Thursday, January 10, 2013

Georgian government suspends deal with TAV on Tbilisi Airport

10.01.2013. The Georgian government has suspended a memorandum with a Turkish operator of the Tbilisi International Airport on reconstruction of now unused runway, which means that the Turkish company will no longer get extension for more than ten years of its right to run the airport till late 2037.

In August, 2012 Georgia’s previous government signed memorandum with TAV Airports Holding, which owns 76% shares in Tbilisi airport operator TAV Urban Georgia, under which the airport operator company was planning to invest USD 65 million in reconstruction of the unused runway, one of the two runways at the Tbilisi airport. In exchange TAV received extension of airport’s operational right from February 2027 to November 2037.

“Extension of operational rights for [almost] eleven more years is not appropriate,” Natia Mikeladze, deputy minister of economy, said on January 8. “Construction is currently suspended, but its construction will be resumed, because this second runway is really needed. The state will take in charge of its construction.”

She indicated that the government might look into possibility of attracting soft loans from international financial institutions to fund the construction of this runway.

“Construction of the runway, which was launched on September 1, is now suspended,” Tea Zakaradze, TAV Urban Georgia’s administration manager, said on January 8. “We have received a notification from the Ministry of Economy about review of the memorandum. TAV Georgia is ready for negotiations; we respect any decision of the government… The most important is to have a new runway.”

Deputy Economy Minister, Natia Mikeladze, said that the Turkish operator would be eligible to compensation from the state for the expenses it had already invested in reconstruction of the second runway.

Tbilisi International Airport is operated by TAV since October, 2005.

In Georgia the company also operates airport in Batumi for 20-year term starting from May, 2007.

On January 7 President Saakashvili criticized suspension of construction of the runway in Tbilisi airport and said that as a result of this move by the government “Georgia will lose hundreds of thousands of tourists.”


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