Arab royals profit from U.S. power project

By Steve Peacock

Although the Obama administration claims U.S.-funded power infrastructure projects in the nation of Georgia will boost energy security and stability in the former Soviet republic, WND has uncovered corollary beneficiaries of this foreign assistance: Arab royals.

Promoting the development of the Poti Free Industrial Zone, or Poti FIZ, on the Black Sea coast is a driving force behind the Georgia Improved Transmission, or GIPT, project, according to several procurement documents that WND found during routine database research.

The U.S. Agency for International Development claims that developing Georgia’s energy sector has strategic importance, as it will enable the struggling country to emerge “as a strong democratic nation with a vibrant economy.” Past civil wars, combined with Russian incursions to put down separatist groups in and around the port of Poti, destroyed much of that energy infrastructure, it said.

However, the agency is not advertising the fact that one of the United Arab Emirates monarchies manages the zone. Indeed, Poti FIZ is an investment project of the Ras al-Khaimah Investment Authority, also known as RAKIA.

Ras al-Khaimah is one of seven emirates comprising the Persian Gulf nation of the UAE, a U.S. ally. Each is ruled by a hereditary “absolute monarchical” emir.

The University of Michigan-educated Sheikh Saud bin Saqr al Qasimi succeeded his father Saqr bin Mohammad al-Qassimi as RAK ruler when the elder al Qasimi died in 2010.

RAKIA has a management concession with the Georgian government allowing it to develop the zone near the port of Poti, which RAKIA describes as “a profitable port” that is in “expansion mode.”

According to RAKIA’s English-version website, the group “acquired 400 hectares of land around the port, of which 100 hectares will be used to build a new port and rest will be used for a state-of-art free industrial zone.”

The sprawling zone will be spread over three million square meters for industrial use, the site said.

The latest USAID action undertaken under the GIPT program was an $18 million contract awarded earlier this month to rebuild a stretch of power lines and substations that ultimately will benefit the zone. While the agency pointed out that this infrastructure was destroyed in Georgia’s 2008 conflict with Russia, it acknowledged that the endeavor furthers the overarching goal of promoting the Poti FIZ.

The Georgian company JSC Sakenergoremonti will reconstruct a 57.7-kilometer pair of power transmission lines while also connecting western- and eastern-region electrical substations.

USAID additionally intends to provide an unspecified level of financial support to build a 47-kilometer natural-gas pipeline – an endeavor known as the Kutaisi-Abasha project – to boost energy security and to generate power exports, USAID said in the initial solicitation. This project segment will arrange the delivery and installation of tens of thousands of pipes, caps, and related infrastructure.

The agency in August 2011 also issued a Special Notice alerting contractors to the separate 29-kilometer Abasha-Senaki pipeline extension project. It remains unclear whether U.S. taxpayers partially or entirely will shoulder the cost of the equipment and services, as USAID did not provide the estimated cost of the assistance package.

Both measures specifically refer to the promotion of the Poti FIZ, absent references to the UAE.

The Obama administration separately will cover the cost of dredging the Georgia Coast Guard Harbor at Poti. Unlike the above-mentioned procurements, this measure was not touted as specific to the UAE-controlled zone.

The U.S. Army Corp of Engineers project will remove scrap metal, debris, and possibly unexploded ordnance from the waterway.

Though initially the Army Corps gave that project an estimated $40-$70 million price tag, last month it slashed that estimate down to the $250,000-$500,000 range.

The Obama administration infused about $1 billion in aid to Georgia following the 2008 conflict with Russia, according to a U.S. Department of State fact sheet.

Despite the latest boon for Georgian power and maritime infrastructure, however, U.S. assistance dropped slightly from $87 million to $85 million between FY 2011-FY2012. The administration’s FY 2013 budget request for Georgia additionally sank to less than $69 million.

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