Russia Tries to Bog Down the Anaklia Deep Sea Port Project

On May 6, Turkish, Azerbaijani and Russian representatives met in Ankara and issued a joint memorandum on significantly transforming the Baku–Tbilisi–Kars (BTK) railway project. The Georgian leadership made clear that it was dissatisfied with the trilateral proposal, which was signed without Tbilisi’s consent (see EDM, May 16). Yet, this was not the only recent example of Moscow’s attempts to influence strategically important infrastructure projects in the South Caucasus region in order to split the participants îr slow down the initiatives’ implementation. Another such project currently in Moscow’s crosshairs is the Anaklia deep sea port, on Georgia’s Black Sea coast.

The idea of building a new port on the Black Sea capable of receiving large cargo vessels was originally put forward by then-president Mikhail Saakashvili, in 2012. According to the project, by 2030 the port will be able to receive 100 million tons of goods per year (Anakliadevelopment.com, accessed May 20). Saakashvili was confident that the new port facilities would turn the nearby town of Lazika (near the de facto border with occupied Abkhazia) into a Caucasian Singapore or Hong Kong, and the huge port itself would become the most important hub on the East-West transport route linking China and Europe.

In 2013, Saakashvili left Georgia following the expiration of his last presidential term. However, the idea of a deep-water port was picked up by the Georgian Dream party of billionaire Bidzina Ivanishvili, which came to power after the 2012 parliamentary elections. The new authorities only changed the name and spoke about the “Port of Anaklia,” preferring not to mention Lazika. But until recently, these subjective factors did not hinder the development of this ambitious project.

In 2016, the Anaklia Consortium, with TBC Holding (including TBC Bank) as its principal partner, won the state tender to construct the port and signed a deal with the government (Anakliadevelopment.com, accessed May 20). The Anaklia Consortium began infrastructure construction work in Anaklia, but soon the project ran into serious problems (see below). Georgian government members expressed growing skepticism about the feasibility and viability of the Anaklia project, despite their previously unequivocal support for its implementation.

From June 2018, four state agencies opened simultaneous inspections against one of the founders of TBC Bank, Mamuka Khazaradze, who, until recently, also served as the chairperson of its Supervisory Board. In January 2019, the Georgian Prosecutor’s office announced an investigation into Khazaradze, on suspicion of money laundering. Soon Khazaradze was forced to step down as chair of the TBC Bank Supervisory Board. Georgian Infrastructure Minister Maia Tskitishvili noted two months ago that the Anaklia Consortium faced problems with attracting funds for the $2.5 billion Black Sea port project even before the investigation was launched (Agenda.ge, March 11). But many experts in Tbilisi doubt that only commercial problems are behind the Anaklia project’s woes. Rather, the investigation into TBC Bank’s Khazaradze simply “coincided” with preexisting Russian attempts to interfere in the port’s construction.

Several Georgian opposition members—and Khazaradze himself—have gone on record to state that the reason behind the “absurd” government investigation may have been driven by Bidzina Ivanishvili’s wish to create problems for the “very important project [that is] irritating Russia” (Civil.ge, May 5).

The vice president of the Atlantic Council of Georgia and a fellow at the McCain Institute for International Leadership, Batu Kutelia, asserted on May 19, in an exclusive interview with this author, that Russia is interested in either blocking the Anaklia port project entirely or, at least, diminishing its strategic importance through indirect control. “This can be done only if the Georgian government is weak enough to be susceptible to Russian coercion and either stops backing the project or minimizes the chances of direct Western engagement through investment and operation,” Kutelia added.

The expert predicted that the Seattle-based firm SSA Marine would be replaced within the Anaklia Consortium by the Chinese company COSCO, which is also an arms manufacturer and shipping giant. He further believes that Anaklia’s port-management structure will be changed soon. “Shaping the discussion around the American SSA Marine versus Chinese COSCO could be an effective tactic to either stagnate the project or prevent [further] credible Western investment… As a result, Russia would benefit significantly,” Kutelia underlined (Author’s interview, May 19).

Additionally, the Georgian Atlantic Council vice president explained that Russia’s desire to thwart such strategic geo-economic projects could accelerate Georgia’s integration into Euro-Atlantic structures. “The Anaklia deep sea port is a strategic economic project with significant security implications for Georgia and beyond. The idea and the concept emerged when Georgia started its accelerated European and Euro-Atlantic integration in 2003,” Kutelia noted. He expressed confidence that the Anaklia Consortium’s (Mamuka Khazaradze’s) development vision is fully in line with Georgia’s broader Westernization strategy. Whereas, he countered, “Recent steps made by the government of Georgia clearly show its interest to remove the Consortium (and Khazaradze) from the project, but the conflict became public. The government-linked media campaign can be visibly traced. The dispute/negotiation process is still ongoing, but unlike its initial phase, it became less public” (Author’s interview, May 19).

According to Kutelia, part of the strategy at play here is to prevent any further integration of Georgia into Euro-Atlantic economic and military systems. Kutelia told this author that strategic logistical infrastructure like the Anaklia port, besides its commercial functions, has military significance by potentially facilitating an increased military presence for the United States or the North Atlantic Treaty Organization (NATO). This helps deter Russian aggressive expansionism in the Black Sea and Middle East, thus further reinforcing Euro-Atlantic security. “After occupying and annexing Georgian and Ukrainian territories [Crimea and Abkhazia] and projecting its military power in the Middle East, Russia’s Anti Access/Area Denial (A2/AD) strategy includes boosting the military infrastructure on those territories. Among those is the Gudauta military base and Ochamchire port [in occupied Abkhazia],” Kutelia explained.

The Georgian government denies all charges of blocking the Anaklia project under orders from Moscow; and no smoking gun evidence exists. Yet, as Kutelia mentioned, “There is an obvious mismatch between the rhetoric and actions of the government regarding the Anaklia port. This can be explained by the significant degree of unhealthy interest Bidzina Ivanishvili (the informal ruler of Georgia) has shown this project as well as the influence Russia might have over his personal decisions” (Author’s interview, May 19).