25 September 2022,   08:13
Government is offering another initiative to the construction sector

For the acceleration of economic growth and improvement of the public infrastructure, we are incentivising the construction sector to attract additional funds under guaranteed contracts on construction and rehabilitation of public infrastructure. It was announced by Prime Minister of Georgia.

Referred initiative is believed to lead to an additional 1 - 2% economic growth, according to Irakli Garibashvili.

He also noted that in the past, when he served as a Minister of Defence of Georgia, this idea was successfully practiced and a workload of 3-5 years was in fact carried out within a year.

“I had a discussion of this initiative with the Economic Team of the Government and my idea implies the following: we currently need accelerators of economic growth and specific unordinary steps need to be taken. We wish to incentivise the construction sector, as I already noted to accelerate the economic growth on the one hand and to improve the public infrastructure - on the other hand. The Government of Georgia is thus suggesting yet another initiative to the construction sector, aimed to support the industry along with boosting the competition in the public procurement system within the construction sector, which will of course have a positive impact on the overall economic indicators and advancement of urban development. With this initiative, we plan to witness an additional investment of 500 MLN GEL at least, though it is by far our lowest expectation, as the industry may well mobilise and absorb almost a billion GEL.

I wish to explain to our citizens: you may well be aware that many line ministries have a lot of projects that are still pending. We have about half a million cubic meters of housing to be built, for instance. Also, the Ministry of Internal Affairs is going to commission the construction of a Police City. Plan will also imply the construction and rehabilitation of police stations. The Ministry of Education intends to rehabilitate and/or construct about 800 schools, kindergartens, while the Ministry of Defence has its own priorities. Same applies to the Ministry of Justice and others. I will not list them all. The Ministry of Infrastructure has a list of projects for water supply and other directions.

That is why, we incentivise the construction firms to attract additional financial resources domestically - e.g. from commercial banks operating in the country - with support of our guarantees. They will in essence have guaranteed contracts on a pre-defined volume of works. Of course, we will be servicing these loans in installment payments during 3-5 years. I implemented this idea in practice when serving as a Minister of Defence of Georgia.

Workload of three or five years was done within a year.

Juansher remembers it well. It applied to the construction of military base stations, procurement, replenished vehicle pool and many other projects, which were done in a most efficient manner and I believe that it will be utterly interesting this time again. We will be witnessing results in 1 year, instead of about 4-5 on the one hand and will be thereby boosting the effectiveness of local companies - on the other hand. More jobs will be created, especially when the initiative is directly linked with public works that we are launching now. Of course, it will lead to at least 1 or 2% additional economic growth. That is why, we will be commencing this project and I wish to instruct Levan Davitashvili to start active interaction and meetings with businesses. We will be endorsing this project very soon, as it will serve the interests of our state and citizens”, - said Irakli Garibashvili.