The Road Department of the Ministry of Regional Development and Infrastructure won three cases in French international arbitration. The disputes were against companies which were constructing the first and second sections of the Samtredia-Grigoleti road and the Zemo Osiauri-Chumateleti section, all part of East-West high-speed highway (E-60).
The Road Department of Georgia scrapped agreements with the contractor companies due to their failure to comply with the obligations and instituted a legal dispute through international arbitration for reimbursement for damage inflicted. The disputes, with the representation of the Ministry of Justice of Georgia and the involvement of international legal firms, were considered by a Paris international arbitration chamber. Arbitration ruled all three disputes in favour of the Road Department of Georgia and decided that the Road Department is entitled to nearly GEL 187 million as compensation for damages as part of all three arbitration cases.
The Samtredia-Grigoleti road is the most problematic and protracted project of the high-speed highway as the construction started in 2014 and is yet to be finished.
Construction of all four parts of the Samtredia-Grigoleti road was carried out with complications. The second section of the road, which was being built by the Sinohydro company, turned out to be particularly problematic. According to the initial project, the road was to be built on concrete piles (since the territory is a swampy place). The company demanded a change to the project during the work and installed wick drains. However, the construction with wick drains was not successful and slumps (deformation, lowering of surface) were caused at some placed which hindered road construction. The same problems arose on the fourth section of the road whose construction was supposed to end as early as in 2016. The construction work was carried out by the Chinese China Railway 23rd.
Construction work was also stopped on the first section of the Samtredia-Grigoleti road. The Ukrainian company Altcom was carrying out the construction and they had to be finished by spring 2016 as well. The company carried out only 24% of the total work envisioned by the contract. The Road Department of Georgia cancelled the contract with the company and is still involved in legal procedures to retrieve the advance payment money (EUR 18,338,910). Company Accord is currently in charge of carrying out the rest of the work on the given section.
Construction work on the third section of the Samtredia-Grigoleti road was also supposed to finish in 2018 and the Italian company Todin was in charge of the road work. The contract with the company was also revoked without the latter even having started to build the road.
Currently, construction work is in progress on the first section of the Samtredia-Grigoleti road and work is supposed to be completed by the end of 2022 according to the contract.
The second 15-kilometre long section, which was rather problematic because of road slumps, is currently finished. This section of the road connects the village of Japana with Lanchkuti. At this stage, construction of the fourth section of the road is also finished.
In regard to the third section of the Samtredia-Grigoleti road, tender procedures are open to select a new contractor. It was announced that 24 months were set as the deadline to finish the project, meaning that the full length of the Samtredia-Grigoleti section will not be finished for two more years at the very least.
Of additional note is that according to the draft 2013 budget, GEL 237 million was allocated for the construction of the Samtredia-Grigoleti road and the project was supposed to be finished in three years. According to the 2017 budget, appropriations for the aforementioned road were GEL 633 million and the deadline for finishing construction was postponed for three more years. According to the 2020 budget, GEL 812 million was allocated for the construction of the Samtredia-Grigoleti road and the project was supposed to end in 2023. According to the 2021 budget, GEL 1 billion was allocated for construction of the road and the possible date of completion of road was moved again by a year.
Therefore, the budget of the Samtredia-Grigoleti road was amended several times. If in 2014, GEL 237 million was sufficient to finish the project although a total of GEL 1 billion is needed to build four sections of the Samtredia-Grigoleti road according to the 2021 budget whilst the project, which was slated to be finished by 2016, will be completed in 2024 with an eight-year delay. As of 2021, the actual incurred expenses for the project amounted to GEL 589 million.
