Spuhler met with Georgian Prime Minister Giorgi Kvirikashvili to inform him about the company's decision about building a subsidiary, production of rolling stock, and relevant works planned.
  
  The new factory will supply rolling stock to both Georgia's railroad system and Tbilisi's subway. Depending on technical and commercial considerations, the factory may export its products.
  The world-renowned Swiss rolling stock manufacturer expressed its readiness to invest in Georgia last June when a memorandum was signed by Stadler and the Ministry of Economy and Sustainable Development of Georgia.
  Three sites in Tbilisi's suburbs are under consideration for the factory.
  The meeting at the Administration of the Government was attended by Georgia's Finance Minister Mamuka Bakhtadze.

• Giorgi Kvirikashvili to Participate in World Economic Forum in Davos

  Georgian Prime Minister Giorgi Kvirikashvili will participate in the World Economic Forum in Davos. The Head of Government will visit the Swiss Confederation on January 22-24.

  During the World Economic Forum, the Prime Minister of Georgia will deliver a speech at the Strategic Outlook—Eurasia discussion. Giorgi Kvirikashvili is scheduled to hold bilateral meetings with political leaders from different countries, European Commission leadership, and founders of large international companies.

  The Georgian delegation under the leadership of the Prime Minister includes Vice Prime Minister and Foreign Minister Mikheil Janelidze, Finance Minister Mamuka Bakhtadze, and Co-Investment Fund CEO Giorgi Bachiashvili.

• Face-to-face meeting with the President of Armenia

  Prime Minister of Georgia Giorgi Kvirikashvili held a face-to-face meeting with President of the Republic of Armenia Serzh Sargsyan, who is on an official visit to Georgia.

  The head of the Government thanked the President of Armenia for his visit and emphasized positive dynamics of the good-neighborly relations between the countries throughout many years.

  "Dear President, I would like to welcome you. We are glad that you decided to visit Georgia. First of all, I would like to congratulate you with the upcoming New Year and wish you peace and stable development for your country. I am glad that your visit finalizes the year when we celebrated 25th anniversary of our diplomatic relations. However, our relations count centuries and they have always been as warm and good-neighbourly as they are today. We welcome the growing dynamics of our bilateral relations. Welcome!" - Giorgi Kvirikashvili addressed Serzh Sargsyan.

  The President of Armenia thanked the Prime Minister of Georgia for the warm welcome and expressed his hopes for deepening the relations between the countries.

  "Mr. Prime Minister, thank you very much for this warm welcome. I am sure that high-level meeting will have solely positive effect on the ever-growing relations between our countries. The path undertaken in last millennium bounds and obliges us to serve our nations throughout the period entrusted to us in a decent manner. I would like to wish Georgian people a Merry Christmas and a Happy New Year and wish them patience, optimism, since we have no other choice, we have to develop even further," - the President of Armenia noted.

  The parties discussed bilateral relations across various fields as well as an official visit of Prime Minister of Georgia Giorgi Kvirikashvili to Armenia, which is scheduled in the near future.