Response of Anaklia Development Consortium to Speech of Prime Minister Garibashvili at 12 December 2022 Government Meeting

The Anaklia Development Consortium (ADC) issued the following statement in response to the 12  December 2022 comments by Prime Minister Garibashvili: 

In his speech to the government meeting today about the Anaklia Port project, Prime Minister  Garibashvili made a series of misrepresentations about the Anaklia Project and its past history. He also made assertions about the future of the project which are sure to fail. 

We would remind the Prime Minister that the dispute between the Anaklia Development Consortium and the Government of Georgia is in arbitration at the International Chamber of Commerce in Geneva.  He will be answerable for all his false statements today in that forum, as well as before the Georgian public. 

ADC wishes to point out a few of the most dramatically false and misleading points in the Prime  Minister’s speech: 

1. The idea that the Georgian state can find a serious private investor for Anaklia Port, while planning to take a 51% controlling interest in the project, is absurd. It is the kind of corrupt and deluded privatization and concession process that was attempted in Georgia and the other former Soviet Union countries in the 1990s. It failed then, it was infused with gross corruption then, and the same would be true now. Moreover, no serious investor and no international financial institution will participate in or lend to a major project such as this if it is majority controlled by the Georgian state, especially given the Georgian state’s demonstrated unreliability as a partner in numerous business cases. 
2. It is quite clear that the Government has failed completely in seeking out any legitimate investors or port operators willing to take on this project given the existence of the arbitration claims, along with the politicized Georgian judicial system which this Government has failed to reform. 
3. It defies belief that the government will invest $300 million in the development of Anaklia Port,  in cash from the budget or other state funds, when it refused to contribute even $50 million as a  guaranty (not cash) to facilitate the financing of the construction of the port by ADC. 
4. The idea that the Prime Minister wants the government to proceed with Anaklia “urgently” is obviously wrong. The government has sat on its hands for close to three years since terminating the Anaklia project. It even said in February 2020 it would announce plans for a tender “within  two weeks.” The Prime Minister is speaking now only because of the release of an independent documentary on the project which unveils the deceit of the Government in killing this project.

5. The tragedy of Anaklia, and here we mean especially the tragedy for the people of Anaklia village, who have been left without jobs, with smashed hopes, and with an environmental catastrophe in their front yards, is singularly the fault of the Georgian state which stopped ADC  from being able to finish the project that we started. The Georgian government has now owned, controlled and neglected the site for almost three years since they terminated the  Investment Agreement with ADC. This Government has not lifted a finger nor invested a tetri in the mitigation of the environmental problem they created by stopping the project nor in the completion and development of civic infrastructure in Anaklia and its surrounding area, much less moving to resume construction of the port. 
6. The Prime Minister’s simultaneous announcement that he is supporting the development of a  large port at Poti demonstrates by his own words the insincerity and absurdity of his statements about the government’s plans to develop Anaklia. As the Prime Minister knows very well, it has been the Government’s continued encouragement of the potential development of a deep water port at Poti that has been one of the major obstacles to banks and private investors in financing the construction of a larger deep water port at Anaklia. Of course the Prime Minister is in a difficult position on this subject, as the Pandora Papers prove that the Georgian Dream party leader, Mr. Ivanishvili, has long held a business interest in the development of the Poti  Free Industrial Zone, which depends on the development and expansion of Poti Port. So he is trying to walk a fine line between pretending to encourage the development of Anaklia Port,  while not alienating his party leader and other oligarchic interests with stakes in the development of Poti Port. 
7. As confirmed by the Ministry of Economy and Sustainable Development’s own audit, the amount of ADC’s investment was $75 million (and indeed higher), of which $40 million came from Messrs. Khazaradze and Japaridze (not $3 million as claimed by the Prime Minister). 
8. Lastly, as the Prime Minister should also well know, ADC has sought continuously to achieve a  negotiated solution to the legal dispute over Anaklia port. Filing an arbitration case was a last resort for Anaklia Development Consortium and its shareholders, forced upon us and them by the Government’s determined opposition to letting ADC finish building the project and to its efforts to bring in other investors and banks for financing it. ADC’s demand for damages in the arbitration case are necessary for it to protect its, and its shareholders, legal rights. But the  Georgian government well knows that it can settle the matter without spending a penny from the state budget, were it to negotiate reasonably and in good faith with ADC to secure the investment and financing needed to finish the Anaklia Deepwater Port project. 
9. Our desire is to see the Anaklia Port developed. Plain and simple. This latest scheme from the  Government has no chance of success, and we think the Government knows this. It’s another case of the Government stalling and wanting to blame others for its failure.