Anaklia Development Consortium ‘left no choice but to arbitrate’ dispute with Gov’t on Anaklia port
The Anaklia Development Consortium won a state tender to construct the port and signed a deal with the government in 2016 with TBC Holding as its principal partner, but has faced problems in attracting the $2.5 billion in funds needed to construct the port. Photo: Anaklia Development Consortium
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The Anaklia Development Consortium (ADC), which has been overseeing the Anaklia deep sea port since 2016, announced yesterday that it “remains committed to finding a way forward for the future success of the project” and hopes that it may be possible to resolve its dispute with the Government of Georgia (GoG) amicably.
Regrettably the GoG has not yet engaged in any meaningful way in discussions with ADC and has not taken any constructive steps to avoid arbitration”, the ADC said adding that, therefore, it “will be left with no choice but to arbitrate its dispute with the GoG”.
Its international investors “will also be commencing proceedings” against the Government of Georgia.
The ADC announced that it is fully committed to taking all legal and other steps necessary to protect its position, including the commencement of international arbitration proceedings in Geneva.
It noted as well that the GoG “has been unwilling to work together with ADC and others to find solutions to issues raised by internationally recognised lenders and investors”.
ADC has invested more than USD 75 million to make the Anaklia Deep Sea Port a reality and has worked hard to find and appoint a port terminal operator, prepare the particulars for the design and build of the facility, and start significant dredging and other preparatory ground works on the site”, the Consortium stated.
The opening of the port and the receiving of ships in Anaklia was planned for 2021. Photo: Anaklia Development Consortium
It further stated that the actions of the GoG “have made it impossible for ADC to finalise key terms with potential investors whose involvement is essential to the continuation and future success of the Anaklia project”.
The GoG is well aware of the problems it created yet has blamed ADC for the lack of necessary investment and used this as an excuse to terminate the Investment Agreement. ADC does not accept that the GoG is entitled to terminate the Investment Agreement”, the ADC said.
The Consortium also explained that “practically, this means that no further physical works can be undertaken at the site and it is unclear when the Anaklia Port Project will be built and able to operate”.
The Anaklia Development Consortium won a state tender to construct the port and signed a deal with the government in 2016 with TBC Holding as its principal partner, but has faced problems in attracting the $2.5 billion in funds needed to construct the port.
Construction of Anaklia Deep Sea Port started in 2017.
The Georgian government will begin procedures to cancel the investment agreement signed with the Anaklia Development Consortium on October 3, 2016 to build the Anaklia Deep Sea Port. The consortium has been unable to obtain the needed $400 million in loans from international financial institutions and $120 million from potential investors by the official expiration of the term limits at the end of 2019.
Anaklia Deep Sea Port project has once again become the topic of discussion, the main question now being whether the Georgian government is considering backing out of an agreement signed with the Anaklia Development Consortium in 2016.
Georgian Minister of Regional Development and Infrastructure Maya Tskitishvili says international financial institutions have eight demands that should be fulfilled in order to invest in the project. Tskitishvili said that the investors demand a feasibility study of each phase and say that the port development should not be linked to any specific date and should start only after the feasibility study is done.
The government of Georgia will prolong the term for submitting financial closer documents for the The decision to extend the deadline to accumulate the necessary funds was made at today’s government meeting. Georgian Infrastructure Minister Maya Tskitishvili said this is the sixth time the term has been prolonged.Anaklia Development Consortium, which is overseeing the Anaklia deep sea port, by six months.
The Georgian government says that the Anaklia Development Consortium (ADC) has the right to start arbitration but that the government is not going to renew the agreement with the ADC to build the Anaklia Deep Sea Port.
US congressman Adam Kinzinger says that he believes in the government of Georgia when they say the Anaklia deep sea port project is important for them, and has thus urged the government to allow American investments into the port project as soon as possible during an interview with the Georgian bureau of Voice of America.
The Anaklia Development Consortium and major foreign investor Bob Meyer have filed independent arbitration claims against Georgia on July 29 over their infringed rights in the Anaklia Port project.
Neqsol Holding, a shareholder of Georgian internet provider Caucasus Online, is going to sue the Georgian government in the International Court of Arbitration for appointing a special manager to the board of Caucasus Online, who has been given the authority, amongst other things, to dismiss directors, members of the supervisory board and employees of the company, and suspend or restrict its right to distribute.
The Anaklia Development Consortium (ADC) says that the Georgian government admits that a new tender to build Anaklia Port is likely to fail as there is a risk that an investor may not be found due to the potential arbitration dispute between the Georgian government and the ADC.
The Georgian government will start the process of selecting a new potential investor for the Anaklia Deep Sea Port project in the near future, Georgian Prime Minister Irakli Garibashvili announced earlier today.