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Five companies bid in Georgian Railway tender

By Messenger Staff
Tuesday, January 29
Five companies submitted bids in a tender for the state-owned Georgian Railway by the January 25 deadline, the Ministry of Economic Development announced.

Meanwhile, as parliamentary elections approach the political opposition is warning against privatizing “strategic state assets.”

The only Georgian company to place a bid is the Silk Road Group, whose business interests include rail transport, shipping and pipelines, according to the holding’s website.

The ministry said a Russian firm called Center Invest Capital Partners has also submitted a proposal.

Two US companies made bids: Stratton Holdings, the parent company of US investment management firm Stratton Management Company, and East Capital, which the ministry says is a US company.

Lastly, Capital Investment AG, a Swiss-registered firm has also bid.

Each company was required to submit their development plan for the railway as well as how much capital they propose to invest in it.

The opposition has been quick to denounce the tender. The New Rights released a statement saying that “strategic state assets” should not be privatized before the parliamentary elections, which are expected to be held this spring.

It also warns potential investors not to enter into any agreement with the government, which it claims is illegitimate due to controversy over the January 5 presidential election, which the opposition say was rigged.

“The Georgian nation don’t recognize this government as legal, so their contracts will be canceled as illegal [when they’re out of office],” says Manana Nachkebia of the New Rights. “Strategic assets must stay in the government’s ownership, or we’ll find out soon that the owner of Georgian Railways turns out to be a Russian company.”

However, none of the details of the bids have been released, and the Ministry of Economic Development says it is not yet decided whether, or to what degree, the railway will be privatized.

The ministry did not respond to requests for further information.

The railway has been the subject of controversy since it was struck off the list of strategic state assets last July, making it legally eligible for privatization.

On August 16 2007, officials announced that Parkfield Investment Ltd, a front company with anonymous backers, was buying management rights to the railway for 99 years.

However, in October officials confirmed the deal had been called off and then-state minister for reforms coordination Kakha Bendukidze said that a new “general” tender would be announced “to receive general proposals.”