Russian energy chief laments Georgian “aggression”
By Keti Sikharulidze

Tuesday, September 14, 2004, #174 (0698)

The head of RAO-UES in Georgia Andrei Rappaport says that he is
no longer comfortable in Georgia owing to the “aggression” of the
Georgian government.

RAO-UES owns Telasi, the energy company which distributes electricity
in Tbilisi, but Rappaport, who is a deputy head of the Russian company
and head of its activities in Georgia, says that he is opposed to
further investment in the Georgian energy sector owing to the current
situation.

“In Armenia, they are very kind to us. If there is any problem it
is solved at once,” Rappaport said in a wide-ranging interview with
the Russian paper Gazeta concerning the company’s activities. The
interview was also published on RAO-UES’s website.

“I cannot say that we are broadening exports [in Georgia], we are
just stabilizing the situation,” Rappaport said

He added that income from RAO-UES’s Armenian utility is about USD 80
million but only USD 15 million in Georgia. “They have problem paying
money in Georgia and Georgia has about 53 million lari in debts. We
also have problems with local authorities, there is some aggression
toward us, but it is unclear what the cause of it is since Georgia
is eager to welcome new investors in the country,” Rappaport said.

“As I have declared at my last negotiations with Georgian authorities,
I am not feeling very comfortable, so I am not planning any serious
investment in Georgia. Our position is based on business logic –
if you want energy pay for it, and if there is not any money to pay,
then good-bye,” he told Gazeta.

Last summer, RAO-UES took over the Telasi electric company from the
American firm AES.

As for specific examples of aggression, Rappaport said, “for instance
the tax police tries to block our account numbers of the company. The
situation is as follows. The budget owes us about GEL 5 million for
the import of energy but we also have to pay to the budget the amount
of 3 million lari for tax payments.”

“We will not pay taxes until Georgia will pay us what they
own. Moreover, some authorities of the Georgian government try to
revise the negotiations that was signed before. We have already paid
all debts in the amount of 40 million dollars and we are going to
appeal to the court of London,” Rappaport said.

Analysts forecast that Rappaport’s statements could reflect major
problems within the Georgian energy sector, as he is chairman of the
supervisory boards of both the biggest electricity company Telasi
and the joint Georgian-Russian company Sakrusenergo.

Furthermore, he is the only person entrusted by Russian electricity
companies to resolve difficulties in Georgia; and intended this
week to hold negotiations with the Georgian government regarding
Georgia’s debts to Russia, although later he postponed his meeting
and now intends to meet the representatives of Georgia during the
CIS Summit in Astana, Kazakhstan.

Part of this debt is due to rehabilitation work carried out on
high-voltage lines in Abkhazia in 2000. The Ministry of Energy
agreed that the work would be partly financed by Sakrusenergo, which
contributed USD 180,000, and partly by the Abkhaz Energy Company
ChernomorEnergo, which received USD 600,000 from the Russian Energy
Ministry towards the project of rehabilitating the lines that connected
Enguri and Sochi.

The head of Sakrusenergo Gia Maisuradze told Georgian television that
“the Georgian side agreed during negotiations with the Abkhaz side to
help to restore the electricity lines that were destroyed during the
war. The then-Minister of Energy David Mirtskhulava issued a decree
and I was obliged to follow it, though these lines did not belong to
the company .”

This restored line is now a subject of controversy, as it is believed
by Georgia that it is being used to illegally move electricity from
Georgia to Abkhazia.

“The energy that is used by Abkhazia is equal to the energy that is
used by nearly the whole of Georgia. Then the Abkhaz sell this energy
in Russia and afterwards we buy the same energy back at much higher
prices,” the president Mikheil Saakashvili told members of the Abkhaz
Supreme Council on Friday.

As reports Rustavi-2, a General Prosecutor’s Office investigation
found that much of the energy produced by Enguri Hydroelectric station
was being moved to Russia through Abkhazia, after which Georgia was
buying it back at higher prices.

The investigation found that several intermediary firms, headed by
Georgian and Russian officials, were exploiting this difference in
price to make very high profits. Among these companies, the most
famous is Winfield, which was founded in 2000 (the year the Georgian
government contributed to rehabilitating the electricity lines in
Abkhazia) and is headed by Ilia Kutidze, who now lives in Moscow
where he works for RAO-UES.

Meanwhile, there are unconfirmed reports on Rustavi-2 that the
director of Sakrusenergo Maisuardze may be dismissed from his post
when Rappaport next visits Tbilisi, and replaced by former Premier
of Tbilisi Gia Sheradze.

From: Emil Lazarian | Ararat NewsPress