Who the Anaklia Port construction permit will be granted to?
Construction of a new port has been considered in recent years in Georgia in the village of Anaklia of Zugdidi Municipality.
During Mikheil Saakashvili’s presidency there was a plan to build a new city, Lazika, on Anaklia territory together with a sea port, but this idea never came to fruition. Following the change of authorities, talks started on the construction of just the port, which initially should have been built with the capital raised by the Co-Investment Fund.
Finally, in August 2014 through the Ministry of Economy and Sustainable Development of Georgia, the Government of Georgia expressed interest in the Anaklia deep water port project. The Commission to examine proposals submitted was organized by the Government Decree, headed by the Prime Minister of Georgia Irakli Gharibashvili.
Under the plan, the Anaklia Port will be built in 7 stages, with the capacity of 100 million tons. It must be designed for mixed cargos and must serve the containers as well as liquid, solid, and dry cargos. The contract will be awarded to a bidding company in September 2015, and the port's construction will begin in 2016.
1. BOUYGUES TRAVAUX PUBLICS S.A (France);
3. JSC ANAKLIA DEVELOPMENT CONSORTIUM (Georgia);
4. TERMINAL INVESTMENT LIMITED (Luxemburg);
5. ANAKLIA PORT AND INDUSTRIAL ECO PARK (Georgia); POWER CHINA – HUBEI HONGYUAN POWER ENGINEERING CO., LTD (China); BRITISH ECO POWER LTD (Great Britain); Spartak Eragia - natural person); (consortium);
6. AECOM TECHNICAL SERVICES INC (USA); DIA HOLDING FZCO (United Arab Emirates); (consortium);
7. CHINA HARBOUR ENGINEERING COMPANY LTD (China).
By the governmental Commission's May 2015 decision, two out of 7 companies were given an opportunity to submit final proposals.
These companies are:
1. ANAKLIA PORT AND INDUSTRIAL ECO PARK (GEORGIA); POWER CHINA – HUBEI HONGYUAN POWER ENGINEERING CO., LTD (China); BRITISH ECO POWER LTD (Great Britain); Spartak Eragia - natural person); (consortium); this consortium is founded by Georgian businessman Temur Karchava.
2. JSC Anaklia Development Consortium, including Conti International LLC - (Conti Group) (USA) and TBC Holding LLC (Georgia), founded by the Chairman of TBC Bank Supervisory Board, Mamuka Khazaradze.
Transparency International Georgia inquired into the heads and lobbyists of two groups of companies advanced to the final bid stage. Accordingly, below is the information we have obtained from various sources:
For years, Teimuraz Karchava did business in the Russian Federation. He owned VIP Club National in Moscow. In 2004 Karchava was arrested on bribe-giving charges. Following the publication of our blog, we were contacted by representatives of Teimuraz Karchava and presented with the July 27 2006 decision of Moscow's Local Court. The decision stated that Teimuraz Karchava was found innocent and thus was freed from imprisonment.
Teimuraz Karchava began doing business in Georgia in 2008. The Anaklia Port company in his 100% shareholding was supposed to build a port in the village of Anaklia. On 20 October 2009 Anaklia Port LLC received a regional transport hub construction contract, which included the construction of a port, cargo airport, railway and road infrastructure and provision of a new settlement with electricity and engineering-technical works. By 2013, Anaklia Port should have invested 5 billion USD in these facilities. In exchange, for 6 340 445 GEL it received 2 113 hectares of land, i.e. 298 private land parcels. On 10 June 2010 Temur Karchava sold Anaklia Port and its multi-million property for 2000 GEL to BVI-registered Olimp Management. On September 27, the sole Director of Olimp Management, Rya Klein has appointed Karchava as the Director and Chairman of the Board of Directors of Anaklia Port LLC.
In the summer of 2012 the Government confiscated the property of "Anaklia Port" due to the company's failure to meet construction deadlines. Karchava claims the Government revoked the agreement after ex-President Saakashvili had announced the construction of a new settlement in Lazika.
In September 2012 the Ministry of Economy sued Teimuraz Karchava in court and claimed from him 100 million USD for the breach of investment terms. The Zugdidi District Court instructed "Anaklia Port" LLC to pay a fine of 240 thousand GEL, the decision upheld in 2013 by the Kutaisi Appellate Court.
In 2014, ANAKLIA PORT AND INDUSTRIAL ECO PARK invested 600 million in Armenia, with the aim of building a thermal power station. As Karchava reported to media, the Georgian side will purchase the electricity generated by this thermal power station, used entirely for construction of the Anaklia Port.
Under the Public Registry data, Teimuraz Karchava owns shares in several companies, namely:
- Epic Stone International Anaklia LLC (i/c 419995152) - 100% shareholder. Remarkably, the Director of this LLC is Giorgi Sigua, the former Head of the National Tourism Administration and the former Deputy Head of the Agency of Protected Areas. Currently Giorgi Sigua organizes an electronic music festival Gem Fest planned in Anaklia.
- Anaklia Port LLC (i/c 220351492) - Teimuraz Karchava is the Chairman of the Board of Directors. BVI-registered "Olimp Management Limited" is the 100% shareholder.
- Industrial Ecological Park Anaklia LLC (i/c 404457093) - 100% shareholder and General Director.
- JSC Chateau Manavi (i/c 238109195) - General Director.
- Wine World LLC (i/c 211403818) - Director.
- Black Sea Port Anaklia LLC (i/c 419990326) - 100% shareholder and Director.
- Black Sea Port Anarkia LLC (i/c 404463068) - 100% shareholder and Director.
- Black Sea Harbor LLC (i/c 405023317) - 100% shareholder and General Director.
- Egrisi 2009 LLC (i/c 204563720) - 100% shareholder.
- Churia LLC (i/c 220409635) - 100% shareholder.
- Premier Project Development LLC (i/c 204460243) - 100% shareholder.
- Anaklia Gas LLC (i/c 204575030) - 100% shareholder.
As for the companies within the consortium set up by Teimuraz Karchava:
- Hubei Hongyuan Power Engineering Co., Ltd is a Chinese company set up in 1998, specializing in electrical engineering and electrical technology production. Since its foundation, the company has built 11 electrical power stations (total power of 3 390 MW), 2 568 km. length electrical lines and 4 sub-electrical power stations (total power of 1 200 MVA). The company operates globally.
- British Eco Power is a British company operating in the energy sector, which manages the state and institutional projects. It also develops various projects for its own construction companies and consortiums. Key areas of operation are: hydroelectric engineering, geothermal energy, biomass energy, as well as Thorium nuclear power and small nuclear reactors.
Mamuka Khazaradze is the Chairman of TBC Bank Supervisory Board. According to the Bank's web page, in 1995 he founded Georgian Glass and Mineral Waters (GG&MW Co. N. V. currently Borjomi Beverages Co.N.V.). In 2004, Mamuka Khazaradze founded the Georgian Reconstruction and Development Company (GRDC). As of 2007, Khazaradze heads the company Lisi Lake Development. Mamuka Khazaradze is one of the founders and Co-Chair of Supervisory Board of the American Academy in Tbilisi.
Mamuka Khazaradze founded the Anaklia Development Consortium for the purpose of building the Anaklia Port, in partnership with the US company Conti Group.
Conti Group is the US investment holding group operating in the US and globally. Conti Group offers governments and private clients the following services: development, design, construction, construction management, other operational and technical services. Conti Group has implemented over 400 projects in the energy, infrastructure, industrial, and environmental sectors.
In May 2015 Mamuka Khazaradze, together with the co-founders of the Anaklia Development Consortium, met with the Chinese companies identified by the "Anaklia Development Consortium", as potential partners in the port construction.
According to the Public Registry data, Mamuka Khazaradze owns shares in several companies, in particular:
- Art Radio LLC (i/c - 404492205) - 50% shareholder.
- Technical Design Studio LLC (i/c - 205204198) - 27.5% shareholder.
- TBC Holding LLC (i/c - 404468884) - 100% shareholder.
- Federation of Businessmen of Georgia (i/c -203842510) - member of the Executive Board.
- Georgian Real Estate Management LLC (i/c - 205147857) - 36% shareholder.
- New Construction Company LLC (i/c - 205044165) - 26.984 % shareholder and Chairman of the Supervisory Board.
- Georgian Tradition LLC (i/c - 204949547) - 50% shareholder.
- Geoplant LLC (i/c - 204888078) - 26.12892857% shareholder.
- Royal Khvanchkara LLC (i/c - 222934350) - 32.675% shareholder.
- JSC Lisi Lake Development (i/c - 404857534) - 33.33% shareholder.
- Bravo Records LLC (i/c - 404868639) - 7.2% shareholder.
- Radio Art LLC (i/c - 203845054) - 50% shareholder.
- Vazisubnis Mamuli LLC (i/c - 404443349) - 50% shareholder.
Construction of the Anaklia Port will be a considerable step forward in the development of the Georgian economy and enhancement of the state's strategic importance. Under the plan, it will be the largest port in Georgia with the ability to harbor the Panamax and post-Panamax ships (the largest ships able to pass through a canal, with a cargo capacity of up to 40 thousand tons). Several thousand individuals will be employed on its construction and further development, and thus reducing unemployment in the country. Revenues generated from the port will be crucial for Georgia’s economic development. Further, construction of the Anaklia Port will increase the importance of Georgia as a transit and strategic state in a trade-economic respect.
Also worth noting is that numerous citizens own land or private owner buildings in Anaklia, where the deep water port is to be constructed. In 2010-2012, property in these areas was unlawfully seized from several dozen citizens. Transparency International Georgia is defending the rights of several of them. Only in 2015, we have assisted four citizens in restoring their titles to land located on the Anaklia coast.
Considering this information, it is essential that prior to beginning construction of the port, Georgian authorities especially focus on the protection of ownership and examine these problems in Anaklia, and take proper measures to secure land ownership rights, as well as protect the interests of already affected owners.