A joint venture between Georgian TBC Holding and U.S.-based Conti International has been awarded the contract to build and operate deep-sea port on Georgia’s Black Sea coast in Anaklia, close to breakaway Abkhazia.

Georgian PM Giorgi Kvirikashvili announced on February 8 that the Anaklia Development Consortium (ADC) will develop the project, which will “bring new opportunities” for Georgia and for the South Caucasus transit route, and will also help the country to make full use of possibilities provided by the Silk Road.

ADC is owned in equal shares by Tbilisi-based TBC Holding, which is wholly owned by chairman of TBC Bank’s supervisory board Mamuka Khazaradze, and Conti Group, a New Jersey-based developer and builder of capital asset projects.

ADC estimates cost of Anaklia deep-sea port, which will be able to provide berthing for post-Panamax size vessels, at USD 2.5 billion. 

According to ADC, the Georgian government has committed to invest USD 100 million in the project, which aims at building of the port to berth container ships with capacity of 10,000 TEU (twenty-foot equivalent units).
 
Economy Minister, Dimitri Kumsishvili, has confirmed that the government will invest in road and railway infrastructure development projects, but declined to specify the amount it plans to invest.

The contract is on a build, operate and transfer basis.

ADC will receive the right to use about 400 hectares of land, where the port is planned to be built, for 49 years.

It will also receive the right to develop a free industrial zone on about 600 hectares of land, adjacent to the planned port, according to ADC.

PM Kvirikashvili said that the construction will be launched this year and “full scale construction will resume” next year after completion of environmental reviews.

The port is expected to be operational in three years after its groundbreaking.

During the first phase of the project, which involves first three years of port’s operation, its capacity should be handling of at least 7 million tons of cargo annually, according to the PM.
 
ADC expects that the project will create about 3,400 jobs during the construction stage and 6,400 jobs to operate the port upon completion.

Announcement about awarding ADC of the contract comes 19 months after the Georgian government called for expression of interest for the project to select an investor on build-operate-transfer basis.

Seven bidders, out of original 12, were shortlisted in January, 2015 and five months later the list was narrowed down to two consortia: one of them was ADC and another one – a consortium of Chinese state-owned Power Construction Corporation of China (PowerChina) and Anaklia Industrial Eco-Park and Port, a company founded by Georgian businessman Teimuraz Karchava with businesses in Russia and Georgia.

A tentative indication that this latter consortium was losing out in its bid came late last week when the Georgian daily Rezonansi published an interview with Karchava in which he was complaining about unspecified terms of the proposed investment contract and saying that his consortium with the Chinese company wanted some terms to be revised; he did not elaborate.

ADC said that U.S.-based port design and planning company Moffatt & Nichol and the Netherlands-based port transactions advisor Maritime & Transport Business Solutions (MTBS) are also its partners in the project.

Mamuka Khazaradze, founder of TBC Holding, said that the company is now in discussions to add other partners in the project, including from China.

“I think it’s not an exaggeration to say that it’s a construction of the century taking into view its ambition and scale,” Khazaradze said standing alongside with the PM. “This project will link Asia and Europe; this will be a continuation of China’s One Belt-One Road initiative, which is a new concept for old Silk Road.”

“We are looking forward to breaking ground and working with the government of Georgia to help forge new paths from Asia to Europe,” Kurt Conti, CEO and President of Conti International, was quoted in a press release issued by ADC.

Georgian ports in Poti and Batumi are capable to handle only feeder vessels, carrying a maximum of 1,700 containers.

Georgia’s largest port of Poti, south from Anaklia, handled 325,000 TEUs in 2015, down from 385,000 TEUs in 2014.

Last year APM Terminals, part of AP Møller-Maersk, which operates and owns 80% stakes in port of Poti, announced about a “large scale port expansion” plan in Poti, involving building of two new deep water berths able to accommodate vessels with capacities of 9,000 TEUs and an annual throughput capacity of one million TEUs. The company is now waiting for permission to launch the construction from the Economy Ministry; APM Terminals expects to complete the project in 2018.