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 - 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.’”
Some examples of the Government’s efforts to strangle ADC and the Anaklia Port Project include:
- 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.
- 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.
- 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.
- 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.)
- 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.
- 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.
- 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.
- SSA Marine advised ADC that it was suspending its activities related to the Anaklia Port project.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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
Giorgi Gakharia: Every citizen of the country should call a doctor and get PCR tested on COVID-19 as soon as feverish or suspecting other respiratory symptoms
Giorgi Gakharia, Prime Minister of Georgia instructed respective institutions to extend the coverage of COVID-19 tests in parallel with re-opening of the economy and on the background of increased epidemic risks. Head of the Government of Georgia held a working meeting today on the topic.
On the background of COVID-19 circulation and restrictions being lifted in the country, greater importance is acquired by the timely detection and treatment of possible cases. Every citizen should immediately call 112 or a family doctor and get PCR tested on COVID-19 if and when gets fever, cough, and difficulty in breathing or other respiratory symptoms.
As of June 11, 2020 the country has identified 6 new cases, out of which 4 are not traceable and thus contain an outright threat. Hence, Government of Georgia and healthcare professionals once again urge the population to strictly adhere to the pre-defined measures.
Gradual lifting of restrictions and resumption of the economy should not serve as a basis of lessening the effort or lead to an illusion that a virus has been defeated. Examples of various countries have been discussed at the working meeting, which have had repeated epidemic outbreaks. Significance of joint efforts and high degree of responsibility has been underlined in the process of tackling the global pandemic.
Prime Minister of Georgia and management officials of the National Centre for Disease Control and Public Health (NCDC) discussed the current stance at Fever Centers and inbound calls to 112, along with the resources required for the greater extension of testing practices. It was noted that as of today 18 labs in Georgia perform the polymerase chain reaction (PCR) tests and this number will increase to 24 in July 2020. Average daily number of tests performed in the country is around 1500, which is expected to increase to 4500 in the nearest future. By autumn daily indicator of tests will reach 6000-8000. Along with possible cases, tests at present will be performed among some number of groups, which will be defined in the nearest future under the Government Resolution. In line with the instructions issued by the Head of Government of Georgia, stock of test kits will be periodically increased. NCDC is also replenishing its material-technical base.
Press Service of the Government Administration
Presidents of EBRD and ADB Confirm Readiness To Help Georgia Return to High Rate of Economic Development in Video Conference With Giorgi GakhariaThursday, 09 April 2020 12:03
Prime Minister of Georgia Giorgi Gakharia held a video conference with the presidents of the European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank (ADB) regarding the possible assistance and financial resources to be allocated to Georgia due to the challenges associated with the global pandemic.
Economic problems caused by the global spread of COVID-19 were emphasized during the video conference. Funding allocated by EBRD and ADB to the Georgian private sector, Georgian banks, and other business entities was noted in particular.
The sides also discussed post-crisis measures and the assistance that Georgia might receive from the financial institutions, which would enable the government to continue the state funding programs that are being implemented today to support citizens and private businesses.
It was noted that the government team is actively working with the local representatives, as well as the head offices of both EBRD and ADB to jointly develop a package of measures that will focus on overcoming the ongoing challenges.
According to the assessment of the presidents of the financial institutions, the fact that Georgia is successfully coping with the crisis constitutes sufficient grounds to say that the country will very quickly regain the rate and positions of economic development that it possessed at the beginning of 2020. Suma Chakrabarti and Masatsugu Asakawa confirmed their readiness to actively support Georgia in this area.
The Georgian side stressed that EBRD and ADB are very strong and serious partners for Georgia. It was noted that the European Bank for Reconstruction and Development and the Asian Development Bank have financed extremely important projects worth hundreds of millions of dollars in Georgia, including in the area of infrastructure. It was noted that all major systemic infrastructural projects funded by them are still in the active phase of implementation today, despite the ongoing crisis.
The head of government thanked EBRD and ADB for their active cooperation and their support of Georgia.
Deputy Prime Minister and Minister of Regional Development and Infrastructure Maia Tskitishvili and Minister of Finance Ivane Machavariani participated in the video conference.
Government Allocates 2 Billion GEL To Directly Assist Economy, According to Giorgi Gakharia's DecisionWednesday, 01 April 2020 15:23
The prime minister of Georgia would like to thank each and every citizen, particularly the residents of Tbilisi, for the understanding with which they approached yesterday's events throughout all of Georgia, especially after 21:00. Georgian Prime Minister Giorgi Gakharia made this statement at the session of the Interagency Coordination Council on the coronavirus.
According to the head of government, this shows how the citizens perceive a sense of shared responsibility.
"This is of extreme importance to us as it shows the way in which we jointly perceived the responsibility, which is our shared responsibility - not just of the government but of each and every citizen of this country. Above all, this is a responsibility toward one another, toward our parents, the older generation. Only thus will we be able to overcome this challenge quickly," Giorgi Gakharia stated.
The head of government discussed the decisions taken to support the economy.
According to the government's decision, 2 billion GEL has been allocated for the direct assistance of the economy as of today.
According to the prime minister's assessment, this is the assistance that will be aimed at the retention of jobs, as well as the retention of companies, ongoing production, and current businesses.
"First of all, we understand that every one of our citizens has suffered direct economic damage in connection with the measures that the government is forced to implement in order to protect the health of our citizens. This damage is often direct and tangible. In many cases, people have lost their income and their jobs. Precisely for this reason, at this stage, and considering the fact that this crisis differs from all other crises because it is impossible to make accurate predictions concerning duration, as well as in terms of correctly estimating damage to the economy, we are forced - and in contrast to all other actors, it is our responsibility - to utilize even the modest capabilities of our economy today in a manner that is as effective and rational as possible," the head of government stated.
According to Giorgi Gakharia, this decision is of utmost importance in order to enable the Georgian economy to develop rapidly and to restore the starting positions it had at the beginning of the year as soon as the concluding phase of the crisis has been reached.
"In this regard, it is our unequivocal decision that we will do our utmost to maintain large-scale, systemic infrastructural projects under conditions of heath safety protection, as well as to support and enable systemic production to continue operating, and to do our best to support systemic fields of the economy to the greatest extent possible. In this regard, as of today, we have mobilized 2 billion GEL in the budget. This is only the beginning and the first stage, given the data that we possess today," the prime minister stated.
The head of government noted that at some stage, after some time has passed, it is possible that the country might face such challenges that this assistance might need to be increased.
The prime minister emphasized that the 2 billion GEL does not include the 351 million GEL that was directly allocated from the budget for the purposes of healthcare in the fight against COVID-19.
"This is the sum that was reserved in the crisis budget in order for us to fight for the health of our fellow citizens and to do everything in our power to hinder the rapid growth of the scale, as well as of the geographic distribution of the infection. These funds must be utilized in an extremely rational manner," the prime minister noted.
According to Giorgi Gakharia's assessment, how the government is managing to provide every citizen with direct assistance at this stage is of the utmost importance.
To this end, the government has decided to fully fund the utility payments of all of our citizens who consume less than 200 kilowatts of electricity per month and less than 200 m3 of natural gas per month for the duration of three months - March, April, and May.
"This includes both cleaning service and water utility payments. This assistance, which we decided within the framework of government, will directly reach our citizens. We understand that this will not be enough. Of course, we understand that we must identify every one of our citizens who have lost their job and we will then make special arrangements to provide them with direct assistance. Furthermore, I would like to emphasize once again that it is of extreme importance, in our case, to utilize each and every lari that was mobilized in the budget today in a rational manner - 2 billion GEL in terms of the economy and the direct assistance of our citizens, and 351 million GEL in terms of healthcare, for the direct fight against COVID-19," Giorgi Gakharia noted.
According to the prime minister, the crisis budget, within the framework of which the government is operating today, is of the utmost importance and the main thing is that the funds have been directed in order to maintain the most effective balance in terms of the fight against the infection, as well as in terms of economic potential.
"Ultimately, all of us understand that our goal is to overcome the virus in such a manner that our economy can retain the potential for rapid growth, and for us to overcome the virus in such a way that the damage to our economy is minimal, and so that job losses are minimal. I would like to call on every individual government agency to use the resources that are mobilized in the crisis budget for your agencies today in the most rational way possible. Of course, we will further discuss the radical reduction of ongoing expenses, which is also envisaged by the crisis budget and this concerns hundreds of millions. However, we must all understand that the main challenge is the following: It is difficult to make concrete and high-quality predictions. For this reason, we have to operate while practically facing new challenges on a daily basis and our main goal should be to act in a rational and effective manner in terms of management and budget spending, while also acting effectively in terms of the fight against the virus," the prime minister stated.
Press Service of the Government Administration
Giorgi Gakharia: We Have Decided To Significantly Tighten Measures Under State of Emergency, Effectively Declaring Universal Quarantine
The government made the decision to significantly tighten measures within the framework of the state of emergency, which will take effect at 8:00 in the morning tomorrow, stated Georgian Prime Minister Giorgi Gakharia at a briefing held after the conclusion of a session of the Interagency Coordination Council on the coronavirus.
Today's session took place in an extended format and was attended by the mayor of the capital, members of the Cabinet of Ministers, and senior officials from the Center for Disease Control, in addition to members of the council.
"We have decided to significantly tighten measures within the framework of the state of emergency. Effectively - and I would like to emphasize this - effectively, we are declaring universal quarantine, which will begin tomorrow, at 8:00 in the morning. This quarantine means the following:
• It is completely forbidden to travel using any type of public transport (including the subway), both within and between cities and municipalities.
• It is only permissible to travel using light vehicles (including taxis), and only if the recommendation of the Ministry of Healthcare has been taken into consideration, i.e., if there are no more than three persons in an automobile, with the essential condition that the two persons are seated in the rear seat. This is a very important recommendation and relevant state bodies will make the appropriate decisions in case of noncompliance.
• Also, it is only permissible to carry passengers for the purpose of transporting employees of facilities of strategic importance in an organized and safe manner.
• Gathering of more than three persons is forbidden, with the exception of grocery stores and pharmacies, where maintaining a social distance of two meters is mandatory
• Furthermore, rules governing the operation of enterprises that are permitted by the government will be set out separately; they will have separate protocols that will be agreed with the Ministry of Healthcare. We are doing this so that the economy can continue to function and to ensure that the potential that the Georgian economy possesses is not brought to a standstill, as well as, of course, to ensure that our citizens can retain their jobs as much as possible.
• Our citizens above 70 years of age will be forbidden from leaving their homes, unless they are going to their nearest grocery store, their nearest pharmacy, or their nearest medical facility.
• If our citizens above 70 years of age live alone, the Ministry of Healthcare and the Ministry of Economy, as well as local municipalities, are obligated to provide them with assistance.
• Most importantly: Effectively, a full quarantine will be declared for the duration of the state of emergency. It will be forbidden to move on foot or using any other mode of transportation in the cities and throughout the entire country between the hours of 21:00 and 06:00. Effectively - and I would like to emphasize this once again - effectively, this means that a so-called curfew is being declared throughout the entire country between the hours of 21:00 and 06:00.
• Checkpoints will be set up in the cities of Tbilisi, Batumi, Kutaisi, Rustavi, Poti, Zugdidi, and Gori in order to control the movement of individuals, to check their health status, and to ensure the fulfillment of the tightened measures under the state of emergency, as well as to provide initial thermal screening and to control the administrative borders of these cities. These measures will be carried out by the forces of the Ministry of Internal Affairs, with the involvement of the relevant agencies of the Ministry of Defense.
• A very important point: Every citizen must carry their identity documents while moving within the city at any time," the prime minister of Georgia stated.
Press Service of the Government Administration
Georgia has declared the state of emergency starting today till April 21 in connection with the situation over the novel coronavirus in the country – Prime Minister Giorgi Gakharia announced.
Prime Minister has already applied to President. Declaration of state of emergency requires approval of the parliament, which will hold the extraordinary sitting later this afternoon.
Georgia confirmed three new cases of the novel coronavirus (COVID-19) bringing the total number of the infected individuals to 47 – reads the information posted on the special web-page stopcov.ge created by the government of Georgia.
According to the latest data, 1966 remain under quarantine, while 251 under hospital supervision. Only one patient recovered from the virus.
Thematic Healthcare Group of the Interagency Coordination Council Holds a Meeting under the Chairmanship of Giorgi GakhariaWednesday, 18 March 2020 14:33
The Thematic Healthcare Group of the Interagency Coordination Council on Coronavirus held a meeting today under the chairmanship of Georgian Prime Minister Giorgi Gakharia.
To achieve greater effectiveness, the Interagency Coordination Council has been divided into thematic healthcare, economic, and law enforcement groups that will hold a series of regular meetings under the chairmanship of the Prime Minister.
During today's meeting of the Thematic Healthcare Group, the Head of Government was briefed on the health conditions of coronavirus-infected patients in Georgia, also on the readiness of designated clinics and additionally attracted capacities. The meeting reported that 38 people are currently infected in the country, with most of them in satisfactory condition. All patients are stable and receive necessary treatment.
The Coordination Council was informed that 1,261 people are currently under quarantine, and 216 are under hospital supervision.
The Prime Minister was also briefed on the conditions of clinics throughout the country, the number of rapid tests available and expected in the country.
The council's meeting was attended by the Health Minister, Deputy Director of the National Center for Disease Control, representatives of the healthcare system, and the Mayor of Tbilisi.
The Administration of the President of Georgia and the relevant parliamentary committee are actively involved in the council's work.
Press Service of the Government Administration
Georgia cannot be a threat to security to Armenia in the same way as Armenia cannot be a threat to Georgia – Armenian Prime Minister Nikol Pashinyan, being with an official visit to Georgia, said during the meeting with Georgian Prime Minister Giorgi Gakharia at the Georgian Governmental Administration.
Pashinyan underlined that there is vast unused potential in Georgia-Armenia relations. “Democratization has a big importance. I believe that if Georgia and Armenia are perceived as democratic territories, the attraction of our countries will further increase. We respect Georgia’s Euro-Atlantic integration aspiration and it seems that the two countries have different opinions regarding security system. But I think that we have common standpoint,” Pashinyan said.
Within the framework of the official visit, Prime Minister of Armenia will hold meetings with President of Georgia Salome Zurabishvili and Speaker of Parliament Archil Talakvadze.
Nikol Pashinyan, together with the delegation members, will pay tribute to the memory of heroes who died in fight for Georgia’s territorial integrity.
The official visit of the Armenian delegation to Georgia will end on March 4.
Ambassador Li Yan, together with Georgian Prime Minister, attends the official opening ceremony of Chinese-built thermal power plant
Ambassador of the People’s Republic of China to Georgia, Li Yan, together with Georgian Prime Minister Giorgi Gakharia, was invited to attend the official opening ceremony of Gardabani II Thermal Power Plant, constructed by China Tianchen Engineering Corporation, and deliver a speech. Natia Turnava, Minister of Economy and Sustainable Development of Georgia, Yuan Xuemin, President of China Tianchen Engineering Corporation and others have also attended the opening ceremony.
The Georgian side highly praised and expressed their gratitude towards Chinese constructors for their excellent quality projects completed at a record pace. Also, they pointed out, that Gardabani Thermal Power Plant is the largest cycle, energy-efficient power station in Georgia, which can meet 70% of average monthly electricity consumption in Tbilisi, improve the energy stability and security in Georgia. At the same time, it will create many job opportunities; contribute to the economic development of the country and peaceful life of its residents.
After the opening ceremony, Ambassador Li Yan and Prime Minister Giorgi Gakharia visited the Power Plant and saw the equipment.
Giorgi Gakharia, Prime Minister of Georgia met Ilham Aliyev, President of the Republic of Azerbaijan within the scope of World Economic Forum (WEF) in Davos today.
Second meeting of Georgian and Azeri leaders within a short timespan evidences high-level dynamism of bilateral relations.
Discussions at the meeting today were related to the strategic partnership of two countries, along with transport and energy projects of regional magnitude that are implemented jointly by Georgia and Azerbaijan. Topics of bilateral agenda were also reviewed.
Prime Minister of Georgia and President of Azerbaijan agreed to continue with intensive communication in future.
Prime Minister's Press Office