Bloomberg News

Georgia in Talks With Investors to Build City of Half a Million

July 13, 2012

Georgia began talks with potential investors to build a city of half a million people on its Black Sea coast after lawmakers backed a decision to grant the site “special constitutional status.”

“We are in talks with large Chinese corporations, Iranian, Azeri, Ukrainian investors to develop this project,” Iva Davitaia, director of the Strategic Development Agency, said by phone today from the capital, Tbilisi, declining to name the companies because the talks aren’t yet complete. A selected investor will “develop and manage the area,” he said.

The city, to be called Lazica, will be located near the breakaway republic of Abkhazia and will include a commercial center as well as a port. The project may take 10 years to complete and require as much as $10 billion in investment, Davitaia said.

While being under Georgian administration, the area’s special status means that a separate form of governance and jurisdiction will apply over its civil courts to lure capital, Davitaia said.

If completed, the new city will be the country’s second- biggest. Tbilisi is the nation’s largest city with a population of more than 1 million.

A poll conducted by the National Democratic Institute showed Lazica’s construction was supported by 54 percent of those aware of the initiative and 42 percent of respondents said most of the money should come from foreign investors.

Abkhazia declared independence from Georgia after a war in the early 1990s that left hundreds of thousands displaced. Georgia considers it part of its territory.

To contact the reporter on this story: Helena Bedwell in Tbilisi at hbedwell@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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