RAS AL KHAIMAH UNITED ARAB EMIRATE TO INVEST UP TO $500 MILLION IN GEORGIA’S PORT OF POTI

PanARMENIAN.Net
May 11, 2010 – 10:57 AMT 05:57 GMT

The Ras Al Khaimah United Arab Emirate will invest up to $500 million
in Georgia’s busiest Black Sea port of Poti over the next four to
five years through its investment authority Rakia, senior executives
in its Georgian subsidiaries said in interviews this week.

Poti, which was briefly seized by Russia after August 2008’s war
over the breakaway territory of South Ossetia, is a key transit
route linking the Caucasus and Central Asia to Europe, and Georgia’s
government has been working with Rakia to establish a free industrial
zone on the territory which would allow companies to operate tax free
and export goods.

Rakia already fully owns Poti’s existing port, plans to finish
construction of the zone by the end of May, and will start to build
a second port adjacent to it next year at a cost of $300 million.

"Rakia will hold a majority in the new port, we’re funding it but also
looking for big international banks to become involved," said Khaled
Chatila, Poti Sea Port’s general manager. Rakia will also expand the
first port, which handles oil and general cargo, to increase grain
and cement capacity, he said.

Some 15 companies have already signed up for the free zone and 50
are expected by the end of 2010, according to Joseph Nibladze, Rakia
Georgia’s senior marketing executive.

"They will include furniture makers, chemical manufacturers, steel
fabricators and agricultural producers from Azerbaijan, Armenia,
Turkey and the United Arab Emirates," he said.

Georgia’s economy, fuelled by $2 billion in foreign investment, grew
12.4% in 2007. But the war and world economic crisis scared investors
away and it shrank by 3.9% last year. The government is predicting
a return to growth of 4.5% in 2010.

Another free industrial zone in Kutaisi in western Georgia is already
up and running, with Egyptian household goods manufacturer, Fresh,
assembling gas cookers and water heaters there for export to Azerbaijan
and Armenia.

"Two more zones are planned, one in Gonio near the Turkish Georgian
border, and one in the east of the country," said Finance Minister
Kakha Baindurashvili.

"Our theory with the free industrial zones is that both the investor
and the government do well. They get a free tax environment, free
trade and good logistics and we get increased employment and dollar
flows," he said, The Wall Street Journal reported.