Georgian construction company Prime Concrete starts building a new Pace Terminal Project in Poti

Published in Economics
Sunday, 20 October 2019 16:27

Georgian construction company Prime Concrete starts building a new Pace Terminal Project in Poti co-financed by the U.S. Overseas Private Investment Corporation (OPIC).

October 10, 2019. Poti. The Georgian construction company Prime Concrete has been commissioned to build a new Pace Terminal Project in Poti with a total value of construction work of US$ 20 million. The project is co-financed by the U.S. Overseas Private Investment Corporation (OPIC). An official ceremony to mark the beginning of construction was held in Poti on October 1, 2019 and was attended by the Deputy Prime Minister of Georgia Maia Tskitishvili, the Minister of Economy of Georgia Natia Turnava, the Managing Director of OPIC Kenneth Angel, the Pace Terminal’s Director David Nadirashvili and the Founder of Prime Concrete Alexander Sokolowsky. Other high-ranking members of the Georgian government and parliament as well as diplomats and foreign guests were also present.

For a Georgian company to build such an important terminal is a unique opportunity. Prime Concrete managed to successfully qualify for the tender in a highly competitive process with dozens of international contractors. Its competitive advantages lay in its distinctive means and capabilities, its experience and know-how, and its truly local presence. Prime Concrete also partnered with the Dutch companies Royal HaskoningDHV, which developed the most efficient design for berth and pier construction, and Vanthek, a leading international piling contractor.

Prime Concrete is a well-established Georgian construction company that has successfully implemented numerous large-scale projects, acquiring exceptional competence and invaluable expertise in the fields of port, water, road and other civil and industrial infrastructure projects. Its portfolio includes maritime projects such as the rehabilitation of berth no. 7 and the construction of an inland container terminal in Poti; public works such as wastewater treatment plants in Anaklia, Ureki, Zugdidi and Gardabani; extending Tbilisi’s 2nd metro line (to University Station); and building and rehabilitating several municipal roads in western Georgia (Samegrelo).

Prime Concrete CEO Alexander Sokolowsky underlined the importance of the Georgian company winning the tender: “We are extremely glad to engage in the construction of this strategic facility. It is an exceptional occasion when a Georgian company under an EPC contract takes full responsibility for the construction of such a complex and large-scale project. We use local capabilities, bring our decades-long experience and expertise, hire local workers, and use local construction materials, which is beneficial for local communities and the entire country. We will make sure with our partners from Pace Group, Royal HaskoningDHV and Vanthek, that the new terminal is built in a high-quality, safe and environmentally friendly manner, increasing Georgia’s transit capabilities to new high levels.”

The new terminal will occupy 25 hectares of the New Port Zone in Poti’s former shipyard. The total length of the berthing facilities will be 650 meters, with a water depth of 12 m. This will be the first modern facility in Georgia to handle deep-water vessels by 2020. The total cargo turnover of the terminal will be 5 million tons. The total project cost is US$ 93 million, of which US$ 50 million will be allocated by OPIC and the remaining US$ 43 million by Pace Group as an equity contribution. This is OPIC’s single biggest engagement in Georgia. The terminal will increase the country’s strategic importance as a hub between East and West and as an integral part of the Belt and Road Initiative. OPIC’s decision to finance the project is also a form of recognition from the U.S. and other international stakeholders of the terminal’s significance for Georgia and the wider region.

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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 5th 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

     

  • EU4Business project helps set up business clusters for better access to EU market

    Up to 100 Georgian small and medium-sized enterprises (SMEs) are now in a better position to take advantage of the benefits of the free trade agreement between the EU and Georgia.

    The EU-supported project ‘SME Development and DCFTA in Georgia’ has helped to establish three business clusters in the country and to lay the groundwork for two more, reaching out to 100 SMEs specialising in furniture, interior design, film production and post-production, ICT, apparel and honey production.

    As a result of the 4-year project, these SMEs have received access to leading international expertise to help them identify opportunities for capacity and product development, better competitiveness and integration with the European market.

    Cluster member SMEs currently employ more than 1,400 staff members in Georgia.

  • The Project to Foster Peace Citizens, Implemented by HWPL Peace Education

    Kotebe Metropolitan University implements the peace education to train peace-building citizens in Ethiopia

    In December, the professors and students at Kotebe Metropolitan University participated at the ‘Heavenly Culture, World Peace, Restoration of Light (HWPL) Peace Education’ sessions which are also joined by 214 schools in 36 countries. The sessions provided platforms for students and professors to express the significance of peace education and discuss the process of implementing peace education with the visions laid out by HWPL.

    Ethiopia is the melting pot country, enriched with the diverse cultures, peoples, and religions. However, such diversity sparked many conflicts in the past, some of which are still ongoing. These conflicts have stripped the country and people apart emotionally, and the Ethiopian government is actively working to peacefully resolve them for the better future of the country.

    To bring the peaceful reconciliation in the country, the Ministry of Education in Ethiopia and 9 other states had previously signed MOA with HWPL to implement the HWPL Peace Education. The curriculum is designed to empower citizens to properly recognize the value of peace and take the pioneering role of spreading the culture of peace. Implementing Peace Education is also the practical step toward implementing visions laid out by the Article 10-Spreading a culture of peace, out of 10 Articles and 38 Clauses of the ‘Declaration of Peace and Cessation of War (DPCW)’. Citizens are carrying out the popular peace movement to present DPCW to the United Nations to make it into the international law of peace in the form of a legally binding document. This global movement aims to fundamentally cut off vicious cycles of war and support citizens to promote the value of peace as the universal culture for humanity.

    A student who participated at the peace education said, “I learned why peace education is important for resolving conflicts in Ethiopia. It taught me to act as a messenger of peace. It is also important to present 10 Articles and 38 Clauses of the DPCW to the UN to fundamentally eradicate war and conflicts. To this end, we must continue to participate in peace education,” emphasizing the need of peace education in order to peacefully resolve the conflicts in Ethiopia.

    After signing MOA with HWPL, the Ministry of Higher Education in Ethiopia is currently reviewing the ‘HWPL Peace Education’ to incorporate and implement it as formal curriculums in all the universities. Addis Ababa School of Science and Technology (AASTU) also held the peace education sessions right after the Kotebe Metropolitan University.

    After an initiative to pursue HWPL Peace Education was publicly announced in September 2017, HWPL began signing MOA with every Ministry of Education in need of peace education.

    So far, HWPL has signed MOA with the corresponding ministries of 10 countries, as well as MOU with 214 schools in 36 countries, most of which are officially implementing peace education curriculums.

  • EU4Business project holds sectoral meetings on beekeeping, fruit growing and market gardening in Georgia

    Beekeeping, fruit growing and market gardening were the focus of a sectoral meetings organised last week in Georgia in the framework of the EU4Business initiative.

    Representatives of small and medium-sized enterprises (SMEs) and civil society organisations (CSOs) from different regions of Georgia attended the meetings. Ministry representatives included heads of relevant departments, field experts, scientists and representatives of the country’s Agricultural Projects Management Agency.

    The first section of the meeting was dedicated to challenges in the beekeeping sector. During the second part, problems identified in the areas of fruit growing and market gardening were discussed.

    The event was organised within the EU-funded “Georgia on European Way: Creation of Effective Model for DCFTA and SME Strategy Implementation” project. It seeks to strengthen the capacities of Georgian CSOs and business support organisations in supporting the implementation of the Deep and Comprehensive Free Trade Area (DCFTA) with the EU. It also helps implement the SME strategy for Georgia through capacity building, awareness raising and the creation of advisory councils bringing together all stakeholders.

  • EU-supported summer camp focuses on rural development and tourism potential of Kakheti region

    Generating project ideas, devising projects and teamwork were the major topics of a recent EU-supported youth summer camp, organised by the Akhalkalaki Local Action Group in the Kakheti region of Georgia.

    During the summer camp, participants had the opportunity to raise awareness about the history of the region, visit cultural, historical and recreation sites, and receive information about the academic programmes of local educational institutions. Moreover, the young people learned traditional local crafts, such as the art of patterning and creating Georgian tablecloths and local cuisine.

    The camp’s main topics were regional development and tourism, in which Kakheti region has great potential.  

    The event was held within the framework of the EU-supported project “Promoting a New Rural Development Approach in Akhalkalaki”, which is supported in the framework of European Neighbourhood Programme for Agriculture and Rural Development (ENPARD).

    The EU is supporting agriculture and rural development in Georgia through the ENPARD Programme. Implemented since 2013, the main goal of ENPARD is to reduce rural poverty in the country.

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