The FINANCIAL — As the European Bank for Reconstruction and Development (EBRD) reports, the bank is opening a credit line of USD 12.5 million to Sakaeronavigatsia state owned air traffic management company which suffered during the Russo-Georgian war in August 2008.
But EBRD said that investment is required to replace outdated Soviet equipment and to increase the reliability, quality and safety of services.
“The investment will facilitate the client’s membership of the European Agency for the Safety of Air Navigation (‘Eurocontrol’) and compliance with other international aviation organizations,” the bank said.
Currently Sakaeronavigatsia has restored 70% of the customers which they had before the Russo-Georgian war.
According to the company the main changes in Sakaeronavigatsia ltd. started in 2004.
Equipping of the new air traffic control tower with a new navigation system, which Sakaeronavigatsia purchased from the Italian company SELEX, started in 2005.
According to the company website, in cooperation with the Israeli Company Y.S.L, the strategic facilities have been equipped with such defence systems which ensure constant monitoring of the navigation systems in each given locality of Georgia.
But Sakaeronavigatsia became the main target for warplanes soon after Russian forces invaded Georgia. On August 11, 2008, a military rocket aircraft hit the civil ASR-12 radar complex (PSR + MSSR) and completely destroyed it.
On August 9, 2008, bombs were thrown at the Senaki MSSR – a civil MSSR. Bombs fell about 150 m away from the radar.
At the moment Sakaeronavigatsia is normally performing its usual air navigation services applying all of the required safety regulations, the company says. But as Director of the company told The FINANCIAL USD 20 million in total is needed for restoration of the Air Navigation system.
“We are negotiating with EBRD directly, without any government official’s intervention. Our aim is to receive a commercial and beneficial loan. At a common meeting with representatives of EBRD we presented our investment plan. The mortgage will be focused on restoring radio-navigate, radio-location and infrastructure,” Irakli Davitadze, Director of Sakaeronavigatsia, told The FINANCIAL.
“It is a long term loan, a from 8 to 10 year period. Circumstances of mortgage are libor +4 or libor +6. Libor is the middle interest rate. Besides the cataclysms we had a strong incoming base. Over 500 companies use our airspace. We have moved commercial interests to the back stage. Improving quality and safety is preferential for us,” Davitadze added.
“The French Government submitted a loan of EUR 4,690,000, which will be used for restoration of the radar damaged by Russian military. The terms and conditions of the loans is 1.1% annually for 18 year,” Davitadze says.
“The payment of sky transition is fixed by the country individually. But all of them are consented with IATA and other organizations, whose members they are,” Davitadze explains.
“The unit’s rate of sky transition of Georgia is USD 36.2. If a plane flies for example, from London to Singapore, they pass about 25 countries. Later, all these countries send invoices to IATA. And the air company is obligated to cover all sums.”
IATA is an international air transport association that combines airlines and airports of various countries. It provides technical, legal, advisory, financial and other types of service to airlines, airports and air traffic control organizations. IATA is a strategic partner for Sakaeronavigatsia. According to the contract signed with IATA, gathering fare for services from airlines using Georgian airspace is carried out through IATA which simplifies the process of raising money and makes conditions favourable for airlines in terms of payment.
“Our geographical location is the most profitable for moving from Europe to Asia. Today we serve such big companies as Singapore Airlines, Air France, United Arab Emirates and so on. After August’s events it took us a long time and hard marketing works, to restore our reputation. On average we service about 500 companies. At present we have restored 70% of current customers. We reached this target with proper marketing mix solutions and promotion,” Davitadze added.
“The total amount of EBRD’s credit portfolio in Georgia in 2007 was USD 700-800 million. The number rose by 50% in 2008,” as top banker of EBRD Georgia, Irakli Mekvabishvili, told The FINANCIAL.
Written By Madona Gasanova