APM Terminals Poti on its plans and Anaklia port - There is not enough cargo for two ports in the country

Managing director of APM Terminal Poti, Klaus Holm Lawrence and Head of APM Terminals Europe Office, Igor Van den Essen has said that APM Terminals Poti is going to invest between $ 250 and $ 300 million in Georgia. 

As they told Georgian news agency BMG, their partner in this project will be Poti New Terminals Consortium (PNTC).  

According to BMG, APM Terminal Poti is demanding the transfer of the land (351,056 m2 ) located near Poti port in order to build a new berth. 

On 2 May 2019 the Agency for Construction and Technical Supervision of the Ministry of Economy and Sustainable Development of Georgia issued a document of a land use on this territory. Later Minister of Economy and Sustainable Development, Natia Turnava abolished this order. 

“First of all, I would like to say that the document, which was issued, is not a construction permit; it is a so-called preliminary use document of a land use, which   was issued by one of our agencies, in particular, by the order of the head of the Agency for Construction and Technical Supervision, but this issue has not been agreed with any member of the government, including me. In addition, as it turned out, that there are procedural violations on the basis of which this document was issued; therefore, today we have made a decision and this document has been cancelled. And the head of the agency has been dismissed”, Turnava said.at a briefing on May 30.

After this fact, APM Terminal Poti demanded an inter-departmental inquiry from the Economy Ministry, which, according to Claus Lawrence, is still ongoing. 

As Igor Van den Essen said he had arrived in Georgia to hold meeting with representatives of the Georgian government. “I am going to meet Minister Natia Turnava this week,” he added.

APM Terminals Poti leadership  said that the project plan entails a 13- 14.5-meter water depth at the 700-meter quay wall and 25 hectares of dedicated land for the bulk operation for yard and covered storage facilities for various cargo types, including grain, ore, and minerals. 

When asked by BMG, “Why did the company decide to build a new terminal when it didn't see the need of this in the past?”, Klaus Holm Lawrence said: “due to the increased cargo turnover”.  But despite this increase, Lawrence thinks that “there is not enough cargo for two ports in the country”.

“The new bulk port will handle cargo lots up to 60.000 tons / vessel. We did a very detailed analysis of expected cargo turnover and made a decision to invest between $ 250 and $ 300 million to build a new berth in Georgia.  Based on our analysis, we do not see that there are volumes of cargo needed for the operation of two ports in Georgia,” Igor Van den Essen said. 

When asked by BMG, “As for the port of Anaklia, how would you see the synergy between the two new ports?” Igor Van den Essen stated:

“As I stated before, we don't see the amount of cargo that can support two new port projects. However, of course, if we have equal opportunities, we welcome such healthy competition. Competition is always useful, but I would say that we simply do not see the appropriate volume of cargo, that is our analysis”. 

When asked by BMG, “Who are your partners and what kind of participation are you talking about?”, Klaus Holm Lawrence said: “Poti New Terminals Consortium (PNTC) is our partner. They are looking for investors to build a new terminal. Under the partnership plan, they will perform the functions of a dry bulk access operator”.

“As for my statement about the deep sea port, it relates to the geographical limits that the Black Sea has. Only ships of limited size can cross the Bosphorus Strait, Also the size of the market and the logistical relationship with global trade is such that there is no need for particularly large container ships to move in this region. You do not need a port which depth is 16-18 meters. We probably won't see a ship coming to Georgia for many more years with a cargo capacity of over 4500 TEU,” he said. 

APM Terminals Poti leadership also said that the term "deep-sea" port itself is a relative term and that there is no exact definition.

“The Black Sea has geographical limits, due to which vessels larger than 300 meters practically don’t enter on the Bosphorus Strait.  Because of this, building a new berth which will be more than 14.5-meter deep, may not be a justified investment,” Klaus Holm Lawrence added. 

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