Page 44 - bne IntelliNews George country report Sept 2017

Georgia's reco rded number of incoming travellers grew by 7.6% y/y to 6.35mn in 2016, Giorgi Chogovadze, head of the country's national tourism organisation, said on January 4. International tourism receipts rose by 11.7% y/y to $1.7bn in the first three quarters of the year.
9.1.6 Utilities sector news
Two subsidiaries of Russia utility Inter RAO based in Georgia have initiate a legal case in dispute with Georgia over energy investments and asked the World Bank to arbitrate.
The subsidiaries -- Gardabani Holdings B.V. and Silk Road Holdings B.V. (the Netherlands) -- initiated arbitration at the International Centre for Settlement of the Investment Disputes (ICSID) in Washington, D.C. in their dispute with the Republic of Georgia. ICSID is part of the World Bank, Inter RAO said in a statement.
At issue is an unfulfilled investment promise by Georgia to the companies.
The two Dutch-registered daughter companies are asking for compensation in the combined amount of no less than $175mn and claim that the government of Georgia violated an agreement on Encouragement and Reciprocal Protection of Investments between Georgia and the Kingdom of the Netherlands, which has been in force since 1999.
“The government of Georgia repeatedly breached its commitments under the [agreement] and subsequent investment agreements, failing to accord fair and equitable treatment and to protect and secure the investments of Gardabani and Silk Road in Georgian energy generation and distribution projects,” Inter RAO said in a statement.
Gardabani is the sole owner of JSC Khrami HPP-1 and JSC Khrami HPP-2, which generate hydropower in Georgia and provide the capital Tbilisi with heat in the winter.
Gardabani acquired these companies from the Georgian State in 2011 on the understanding that the tariffs would be increased in the future to compensate the company from the depreciation of the national currency, the lari, which had fallen by 40% between September 1, 2013 to September 1, 2016.
Georgia changed the rules on tariffs in 2014 and Inter RAO claimed unfairly used the new regulations to avoid hiking tariffs at Gardabani’s request in 2016 and 2017. The company also claims it has not received tax reimbursements it is due from the government.
The row between Silk Road, the 75% owner of JSC Telasi, a major electricity distribution company in Georgia, and the government is very similar.
The company claims that the Georgian government expressly guaranteed a number of rules for adjustment of Telasi tariffs that would have been in the company’s favour, but later reneged on the promises.
“In particular, Georgia agreed to adjust Telasi’s tariffs in the event of an
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