Airport in Abkhazia to be renovated and managed by son of Russian official

Nurgaliyev owns Sukhum airport

The Russian investor who will restore and operate the airport in Sukhum was kept secret for a long time. And now, it was revealed to be the company “Infrastructural Development,” owned by Rashid Nurgaliyev Jr., the son of the deputy secretary of the Russian security council, despite having no prior experience in the aviation industry.

This company, registered in Moscow as recently as July 2023, primarily engages in financial services such as accounting and auditing, and provides consulting on commercial and management matters.

Under the terms of a “Public-private partnership agreement” with the Government of Abkhazia, the investor will undertake various projects, including the reconstruction of the runway, construction of a new passenger terminal, and the refurbishment of the historic airport building to accommodate officials and delegations.

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The new air terminal complex will have a capacity of 1,300 passengers per hour, and the estimated cost of the reconstruction is 8 billion rubles [approximately $84 million dollars]. The airport is scheduled to be operational by December 31, 2024.

The Abkhazian authorities view the restoration of Sukhum airport as a vital infrastructure project that will bring a significant boost to the republic’s economy.

In contrast, the opposition is highly critical and accuses the authorities of including “exclusive state guarantees, unaltered tax rates and benefits, as well as the prioritized allocation of land plots” in the agreement.

The list of benefits for the investor is indeed remarkable.

It includes exemptions from customs duties on all construction materials, equipment, and even aviation fuel and special liquids necessary for airport restoration and operations.

The investor is also granted a waiver on property and income taxes during the payback period, which extends up to 25 years. Additionally, the electricity consumed will be billed at a rate reserved for the most privileged category of legal entities, such as schools and hospitals.

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According to Abkhazian economist Akhra Aristav, the Russian investor basically hired the government of Abkhazia to solve issues:

“Regrettably, the airport agreement hardly resembles a true public-private partnership. It appears more like a scenario where a foreign investor has effectively enlisted the government’s assistance to secure all advantages in their favor, including land acquisitions, 25-year tax benefits, expedited permit issuance, and more.”

Sukhumi airport has not been functional for 30 years since the end of the Georgian-Abkhazian war in 1992-93. Once restored, it will not have international status, and serve only Russian airlines.

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