Sector Analysis

Georgia’s very advantageous geographic position located at the crossroads between Europe and Asia makes a natural corridor between the two continents. Its comparative advantage to emerge as a transit country is the fact that the shortest route from Azerbaijan and Central Asia to the west, and from Turkey to Russia, runs across Georgia. The government of Georgia recognizes this potential and has undertaken broad reforms of the Customs Code and is working to upgrade infrastructure.  

Since 1998, Georgia has participated in the multi-lateral agreement Transport Corridor Europe-Caucasus-Asia (TRACECA) to develop the transport route between Europe and Asia, and is party to approximately 30 international conventions on transportation.

Transportation today in Georgia represents approximately 9.8% of the Georgian GDP. The total output of the entire transport sector in 2006 is estimated to be over one billion GEL, employing over 41,000 Georgians.  The growth in this sector is 19.6% over the previous year. Total volume of cargo today is 11 million tons and according to many Georgian transportation experts, Georgia has the capacity to support this.  However, if the volume would increase, per some projections, to 20-25 million tons, the entire system would need to be modernized within Georgia and Azerbaijan.

Several investment opportunities exist for investment, including: in cargo infrastructure (TAM Project), railway links under construction, modern logistical systems in the ports, further airport development, opportunities for management expertise in port structure, implementation and monitoring system, development of the opportunities that will arise from the Special Economic Zones, warehousing and storage facilities and transportation/logistic specific think tanks to provide the system integration that will make Georgia strategy become reality.

Ports & Shipping:
This type of transportation accounts for 41% of total cargo imported in Georgia.  There are 2 ports on the Black Sea, Poti and Batumi.  Georgia’s ports have rail ferry links with Ukraine, Romania, Russia and Bulgaria.  Both ports are key links in the TRACECA trade route. 

Poti (depth 11 meters; established 1858)  Georgia is developing a free economic zone on the territory of Poti and surrounding area to allow investors to leverage Georgia’s strategic location.  Poti is estimated to carry 15.5 million tons by 2010 and 19.0 million tons by 2015. 

Batumi (depth 12 meters) Batumi is both an oil terminal and seaport.  It is estimated to carry 17.5 million tons by 2010 and 33.8 million tons by 2015. 

Railways
Georgia’s favorable location between Europe and the rapidly developing economies of Central Asia such as Kazakhstan is an asset to its future rail development, as it can provide a staging area for companies providing products and services to the oil industry, as well as warehousing, distribution, and final assembly site for companies wishing to meet the increased consumer demand from this region.

Booz Allen Hamilton conducted an Assessment that found the railway in better physical condition than expected, not to mention its advantageous double track, which allows trains in opposite directions to easily pass each other. The route structure of the railway is also well designed, as it connects to the major ports, Batumi and Poti, the capital, and east to Azerbaijan. This structure will be further supported by the planned new railway serving Georgia, Turkey and Azerbaijan due to be completed by 2010. 

Georgian Railways have opportunities for growth and foreign investment. Once tariff structures, equipment shortages, facility limitations, and better business processes are addressed, the Railway would be able to take advantage of the container traffic from the ports, in contrast to the very limited number of container traffic it now handles. Additionally, the passenger service has opportunities for growth.  In 2006 Georgia’s rail system served 3.9 million passengers and 22.6 million tons of cargo.

Road Transportation/Trucking
The poor physical condition of many of the main roads in the country pose an impediment to transport and increase costs to transport. However, concerted efforts are being made to rehabilitate the poor state of the country’s road network.

In 2006, 181 million GEL and in 2007, 459 million GEL was allocated from the state budget to improve the quality of its 20,229 km of public roads.  The World Bank has financed road rehabilitation and construction on all major trunk roads in Georgia and is now rehabilitating the secondary roads in the regions. The Millennium Challenge Georgia (MCG) has allocated over $100 million for construction and reconstruction of roads in Georgia. 

Civil Aviation/Airports
Two airports out of five Georgian airports are international. These are Tbilisi International Airport and Batumi airport. Tbilisi’s new international terminal, opened in February of 2007, with a 3,000 meter runway. Four national and 14 foreign airlines serve Georgia including Austrian Airlines, British Airways, Lufthansa, Air Baltic and  Turkish Airlines etc.   Batumi’s new airport, also opened in 2007 and has a runway of 2,420 meters. Kutaisi has a 2,500 meter runway, Senaki a 2,400 meter runway and Poti a 1,500 meter runway.

 

Pipelines
Georgia plays in important role as a strategic crossroad in the Caspian region.  British Petroleum (BP) and its partners have invested over $5 billion over the last 10 years to develop the major oil and gas pipelines that cross Georgia.

name of pipeline	capacity/volume	route	payments
Baku-Tbilisi-Ceyhan Pipeline	1 million barrels oil per day, finished in 2005	Sangachal, Azerbaijan to marine terminal in Ceyhan, Turkey	Estimated profit tax payments to Georgia 2007 $25 million
South Caucasus Gas Pipeline	800 million cubic meters potential, finished in 2006	Shah Deniz field in Caspian Sea to 3 Caucasus states	In kind gas in lieu of tariff; energy security for Georgia
Western Route Export Pipeline	Finished in 1998	Baku - Supsa	Transit fee revenues

         Source: Ministry of Economic Development, Ernst & Young, “Invest in Georgia” 2007

AmCham and/or EUGBC Members

 Batumi Oil Terminal Ltd
Tel: +995 (32) 241 818
Website: http://www.batumioilterminal.com 
In February 2008, JSC KazTransOil the daughter company of NC JSC KazMunayGas acquired Batumi Oil Terminal Ltd and the forwarding company Petrotrans. At the same time JSC KazTransOil acquired a long term management right of Batumi Sea Port Ltd. Investments by the owner insures the infrastructure of Batumi Oil Terminal Ltd and Batumi Sea Port Ltd continues to develop.

 

 Bertling Caspian Ltd.
Tel: +995 (32) 941 382
Website: http://www.bertlingcaspian.com
International freight forwarders, cargo forwarders, charter brokers, air, sea and land customs brokers. Offices are located in Africa, USA, Azerbaijan, Russia, Mongolia, China, Middle East, Europe, Kazakhstan, Uzbekistan, UK, Vietnam. Several other world wide agreements are also in effect.

 Catoni & Co. Georgia
Tel: +995 (32) 989 230
Website: http://www.catoni.com.ge
Since it's establishment in Georgia in 1999, Catoni & Co. Georgia provides shipping, logistics, multimodal transportation and inspection servises to its clients in the Caucasus and Caspian region via Georgian ports of Poti, Batumi and Supsa. Catoni & Co. Georgia is part of CATONI GROUP of Companies established in 1840 and headquartered in Istanbul. Catoni is the oldest and most widely represented maritime agent operating an agency network, performing in Turkey; Bulgaria; Romania; Russia and Georgia. In the Caucasus Catoni represents the most profitable world wide HAPAG-LLOYD container line. Among Catoni's clients in the Caucasus are BP in Supsa, NYK, APL Logistics, LTS Shipping, Seatraders and many others.

 Channel Energy (Poti) /Petromar Shipping
Tel: +995 (32) 752 051
Operators of a floating storage in Poti for transit of petroleum products, ship owners, ship management, chartering.

 Globalink
Tel: +995 (32) 253 262
Website: http://www.globalink-logistics.com
Globalink is an international freight forwarding, projects and relocation management company that handles the movement of cargo on air, land and sea to destinations throughout the former Soviet republics and world wide. Globalink develops comprehensive plans tailored to meet the specific requirements of each client by concentrating on customers' objectives and needs.

 Maersk Georgia
Tel: +995 (32) 920 801
Website: http://www.maersksealand.com
Member of, and owned by, the A.P. Moller group, engaged in shipping, exploration for and production of oil and gas, ship building, aviation, industry, super markets and EDP services. Maersk Georgia LLC is an agent for MAERSK-SEALAND, the world's leading International container carrier.

Murphy Georgia
Tel: +995 (32) 923 200
Murphy Shipping & Commercial Services Georgia Ltd is the Georgian branch of the Murphy Group with offices in Tbilisi, Batumi and Poti. Services include port terminal handling, transit and import customs clearance, heavy lift, warehousing, materials management, dangerous goods, and onward transportation to CIS countries by rail and road.

 Nomad Georgia
Tel: +995 (32) 506 272
Website: http://www.nomadexpress.ge
Nomad Express provides international removal services (origin-and / or destination, customs clearance, line haul, storage, insurance, or full relocation) to various organizations. Nomad Express has recently been acquired by Gosselin World Wide Moving, which is headquartered in Antwerp, Belgium. As a member of The Gosselin Group, Nomad Express becomes part of a multinational organization with branch offices in 32 countries, more than 600 employees, a million square feet of warehousing and 185 vehicles providing service from the western border of China to The United States.

 Solar Georgia
Tel: +995 (32) 231 248
Website: http://www.solargeorgia.com
The main specializations of the company are: supply of technical provision for maritime and industrial objects; service, installation, maintenance of radio-navigation and radio-electronic equipment of maritime and coast basing. The specialists of the company carried out the following activities: installation and servicing of marine radars, AIS (Automatic Identification System), VHF receivers, inspections, tests and repair of radio-navigation equipment. Solar Georgia Ltd. supplies the wide variety industrial objects: marine ports, different coast bases and power stations with spare parts, etc. Also the company has interests in ship-repairing sector.

 Poti Seaport Corporation
Website: http://www.potiseaport.com
Poti Seaport Corporation owns and manages the port of Poti in Western Georgia. The port handles in excess of Million tons of cargo per annum.

 

 BARWIL Union Ships Service
Website: http://www.barwilunitor.com
Wilhelmsen Ships Service is the world's leading maritime services provider, with the capacity to service 2,200 ports in 115 countries. Its focus is to deliver improved vessel operating efficiency to the merchant fleet. Last year Wilhelmsen Ships Service made 208,000 product deliveries to customer vessels and handled 53,000 port calls.

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