Issue 6, 2012. December-January

   

END OF MINISTRY, END OF LAZIKA PROJECT?

One of the new government's first decisions was to close the Ministry of Infrastructure and Regional Development, redistributing its portfolio between the economy ministry and the prime minister's office. Investor.ge spoke with Davit Narmania, the head of the ministry, about the government's plan and its potential impact on major infrastructure projects.

Maia Edilashvili

Davit Narmania, the current minister, said re-parceling the ministry's responsibilities will not impact ongoing projects, but should streamline procedures. He noted that there is plenty of overlap between departments in the Ministry of Economy and the current Ministry of Infrastructure.

In 2009, when this ministry was created, the idea was to bring all the infrastructure-related projects under a single agency to simplify coordination. "In terms of infrastructure project implementation, this ministry was successful; it has carried out many good projects, but the second direction - the decentralization and development of self-governance - was put aside [to the extent that] the country had no decentralization strategy," he said.

Under the new plan, a separate agency will focus solely on regional development and decentralization issues. The reorganization is expected to take several months; and once the ministry is closed, Narmania will become the First Deputy Finance Minister.

Narmania stressed that highways and other big infrastructure development projects will remain priorities and local infrastructure improvement projects in the regions will continue with the help of donors such as the World Bank, the Asian Development Bank, and others.

There are some questions about projects proposed by the Saakashvili government, however - including the building of a new bridge in Mtskheta and the construction of a bridge in Tbilisi to connect the Marshal Gelovani and Samtredia Streets over the Mtkvari River- that the new administration is still considering. One large infrastructure project that will not happen, Narmania said, is Lazika, the President's pet project on the Black Sea coast.

The Georgian Dream coalition has questioned the need and financial affordability of such a huge project, and environmentalists have warned that the Kolkheti National Park would be damaged by the project.

"Lazika as a city is not [even] under consideration at all," Narmania said, adding, however, that some investors have spoken with the Ministry of Economy about developing Lazika Port.

Another major change planned for infrastructure projects will be a shift in priorities.

"Overall, in terms of infrastructure development, the government's general approach will be to first improve infrastructure that is vitally important for the people," he said. "We do not want to build a country where GDP growth is the highest priority unless this growth is reflected in people's wellbeing."

The new economic team is promoting a policy that would support small and medium- sized businesses, end monopolies and limit oligopolies - something more akin to European free competition laws rather than the libertarian model favored by the previous government.

A core focus will be developing projects that revive the agriculture sector. This remains a major challenge, noted Narmania, but if the government is successful, a stronger agriculture sector will help revitalize rural communities around the country, creating jobs and more economic growth in the regions outside of Tbilisi.