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Anaklia Deep Water Seaport as perfect solution for Georgia's economic resurgence

By Khatia Bzhalava
Thursday, May 14
In the statement issued by Anaklia Development Consortium, readiness to cooperate with the government and attract additional investment is expressed. According to the statement As Georgia turns its attention toward rebuilding the nation’s economic strength in the wake of the Covid-19 health crisis, two vital ingredients of a strong economy - foreign investment and major infrastructure projects – naturally come to mind.

The statement promises that the development of a deep water seaport at Anaklia, together with the surrounding Special Economic Zone will be a leading stimulator to Georgia’s economic rebirth as it would be a catalyst for thousands of jobs and the creation of a new, vibrant city.

Anaklia Development Consortium declares readiness to promptly restart working.

“While the project is currently stalled by a dispute with the Government, ADC has temporarily paused with filing an arbitration claim against the Government as Georgia responds to the Covid-19 public health crisis. At the same time, ADC has voiced its willingness to avoid the arbitration so that the dispute does not further delay this strategic infrastructure project, and work cooperatively with the Government to attract additional investors and continue with the work that has already commenced,” reads the statement.

According to Anaklia Consortium, development of deep water seaport will benefit the country greatly and to prove the point following beneficial factors are mentioned:

Foreign investment: Foreign investors are already on-board with the project, with more being solicited; Jobs: Direct and indirect employment of up to 16,000; Revenue for the Government: Over the duration of the concession, the royalties to be paid by ADC to the government are estimated to be USD 500 million. In addition, ownership of the Port of Anaklia will transfer to the Government at the conclusion of the concession period, meaning even further direct revenue for the Government.

As the statement reads, significant advancement has already been obtained. ADC has been actively promoting Anaklia deep water seaport on an international level; After signing investment agreement in 2016, consortium has also signed cooperation agreements with strategic peers along the Middle Corridor (ports in Azerbaijan, Kazakhstan and Turkmenistan); joined the Trans-Caspian International Transport Route to become a vital part of the cargo transit between Europe and China; collected commitments to attract new bulk cargo from Central Asia; and established cooperation with the Constanza port in Romania to secure the connectivity with the European Union as a major trade partner.

ADC has signed Mandate letters with four international financial institutions (IFI) including the European Bank for Reconstruction and Development (EBRD), the Asian Development Bank (ADB), the Asian Infrastructure Investment Bank (AIIB) and the Overseas Private Investment Corporation (OPIC) for debt funding of USD 400 million.

Within the framework of the project, ADC has been cooperating with some major foreign companies- SSA Marine, ZPMC, Hyundai and Van Oord Dredging and Marine Contractors BV.

According to the long-term view of the project, parallel to the development of the port, Anaklia will be a modern innovative city with distinctive urban design, featuring modern sea, rail and air links, and considerable diverse employment opportunities in logistics light manufacturing, development, healthcare and other sectors, with an emphasis on sustainability.

Alongside the development of Anaklia deep water port, ADC has also been considering the development of the Anaklia City Special Economic Zone and to carry out this project, ADC works in accordance with Japanese investors, who have expressed their readiness for further commitments.

According to the statement, Anaklia is the only suitable location, if Georgia is to realize its full potential as a transport hub and a transit corridor.

“Anaklia is the only suitable location if Georgia is to realize its full potential as a transport hub and transit corridor. The long-term commitments for the Anaklia Deep Seaport project and constant upgrade of the port’s capacities is a sound signal to Georgia’s neighbours and partners that the country is a reliable and committed partner for the development of international transportation corridors,” the statement reads.

ADC pledges that once the project is undertaken, Anaklia city will be an international transport and logistical hub and world-class business and cultural destination, assuring the city to become a focal point between Europe and Asia.

In March, the Prime Minister Giorgi Gakharia announced that according to the Epidemic situation the port of Anaklia needed to be built and if anyone had any resource and could provide additional investment for Anaklia or any other major project, the government would be ready to provide all kinds of support in order to create jobs for citizens.

However, after the release of ADC’s statement, On May 13th, Chairman of the United Nation Movement faction, Roman Gotsiridze said that the port of Anaklia would never be built under the current government as the Georgian Dream would not let it happen. In addition, he stated that without changing the government no major Georgian project would be implemented and considers such beliefs as pure illusions.

The project of Anaklia deep water seaport has been terminated since February 2020, due to disagreement between the government of Georgia and the investor company of the project.