Ministry of Infrastructure on Canceling Contract with Anaklia Consortium

"With regard to the contract signed with the Anaklia Development Consortium, the Georgian government decided to launch procedures for canceling the investment contract signed between the Anaklia Development Consortium (ADC) and the Georgian government on 3 October 2016 on the construction, operation and transfer of a deep sea port in Anaklia," reads the statement of the Ministry of Regional Development and Infrastructure.

The Ministry's statement reads that the Government of Georgia considers that a further extension of a term for the implementation of duties will not bring the desired result.

“As of December 31, 2019, the Anaklia Development Consortium, which had gained the right to build Anaklia's deep-sea port, failed to comply with the obligations under a 7-point investment agreement. It failed to obtain $120 million capital, failed to submit a $400 million loan agreement with international banks, or contracts with the first phase terminal operator or the first phase construction contractor, thereby giving the Georgian Government full and unconditional right to cancel the contract. Although the State had shown unprecedented support to the investor for the project and extended the term for the implementation of basic and necessary obligations several times since 2017, after the above was requested by the Consortium, they failed to meet the deadline, did not make significant progress and failed to present a real action plan for the fulfillment of obligations,” reads the statement.

The Ministry says that since the delay in contractual relations with the ADC could harm the port construction project, the government will launch procedures for canceling the contract with the Consortium, as well as for further development of the Anaklia port project.

"The Georgian government is looking for a new investor for the construction of the Anaklia deep-sea port," Maia Tskitishvili, Georgia's Minister of Regional Development and Infrastructure, said at a news conference after the governmental session.

The Minister emphasized that Georgia needs the deep-sea port by all means.

“We have said many times that our country needs the deep-sea port of Anaklia for security, economic security and the full realization of the logistical potential. The Anaklia port project belongs to the State and not to any private investor. It was the State that initiated the implementation of this project; it was the State that expressed interest in implementing this project as early as 2014”, she said.

Tskitishvili noted that financially stronger investor is needed.

“Georgia needs this port, so we will search for a new partner, who will be able to implement this project quickly and get the results that our country needs," she said.

The Government of Georgia has decided to cancel its contract with the Anaklia Development Consortium and to launch appropriate legal procedures. The issue was discussed at today's governmental meeting and the decision was announced recently.

The topic was the first issue on the agenda of today's governmental meeting.

The Anaklia Development Consortium was to fulfill its duties by December 31, after the government postponed the term for reaching an agreement with potential investors, as well as international banks (EBRD, OPIC, ADB, AIIB) for a loan of $400 million. Another duty of the consortium was to sign a contract with construction contractors. The Georgian government says the Anaklia Development Consortium failed to meet its obligations.

By  Ana Dumbadze 

Related Story: Govt' to Search for a New Investor for Anaklia Port