The FINANCIAL — Bechtel, the largest engineering, construction, and project management company in the United States, is examining the investment climate in Georgia. The company that worked with the U.S. government on the rebuilding of the civil infrastructure of Iraq is now considering a tiny country still suffering the effects from a 5 day war with Russia.
“It’s too early to speak about our plans regarding Georgia, as we are just looking around, to study the situation,” Charles Redman, the Senior Vice President of Bechtel, told The FINANCIAL. “But Georgia does have the potential to attract such huge companies as Bechtel,” Redman said during a telephone interview.
Redman attended the U.S.-Georgia Business Summit that took place on October 27 in Tbilisi. Executives from 19 U.S. companies were taking part in the trade mission, part of the U.S.’s efforts to boost ally Georgia in the wake of the five-day conflict with Russia. Among the companies taking part in the mission were engineering giant Bechtel Group, Citibank and General Electric’s Medical Systems Unit.
Redman has been working as a Senior Vice President of Bechtel since 1996. He was U.S. Assistant Secretary of State for Public Affairs (1987-89), worked as U.S. Ambassador to Sweden (1989-92) and as U.S. Ambassador to Germany (1994-96).
“I don’t think that the current crisis that is present in the world financial markets can significantly influence the moods of large investors in Georgia,” says Redman.
“It will be very difficult to say for how long the crisis will continue, but the next two months will be very helpful in making possible conclusions. The war definitely had a negative impact on Georgia’s economy. Georgia received aid from the USA and EU which will help the country to overcome the crisis period. It depends on the government, how the money will be used in rebuilding the country’s economy,” Charles Redman told The FINANCIAL.
Bechtel is celebrating its 110 year birthday. Bechtel worked on such projects as the Channel Tunnel, the rebuilding of the civil infrastructure of Iraq funded by the United States Agency for International Development (USAID), Hong Kong International Airport, the hauling and installing of more than 35,000 trailers and mobile homes for Hurricane Katrina victims in Mississippi, nuclear power plants, Jubail Industrial City and Kingdom Centre and Tower in Saudi Arabia.
The Group has maintained strong relationships with different officials in many United States administrations, including those of Nixon, Reagan, George H. W. Bush, Clinton, and George W. Bush. The company has come under criticism by the New Yorker magazine for its alleged, financial links to the Bin Laden family, and the manner in which it received Iraqi rebuilding contracts after the U.S. invasion of Iraq in 2003.
Bechtel is 9th in America’s Largest Private Companies list of Forbes. Since its founding in 1898, Bechtel has worked on more than 22,000 projects in 140 countries on all seven continents. Today 42,500 employees are teamed with customers, partners, and suppliers on hundreds of projects in nearly 50 countries. The company portfolio encompasses energy, transportation, communications, mining, oil and gas, and government services.
Bechtel works for governments and commercial customers. In 2007, the company had revenues of USD 27 billion and booked new work valued at USD 34.1 billion.
“With the help of the aid Georgia can restore its position as one of the world’s fastest growing economies. There is tremendous potential for growth in Georgia and we remain confident in the Georgian economy,” said John Sullivan, U.S. Deputy Commerce Secretary.
38 countries and 15 international organizations pledged to provide USD 4.55 billion to Georgia at the Brussels donors’ conference on October 22.
USD 2 billion is a grant and the rest a low-interest loan. Without counting funding going to the financial sector, pledges amounted to some USD 3.7 billion to meet the urgent post-conflict and priority investment needs of Georgia over the coming three years – 2008, 2009, and 2010.
“Rebuilding has begun, and the people of Georgia are already expressing confidence in their future,” U.S. Deputy Secretary of Commerce John J. Sullivan said during the U.S.-Georgia Business Summit.
Sullivan said the U.S. is pursuing a revision of the current Bilateral Investment Treaty and expansion of Georgian products eligible under the Generalized System of Preferences. This will give Georgia’s exporters improved access to American consumers, he said.
In addition, the U.S. Commerce Department is planning to host a hydropower energy event in Washington that will introduce American companies to hydropower opportunities in Georgia.
The U.S. government promised to help Georgian wine producers increase their export readiness and protect their intellectual property. The U.S. will sponsor a financial services roundtable next spring that will advise Georgian officials on the best practices in insurance, asset management, and pensions.
Written By Levan Lomtadze