Furthermore, these deadlines are relevant only if the consortium is successful in securing funding for the construction of the port until the end of 2019, and initiating the construction process in January 2020. This seems difficult to achieve as the Anaklia Development Consortium and its Georgian and foreign founders have not yet offered the international financial institutions an alternative solution for commercial risks and the provision of loans in exchange for state guarantees. And without this, the banks are refusing to issue the 400 million dollar loan to the consortium to this day. Despite this, the Anaklia Development Consortium does not shy away from making numerous public statements, claiming that it has obtained, in full, the funding necessary for the construction of the first phase of the port.

The consortium also claims that it has obtained the investor’s own capital of 120 million dollars in full, at a time when it is still conducting negotiations with practically all of the potential investors. Moreover, at the beginning of July, one of the potential investors and the port operator presented the state with new conditions for the investment, which entailed the government insuring the investor’s commercial risks, as well as the exclusivity of the Anaklia Port. The investor is demanding for the government to refuse to issue a permit for the construction of a competing deep water port until the freight turnover of the Anaklia Port reaches 70% of the planned volume.

We should assume that the government and geopolitics in general will once again be blamed for the fact that despite numerous delayed deadlines, the consortium is still failing to fill its own capital of 120 million dollars, let alone to secure a 400 million dollar loan. As for the guarantees of commercial banks, apparently the Consortium is still trying to deceive the public and convince people that indemnity of commercial risks is an obligation of the government, rather than that of the private investor, as the deep sea port of Anaklia is a project of sovereign importance. Project is indeed of sovereign significance and that is why the authorities are providing the following:

• Transfer of 1000 hectares of land to the private investor and cost incurred so far for this commitment is almost 60 MLN GEL;

• Extension of the new road and railway to the port facility with a potential cost of 330 MLN GEL;

• Allocation of 100 MLN USD as an equity contribution to the Consortium;

• Creation of a Free Economic Zone (FEZ);

• Amendments to the Constitution of Georgia made by the authorities of the country manifesting in the unprecedented support for the development of a special legal framework for the creation of the Free Economic Zone (FEZ);

• Indemnity of risks arising from political disorders and force majeure;

• Indemnity of investor against risks of legislative amendments;

• Unprecedented support and assistance to the investor.

Even when the private investor has to solicit 520 MLN USD in total at the inception phase of the port infrastructure development, financial contribution of the state has amounted almost 250 MLN USD, which is over 30% of the investment amount.

Consortium is now requesting the state to provide full security for the commercial bank loan of 400 MLN USD out of the 520 MLN USD to be solicited. Same applies to the indemnity of its own commercial risks – volume of cargo – which is the consortium wishes the state to guarantee. It is literally requesting an indemnity of revenues to be generated by the private investor. It absolutely contradicts the essence of private investment and principle of risk sharing under the public-private partnership (PPP). If the state secures the commercial risks and borrowings of the investor, it becomes unclear what makes this project qualify as private?

At the same time, it is worth noting that only one share of the Anaklia port belongs to the state. Revenues generated from the operation of the port and related facilities operating within the Free Economic Zone (FEZ) over 50 years will entirely belong to the Anaklia Development Consortium and it will pay a small percent of the port revenues to the government only after 20 years.

Consortium is trying to convince the society that it has exclusive right to breach all the commitments assumed during the Call for Expression of Interest and within the Investment Agreement concluded with the Government of Georgia on the grounds of being of sovereign importance; It claims to be entitled of deferring the operation of the port of sovereign importance for a certain period of time; It claims to fully adjust the key terms and conditions of the Call for Expression of Interest as well as of the Investment Agreement; It claims to have the right to oblige the state to indemnify the commercial risks of the private investor if and when the consortium fails to repay the loan and to fully compensate the borrowing and violate the inter-state and international agreements, Constitution of Georgia and prevent the development of the consortium by competing private investors.

According to the statements made by the consortium, all of it should not be surprising to anyone as it was known to the consortium from the inception phase that additional guarantees and commitments would be called upon from the state and it was not even intending to honor its commitments assumed under the agreement. Thus, refusal of the state to act upon the scenario planned by the consortium is presented by the consortium to the general public as an obstacle, cheating and political chasing, while the truth is simple – Anaklia Development Consortium fails to solicit the funding required for the first phase of the project even at present irrespective of multiple deferrals, concessions and truly unprecedented exceptions and state support. It is thus putting the implementation of a project of sovereign significance under a huge risk.

Considering all the aforementioned, we are obliged again to call upon the Anaklia Development Consortium, its Georgian and foreign founders, interested investors, partners to concentrate their efforts towards honoring the commitments given to the government in the most efficient timeline and towards the implementation of the most important project of Georgia, instead of false accusations, spread of inaccurate information and search for geopolitical and political reasons.

We assure all the supporters of the Anaklia Deep Sea Port Construction Project that the deep sea port of Anaklia will be built by all means – either with private of public investment! Besides, we remain optimistic that Anaklia Development Consortium will solicit opportunities to return to the constructive framework and complete the implementation of this most important project, which it had and will still have support from the Government of Georgia.