Georgia’s former Economy Minister Giorgi Kobulia has described the arbitration dispute with Namakhvani HPP investor ENKA as a “disastrous example of ineffective state governance.” Under the arbitration ruling, Georgia is required to pay ENKA USD 443 million, EUR 356,190 and GBP 40,362 - around GEL 1 billion in total. The government has appealed the ruling, although lawyers say the appeal is unlikely to significantly change the outcome.
“It is outrageous, and largely the government’s fault. We stopped the construction of Namakhvani HPP and now have to pay another USD 450 million. Imagine how outrageous that is,” Kobulia said on BMGTV. He said that during his tenure as economy minister in 2018–2019, he proposed creating a 50-member agency to communicate with local communities and protect major investment projects, but the initiative was never implemented.
Kobulia said a lack of initiative and responsibility among public officials is a systemic problem. “People in government do not want to take initiative or responsibility. They may fear that proactively helping an investor or investigating protests could be perceived as a corrupt deal or personal interest. So many officials think it is better to stay silent,” he said. According to Kobulia, frequent changes of officials and governments also weaken political accountability, as each administration tends to blame its predecessors.
He also said statements by government officials describing Namakhvani as a “bad project” were used against Georgia in arbitration. “How can you say it was a bad project when the state itself signed the contract? That was one of the arguments used against us,” Kobulia said. He criticized claims that the project failed because of “foreign agents” or a “weak state,” arguing that blaming previous prime ministers does not solve the problem. “ENKA will receive ten times more than what it invested, for nothing,” he said.
