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Problems in construction business

By Messenger Staff
Friday, August 21
The state is supporting the construction business and the Georgian Government has elaborated a new scheme for doing so. This scheme could also result in the improvement of the living conditions of the people of Tbilisi.

The Government of Georgia will take guarantees from the banks and developers will be given credit with these guarantees to continue constructing the new buildings people from the central parts of the capital will occupy. This will release space in the centre of the city which could be sold, used for further building projects, etcetera.

The construction business has recently suffered serious setbacks and this once-booming segment of the economy is in a very bad condition. Building things once meant making big profits and banks got involved in this business, issuing risky loan on the basis of little collateral which due to the crisis and the Russian aggression have turned out to be a burden to all parties. Some companies also sailed close to the wind by starting a new project before finishing the previous one in the hope that they would fill a financial hole by selling newly built real estate, but the crisis has frustrated their optimistic plans.

Now the prices of flats have gone down there are many bad loans in the banks and many construction and development companies face bankruptcy. Government support is timely and maybe it will give some companies the chance to at least survive.