At the extra session of the Kaspi Municipality Assembly, the member of the New Political Centre – Girchi, Mikheil Bekauri, stated: “Old projects in the Kaspi Municipality, which should have been concluded by now, are not yet finished. The construction of the sports complex which has been going on for a long time has now stopped and workers have not even received their wages for the last two-to-three months.”
FactCheck verified the accuracy of this statement.
In his interview with FactCheck, Mikheil Bekauri explained that the project was designed with significant flaws in the first place. It turned out that it had not envisioned the inclusion of a sewer system. The construction work was to be finished at the end of 2015.
The Kaspi Governor’s Office designed the project for the rehabilitation of the sports complex and in 2014, after receiving funding from the World Bank, gave it over to the Municipal Development Fund for a tender. The Fund announced a tender on 5 November 2014 with Block Georgia Ltd becoming the contractor (no other companies participated in the tender). According to the agreement between the parties, the value of the project was estimated at GEL 1.6 million (this amount increased several times afterwards).
The project was supposed to be finished 12 months after beginning the construction work which would be January 2016.
FactCheck contacted the Kaspi Municipality Governor’s Office about this issue. According to the explanation of the representative of the Office’s Media Service, Dali Korkomashvili, the Office is not responsible for observing the construction work undertaken in terms of the project. According to her: “As the project is being implemented in the Kaspi Municipality, our participation is of a financial character, only. At the first stage of the project, GEL 326,000 was allocated and the remainder, which is GEL 167,800, will be transferred when the construction work is finished.”
Several changes were made to the agreement after the beginning of the construction work. On 29 January 2016, when the project was supposed to already have been finished, the initial project plan details were altered in order to allocate additional funding and extend the completion deadline. These changes were accepted by the project’s monitoring body and the completion date was postponed to 1 July 2016. According to the corrected expenditure data, the value of the agreement increased by GEL 711,670 and amounted to a total of GEL 2,469,049. These changes were by no means final. The agreement was corrected once again on 5 July 2016; specifically, the need for further construction work during the rehabilitation process was once again revealed for which the contractor asked for an advance payment of GEL 167,788.
In his interview with FactCheck, the Director of Block Georgia Ltd, Vakhtang Janashvili, stated that the construction work set out in the initial version of the agreement was finished in the initially agreed timeframe. However, as it turned out, important details such as heating, ventilation and sewage were not included in the project which caused the necessity to make additional plans and allocate additional money. Furthermore, the contractor company was unable to receive the additional expenditure necessary for the project as it was unable to present a bank guarantee (the company’s properties have been seized which is why it could not present a bank guarantee). According to the statement of the company’s managing group, this problem was solved with the involvement of government structures; specifically, the Municipal Development Fund assumed the role of mediator between the company and several commercial banks. Finally, the company managed to get a bank guarantee from Cartu Bank.
Despite receiving the necessary funds, part of the construction work set out in the project has not yet been started. According to Vakhtang Janashvili’s explanation: “The equipment necessary for installing heating, ventilation and sewage are not manufactured in Georgia. The orders for their delivery have already been placed and as soon as they arrive we will be able to install all of the necessary parts and finalise the sports complex.”
As for the part of the statement where Mikheil Bekauri talked about workers not receiving their wages, FactCheck visited the construction site in the Kaspi Municipality and asked the workers about their wages. Those who spoke to us stated that they have received only part of their wages. Some of them said that they receive their wages in portions and usually late. The workers stated that if they do not receive their wages in full, the construction process might have to be delayed.
Vakhtang Janashvili also confirmed the problems of wage disbursement and explained it in reference to construction delays and the specific nature of calculating the value of the already completed work.
FactCheck’s study found that the rehabilitation of the sports complex in the Kaspi Municipality stopped several times after it was initially started owing to flaws in the project itself. The process was further delayed by the fact that the contractor company failed to present a bank guarantee necessary for receiving additional funds for the construction work. This was resolved with the involvement of the Municipal Development Fund. Despite the fact that construction work is currently ongoing, the workers’ wage disbursement is in a state of delay which is confirmed by the managing group of the contractor company itself.
Hence, Mikheil Bekauri’s statement is MOSTLY TRUE.