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| PM Nogaideli: increase of the price of gas will not impact Georgia’s economy. |
PM Nogaideli visited Moscow in order to participate in the Summit of Heads of Governments of the Commonwealth of Independent States (CIS) on November 24-25. He said, while commenting on speculations about Georgia’s possible withdrawal from the CIS, that the mere fact of his presence at the CIS event, “proves that Georgia’s pull out from this organization is not on the agenda.”
On the sideline of the summit, PM Nogaideli held talks with Russian Foreign Minister Sergey Lavrov and chief executive of the Russian energy giant Gazprom, which is currently the only supplier of gas to Georgia. He spoke about the details of these talks at a news conference organized by the RIA Novosti news agency.
Gas Price
Nogaideli confirmed that Gazprom will increase the price of gas for Georgia, from the current USD 63 to USD 110 per 1000 cubic meters starting next year. He described this decision as “purely political,” but added that this increase of gas price will not severely impact the country’s economy, as Georgia is already prepared for this.
When officials from the Russian state-controlled Gazprom first started to speak about a possible increase of gas prices in September, they were mainly citing the fact that Georgia currently receives gas at “a subsidized price” and justified this decision by stating that the company wanted to supply gas at “market prices” as is the case with western European countries. But PM Nogaideli dismissed these claims as “incorrect” and said at a news conference in Moscow that Georgia buys Russian gas at the market price which is appropriate for this region.
“We currently receive gas at the market price, a market price for our region – the South Caucasus. Of course gas prices, for example, for Germany and the South Caucasus will always be different, because gas for our region is delivered from Central Asia. From Kazakhstan to Georgia via Russia there are two pipelines – the length of one pipeline is 800 kilometers and the length of the other is 1500 kilometers. This is the length from Central Asia to Georgia. Also, there is no transit country between Georgia and Russia. Meanwhile gas for Germany – [a country] which is often brought-up as an example and where gas price is USD 200 [per 1000 cubic meters] – is delivered from Siberia and must first pass through several transit countries before it is delivered to Germany,” Nogaideli said, adding that Tbilisi considers this change of gas price for Georgia “a political decision.”
But he said that Georgia’s economy is prepared for this increase of gas prices. “The [financial] losses caused [by this increase in gas prices] will be only 0.6%-0.7% of Georgia’s GDP. But these losses will be compensated by economic growth, which will be a double-digit figure next year,” Nogaideli said.
He said that talks about gas prices are expected to be over within the next 7-10 days. “These talks involve gas prices as well as the amount of gas which will be delivered to Georgia – I think it will be about 2 billion cubic meters [next year], or maybe slightly less,” he added.
Nogaideli said that Tbilisi will closely observe Russia’s gas price policy in respect to other countries of the region as well. “The price of gas for other countries will increase as well; but for Georgia it increases more then for other countries. So I think that this was a purely political decision,” the Georgian Prime Minister stated.
Nogaideli also said that despite controversy over the price of gas, he “tried to put forth some positive issues.” The Prime Minister put forth an offer to Gazprom regarding a joint Russian-Georgian venture which would be owned equally by both sides and which would deal with gas transit through Georgia as well as with investments in “Georgia’s gas transportation capabilities.” But he did not specify exactly which facilities in Georgia can be offered for investment to this joint venture.
Military Bases
PM Nogaideli also said at the news conference that he discussed the process of withdrawal of Russian military bases from Batumi and Akhalkalaki with Russian Foreign Minister Sergey Lavrov. Although the Foreign Ministers of the two countries have signed a joint declaration prescribing a timeframe of these bases’ withdrawal, Tbilisi “deems it necessary to back this declaration with an intergovernmental agreement.”
According to a joint declaration Russia should remove its bases in the course of 2008.
“After the May 30 joint declaration of our Foreign Ministers, the withdrawal of Russian military bases was launched in late August-early September and I think that now it is very important to sign an appropriate agreement. This kind of agreement has already been prepared by Georgia and the agreement is already undergoing official procedures in the Russian Government and Foreign Minister Lavrov assured me that he will oversee [the process] so as to speed up this process and to prepare the document for ratification,” Nogaideli said.
“Our principle is very simple: Georgians do not want presence of any foreign military bases on our soil,” he added.
South Ossetia
Tbilisi’s proposals over a peaceful resolution of the South Ossetian conflict was another issue discussed with Foreign Minister Sergey Lavrov, PM Nogaideli said.
He said that the Action Plan over South Ossetia, recently proposed by Tbilisi, is based on the initiative voiced by President Saakashvili last September at the UN General Assembly, which envisages a resolution of the conflict in three phases.
“This three-phase resolution plan was hailed by Russia and, to a certain extent, by the de facto authorities of South Ossetia as well… But certain skepticism was voiced by Russia towards the recently proposed Action Plan as it [seemingly] failed to reflect the previous three-phase proposal. But this is not correct,” Nogaideli said, adding that the Action Plan is designed to be implemented in the next 12-15 months.
He said that Tbilisi wants the region to be demilitarized during the first stage. “Russia should play a key role in this process, because armaments in South Ossetia was brought there from Russia and the armaments should return back to Russia now,” he said.
A confidence-building process, accompanied by implementation of investment programs, followed by a political settlement of the conflict will be the second and third phases of the resolution plan, Nogaideli said.
He said that “at the level of the population, the conflict is solved” and “it is time for the politicians to come into play for a final political agreement.”
Nogaideli said that Georgia is now waiting for Russia’s suggestions regarding the Action Plan and added that although the document is “well-prepared” it is “open for further discussions and improvements.”
While speaking about the South Ossetian conflict, he confirmed that Georgia has hardened its stance over Russia’s membership in the World Trade Organization (WTO). Georgia demands that Georgian custom officers be deployed at the Roki tunnel, which links breakaway South Ossetia with the Russian Federation, as well as at the Adleri-Leselidze border checkpoint in breakaway Abkhazia. Tbilisi wants Moscow to assist in carrying out these goals in exchange for Georgia’s consent for Russia’s WTO membership.
“Our firm position is that goods in Georgia should be delivered through legal customs checkpoints. This is directly linked to the settlement of the conflicts,” Nogaideli said.
