Government Gears up for New Wave of Privatization

Government wants Parliament to truncate list of state-owned facilities that cannot be privatized. The proposal will also remove railway infrastructure from the list if approved by the Parliament.

Draft of amendments to the Georgia State Property Privatization Law has been already approved by Parliament with its first hearing and the government now wants the lawmakers to speed up its final approval with the second and third readings.

According to the amendments, the following facilities may be subject to privatization:
 
• Railway infrastructure;
• Water supply systems and its infrastructure with pumping stations and pipelines, as well as sewer systems;
• Postal communication;
• Technical means of Channel One of the TV and Radio Broadcaster and antenna-feeder equipment;
• Buildings housing kindergartens;
• Administrative buildings of the state agencies;
• State-owned cemeteries.
 
The mentioned draft law paves the way for privatization of berths at ports; landing tracks, state archives, including film and photo materials and museums, if they are not enlisted as “property of special importance.” This list will be drafted by the government.

The North-South Gas Pipeline which is used to transport gas from Russia to Georgia and to transit gas to Armenia will still remain in the list of facilities that can not be privatized. Motor roads and air space also remain in the list.
 
The draft law says that privatization should be carried either through auction, or through direct sale.

Opposition lawmakers and some from the ruling party as well criticized the proposal allowing to sale infrastructure of the state-owned Georgian Railway Ltd.

State Minister for Economic Reform Issues Kakha Bendukidze, who is a co-author of the draft law, however, said that no privatization of the railway is planned by now.
 
“But it is not ruled out that the Georgian government decides to transform the Georgian Railway into a joint stock company so that the people have an opportunity to buy a part of its shares,” Bendukidze said on June 27.

Vladimir Papava, a lawmaker from the ruling National Movement party, says that from economic point of view, privatization of the railway, which is a profitable enterprise, is absolutely understandable; however, he added, political factors should be taken into consideration.
 
“Russia’s plan is economic expansion and taking over Georgia’s transport infrastructure is part of this plan… Russia already controls Armenia’s economy,” MP Papava told Imedi television on June 27.