Strike Pushed Poti Port to Critical Point
15 November, 2012
Strike Pushed Poti Port to Critical Point

The 10-day strike pushed Poti Port and transit-related businesses on critical level of losing cargos and the image. The sector pundits doubt the strike smells of sabotage and ask government to investigate the issue. 

A 10-day long strike started on November 1, 2012 at the largest Georgian port in Poti was ended on November 10, after governmental interference. Giorgi Kvirikashvili, Minister of Economic and Sustainable Development of Georgia, who visited Poti Port to negotiate with the strikers and leave the message

of Bidzina Ivanishvili, Prime Minister of Georgia [who asked to stop protesting lest make a heavy impact on Georgia’s economy] succeeded to achieve an agreement on major demands of strikers: 20% increase of salaries starting December 1, this year [instead of January 1, 2013 as the port administration suggested] and improved working conditions.

Besides, the newly created governmental commission on Labor Relationships and Social Dialogue headed by Premier himself, will make more in-depth research of Poti Port employees’ problems, Kvirikashvili said. This commission was set up recently to regulate the overwhelming protestation band obsessing entire Georgia starting by strikes at coal and manganese mines and contracting Georgian railway, prisons, municipal transport, Involuntarily Displaced People (IDPs) occupying empty buildings illegally and many more threats to stability of the country that apparently loom in prospect – Tbilisi metro and Kulevi terminal in Poti also plan to go on strikes.

But the complete paralysis of Poti Port for ten days led the port to the critical level of losing serious cargo consignments for good and all. Poti Port currently serves as the European gateway for international trade in Georgia, Armenia and Azerbaijan, and is ideally located to become a future hub for Central Asia trade. It is one of the crucial points of Transcaucasia transit corridor stretching from Baku port at the Caspian Sea to Georgian Black Sea outlets including both Azei and Georgian railway. Ferry lines connect Poti to Ukraine and Bulgaria. And halt of Poti Port operation affected the entire railway and ferry infrastructure related to Poti Port taking an impact on transportation and cargo owner companies as an aftermath.

According to Zurab Shengelia, Head of Association of Georgian Forwarders, some ships were diverted to Turkish ports, others headed to Batumi Port [the other Black Sea outlet of Georgia] and most part of cargos were transported by vehicle that caused enormous traffic jams and demurrages stretching within 11 kilometers of thoroughfare from Batumi to Chakvi village.

“I cannot remember any this kind of large scale strike in Poti Port, it paralyzed not only Poti but the entire vehicle traffic near Batumi. Trucks were literally stacked as herrings in the can waiting for hours alongside the main road. My colleagues from abroad have been calling in fuse,” Shengelia told Georgian Journal.

He reminds that each delayed day in transporting/transit business equals to not financial losses alone but also undermines reputation of the country and transporting companies and it takes quite long to get the image back.

“We were at the critical level,” Irakli Iashvili, Chairman of Supervisory Council of East Gate Group transportation company, said in the interview with GJ. “That much long strike may take an irretrievable impact on any port. For example recently after approximately a month-long strike a Greek port Tyros lost all cargos completely. We should remember that Poti is not the single port nearby and cargos always can find other routes.”

Although parts of ships were sent to Batumi it did not discharge situation much inasmuch as Batumi Port capacity for dry cargos is much behind Poti Port. Batumi is focused on oil and oil product mainly and it lacks proper infrastructure for accepting all types of ships and dry cargos as Poti does.  Batumi processes only around 2-2.5 million tons of dry cargo per year while Poti Port handled with over 254 containers and 7 million 200 thousand tons of dry cargo in 2011. The rough calculation shows that during the 10-day strike it lost about 6940 containers and 196 721 tons of cargos. The cargo forwarding companies faced huge losses too.

“We sent several ships to Batumi while the fuel costs per ship to cover the distance between Poti and Batumi makes USD 35-40 thousand. Moreover, based on contracts in force majore case forwarding company are responsible to pay for all the delay-related costs including insurance, cargo storage and so forth. Due to this 10-day strike my company faced around USD 300 thousand of loss and the bigger company may be faced even a million,” Iashvili said. “The cargo owners also suffer as far as they have to pay credits tied with their cargos.”

Economic analysts believe the Poti Port strike is a part of well-calculated sabotage scheme organized by Trade Union largely believed to be an arm-group to the ex-ruling power of National Movement who most probably stands behind the strike scenarios.

Some analysts suggest that the best period for strikes was the pre-election not the post-election period especially after shocking facts of human abuse in prison were revealed. To avoid further escalation of discontent and sweep votes the ex-authority would have met all requests of protesting people instantly before the elections day. Instead strikes unleashed in the post-election period and simultaneously that looks suspicious and illogical for new government cannot remove defects of its predecessor so soon.

Fady Asly, Chairman of International Commerce Chamber (ICC) in Georgia, believes the upsurge of protestation in Georgia lately has political rather than social grounds and is targeted to discredit the new government. A well-organized hand manipulated by naive employees at Poti Port too. ICC appeals to Georgian government to investigate who stands behind this country-wide protestation tide. Economic analysts as well as entrepreneurs join the request.

“It looks very suspicious that all workers across Georgia went on strike almost simultaneously. Let the Prosecutors’ Office investigate the case and find the truth,” Iashvili said.

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