Railway Deal Falls Through, Ministers Confirm

An earlier deal with a mysterious company, Parkfield Investment, on the sale of the management rights of the Georgian Railway has fallen through, officials confirmed on October 24.

When asked why the deal had failed, Giorgi Arveladze, the economy minister, responded: ?Our major goal is always to have a contract which would maximise the benefits to the country.?

Parkfield Investment declined to comment on the issue on October 24.

A tender will be announced, officials say. Kakha Bendukidze, the state minister for economic reforms, however, said it still hadn’t been decided what percentage of shares would be sold.

?Discussions are currently underway within the government on the issue,? he told reporters on October 24, ?on whether to totally privatize the railway or only part of it, or to sell the management rights to all the company or just some of it. So what we want to do is to announce a general tender to receive general proposals.?

In accordance with a decree signed by Prime Minister Zurab Nogaideli on August 16, management rights of the Georgian Railway were handed over to UK-based Parkfield Investment for the following 99 years.

At the time both the company and the Georgian authorities were tight-lipped about who were behind Parkfield Investment. The lack of information created a vacuum that was filled by speculation that several Moscow-based businessmen of Georgian origin and business and media tycoon Badri Patarkatsishvili were behind the deal. Patarkatsishvili, so the speculation went, allegedly agreed to swap his media outlets for the rail network.

Patarkatsishvili has strongly refuted such suggestions. In October, when Patarkatsishvili became involved in a political standoff with the authorities, he did, however, say that previously the government had offered him ?numerous lucrative proposals? in exchange for Imedi TV and radio stations. But he declined to elaborate further on these ?lucrative proposals.?

The former defense minister, Irakli Okruashvili, said before he was arrested on September 27 that a businessman by the name of Sharangia and close to President Saakashvili was behind the deal. Okruashvili, however, subsequently retracted all his allegation.

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