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Georgian side does not intend to sell out Enguri Hydropower Station to foreigners

December 2, 2008

Nona Suvarian, Tbilisi

It is understood that Azerbaijan side has taken a sudden interest in participating in the proposed privatization process of the power station. This statement seems a bit weird to the Georgian side as nobody has announced tender on the Enguri Power Station, at least officially.

“Azerbaijan is ready to participate in the privatization process of power stations announced by Georgian authority. Georgian government announced tender on Georgia based power stations like Enguri Power station that is in motion currently. Georgian side offered Azerbaijan to participate in this tender,” stated Marlen Askerov, vice-president of “AzerEnergy” on November 24 during a press-conference in Baku. He added that in order to purchase such stations that rather large sums are necessary and the issue should be discussed by the government.

However, the situation is not as simple as it seems from the first sight. Enguri Power Station is controlled by two parties (sides): Georgian and Abkhazian. The physical dam is located on the Georgian side while the control unit machinery hall is situated on the Abkhazian side.

The Abkhazian side also responded to the “readiness” of Azerbaijan in this matter and stated that such negotiations they should also be considered.

Rezo Zantaria, the head of the Abkhazian CompanyChernomorEnergy”: “Geographically Enguri Power Station is located at the border of Abkhazia and Georgia and Azerbaijan should be aware of what is going on there. We have basic information the dam on our side and know that the dam is located on the Georgian side.”

Officials from Georgian Ministry of Energy cannot understand how this rumor even started because Georgia does not intend to sell the power station at all.

Mariam Valishvili, deputy minister of energy: “This information is absurd. We do not intend to sell the entities that are strategic state. Today all power stations are private properties; only one, Ortachala Power Stations does not have a current owner but it will in the near future.

Since we, unlike Azerbaijan, have wider privatization schedule, they seem to have decided that like other entities that are being sold in Georgia Enguri Power Station can also be sold out. It is their interpretation of reality. In fact, we have never discussed privatization of this station.”

Expert Gia Khukhashvili stated in his interview with Radio “Liberty” that this issue might actually be discussed because Azerbaijan is our strategic partner and our statehood should not expect to face any danger from them.

“However, the issue is weird because Georgian government is not authorized to sell this station,” said Khukhashvili.

Liana Jervalidze, expert in the field of energetic, does not exclude the possibility that Russia demanded Georgia to include Enguri Power Station on the list of privatized entities in exchange to supply a continuous supply of electricity in the winter.  The expert drew her attention to the fact that during the war Russian army did not damage a single electrify transformer.

Liana Jervalidze added that assigning Enguri Power Station to a private investor will create a problem for us in the event that the investor does not supply electricity or gas properly. However, she cannot understand why Azerbaijan should be interested in this power station. It cannot be profitable for them.

Currently, Bank of European Reconstruction and Development, ERBD, is implementing a project at the power station and the total budget of the project is 38 million USD. Besides that sum, EU has apportioned grants of 10 million Euro to the station. The project implementation started in 2002 and it consists of several components. The project is schedule to be completed at the end of 2008.

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