Page 40 - GEORptMay19.pdf

directions—Samgori-Vazisubani, Akhmeteli-Temka and Sameba-Makhata Mountain. Therefore, we need to prepare technical and economic research and a justification, after which we will have a complete picture "
A minister in Georgia has raised the prospect of the state taking the Anaklia Deep Sea Port project back into state ownership, citing eight demands international financial institutions (IFIs) will want met before they go ahead and finance the $2.5bn flagship infrastructure project. The move will raise further questions over how prosecutors in Georgia investigating historical lending at TBC Bank may have had an impact on the fortunes of TBC Holding—it is the lead investor in the Anaklia Development Consortium (ADC) developing the port on the country’s Black Sea coast and as soon as the lending probe began there were voices that predicted the affair could loosen its grip on the project. Georgia has great hopes for the port, which it wants to see become an important hub within China’s massive Belt and Road modern-day infrastructure-for-trade initiative.
Georgian Minister of Regional Development and Infrastructure Maia Tskitishvili spelled out the eight IFI demands on March 21 in parliament, according to a report from Agenda.ge . She reportedly said that under the existing partnership agreement, if the agreement was terminated the port project would be returned to state ownership.
The first demand of the IFIs—which is also a provision to be complied with under the public private partnership (PPP) contract for the Anaklia port—is that the first phase of the project must be completed within three years from the start of construction, namely before November 20, 2020, Tskitishvili said. Another demand apparently centres on a project “golden share” held by the government under the PPP agreement, with banks wanting to diminish the associated rights of the government.
Tskitishvili said other IFI demands were related to the continuation of contractual terms, compensation and political force majeure stipulations. Another requirement concerned road and railway links to be connected to the port, with banks reportedly demanding that the government build the vital infrastructure along specific routes—a detail that was not included in the PPP agreement.
“At this stage we have a deal which means that if the contract was terminated due to a government or investor failure, the port would be returned to state ownership and the process of searching for a new investor will be started. Liabilities the previous investor had with the banks would go to the new investor as well. Right now the banks are demanding the state guarantee the loans,” added Tskitishvili.
9.1.6 TMT sector news
The World Bank, in collaboration with the Georgian economy ministry, will develop a National Innovation Ecosystem in the country in order to foster the digital economy and innovative start-ups. The World Bank will finance the project, which is estimated to cost $40mn. Countries in the South Caucasus, including Georgia, have been seeking to develop their value-added sectors, such as information technology, in recent years. Armenia is a leader in this sector in the region, with IT and technology accounting for 5% of GDP, and a sizable qualified workforce that has attracted the likes of Microsoft to open up innovation centres in the country. Meanwhile, Azerbaijan has been working on digitising its public services and installing fibre-optic Internet connections across the country. Following in their footsteps, Georgia is also
40 GEORGIA Country Report May 2019 www.intellinews.com