Georgia will refuse to buy metro cars from Russia after US sanctions

The Tbilisi City Hall will break the contract with the Russian company Metrovagonmash, which is subject to US sanctions, the city administration announced.

“Georgia applies international financial sanctions. Therefore, the Tbilisi City Hall does not intend to cooperate with the sanctioned company, and the contract with Metrovagonmash will be terminated,” the statement reads.

In March 2021, the Tbilisi City Hall signed a contract for the supply of railway cars with Metrovagonmash. The Russian company won the tender for the supply of 40 new carriages for the Tbilisi metro. The competition was organized with the co-financing of the European Bank for Reconstruction and Development. In March last year, the bank withheld the payment of approximately EUR 50 million to the Russian company for the wagons.

In February, the Tbilisi City Hall announced that it had decided not to terminate the contract with Metrowagonmash. “Taking into account the fact that we could not find an alternative supplier of wagons at a price that suited us, and moving to the next stages of the tender would increase the purchase price by 30-35%, we tried to conclude negotiations with the current supplier,” said the city’s deputy mayor Irakli Khmaladze ( TASS quote).

On May 19, the US Treasury Department placed Metrowagonmash on its sanctions list. The restrictions also affected gold mining companies Polis and Polymetal, as well as Russian officials, businessmen and top managers.

Metrovagonmash is one of the largest manufacturers of metro cars in Russia. The company is part of Transmashholding. According to the website, more than 9,000 subway cars produced by the factory carry more than 16 million passengers in 19 subways in 11 countries.