Geneva-Based Company Buys Tbilisi Water for USD 85.6 mln

Multiplex Solutions took over water distribution company in the capital, Tbilisi Water, after offering USD 85.662 million, the Economy Ministry said on October 27.

The ministry said Multiplex Solutions was a Swiss company, but failed to provide more details.

Multiplex Solutions AG was set up in August, 2005 in Geneva with a capital of CHF 100,000 (about USD 85,000), according to the register of commerce of Geneva. CHF 100,000 is a minimum capital needed for establishment of a joint stock company in Switzerland.

The company?s Tbilisi office said it had no experience in management of water supply networks and planned to contract an operator company in the future.

Five other companies were also bidding for the privatization package, which along with Tbilisi water, also included Mtskheta water supply system, Gardabani sewage cleaning system and Zhinvali hydro power plant and water reservoir.

French-based Veolia Water, the world?s largest private water company, formerly known as Compagnie G?n?rale des Eaux; a subsidiary of Spain?s Fomento de Construcciones y Contratas (FCC), Aqualia; a consortium of  Bank of Georgia and British Biwater Plc?s subsidiary, Cascal; Czech-Slovak investment group Penta and Bond Group, which according to the Economy Ministry, is the Czech-based company, were among them. All of them were shortlisted from initial ten companies bidding for the privatization lot.

Aqualia, according to the Economy Ministry, was offering USD 107.6 million, the highest offer; Penta ? USD 91.2 million; Bond ? USD 80 million; Veolia ? USD 75.5 million and Bank of Georgia/Cascal ? USD 72.5 million.

The Economy Ministry said that Multiplex Solutions was selected after it has pledged to further invest USD 350 million in rehabilitation of water distribution network and after vowing to maintain current consumer tariffs on water for next two years.

The fixed tariff for water consumption in Tbilisi is GEL 2.4 per family member per month. Unlike households, organizations and enterprises pay a tariff per consumed cubic meters of water. The tariff is now GEL 4.4 per cubic meter.

The company, according to its offer, plans to increase tariff for household to GEL 2.95 from 2010 and maintain that increased tariff before 2014. The Tbilisi Water has already started installment of communal water meters in some of the districts of Tbilisi, so it remains unclear what will be the pricing policy of the investor company for those neighborhoods where communal meters will be installed.

This post is also available in: ქართული (Georgian) Русский (Russian)