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Tbilisi’s gas bidding2010-07-09 18:51
Georgian parliament has finally adopted a draft law on state-owned property that lifts restrictions on sale of North-South gas main pipeline supposed to be partially sold on the London Stock Exchange. Is Georgia so economically weak wanting to sell its property to any bidder, or is there any specific purpose? This is what GeorgiaTimes correspondent discussed with Vitaly Kryukov, IFD Kapital analyst, and Tatiana Stanova, head of Analytical department of Center for Political Technologies Foundation.
Rumors that the Georgian stretch of North-South gas pipeline that connects Russia and Armenia will be sold have been there for years. Three years ago then PM Kakha Bendukidze launched a proposal to get rid of this gas-main burden on a plain pretext of the pipeline's poor condition and lack of investments for constant repair works. The West, i.e. the States, immediately showed empathy stating they disapproved of privatization and sale of the section and offered a USD 300 mln aid. 2010 is drawing to its end, gas pipeline rehabilitation is over; the report indicates USD 35 mln as allocated funds. Where is remaining 265 million?
To sell or not to sell is what the parliament is now debating over. Pavle Kublashvili and Lasha Tordia, his deputy, who launched the proposal to auction the pipeline sing their old song: there is no money for pipeline repair. There is a new tune though - the decision reflects an economic initiative that allegedly demonstrates liberal policies of the current regime advocating free market economy. PM Nika Gilauri assured the parliamentary minority that the state will retain the control stake accidentally saying that the shares (10% according to preliminary information) will be offered for sale at London Stock Exchange.
If things develop by Gilauri's scenario the opponents to the sale can tense up their muscles. Shares subject to free bidding might be purchased by any interested party at the most attractive price. However, presently the pipeline needs huge investments and can't be interesting to the broad spectrum. The question about who will buy it is now secondary: current price of the stake on sale must be too low to be interesting to the structures Georgia considers beneficial.
There is only Gazprom, a "non-beneficial" structure, that expressed willingness to buy the pipeline - in 2005-2006 - when the USA intimidated Tbilisi with energy dependence taming it with their millions.