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Wednesday,
July 18,
2007, #135 (1402)
The Minister of Economic Development sought to dispel claims of an impending privatization of the state-owned Georgian railway on Monday, but left open the possibility that railway management could be farmed out to a private business. “It's too early to speak of any specific plan or outline,” Economic Development Minister Giorgi Arveladze said, after getting acquainted with the latest six-month report from the Georgian railway’s administration. Meanwhile, the ministry has announced a contest to lease Georgia's Black Sea port of Poti for a 49-year term, together with the 400 hectares of adjacent land set aside for the free economic zone. The ministry is requiring concession candidates to present their proposals by September 14. Both Poti port and the railway dropped off the list of “strategically important” state assets, making them legally eligible for sale, after parliament adopted amendments to the privatization code. That prompted some experts and politicians to talk of the threats posed by privatizing the railway and other key state assets. Economist Davit Ebralidze fears a long-term concession of the railway and port is as much a danger to Georgia’s ambitions as a transit state as an outright privatization. “Unless the government manages permanently and competently monitor the railway, granting management rights to a private company can be as dangerous as privatization. And judging from the ministry's usual approach, which tends to stress the positives and ignore potential negatives of their decisions, I doubt they’ll be able to do this,” Ebralidze explained to The Messenger. Ebralidze is not happy with the Poti port lease either, but the government’s decision to bundle the port and the surrounding area together in the creation of a free economic zone is a better solution, he says, than granting each to separate businesses. Dual management could create competition problems, he argues. However, Ebralidze says the government should be careful not to jeopardize the country’s aspirations to be a regional transit state. “There are signs we are losing control in this direction,” Ebralidze warns. Another economic analyst, Rezo Sakevarishvili, says he’s in favor of privatizing state assets, but is concerned about the transparency and fairness of bidding procedures. “Moreover, I think handing managing rights to a private company is less effective than actual privatization—that’s the most viable way to run a railway or any other asset. However, [concessions] are still better than state ownership,” Sakevarishvili told The Messenger. “Selecting the winner while weighing business and political risks is essential, so we don't end up with a company that is interested in marginalizing Georgia, rather than strengthening its role on the international market,” Sakevarishvili says. |
