President Giorgi Margvelashvili visited the Parliament of Georgia on 21 February 2014. Debates were held after the President’s speech. Zurab Tkemaladze, Member of the Parliamentary Majority, assessed the infrastructural projects from the previous year and stated the following: “Now, when we are ratifying these suspended projects, we see that [GEL] 15 million worth of construction work on the Tbilisi-Rustavi highway was overestimated. It turned out that only foreigners were working there. This contract was changed and then Georgians were employed. In Kakheti, the Gombori-Telavi road project was reduced and, if I remember right, this led to the possibility of producing an additional 25-kilometre stretch. Construction was being implemented on a 111-kilometre stretch in the previous year. These infrastructural projects were implemented and there are documents to confirm this.”FactCheck
took interest in the accuracy of the MP’s statement and sought to verify it.In order to verify the statement, FactCheck
contacted Zurab Tkemaladze directly. According to the MP, the cost of the Tbilisi-Rustavi highway project decreased by GEL 15 million since the cost of the work had been overestimated. Reducing the Vaziani-Gombori-Telavi highway project, therefore, will enable the rehabilitation of an additional stretch of the Sasadilo-Sioni highway.
The Ministry of Regional Development and Infrastructure and the Municipal Development Fund are implementing the Tbilisi-Rustavi highway construction project with the financial support of the Asia Development Bank (ADB). The project considers the modernisation of the Tbilisi-Red Bridge highway to be of international importance. The length of the new highway is equal to 17.4 kilometres. The work on the project started in 2012. According to the information published on the website of the Asia Development Bank, the Government of Georgia; in particular, the Ministry of Finance, presented the Investment Programme for Urban Development proposal to the Asia Development Bank for funding which included the construction of two sections of the Tbilisi-Rustavi highway; namely: Section 1 (0-4 km) and Section 3 (15.5-17.1 km). A contract was signed between the Asia Development Bank and the Municipal Development Fund of Georgia on 24 July 2012. The agreement noted that the Asia Development Bank was ready to lend USD 64,886,000 to Georgia for the implementation of the project. The implementation of the project was planned for a 17-month period and was to start in 2012 but was then temporarily suspended.FactCheck
searched for the interview with Elguja Khokrishvili, the then Executive Director of the Municipal Development Fund (currently the Minister of Regional Development and Infrastructure) on the website of the Municipal Development Fund of Georgia where he talked in details about the Tbilisi-Rustavi highway project and explained the reasons for its suspension.
According to Khokrishvili, in December 2012, during a period of new management for the Fund, the New Energy company was the winner of the tender for the construction of the Rustavi-Tbilisi highway. Prior to the signing of the agreement, the company was to present a guarantee of advance payment and the provision of the contract. It was not able to present the aforementioned due to the fact that New Energy was experiencing some financial problems during this period. In this case, the company which had achieved the second place in the tender would become the winner or, alternately, the tender should be annulled and held again. The issue was discussed at the Supervisory Council which includes the Prime Minister, Minister of Finance and other representatives of the Government.
Further according to Khokrishvili, some violations were revealed after researching the issue. The name of the company winning the tender was not announced until 14 September 2012 even though the President and a representative from the New Energy company talked about the start of the project on television on 20 August 2012. The New Energy company logo was clearly shown on the construction equipment at this time. All of this questioned the conduct of the tender and if it was held in a transparent manner in accordance with the law. In addition, there was no construction permit granted for the work. The construction permit has its own set of categories such as, for example, a so-called ‘difficult highway’ and so the start of construction without a permit is a violation of the law. Moreover, the project did not consider hiring local workers.
Khokrishvili also explained that the Supervisory Council took all of the aforementioned into consideration and made a decision to annul the tender and revise the project, acquire a construction permit and announce a new tender. In addition, negotiations were started with the Asia Development Bank that one condition should be included in the tender requirements in that members of the local population should be employed in terms of non-professional labour. This condition, in fact, was included in the project despite the Asia Development Bank refused this in the beginning.A new tender for the construction-rehabilitation work on the Tbilisi-Rustavi highway was announced by the Municipal Development Fund on 18 May 2013. FactCheck
searched for information about the process of the tender in several Municipal Development Fund reports. One noted that the turnout was extremely high for the repeated tender and 41 companies purchased tender documents. Also noted was that every project shortcoming had been rectified and problems related to property rights were solved, the construction permit was issued and the cost of the project was significantly reduced. The price quoted by the winning company (the aforenoted New Energy) in the first tender of the Tbilisi-Rustavi highway project was equal to GEL 96,799,813. The price of the new contract is equal to GEL 88,761,128. Accordingly, during the implementation of the project, GEL 8,038,685 was saved. One of the reports also indicated that an agreement had been reached with the Asia Development Bank according to which 100% local workers were employed in the construction of the highway.Zurab Tkemaladze talked about Kakheti roadways in the second part of his statement; in particular, the Vaziani-Gombori-Telavi and Sasadilo-Sioni highways. FactCheck
took interest in the construction work on these abovementioned roadways and looked into them as well.FactCheck
contacted the Department of Highways. According to the response received, a complete Vaziani-Gombori-Telavi rehabilitation project of 55 kilometres of roadway was finished in 2010 with the highway completely rehabilitated from the capital city in the direction of the Telavi Municipality and infrastructure improved. The rehabilitation of the Vaziani-Gombori-Telavi highway was implemented under the World Bank’s Secondary and Local Roads Rehabilitation Project (SLRP). Two new bridges were built within the rehabilitation of the highway and rehabilitation-reconstruction work was implemented on seven existing bridges. Culverts, ditches and road signs were erected on the rehabilitated roadways as well.
The amount of money spent on 54 rehabilitation work projects on the Vaziani-Gombori-Telavi highway was equal to GEL 42,445,423.
The rehabilitation of the Vaziani-Gombori-Telavi highway, in fact, cost much less than planned (USD 30 million was allocated). Accordingly, the Government of Georgia came up with an initiative that the savings of the project should be spent on the rehabilitation of dining halls for villages and on the Sioni connecting section of the highway. The rehabilitation of the Sasadilo-Sioni highway is also being implemented within the Secondary and Local Roads Rehabilitation Project.
The project envisages asphalt concrete pavement on a 17-kilometre section of the highway, the rehabilitation of five bridges and the placement of culverts and concrete cuvettes. The project is divided into three phases. Detailed design work for the rehabilitation of this section is carried out for each stage of the rehabilitation activities in advance of starting the actual work. Detailed design work is currently underway for the first 5-kilometre section of the Sasadilo-Sioni highway. The project will be implemented from January 2014 until May 2015 at a cost of GEL 7,920,600. The design and rehabilitation work is being implemented by the contractor organisation, Caucasus Road Project Ltd.
Zurab Tkemaladze talked about the reduction of the cost of the Tbilisi-Rustavi highway construction project in the first part of his statement and the employment of local workers. According to the information received from the Municipal Development Fund, the price quoted by the winning company in the first tender was equal to GEL 96,799,813. Subsequently, the project cost was significantly reduced and the contract price quoted by the winning company, Sinohydro Corporation Limited, in a repeated tender was equal to GEL 88,761,128. Accordingly, GEL 8,038,685 was saved during the implementation of the project which does not quite comply with the figure stated by the MP; namely, GEL 15 million. According to the report of the Municipal Development Fund of 2013, an agreement was made with the Asia Development Bank to employ 100% local workers in the construction of the highway.
As for the second part of Zurab Tkemaladze’s statement, according to the information obtained, the Vaziani-Gombori-Telavi highway rehabilitation project cost less than what was initially planned and, accordingly, the Government decided to use these savings for the rehabilitation of the Sasadilo-Sioni highway. This part of the MP’s statement is true, however, the rehabilitation of a 17.4-kilometre section of the highway will be implemented and not a 25-kilometre section as the MP stated.Zurab Tkemaladze talked about the high-speed highway as well; in particular, the construction work on a 111-kilometre section of the highway. FactCheck has already published an article regarding this issue and so we will not cover this again herein. FactCheck
notes that this part of Tkemaladze’s statement is true since the construction activity was ongoing on a 111-kilometre section in the previous year.Based upon the aforementioned facts, FactCheck concludes that Zurab Tkemaladze’s statement, “The cost of the Tbilisi-Rustavi highway project decreased by [GEL] 15 million, the Gombori-Telavi road project was reduced and, if I remember right, this led to the possibility of producing an additional 25-kilometre stretch,” is MOSTLY TRUE.