Elene Khoshtaria: “Tbilisi City Hall purchased Russian metro cars.”

Verdict: FactCheck concludes that Elene Khoshtaria’s statement is TRUE.

Resume: The Russian company MetroWagonMash has won the tender announced by the European Bank for Reconstruction and Development for the purchase of 44 metro cars for Tbilisi Metro. The value of the tender was nearly EUR 50 million. Tbilisi City Hall and the European Bank for Reconstruction and Development (EBRD) suspended money transfers to the company in the wake of Russia’s invasion of Ukraine. Ultimately, the contract with the Russian MetroWagonMash company was extended (as clarified by Tbilisi City Hall, the contract could not have been revoked without incurring a financial loss), although safeguard mechanisms were added to the contract, meaning that the money will not be transferred until the metro cars are delivered to Tbilisi and put into use.

Therefore, Elene Khoshtaria’s statement is TRUE. It is not disputed by Tbilisi City Hall itself and is officially confirmed.

Analysis

The leader of the Droa party, Elene Khoshtaria, unveiled documents at her briefing to confirm that the mayor of Tbilisi purchased Russian-made metro cars and financed the aggressor country in this manner. Therefore, Ms Khoshtaria demands that Mayor Kaladze should be sanctioned. At the same briefing, she also underlined the use of Georgia to bypass international sanctions imposed against Russia.

The Tbilisi Metro project was considered and approved in April 2020. According to the project, the EUR 75 million loan from the European Bank for Reconstruction and Development (EBRD) should be spent for the needs of Tbilisi Transport Company LLC. As part of the project, it was envisioned to purchase 40 modern metro cars as well as the repair of tunnels and the depot.

Information about the acquisition of metro cars from Russia was reported as early as on 29 December 2021 by the Russian news agency Tass, noting that the Russian MetroWagonMash company won the tender announced by the European Bank for Reconstruction and Development for the purchase of 44 metro cars for Tbilisi Metro. The value of the tender was nearly EUR 50 million.

In March 2022, Tbilisi Mayor Kakha Kaladze said that the acquisition of metro cars for Tbilisi Metro was carried out by the initiative of Tbilisi City Hall through the funding provided by the European Bank for Reconstruction and Development: “When any international financial institution provides funding for such a project, acquisitions are always made in line with the rules of procurement established by that institution. This was the case in regard to the tender announced for purchasing metro cars: Tbilisi City Hall fully complied with the procurement procedure, approved by the EBRD, and the Russian company won the tender because of a low price. The tender was announced in February 2020. International financial institutions have rather lengthy procedures. Therefore, we also had to undergo these stages. The winner company was selected in November 2021.”

In addition, Kakha Kaladze also emphasised that money transfers to the Russian company were suspended because as a result of Russia‘s war against Ukraine as it was still unknown which Russian companies would end up being sanctioned.

In November 2022, Mayor Kaladze stated that Georgia was not going to purchase metro cars from the Russian MetroWagonMash company because of concerns that it could be sanctioned. Mr Kaladze stated: “The abrogation of the contract with the company is a joint decision of Tbilisi City Hall and the EBRD. There are ongoing communications with different companies and the EBRD is also involved in the process.”

In February 2023, it was reported that Tbilisi City Hall would still buy metro cars from the Russian MetroWagonMash company. As clarified by the Kakha Kaladze, this was a forced step since abrogation of the contract was impossible without being charged a fine and creating a financial problem. Therefore, the choice was made to avoid financial loss for the country.

It was also reported that the contract with MetroWagonMash was amended to insure financial risks – payments will be made after the metro cars are delivered to Tbilisi and put into use. This will remove the risk that the company will not be able to produce the cars with the payments already made.

Kakha Kaladze stated that the contract with the Russian company was signed because legislation does not envision control over the origins of products that need to be procured by tender: “When Tbilisi City Hall announces a tender, we have no leverage whatsoever by legislation to indicate product origin or any right to indicate a brand.”

These circumstances confirm that Tbilisi City Hall purchased metro cars from the Russian company and this fact is also not denied by Tbilisi City Hall.

In regard to Russia bypassing sanctions through Georgia, FactCheck published an article about this topic in February 2023. According to the article, the claim that Georgia is being used to bypass sanctions imposed against Russia needs proper grounds and the fact alone that Georgia (at the level of political statements) has not joined the sanctions is not a sufficient argument to corroborate this serious allegation. Publicly available statistical data do not indicate an intensification of Georgia’s trade with Russia to such an extent that would prove the assumption on the use of Georgian territory to bypass the sanctions imposed against Russia.

FactCheck concludes that Elene Khoshtaria’s statement is TRUE.


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