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Energy Minister “Forced By Russia”
Going forward in 2017 Georgia will switch to a monetary compensation plan with Gazprom in exchange for allowing transport of Russian natural gas to Armenia. Georgian Energy Minister Kakha Kaladze said on January 11 that the Georgian government made “an optimal” decision on agreeing to Gazprom’s proposal, according to which, during the first year of the two-year contract, Georgia will partially maintain the commodity payment scheme and move to full monetary reimbursement in the second year.
With the amount of money received in the deal, Georgia will not be able to buy the same volume of gas,” Press Secretary of the Minister declared. Further, the Ministry of Energy indicated that this was not a free choice and the negotiation outcome was forced by Russia.
President Goes Against Deal
President of Georgia Giorgi Margvelashvili has declared, that the agreement signed with Gazprom will worsen Georgia’s energy sector and will harm the country politically as well as economically. According to the President, the situation may cause a whole new set of problems in the future.
During all this process the President repeatedly declared, that the Gazprom issue is far more than a business deal, saying it refers to security, foreign policy, geo-policy, energy and the economy.
Negotiations with Gazprom were conducted one-on-one, behind closed doors. The Prime Minister approved the deal without proper risk analysis, negotiation strategy, involvement of local experts, international political allies, or the general public.
These circumstances raise doubt as to whether the country’s interests were fully defended during the negotiations. In addition, the Ministry claimed that the transit fee is a “commercial secret”.
“You know that this kind of agreement is a commercial secret in any country”, said Kaladze.
However, Kaladze proudly declared that they reached the agreement, according to which, in case of additional needs, Georgia will receive Russian gas for reduced price – $185 per 1,000 cubic meters instead of $215.
But before bragging on this, it is worth noticing that the negotiated price for Georgia is already political – it is higher than the price for Armenia ($165 USD/1000m3) and for Germany ($160 USD/1000m3).
Public Sector Demands Transparency
About 80 NGOs have requested Kakha Kaladze publicize the agreement signed with Gazprom.
80 civil society organizations of the Georgian National Platform of the Eastern Partnership Civil Society Forum, issued a statement on January 17:
“We believe that the new transit agreement with Gazprom Export is not an energy-related matter only; it is part of the wider national security. Therefore, [we think that] during its preparation, consultations should have been conducted with Georgian, as well as international experts and academic community, the process should have been done in a transparent manner and the government should not have decided without considering the public opinion,” the statement reads.
The Coalition for Euro-Atlantic Georgia, which gathers 23 civil society organizations, called on the government to disclose the agreement details.
Political Parties Demand Parliament To React
United National Movement lawmakers called on authorities to disclose the agreement details and added that they will propose a parliamentary resolution on the matter.
“We are preparing the draft for parliamentary resolution on the new transit deal with Gazprom. This is a harmful agreement, which goes against the country’s political and economic interests,” MP Roman Gotsiridze stated on January 17.
Parliamentary minority faction European Georgia, invited Energy Minister Kakha Kaladze to the parliament to answer their questions on the Gazprom deal.
The Republican Party of Georgia criticized the government on January 11 for its “obscure” statements about the agreement, which, according to the party, “is financially unprofitable and politically dangerous.”
Protests In The Streets
On January 18 Platform “Defend Liberty Georgia” organized protest #NoToGazprom for the 4th time during a year period. Citizens protested the new agreement in front of State Chancellery demanding exposure of the details of the agreement.
“The decision government made goes against national interests of Georgia. This is not the first time that we are protesting against Gazprom in the streets. Last year, we managed to influence the decision, but now, we no longer believe that the Government will defend countries’ interests” declared the protesters.
Georgian citizens, unlike the authorities, certainly remember year 2007, when Tbilisi was locked in a bitter political struggle with Moscow, with no choice but to accept double price for gas as punishment for the country’s pro-Western agenda. The gas price row was accompanied by an embargo on trade, proving that the price increase was politically motivated and Russia was using Gazprom as a political weapon.
It is unlikely that Georgia will ever return to the terms and conditions of the previous agreement and receive 10% of gas from transit. The deal has already been approved. However, the real political price of the agreement remains unpredictable.