PM presents half a billion GEL program of Georgia’s Urban Renewal
By Natalia Kochiashvili
Tuesday, April 27
Prime Minister of Georgia Irakli Gharibashvili presented a GEL500 million program aimed at promoting regional development.
“We are starting a large-scale renewal of the country. This program envisages urban renewal in 63 municipalities, rehabilitation of important cultural and historical sites, rehabilitation of municipal administrative centers, as well as arrangement of recreational spaces, development of tourist infrastructure in recreational parks in all municipalities,” the Prime Minister said.
According to Gharibashvili, tenders for the projects will be announced this week, the works are expected to start in June and 15 thousand jobs will be created in the regions.
Gharibashvili says that “all the best architects” will be involved in the program and the projects will be implemented “while maintaining the existing authenticity on the ground.”
The project is planned to continue for 4 years and the budget of GEL500 million will be divided in these years. It is yet unknown exactly how much money will be spent on the program in 2021. Recall, that in the fall of 2021, municipal-local self-government elections will be held in Georgia.
“GEL500 million is an indicative cost of the first stage projects, which we are going to implement in 4 years, but there are some projects that will be implemented in the municipalities this year. There are projects that require content in a few years and will be implemented in the next 2-3 years,” said Minister of Regional Development and Infrastructure Irakli Karseladze.
According to the Minister of Finance Lasha Khutsishvili, the project of Renewed Regions will not be financed at the expense of increasing the budget deficit and the implementation of new infrastructure projects will affect practically all regions, which will give new life to economic activities.
The Minister of Finance noted that part of the funding of GEL500 million comes from donor organizations like Asian Development Bank and World Bank, while the rest comes from the state budget. The Minister clarifies that the state will not have to make additional commitments for this. The share of donors will be more than GEL150 million, and up to GEL300-350 million will be allocated from the state budget. These are various programs that cost the state less than they envisioned, including at the expense of holding tenders where savings were fixed.
According to the 2021 budget, the Ministry of Infrastructure will spend GEL2.36 billion. The main part of this is GEL1.5 billion for road infrastructure.
This year's budget for the renovation of regional infrastructure is already GEL241 million, while the budget for the rehabilitation of water supply infrastructure in the regions is GEL348 million.
According to Natia Turnava Minister of Economy, over the years and now the state is building an economy where the private sector is dominant, where it is important to protect private property rights and support the rights of private investors.
“One of the areas of incentives for the private sector is enhanced public infrastructure projects because in this case, we share the risks and costs that would otherwise be borne by the private sector. Under normal circumstances, the private sector would take it upon itself, but because of the pandemic, when the economy shrank and the risks to the private sector increased, this is impossible. That is why each of our invested GEL, even in road construction, development of urban centers, even in gasification will bring tens of GEL from the private sector. That is, at least 1/10 of the funds will be invested,” said Natia Turnava. According to the minister, the government has launched an unprecedented privatization program.
