Anaklia and New Port of Baku in Alat intend to establish close cooperation - INTERVIEW
- 14 September 2017
CEO of the Anaklia Development Consortium Levan Akhvlediani’s interview to APA-Economics:
- Mr. Akhvlediani, as we heard, the consortium in charge of development of the Anaklia Port is building a deep water port. It should be the first deep Port in Georgia. Why it’s important to have deep water port in the Georgian Black Sea?
- Georgia has a general vision to restore its transport infrastructure and to try to elevate competitive advantage of its transit function. Without modern transport infrastructure this is not possible. Hence, the government of Georgia decided to implement unprecedented investments in its infrastructure. One of the key elements in the value chain is a port; as you may know current Georgian ports have limited capacity and efficiency as they are not designed to meet modern logistics requirements. Therefore, a modern deep sea port is vital in implementing the above vision. In terms of commerciality - the ability to accept large vessels creates economies of scale which in turn yields cost saving. We have calculated that the ability to accept direct calls (mother vessels) has the potential to save up to 160 USD per TEU, which is approximately 30% of current freight costs from far east to Georgia. This saving, efficient operations (with uptimes of over 95% of the year) and other advantages which the Anaklia port will bring, will benefit Georgia’s economy and overall play a vital role in making the CTC corridor more competitive.
- Can the mentioned Port speed up the shift toward containerization of cargo transshipment over our region and if yes, why it’s important?
- The general trend in the world is containerization. We see more and more goods shipped via containers. Therefore, we believe that a modern container terminal will speed up the process of containerization in our region as well. It is inevitable since commercially it will be more advantageous and faster to ship goods with containers.
- Along with the Port, your consortium also develops FEZ in Anaklia. How this FEZ will be different from other FEZs operating in Georgia and where the potential market for goods/products from Anaklia FEZ?
- Special status of Anaklia is outlined in the constitution, which allows for special regulatory environment and tax system (e.g. British common law, International Arbitration, IP laws etc.) Anaklia SEZ and the newly developed, resilience city, can easily implement investment driven laws and legislative initiatives, that would boost economic growth in Anaklia.
As Georgia stands out with ratings in doing business and low total tax rates it encourages investors to nurture their businesses in Anaklia. Special Economic Zone connected to the Anaklia Port will offer more such opportunities. It will feature zero percent taxes on import-export, VAT, profit, property and dividends. The Special Economic Zone will attract both foreign direct investment and domestic investment, create industrial clusters around the port, attract new industries, promote increased economic integration, and create jobs.
The combination of the Port and Industrial clusters around it can help attract foreign direct investment (FDI) into the region and help the Port to gain regional prominence. As the clusters mature, this will lead to allied industries locating next to this area and the zone will transform into a port based industrial hub. This will also lead to job creation and enhancement of local skills.
The overall concept of Special Economic Zone will enhance different industries such as: logistic, light manufacturing, service, tourism, assembling etc. Dedicated zone for training and development of human resources will help address regional workforce skills development objectives.
- The expert community of the region rely much on “One Belt, One Road” initiative of China. What’s your expectation for implementation of the initiative and what percentage of overall cargo transshipment you want to attract to our region?
- Like everyone in the region we are closing monitoring the ongoing events related to One Belt One Road. We believe that for high value goods the silk road offers an attractive alternative to the maritime route. It is very difficult to predict the volume of cargoes that will pass through our corridor. However, to put it into perspective if 1% of trade between China and Europe comes through this route that can amount to approximately 400,000 TEUS.
- 5. Is there any plan for the cooperation with New Port of Baku and FTZ established around it?
- Yes, we would like to explore close cooperation with New Port of Baku in Alat, in order to develop the most efficient door-to-door product for different cargo customers. The goal would be to promote trade within the region and help attract as much volume as possible to our joint CTC corridor. It is vital that we address all the pending bottlenecks along our corridor and work together towards making the CTC as competitive as possible. In regards to the SEZ, we are happy to commence talks and look at potential synergies between our two zones.
- Azerbaijani oil and gas are exported to world markets via Batumi and Supsa ports. What will be the preference of the transportation of it through the Anaklia Port?
- The biggest advantage Anaklia will have is its deep draft of 16 meters which will allow vessels of upto 80,000 DWT to call on Anaklia. We believe that larger vessels and efficient operations can create economies of scale which will yield further cost savings for cargo owners and trader. Although our main focus in early phases will be containers and dry bulk cargoes, we are happy to discuss potential benefits of Anaklia for liquid bulk cargo and see if there is interest to push the development of liquid terminals forward.