EurasiaNet Eurasia Insight - Georgian Party Accuses President's Family Of Secretly Privatizing Railways

EURASIA INSIGHT

GEORGIAN PARTY ACCUSES PRESIDENT’S FAMILY OF SECRETLY PRIVATIZING RAILWAYS
8/22/07
A EurasiaNet Partner Post from BBC Monitoring

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Text of report by Russian news agency Interfax

Tbilisi, 20 August: The opposition Labour Party of Georgia is accusing President Mikheil Saakashvili’s family of the "covert privatization" of Georgian Railways.

"The Saakashvili family has covertly privatized Georgian Railways, a huge company, handing its management to the British company Parkfield Investment for 89 years. This company is not in the railway business and is involved in real estate sales, restoration and construction of buildings," Giorgi Gugava, one of the Labour Party’s leaders, told a briefing on Monday [20 August].

He promised to produce evidence in the coming days that Georgian Railways had been "acquired by President Saakahshvili’s family, a clan that rules the country".

Salome Zourabichvili, former minister of foreign affairs and currently leader of the Georgia’s Way movement, expressed bewilderment at the Georgian government’s decision to hand management of Georgian Railways to the British company Parkfield Investment for 89 years.

"Handing management of the railway to others means that Georgia will lose its economic leverage and significant income as a transit country," Zourabichvili told a news conference on Monday. She also doubts how "such a small, allegedly British company, Parkfield Investment, founded only last February, with assets of only 6m pounds, "is going to invest 1bn dollars" (according to Georgian Minister of Economic Development Giorgi Arveladze’s earlier statement).

"Taking this into account, it is not clear how this company is going to find the investment funds to invest 100m dollars a year in our railways," Zourabichvili said. She also wonders why Georgia had to take a 200m-dollar loan to build the Kars-Akhalkalaki section of the railway if the entire railway is to be handed to the British to manage, according to which Georgia will not receive any income.

"I don’t understand what it gives us. It is in the interests of Armenia and Turkey to carry cargo by the shortest route; we are interested in longer routes," she added.

Last week, Georgian Economic Development Minister Giorgi Arveladze told journalists that Georgian Railways had been handed to British company Parkfield Investment to manage for 89 years. He said that the British company had offered the best terms: 1bn dollars of investment in developing the railway infrastructure over the first 10 years.

Arveladze called the agreement "the most significant investment project of recent years in Georgia".

Editor�s Note: Source: Interfax news agency, Moscow, in Russian 1509 gmt 20 Aug 07

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