Download Georgia’s Doomed Deep-Sea Port Ambitions: Geopolitics of the Cancelled Anaklia Project

Georgia has long sought to take advantage of its strategically important location and establish itself as a significant transit hub connecting Europe and Asia. This endeavor has been slowly advanced by an array of innovative economic reforms, as well as some successful, smaller infrastructure and development projects. However, it has also been marked by repeated failures in making larger-scale initiatives happen. Despite its 190-mile-long Black Sea coastline, Georgia still does not have a deep-sea port, and enjoys very limited overall maritime capacity. This shortcoming poses a major impediment on the country’s aspirations of becoming a significant hub for the Eurasian transit system.

Successive governments in Tbilisi have repeatedly sought to develop a deep-sea port where the Inguri River meets the Black Sea, near the small village of Anaklia. Former President Mikheil Saakashvili (2004 to 2012) promoted the development of a deep-sea port at the site, which he dubbed Lazika.[1] However, the project has even deeper roots than that: A small pier was built in Anaklia in the 1960s and, shortly before the Soviet collapse, Georgian geographer Archil Kiknadze and architect Giorgi Metreveli were tasked with drafting plans for a deep-sea port at Anaklia.[2] Neither ever managed to see this ambition through to fruition. The current Georgian Dream government shutdown Saakashvili’s Lazika project after coming to power in 2012. However, it resurrected the concept in 2015. Such a port would be a part of an entire industrial city that would be designated a Special Economic Zone (SEZ) and serve as a major economic and free trade hub, much like Singapore.

This time around, the project seemed ambitious, innovative, and promising. It involved highly qualified, serious technocrats and businessmen with proven, successful track records in both Georgia’s government and private sectors. Moreover, it included a diverse group of investors and stakeholders, from the United States to Europe to China, and significant international backing from Georgia’s strategic partners in Washington, D.C., and Brussels. Yet, by 2019, the project again appeared doomed, and, in January 2020, the government officially cancelled it.[3]

Much like with Lazika, over-politicization of the project appeared to be one of the main causes for Anaklia’s death. But there were also questions about the project’s financing. American investors pulled out of the project well before it was officially cancelled. As of this writing, Anaklia Port Company and Dutch investor Bob Meijer are seeking arbitration with Georgia at the International Centre for Settlement of Investment Disputes (ICSID) over the project’s cancellation. As the arbitration moves forward, the details surrounding these financing issues will come to light. But the significant political and geopolitical consequences of the project’s cancellation have begun to unfold already.

The promising project’s messy failure might lead to near-term pessimism about Georgia’s ability to ever build a deep-sea port. Yet the strategic benefits such a project offers means it is all but certain Tbilisi will try again. The Georgian Dream government has already considered expanding its existing port facilities in Poti, and the idea of a deep-sea port has broad political support, even if the parties differ significantly on who should build it and how. Objectively examining the failure of the Anaklia project is necessary if a new effort is to have a more positive fate. Furthermore, the project and its demise will be an important feature of the 2020 election—with Anaklia’s disgruntled Georgian investors leading their own political movement. Moreover, the outcome of the arbitration launched in the aftermath of Anaklia’s cancellation may shape the investment climate in Tbilisi going forward, as well as the reputation of its key political figures, in the eyes of Georgia’s Western allies.

The views expressed in this article are those of the authors alone and do not necessarily reflect the position of the Foreign Policy Research Institute, a non-partisan organization that seeks to publish well-argued, policy-oriented articles on American foreign policy and national security priorities.

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[1] Clement Girardot, “The Rise and Fall of Lazika,” The Tuqay / Ajam Media Collective, March 25, 2013, https://ajammc.com/2013/03/25/the-rise-and-fall-of-lazika/.

[2] Tekla Aslanishvili and Orit Halpern, “Scenes from a Reclamation,” e-flux architecture, https://www.e-flux.com/architecture/new-silk-roads/313102/scenes-from-a-reclamation/.

[3] Georgi Lomsadze, “Georgia Cancels Contract for Black Sea Megaport,” Eurasianet, January 9, 2020, https://eurasianet.org/georgia-cancels-contract-for-black-sea-megaport.