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On 12 September 2014, member of the United National Movement, Zurab Japaridze, organised a media briefing about the situation at Georgian Railway. Mr Japaridze stated:  “There is a decrease in the cargo transported by Georgian Railway and this has become a trend for the last two years. The total amount of transported cargo from January to July of this year is 771,000 tonnes less than that of the same period of 2013 and 2,200,000 tonnes less than the initial plan of 2014. According to current forecasts, Georgian Railway is back to the levels of 2009 (the year following the war) by the amount of transported cargo. Georgian Railway’s statement that the income in GEL has increased is just a manipulation with the currencies and is an attempt to mislead the public. In reality, the income in the basic currency, USD, has significantly decreased along with the value of the company itself.”

FactCheck

took interest in the MP’s statement and verified its accuracy.

According to Georgian Railway’s data, the amount of transported cargo in the first eight months of 2014 has, indeed, decreased as compared to the same period of the previous year. The amount of transported cargo in the first seven months of 2014 decreased by 771,125 tonnes as compared to the same period of 2013 whilst the difference amounted to 900,473 tonnes in the first eight months of 2014. In addition, according to Georgian Railway’s initial plan of 2014, 11,705,321 tonnes of cargo was to have been transported from January to July 2014 and the latest data show that the difference from the plan amounts to 2,208,710 tonnes.

Table 1:

 Overall Amount of Transported Cargo in 2013 and 2014

Overall Cargo

I

I-II

I-III

I-IV

I-V

I-VI

I-VII

I-VIII

2013

1,516,728

2,953,311

4,553,168

6,110,372

7,399,953

8,762,740

10,267,777

11,916,026

2014

1,296,971

2,412,237

3,795,440

5,065,098

6,481,739

7,865,130

9,496,652

11,015,553

Source:  Georgian Railway

Statistics about the amount of cargo transported in 2012 and 2013 can be found on the website of Georgian Railway. It shows that a decrease in the amount of transported cargo was recorded in 2013 as well. In total, Georgian Railway transported 1,891,015 tonnes less cargo in 2013 than in 2012.

Table 2:

 Overall Amount of Transported Cargo in 2012 and 2013

image001 Source:  Georgian Railway

The chart below depicts the dynamics of the cargo transported by Georgian Railway from 2008 to 2013.

image002

According to the forecasts of Georgian Railway, the amount of transported cargo will reach 17,305,648 tonnes by the end of 2014 which is slightly more than in 2009.

As for the financial condition of Georgian Railway, according to the operational data

of the first eight months of 2014, the income of the company reached its historic maximum, GEL 335 million, which is 9.9% (GEL 28.6 million) more than the income of the same period of the previous year. The income for cargo transportation increased by 6.9% (GEL 16.3 million) and amounted to GEL 251 million which was due to a significant increase in dry cargo and petroleum products transportation. The income from other transportation amounted to GEL 70.6 million which is 18.7% more than it was in the same period of 2013.

According to the 2014 first half interim financial position statement

of Georgian Railway, the untaxed earnings of the company decreased from GEL 48.448 million (of the same period of 2013) to GEL 36.987 million (23.6%) as of 30 June 2014.

image003

However, the income of Georgian Railway grew by GEL 15 million and amounted to GEL 229.8 million.

image004 FactCheck

also examined the part of Zurab Japaridze’s statement where he talked about the currency manipulation on the part of Georgian Railway and the USD income as well as a decrease of company value. According to the data of the first six months of 2014, the income of Georgian Railway grew by USD 932,000 as compared to the same period of 2013; however, it is USD 5,882,000 less than in the first half of 2012. Even though the company’s income of the first six months was USD 6.8 million less than in the same period of 2012, it was USD 1,559,000 more by the end of 2013 than in 2012.

image005

As for the value of the assets of Georgian Railway, it has increased by GEL 40,557 in the first six months of 2014. However, if we convert this amount into USD it becomes clear that the total value of the company’s assets decreased by USD 53,082 in the first six months of 2014 as compared to the same period of 2013.

Mr Japaridze said that the decrease in Georgian Railway’s income and cargo transportation was due to inefficent management. On 27 March 2014, the Head of the Supervisory Board of Georgian Railway, Koka Guntsadze, commented upon the decrease in cargo transportation. According to Mr Guntsadze, despite the decrease in cargo transportation, the earnings of the company have grown and its financial plan is being implemented as normal. “Cargo transportation at the Black Sea ports have decreased by 15%. It is normal that if the ports have less cargo to process, we will have less cargo to transport. Thus, all of this has obejctive reasons and there’s nothing alarming. The income increase, on the other hand, is based upon the reserves that we used. The income was due to the imposition of flexible tariffs, the improvement of services at the stations and the transfer of the income of Georgian Transit to the state budget. During the office of the United National Movement, this income was being transferred to the offshore bank accounts of certain individuals. As for the amount of cargo, it will increase according to the condition changes on the market,” said Mr Guntsadze.

Conclusion

According to Georgian Railway, the amount of transported cargo decreased in the first eight months of 2014 as compared to the same period of the previous year. They also say that the trend of a decrease in cargo was recorded in 2013 as well. According to the data of the first seven months of 2014, cargo transportation decreased by 771,125 tonnes as compared to the same period of 2013 whilst according to the data of the first eight months the difference is 900,473 tonnes.

According to Georgian Railway’s initial plan of 2014, 11,705,321 tonnes of cargo were to have been transported from January to July 2014 and the difference from the plan amounts to 2,208,710 tonnes as of today. Georgian Railway’s forecasts also show that the amount of transported cargo will reach 17,305,648 tonnes by the end of 2014 which is slightly more than in 2009.

As for the company’s income in USD, it grew by USD 932,000 as compared to the same period of 2013; however, it is USD 5,882,000 less than in the first half of 2012. Even though the company’s income of the first six months was USD 6.8 million less than the same period of 2012, it was USD 1,559,000 more by the end of 2013 than in 2012. The income of the first six months of 2014 is already USD 1 million more than that of the previous year. Hence, the part of Mr Japaridze’s statement where he talks about a significant reduction in the USD incomes of Georgian Railway is inaccurate.

The total value of the assets of Georgian Railway increased by GEL 40,557 in the first six months of 2014. However, if we convert this amount into USD it becomes clear that the total value of the company’s assets decreased by USD 53,082 in the first six months of 2014 as compared to the same period of 2013.

FactCheck concludes that Zurab Japaridze’s statement is MOSTLY TRUE.

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