Tbilisi City Hall Orders Chinese-Made Metro Cars
Tbilisi City Hall has awarded a USD 150 million tender to local company GT Group to supply new metro cars from Chinese state-owned rail giant CRRC, Mayor Kakha Kaladze announced on July 10.
The announcement comes some two years after an earlier deal to purchase cars from a Russian Metrovagonmash company, backed by EBRD funding, fell through amid Russia’s full-scale invasion of Ukraine and subsequent Western sanctions. The new project is funded by the Asian Infrastructure Investment Bank (AIIB), with the delivery of a total of 111 cars expected to start in November next year.
Long-Delayed Procurement
In 2021, Tbilisi City Hall announced plans to modernize the metro system, initially seeking to buy 44 subway cars worth nearly USD 50 million from the Russian manufacturer Metrovagonmash, with financing from the European Bank for Reconstruction and Development (EBRD).
That plan collapsed following Russia’s full-scale invasion of Ukraine in 2022. Tbilisi authorities said at the time EBRD had suspended payments to Metrovagonmash due to international sanctions, with Mayor Kaladze announcing in November the same year that the city would cancel the deal and seek other suppliers. In February 2023, however, officials said Metovagonmash remained the supplier, citing its lower bid and concerns over financial penalties.
Ultimately, Tbilisi city authorities had to cancel the deal after the U.S. Treasury Department sanctioned Metrovagonmash over its role in Russia’s military production in May 2023. Authorities launched a fresh tender in 2024, this time with the AIIB funding, seeking to purchase 97 subway cars.
Allegations of Favored Tender
Critics say the latest tender was designed to favor CRRC and discourage European competitors.
“That company faces serious problems and restrictions in the United States,” Irakli Abesadze, head of the Center for Civic Participation, told Business Media Georgia.
He said Czech-based Škoda Group submitted a symbolic bid of just one GEL per subway car, signaling it saw no realistic chance of winning. “This is direct evidence that a major European manufacturer was interested but knew the outcome was predetermined,” Abesadze said, alleging the tender’s terms were “tailored to serve someone’s interests,” leaving no space for fair competition.
Early in 2024, the European Commission opened an investigation into the participation of CRRC, one of the world’s largest rail suppliers, in a Bulgarian rail tender under its Foreign Subsidies Regulation, suspecting the company received state subsidies that distorted the EU’s internal market. The company then withdrew its Bulgaria bid, leading the EU Commission to close the investigation.
GT Group
The winning local partner, GT Group, has also faced questions over its political ties.
In a 2021 report, Transparency International (TI) Georgia said the company had received more than GEL 12 million (about USD 4,4 million) in simplified public procurement contracts in 2020, noting the company’s ties to the ruling Georgian Dream party. Company owner Temur Ustiashvili donated GEL 60,000 (about USD 22,100) to Georgian Dream in 2016, while another owner, Giorgi Gvelesiani, donated a total of 120,000 (about USD 44,200) to Georgian Dream and fifth President Salome Zurabishvili’s campaign between 2016 and 2018.
The 2021 report said that prior to 2020, GT Group had secured more than GEL 100 million (about 36,9 million) in public tenders, with the watchdog saying such deals raised “legitimate concerns about corruption and inefficient spending.”
Also Read:
- 15/01/2025 – Paper Warns of Problems with Chinese Company’s Involvement in Infrastructure Projects
- 06/06/2024 – TI Georgia: Chinese Company with ‘Questionable Reputation’ to Build Anaklia Port
- 22/01/2024 – Chinese Companies in Georgia: Sanctions, Delays and Concerns
- 01/05/2020 – EBRD, GCF to Invest EUR 75 Mln in Modernization of Tbilisi Metro
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