Caucasus Business Week #181

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February 20, 2017 #181

February 20, 2017, Issue 181 - www.cbw.ge

Tbilisi Business Hub New Opportunities in State Procurement Mechanisms Pg. 7

Taxi YANDEX Bankrupts Georgian Taxi Market Players

PR Nino Zarkua: A Good Work Atmosphere Leads to More Success

Pg. 6

Pg. 8

Georgia Lacks for Culture of Concluding Marriage Contracts Only 177 Marriage Contracts Recorded Since 2011

Economic Freedom Grows In 2017 Georgia has improved positions in Index of Economic Freedom compared to 2016 and moved to 13th position from 23rd place. In the 2017 report published by Heritage Foundation, Georgia ranks 13th with 76.0 point among 180 countries of the world. Georgia was named among free countries in terms of Economic Freedom. Under the Index, Georgia is Europe’s fifth freest economy. Georgia’s 76 point is up 3.4 point compared to 2016. According to the report, Government of Georgia has maintained strong impulse in terms of liberalization of economic activity. «State debt and budget deficit are under control.

Open market policy backed by competitive low taxes and efficient regulations have grown trade and investments in the country. Large-scale privatization has increased, counter-corruption efforts have brought efficient results», the report reads. The index appraises countries due to four criteria: rule of law, size of government, regulatory efficacy and market freedom.

Pg. 4

Why To Invest In Agriculture

Pg. 5

Georgia is traditionally an agricultural country, which has 22 micro-climates varying from cool to dry, warm to humid. These diversified micro-climates allow for a longer than normal harvesting season and a wide range of growing conditions. Soils are of volcanic origin located in the river valleys. They tend to be quite fertile and reasonably easy to cultivate.

Georgia as an agrarian-oriented country has a significant rural population. The country was renowned as a quality food supplier during the Soviet times and the Georgian food & beverage products are still well-recognized as healthy and supreme quality brands in CIS region.

Georgia has a quite big opportunity in terms of agricultural development. Georgia is considered as as an ideal country not only for initial production, but for processing industry, as well. The scale of exported products grows from year to year.

Pg. 9

2 GOVERNMENT

NEWSROOM IMF visits Georgia to discuss new programme The International Monetary Fund starts a two-week mission to Georgia on Wednesday to discuss the possibility of a new IMF-backed programme that could underpin economic reform and encourage investors.

Inova Discussed Investing Jointly with Partnership Fund in the Hospital Sector Inova Healthcare System already starts construction of American Hospital in Georgia, which will be in line with internationals standards. They does not exclude opening of new clinics.

ECONOMY

Tbilisi International Airport Served Record Number of Travelers The airport served over 163 287 travelers, the growth is 31% y-o-y.

To remind, Georgian International Airports have served 26% more travelers in 2016 comparing to 2015, at that travelers number has been increased by 22% .

Georgia’s Foreign Trade Increased by 22% in January 2017 in January 2017 Georgia’s foreign trade turnover (without undeclared trade) amounted to $ 651 million which is 22 percent more than the figure for the corresponding period last year.

BANKING

Volume of Remittance Flows Amounted to $ 83.9 Mln in January 2017 In January 2017 the volume of money transfers to Georgia amounted to $ 83.9 million or GEL 226.7 million which is 26.1 percent ($ 17.4 million) more than the same figure for January 2016.

1130 out of 27 000 Credits are Converted in GEL According to the President of National Bank of Georgia, 4.2% of loans are converted into GEL by this time. 1 130 (up to $40 000) out of 27 000 credits, with a volume of 14 million USD are converted into GEL.

BUSINESS

14 Million USD Investment to Grant for Construction Business The investor is a Tbilisi-born Saint Petersburg Businessman, Iuri Sarkisiani who has 40 years of experience in business management. The investor entered the market of construction sector with “New Tbilisi” brand.

Georgian Meat Market Sees a Shortage of Beef The retail price index rose in January in Georgia. Accordign to the data of the ISET, since the middle of December, prices have increased by 10.1%. The study authors report that the pork price rose the most, the increase amounted to 35%.

COMPANY

British American Tobacco to Pay 90 mln GEL Fine New trial is reported in tobacco industry, namely, in relation to British American Tobacco company. An unprecedented fine of 90 million GEL has been imposed on the company in Georgia.

February 20, 2017 #181

Foreign Minister Concludes Azerbaijan Visit

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eorgia’s Foreign Minister Mikheil Janelidze has concluded his two-day official visit to Baku, where he met the President of Azerbaijan Ilham Aliyev and Foreign Minister Elmar Mammadyarov to discuss bilateral relations between the two neighboring countries.

At the meeting on February 13, Janelidze and Aliyev underlined that “the good-neighborly and strategic relations” between Georgia and Azerbaijan creates “solid basis” for the further development of bilateral and regional cooperation, the Georgian MFA reported.

According to the Georgian MFA, “special note was taken” of the importance of transport and energy projects between the countries.

The sides agreed to continue close cooperation for the implementation of the Southern Gas Corridor and Baku-Tbilisi-Kars Railway projects, the statement also said.

Janelidze and Aliyev spoke on the two country’s cooperation within the European Union’s Eastern Partnership Initiative, according to the Georgian MFA. “Mikheil Janelidze welcomed the launch of the EU-Azerbaijan strategic document,” it said.

“President Ilham Aliyev said that Azerbaijani-Georgian relations are developing very successfully and dynamically,” the Azerbaijani President’s administration reported in its press release of the meeting.

“The head of state noted the importance of expanding cooperation between the two countries in all areas, including political, economic, transportation, energy and humanitarian ones,” the statement said.

President Aliyev stressed the importance of “increasing efforts” to strengthen “the good results” of bilateral cooperation and “bring the two countries closer to each other,” according to his office.

On February 13, Janelidze held a meeting with his Azerbaijani counterpart Elmar Mammadyarov, where the sides spoke about “the traditionally successful cooperation” between Georgia and Azerbaijan “based on centuries-old friendship and good-neighborly relations,” according to the Georgian MFA. The Georgian MFA reported that the sides talked on a range of issues, including bilateral cooperation in commercial, economic and energy sectors.

“Special attention was paid to the

importance of using the full transport potential of the south-west transport route and of developing transit possibilities of the EuropeAsia transport corridor,” the statement added.

According to the Azerbaijani MFA, Minister Mammadyarov said that “the mutually beneficial” cooperation between Azerbaijan and Georgia, “as friendly and neighborly countries, sets an example for the entire region.”

Foreign Ministers spoke on the bilateral cooperation in economy, trade, tourism, energy and transport sectors and stressed the importance of expanding the ties “of regional importance.” Here as well, the sides noted “the indispensability” of Baku-Tbilisi-Kars Railway and Southern Gas Corridor projects.

“The sides reiterated mutual support for the territorial integrity, sovereignty and internationally recognized borders of Azerbaijan and Georgia,” the statement also said.

Within the visit, the Georgian Foreign Minister also held meetings with Prime Minister Artur Rasizade and Milli Mejlis Speaker Oktay Asadov.

Civil.ge

Turkey, Georgia, Azerbaijan Plan 300 Vacancies in Tbilisi to Increase Turnover to $20B

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urkey, Georgia and Azerbaijan plan to increase the volume of mutual trade up to $20 billion, said Turkey’s Deputy Economy Minister Fatih Metin at the 5th Turkey-Azerbaijan-Georgia business forum in Istanbul Feb. 17.

Metin said that a business forum in such a format is important not only for the development of economic cooperation, but also for rapprochement of the three countries in social sphere. The deputy economy minister noted that Ankara works on elimination of obstacles in the trade among Turkey, Azerbaijan and Georgia.

“An agreement on free trade between Turkey and Georgia and the discussion of an agreement on preferential trade between Turkey and Azerbaijan open big opportunities for the development of business relations among the three countries,” he said.

The structure of economies of Turkey, Georgia and Azerbaijan is interchangeable: via research and innovative potential of Turkey, natural and geographical opportunities of Georgia and strong energy infrastructure of Azerbaijan it is possible to start several joint initiatives, which will contribute to the development of industrial cluster in all three countries, added the Turkish minister.

BUSINESS WEEK caucasus

The Editorial Board Follows Press Freedom Principles Publisher: LLC Caucasian Business Week - CBW Address: Aleksidze Street 3 Director: Levan Beglarishvili; Mob: +995 591 013936 Sales: Mob: +995 558 36 61 07 WWW.CBW.GE Email: caucasianbusiness@gmail.com

During the period of radical transformation of the global economic system, the regional dialogue is extremely important, said Rona Yircali, a member of Turkey’s Foreign Economic Relations Board (DEIK). “We, as three neighboring countries, should work together for the continuation of economic development in our region.

Development of economy will bring peace and prosperity to the region,” noted Yircali. “The effective cooperation among Turkey, Azerbaijan and Georgia can be an example for other countries.”

He added that currently, the trade turnover among Turkey, Azerbaijan and Georgia totals $4.2 billion.

The Azerbaijan-Georgia-Turkey business forum, organized with the support of the Azerbaijan Export and Investments Promotion Foundation (AZPROMO), will also be attended by Azerbaijani Economy Minister Shahin Mustafayev, Turkish Economy Minister Nihat Zeybekci and Georgian Economy and Sustainable Development Minister Giorgi Gakharia.

Azerbaijan’s trade turnover with Turkey amounted to $2.3 billion in 2016, with Georgia – to almost $395 million, according to Azerbaijan’s State Customs Committee. Turkey became Azerbaijan’s main trade partner and Georgia ranked the 12th in 2016.

O

n February 22 Georgian Water and Power will employ 300 citizens in addition. The company will hold employment forum at Expo Georgia, at the third pavilion. Objective of the forum is to attract, select and employ specialists oriented on development in technical, commercial and administrative directions. Traditionally, the project support is provided by Social Service Agency of Ministry of Labor, Health and Social Protection. The agency has updated job seekers registered in the database (www.worknet.gov.ge) about vacancies announced by Georgian Water and Power and invited to the Employment Forum.

Moreover, active support of the Forum is provided by Tbilisi City Hall and Tbilisi Council.

At the Forum applicants will be able to receive detailed information on desirable vacancy from field experts.

Applicants are suggested to pass online registration on the company’s official website and Facebook page.

It should be noted that Georgian Water and Power has started the year of 2017 with doubled investments, compared to 2016. Namely, the company will invest more than 80 million GEL in infrastructure development and renovation, as this is the key investment direction of the company.

Consequently, it is necessary for company to attract new staff and arrange professional training and the employment forum is the best opportunity in this respect. Georgian Water and Power will permanently implement similar projects for developing water supply field specialists.

Editor: Nutsa Galumashvili. Mobile phone: 595 380382 Reporters: Medea Samkharadze; Mariam Kopaliani; Merab Janiashvili Designer illustrator: Ilia Chrelashvili. Technical Assistant: Giorgi Kheladze

Source: www.commersant.ge, www.bpi.ge, www.gbc.ge, www.agenda.ge, www.civil.ge

February 20, 2017 #181

PUBLICITY

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ECONO-MIX

February 20, 2017 #181

Economic Freedom Grows Georgia Advances to 13th position in Index of Economic Freedom

Paata Bairakhtari AYFB analyst

AYFB: It is Inadmissible to Discuss Law on Tobacco in this Form

‘‘

Merab Janiashvili Economic Analyst

Worsened position in monetary freedom is related to GEL depreciation and high dependence of Georgian economy on foreign currency.

According to the research, absence of requirements for minimum salary was also positively appraised.

‘‘

Association of Young Financiers and Businessmen (AYFB) expresses embarrassment over the fact Parliament of Georgia plans to adopt Law on Tobacco in the existing form, without revision.

AYFB analyst Paata Bairakhtari noted that it is inadmissible to adopt the bill in the existing form.

«Seemingly, the Authorities cannot realize threats that may arise in case of adoption of the bill. First of all, the bill lacks for due financial analysis. Consequently, it is unclear what economic effect its adoption will bring.

Explored materials prove that we should not expect any economic benefit, while the bill does not enable to determine losses the state economy, budget and the whole country may receive. There are a number of regulations in the bill of Tobacco Control and a reasonable time is required for their enactment. The clause of the bill that calls for licensing tobacco product traders is also unclear and nonfunctional. The existing bill introduces a licensing of tobacco traders, but the licensing mechanisms are not clarified, what criteria the applicant must satisfy, in general, what is the goal of introduction of this norm in the country.

If the Parliament adopts intricate licensing norms, this signifies that a major part of small entrepreneurs will not be able to satisfy them (the issue is of supermarkets and stores) and they will be led to bankruptcy. As a result, only major entrepreneurs will be able to obtain licenses and will make benefits following extreme reduction of market competition. In the second case, if the licensing norms will be simple and everybody will be able to obtain them, introduction of similar regulations will be useless! This license will grow into mechanism for stealing money from population. As to growth in excise tax, through which the bill authors plan to reduce smoking level, this step will be inefficient and useless and the Georgian experience of the past years prove this consideration, along with international experience. Over the past years tobacco excise tax is growing on permanent basis, but this mechanism has not reduced smoking level. Over the past years tobacco imports continuously grows in Georgia. According to statistics for January to June, 2016, Georgia imported 55.5 million USD cigarettes, up 3.5 million USD compared to the same period of 2015. An only result of tobacco excise tax growth has provoked upturn in tobacco products smuggling and endangered legal business’.

Thus, AYFB urges the Parliament to analyze all risks accompanying the bill adoption in the existing form and asks for making substantiated revision or do not back adoption of this bill under the current form.

I

n 2017 Georgia has improved positions in Index of Economic Freedom compared to 2016 and moved to 13th position from 23rd place. In the 2017 report published by Heritage Foundation, Georgia ranks 13th with 76.0 point among 180 countries of the world.

Georgia was named among free countries in terms of Economic Freedom. Under the Index, Georgia is Europe’s fifth freest economy. Georgia’s 76 point is up 3.4 point compared to 2016.

According to the report, Government of Georgia has maintained strong impulse in terms of liberalization of economic activity.

«State debt and budget deficit are under control. Open market policy backed by competitive low taxes and efficient regulations have grown trade and investments in the country. Large-scale privatization has increased, counter-corruption efforts have brought efficient results», the report reads.

The index appraises countries due to four criteria: rule of law, size of government, regulatory efficacy and market freedom. In the 2017 index Georgia has improved positions in 4 components out of 10 ones: ownership rights, government involvement, business freedom and labor freedom, worsened positions in 3 components – monetary freedom, government expenditures and tax burden.

The situation has not changed in 5 components – efficacy of court system, fiscal freedom, trade freedom, investment and financial freedom.

Due to the mentioned criteria, Georgia’s results are as follows: Rule of Law: 1. ownership rights – 55.1 point, up 15.1 point year on year 2. wholeness of government – 65 point, up 13 point year on year; 3. Efficacy of Court system – 66.5 point, unchanged.

According to information by Heritage Foundation, improvement in property right component is related to improved quality of fulfillment of contracts by the state and implementation of the court system reformation.

Size of Government: 1. Government expenditures – 74.4 point, down 0.9 point year on year.

2. Tax burden – 87.3 point, down 0.3 point year on year.

3. Fiscal efficacy – 93.5 point, unchanged.

Government size reduction is related to government expenditures in relation to GDP, which in 2016 constituted 29.2% of GDP. Tax burden point deterioration supposedly related to growth in some types of taxes.

Efficacy of Regulations: 1. Business Freedom – 87.2 point, up 0.7 point year on year.

2. Labor Freedom – 75.9 point, up 0.2 point year on year.

3. Monetary Freedom – 78.2 point, down 2.7 point year on year.

In business freedom category Georgia has improved positions thanks to simplicity of business registration procedures, low level of non-salary expenditures of workforce, absence of obligatory initial capital in business sector and efficient mechanisms for business regulation.

Worsened position in monetary freedom is related to GEL depreciation and high dependence of Georgian economy on foreign currency. According to the research, absence of requirements for minimum salary was also positively appraised.

Market Freedom: 1. Trade Freedom – 88.6 point, unchanged.

2. Investment Freedom – 80 point, unchanged.

3. Financial Freedom – 60 point, unchanged.

In Market Freedom component, scores have not changed compared to 2016, but positions worsened in several criteria, including trade freedom direction. In 2012 Georgia had 89.1 point in Trade Freedom component and it is the fourth year Georgia’s positions are worsening in this direction.

The report by Heritage Foundation reads that undeveloped domestic securities market remains a problem for Georgia, however the country has quite strong and stable bank sector.

It should be noted that after Georgian Dream came to power, Georgia’s position in Index of Economic Freedom has improved for the first time, In 2013-2016 Georgia’s positions worsened from 21st place to 23rd place, while in 2017 Georgia moved forward by 10 positions to 13th place.

In 2017 Index of Economic Freedom the leading positions are occupied by: Hong Kong (89.9 point), Singapore (88.6 point), New Zealand (83.7 point), Switzerland (81.5 point) and Australia (81 point).

“Doing Business Secretly With Depositors’ Money is Not Right. The first, bank always must be ready to return money upon the depositor’s request and the other, the bank must avoid any interest conflict, because clients trust banks and banks know much about them, so noncore businesses must be separated from banks.

As you know, the separation of non-core assets from the commercial bank has been completed at this level, but the National Bank is considering the expansion of supervision scope, which envisages several regulations for the holdings, which own the banks”.

Mamuka Khazaradze Businessman

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COMMUNITY

February 20, 2017 #181

Georgia Lacks for Culture of Concluding Marriage Contracts Only 177 Marriage Contracts Recorded Since 2011 BFM.GE

Establishment of an institute of marriage contracts is an important acquisition of the new civil code for regulating traditional property relations between spouses. Amid market economy a marriage contract is the best mechanism for protecting property interests of spouses during the divorce process, as well as for sharing all property acquired during the cohabitation period between arguing spouses. Marriage contract determines legal grounds of origination, revision and termination of property relations between spouses.

The legislation enables spouses or citizens planning to get married to conclude a marriage contract, determines its conditions and terms. When concluding the agreement, the Parties are obliged to respect all rules and conditions that, in general, are necessary for concluding an agreement. It is not an act of obligatory character and its conclusion depends on goodwill of both parties. This contract does not determine property rights and obligations of other members of the family.

Over the past 6 years only 177 marriage contracts were signed in Georgia. According to specialists, Georgian couples show growing interest in marriage contracts, but, according to notaries, mainly mixed couples sign marriage contracts, where either of spouses is a foreign citizen.

As to statistics, only seven marriage contracts were signed in 2010, 13 ones in 2011, 21 ones in 2012 and 32 ones in 2013, 38 ones in 2014, 33 contracts in 2015 and 33 contracts in 2016.

Marriage contracts are mainly signed by people of middle age, 30-40. As to contract conditions, under the Georgian legislation, only conditions related to property and its distribution are inserted in contracts. Marriage contract recognizes only 3 forms of property between spouses: common, individual and a share in property. Certain ownership regime may be transformed and moved to another form. It is also possible that the contract comprise both the existing and future property. Marriage contract must comprise necessary details characteristic for agreements: place of concluding an agreement, singing parties, contract content and signatures by the parties.

Marriage contract is tightly related to the issue of legal capacity of a body. Similar agreements are concluded by adults, but civil marriage is legal after 16 years old, according to civil law, when an authorized representative has submitted written consent or a court consent for marriage. Similar bodies may sign the contract prior to marriage if a similar agreement exists. Contracts concluded by underage bodies are powerless.

Marriage contract was considered an immoral deal by the socialist law, while it is an ordinary event in various countries and is widely used in practice. It is an ordinary institute for family law in various countries and is widely used for regulating property rights and obligations of spouses.

Marriage contract is widely used in foreign countries. Initially, negative attitude was expressed by courts of those countries, where it arose (England, the USA). Frequently, similar agreements used to provoke divorces and couples had to depart before marriage. This attitude was transformed later and it turned out that the agreement was a sufficient guarantee and condition to prevent property disputes between spouses. At the same time, the contract alleviates protracted and boring trials. Spouses are authorized to unite all their properties within the same marriage contract content, maintain its part in individual or shared ownership. Subject of the agreement may be property, in movable or immovable form, securities and the property in civil turnover, which may be possessed, used and managed by entities of private law.

In Germany all couples sign a marriage contract prior to wedding ceremony. This practice is related to the there living condition and social situation. There is quite expensive movable and immovable property behind each citizen and it is inadmissible to share these properties to spouses under common regime. Those who get married in early ages, do not sign marriage contracts because this category does not own serious capital.

As to divorce and obligations to be fulfilled under this contract, according to Geostat indicators, after 2010 the number of regis-

As to statistics, only seven marriage contracts were signed in 2010, 13 ones in 2011, 21 ones in 2012 and 32 ones in 2013, 38 ones in 2014, 33 contracts in 2015 and 33 contracts in 2016.

Marriage contract was considered an immoral deal by the socialist law, while it is an ordinary event in various countries and is widely used in practice. It is an ordinary institute for family law in various countries and is widely used for regulating property rights and obligations of spouses.

tered divorces in Georgia has doubled. In similar cases a number of disputable issues arises, especially in relation to property disputes: how property should be divided if spouses decide to get divorced and what should both parties take into account?

Defense lawyer Irakli Utiashvili provides several suggestions around the mentioned questions.

Property division must be carried out within 3 years after divorce Spouses must manage to divide the property within 3 years after divorce, as determined by legislation. Spouses are authorized to demand for their own share during this period.

After 3 years they lose such authority.

Law Recognizes only Civil Marriage Rights and obligations of spouses are originated from marriage determined by Georgian legislation. This signifies that marriage registration is necessary. If both spouses provide consent on divorce, then the process must be carried out by due registrar body, that is, civil registry, but if a husband or a wife does not give consent on divorce, then the issue must be decided by the court. In this case the law does not consider religious marriage important. Marriage certificate does not originate legal rights and obligations of spouses, because religious marriage is not a form of marriage determined by Georgian legislation.

When a Family Splits after Many Years If spouses live together for many years and their marriage had been registered in compliance with legislation, property acquired by spouses in the co-habitation period is their common property.

The law recognizes this fact even if one of the spouses had not worked, cared for children and never had independent revenues.

Their property is common anyway. It does not matter whether a wife had not worked or had no official revenues and only cared for family. Their property should be divided evenly, because the law considers property to be a co-property. It happens frequently when the former husband asserts that everything has been bought by his money, but the wife is authorized to demand for the due share and receive a half part of the property.

By the way, this regulation covers the property the value of which has increased in the cohabitation period, for example, after apartment repair works or different planning. If a husband possessed a house of 20 000 USD before marriage and after repair works its price rose, then this house is considered a common property.

Duration of Marriage does not Matter Much Age of marriage does not matter much for property division. If spouses have jointly bought the property, the time does not matter: they may get divorced in several months or a year, but if they have common property, it must be divided equally and this rule refers to husbands living at wife’s houses too: If a husband has lived at wife’s family in a registered marriage and the couple has bought property together, then this is their co-property. If the the male (or female) has two spouses, one under civil marriage and another by religious marriage, the mentioned regulations are applied to only officially registered spouse. If the spouse has children with another spouse, then children will acquire ownership rights for the property after his/her death.

Individual Property is not Subjected to Fragmentation If a husband or a wife had bought an apartment, a vehicle or other things before marriage, after divorce the spouse is not authorized to demand for the share, because it is an individual property. Under the legislation, property acquired before marriage is considered to be an individual property, as well as property inherited during marriage period: for example, spouse in official marriage inherited property from father or uncle or a relative – this is his/ her individual property and secondly, the spouse is not authorized to demand for share from the mentioned property.

«Almighty» Contract All the above-mentioned regulations become useless if spouses have signed a marriage contract. In this case this contract regulates all issues. This practice is not popular in Georgia, bu anyway this contract regulates all the above-mentioned issues.

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TAXI

February 20, 2017 #181

Taxi service is one of the widespread self-employment sectors in Georgia. There is no precise statistics, but according to specialists, about 50 000 taxi vehicles provide services in the country. A major part of these taxi vehicles are owned by private bodies and their activities are not regulated by state structures.

YANDEX Bankrupts Georgian Taxi Market Players DAVID BAGHASHVILI

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owever, it is famous that Tbilisi City Hall is working on schemes for regulating taxi services. As a result, taxi drivers will have to satisfy specific requirements. Certain duties may be also introduced.

Because of absence of exact statistics on quantity of taxi vehicles, standard tariffs or working schedule, it is difficult to say how much a taxi driver earns every day. However, according to specialists, daily minimum earnings are around 20-30 GEL, all expenditures deducted. Consequently, we should suppose that turnover in this business is more than 100 million USD a year.

As to taxi service companies, there is heavy situation on the market. Russian Yandex Taxi has led Georgian companies to bankruptcy through dumping tariffs. The Russian company has not confined with stealing clients and started enticing drivers too. Taxi service companies complain about reduced orders after Yandex Taxi appearance.

As reported, Russian Yandex Taxi launched services in Tbilisi on August 23. It should be also noted that the company serves passengers through the lowest prices.

«Yandex Taxi Made about 47 Companies Bankrupt and then Absorbed Them» Nika Khoperia, founder of 200200 Taxi company, says that Yandex Taxi entered the market with dumping tariffs with the aim to eject all other companies from the market and occupy monopolistic positions. Yandex Taxi covers 70% of the tariff itself to maintain the bottom margin on the market. Yandex Taxi is a big and strong company in terms of finances. As a result, it is capable for maintaining dumping prices for along period, Khoperia noted.

Almost all other taxi companies

have disappeared from the market, because Yandex Taxi has made about 47 companies bankrupt and then absorbed them.

As to the 200-200 company, its market ratio has dropped to 25% after Yandex Taxi entered the Georgian market, Khoperia said.

«Our efforts are vain. If I earn 57 billion one day, I will compete with them, not before. They are very strong in terms of finances.

We will work to the end anyway», Khoperia said and added that the sector is not regulated.

Nika Khoperia also specified reasons he refrained from submitting an appeal against Yandex Taxi to Competition Agency.

Yandex Taxi is not registered in Georgia and it is impossible to indicate its exact address and identification code.

«We specified our appeal once, but received it back. Competition Agency demands to indicate an exact address, while Yandex Taxi is not registered in Georgia. How can we indicate the address?»Khoperia asked.

Government of Georgia should protect domestic companies from dumping tariffs of foreign companies, the businessman noted.

Those who Let Yandex Taxi Enter Georgia should Be Punished Zurab Bitashvili, head of Panta taxi company, also complains about reduced number of orders. Russian Yandex Taxi has made negative influence on Georgian market and the company revenues. Those, who let this company enter Georgian market, should be called to account, he said.

«This company has employed many citizens in Georgia» Levan Gagunashvili, head of Taxi 112112 company, a Georgian partner of Yandex Taxi, noted that the 112112 company was on the verge of bankruptcy and therefore, decided to cooperate

with the Russian company. «If I had refused this offer, others would accept it. Yandex Taxi made quite attractive financial offer to me», Gagunashvili noted.

Any company would apply dumping tariffs to get established on the market and there is nothing illogical in this decision. The Russian taxi company has employed many citizens in Georgia and this is a definitely positive fact, he added.

Similar noise around Yandex Tax is a little surprising, while 90% of taxi companies on Georgian market are Russian and Ukrainian, Elvan Gagunashvili noted.

This issue should be closed and taxi vehicles should be licensed, he said.

«Drivers should know how to communicate with passengers.

They should not talk about politics and similar issues. Yandex Taxi plans to open its own training school and all companies will be able to train their drivers», Gagunashvili noted.

It should be noted that Georgia has become the fifth country following Belarus, Kazakhstan, Russia and Armenia , where the Russian company has intro-

“

Our efforts are vain.

If I earn 57 billion one day, I will compete with them, not before.

They are very strong in terms of finances.

We will work to the end anyway

“

duced its application in Georgia, Russia and English languages.

Yandex Taxi cooperates with major taxi companies. The call system determines the location of a customer in automatic regime and directs the closest taxi vehicle to the client. The system comprises such components as selection of price category – econom, standard and business categories, as well as separate characteristics – nonsmoking driver, children clothes, air-conditioning and so on.

Yandex taxi needs about 10 minutes on averaged to reach the order place.

Online order services function in Georgia too, including by Ukrainian Uklon, which is an analogue of Uber services. Taxi Net, Agro Taxi, Taxify and other companies also provide online order services.

A certain part of Georgian society expressed protests against entrance of Yandex Taxi onto Georgian market, because Abkhazia and Tskhinvali Region were not marked as Georgian territories on the official website of the company.

Later, the company corrected this mistake.

«Yandex Taxi plans to eject Georgian taxi companies from the market through dumping tariffs. Regretfully, we cannot compete with it by either vehicles or finances. Its finances account for several billions of USD. We cannot withstand their pressure. Even City Hall cannot assist us and nobody else», Bitashvili noted.

The 260-60-60 company has different position. Entrance of Yandex Taxi has made neither negative nor posi-

tive influence on the company performance. «We have our own numerous clients», the company representatives noted.

What plans the Russian taxi company follows in Georgia. Does it genuinely plan to eject Georgian taxi companies from the market entirely? The Caucasus Business Week (CBW) has applied to Yandex Taxi by these questions, but in vain.

The company management remains unattainable.

February 20, 2017 #181

TBH

Shorena Chumburidze Lawyer for Tbilisi Business Hub

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ccording to State Procurement Agency, only 18% of companies are registered in state procurement system. Moreover, 37% of the registered companies have never taken part in state procurement process. Tenders in such fields as construction, engineering, transport and logistics, furniture production and supply of food and beverages are especially problematic, because companies show less interest and their involvement is unimportant. Reports prepared by international organizations show that these insignificant statistical indicators, besides other factors, were caused by lack of human resources and ignorance of state procurement issues.

-For all that, how state procurement process is carried out in Georgia and what tendencies are recorded from the side of Government in this respect?

- Reforms implemented in state procurement system of Georgia over the past years deserved positive appraisals from many international organizations.

Naturally, as a result of these reforms, state procurement system of Georgia has turned into one of the most transparent processes worldwide. In general, unreasonable spending of state funds, as a result of corruption and gaps in procurement system, remains a global challenge till today, especially, in such countries as Georgia. For the purpose of resolving this problem and growing efficiency of procurement system, at the end of 2010 this system was modernized in radical form.

The so-called Paper Tenders were abolished and the country moved to electronic procurement system entirely. The mentioned reforms made the procurement system of Georgia more transparent. Final objective of these reforms was not to minimize corruption risks, but to develop healthy and just competition.

two-level tender. There is also electronic procedure for procurement, grant competition and electronic procedure for purchase by donors’ funds.

As a rule, selection of specific Assistance of companies, which lack due method mainly depends on technical and human resources for participation in value of a deal and its peculiaristate procurement process, is one of the services ties. Each type of procurement comprises various peculiarities. that Tbilisi Business Hub offers to potential When making simplified purpartners. State procurement process is carried out chase, purchaser organization in electronic format. Its transparency and high is authorized to make direct competitive environment grows motivation of purchase, without tender. Howbusiness sector representatives to more actively ever, this practice does not imply participate in electronic tenders. However, many full independence of purchaser companies cannot make use of this excellent chance organization in the procurement process, even more so, accordto grow their revenues and develop business. ing to legislative amendments adopted two years ago, purchaser organization needs a license from Procurement Agency for This process implies creating assumed obligation to adjust making simplified purchase. equally favorable environment its legislation to EU legislation And main difference between for any type of entrepreneurs. step by step. The same article simplified electronic tender and Statistical indicators suggest names fields to be covered by electronic tender consists in their that state procurement repreharmonization process, includduration. Announcesents a considerable part of the ing state procurement of these types of whole internal economic activ- ment field.

Objective of tenders depends on ity of the country and its ratio In our country Tbilisi Business the presumable total in Georgia’s GDP is about 10%. state procurement Hub is to satisfy value of homogenous Every year budget organizaprocess is mainly and improve purchase items. tions buy services and goods regulated by the service of Consolidated tender of several millions of GEL, for Georgian Law on private sector is carried out by State example, construction works State Procurerepresentatives Procurement Agency (civil, special facilities, roads, ment. The law based on analyticalpipelines, irrigation systems), regulates, by use of and back the research activities technologies, software, fuel, of- electronic or other companies agreed with the Govfice equipment, transport, furmeans, a purchase that try to get ernment of Georgia. niture, food, clothes and other of any goods, serestablished The indicated methspecific goods and services. vices and construcon state ods of tender are Thus, conducting purchase tion works by a procurement mainly oriented on transactions in transparent, purchaser organimarket, as well low prices. This signicompetitive and just environzation, by use of as to assist them fies winner will be the ment is one of the important budget funds of supplier, which will preconditions for business dethe Georgian state, in overcoming offer the lowest prices velopment in the country and autonomous Redifficulties to the purchaser orgaeconomic growth. Just, transpublics of Abkhaarisen in nization for goods and parent and non-discriminating zia and Ajara, local the state services determined environment for the procureself-governments procurement by technical condiment process participants and organizations process tions. provides equal opportunities financed by them.

In this respect compein the private sector to receive According to the titions are regulated in state contracts and develop mentioned legisladifferent way because of peculiarbusiness activities. If we also tion, there were five different ity of its purchase item. In this make focus on rational spendmechanisms for conducting case preference is given to qualing of state funds through state procurement process: ity and maximum harmonization transparent system, it will be simplified purchase, simplified of the offer to the purchaser’s evident that the system perfec- electronic tender, electronic requirements. However, by use tion is one of the important tender, consolidated tender of it, the purchaser organization challenges before the governand competition. Over the past is authorized to buy only designment of Georgia. period these types of procureing or/and bookkeeping services According to article 43 of ment system were replenished (for example: architecture and Georgia-EU agreement on part- by a simplified electronic tenengineering plans and projects); nership and cooperation that der without auction, electronic We have noted that two-level came into force in 1999 Georgia auction without auction and

New Opportunities in State Procurement Mechanisms

7 tender was introduced recently in August 2016. This type differs from other tenders by the fact that the pretenders’ ranking is not determined by price of tender proposal, but the best tender offer is determined due to quality and price. This model authorizes the purchaser organization, based on specific needs and purchase purpose, to determine various countable criteria that would enable it to buy top quality purchase item at a low price.

The model of two-level tenders are fully automatized. The criteria determined by a purchase organization and the pretender’s offer is indicated in due field and this enables the system to carry out ranking of pretenders and determine the best tender offer, based on criteria determined by tender conditions.

The most attractive and convenient factor in case of two-level tender is the fact that offers are not assessed only due to prices and, secondly, trades are carried out in a hidden form and this prevents business bodies from the so-called temptation to win at any cost. The practice shows that pretenders seeking tender victory frequently reduce presumable value determined by tender documentation. As a result, later they fail to offer the same price or quality of supplied goods, or services are very low and they are included in the Black List. And this result signifies that companies cannot participate in state tenders for a certain period because of bad reputation. As a result, the companies, which try to offer real prices and better quality on the market, bear losses.

In general, implementation of state procurement process through state tender mechanism ensures growing competition and this factor serves the interests of potential suppliers. They may establish business relations with the state and receive stable and expensive orders.

As noted above, some companies, despite their success on the private market, lack for appropriate human resources for participation in the state procurement process. Presumably, the same reasons precondition shortage of information about state procurement.

For the purpose of successful and useful participation in tenders, it is necessary to involve staff with appropriate qualification in the process, who would have good understanding of peculiarities of procurement system of Georgia and know corresponding legislation very well.

Objective of Tbilisi Business Hub is to satisfy and improve service of private sector representatives and back the companies that try to get established on state procurement market, as well as to assist them in overcoming difficulties arisen in the state procurement process. And this goal is achieved through scrupulous understanding of needs and purposes of tender participant companies and thorough knowledge of tender procedures and their legal regulations.

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PR

February 20, 2017 #181

CBW had an Interview with Nino Zarkua, PR Manager of Kvareli Eden Hotel, where she described a field where she is building her career and how important it is to have a great working space for making company and business sustainable.

“PR specialist should be creative, with logic thought, capable of listening and resolving several problems simultaneously”

A Good Work Atmosphere Leads to More Success - What are you by profession?

-I have graduated from Georgian Technical University, faculty of public relations (BA degree). About a year ago I finished PR school at Georgian-American University.

- Your first job place.

- My career started at Aldagi Insurance company, as an assistant to account manager.

- Current job and position.

- Currently I am a PR manager for Kvareli Eden Hotel. This is a refined, beautiful and diverse resort. I am positively tuned here and this stimulates my working mood.

- Business, project that you are proud of.

- I believe «the Honorable Project» is yet to come, however I think the most successful marketing campaigns are multiplatform campaigns with one idea at the center.

- Field where you would never work.

- I would never work im bank and finance sectors.

- What makes a person successful in your field? Besides knowledge, what special features are required?

- I believe a valuable use of knowledge of PR functions and instruments leads to success. PR specialist should be creative, with logic thought, capable of listening and resolving several problems simultaneously. I think it is also very important to permanently read print media to stay informed about the ongoing developments. PR is a communication, even

“

Being a successful businesswoman really comes down to personality.

I’ve always been fiercely independent, confident and determined to succeed.

more so in the field, where I work. “If you are not knowledgeable on what is going on today, how do you advise clients or companies on what to do tomorrow?”

- Is it possible in Georgia today to study PR very well or international knowledge and experience is required anyway?

- I believe a person can study everywhere if he/she genuinely wants this. Naturally, international knowledge and experience is very good. It would be better if students could get more practice at various organizations during their university studies.

- Is PR perceived and understood in its classic nature in Georgia?

- Valuable perception is simplified more compared to previous years.

I am building a career in public relations and believe that all of the fields work closely together—that the end marketing in its best theory incorporates everything.

If you think about what marketing is today, it is the ability to take a corporate message or a product and expose it to the people who are most important—whether it’s to sell something, or to influence the reputation of something. The skill sets and intellectual capital, as well as platforms, have evolved. The fundamentals are the same.

- How easily can you settle emergency situations and take decisions? Do similar cases worsen quality of working process?

- Fortunately, I have not faced many crisis situations. I try to do business jointly with my colleagues to avoid similar situations.

At the same time, I can simply tackle all problems if any.

- Interesting episode from your life (business) that has changed your life.

- I have an interesting period in my life now and this period is related to Kvareli Eden.

- If not this profession, where would you work?

- I would be a psychologist.

- What are strong features of you, as a businesswoman?

- Being a successful businesswoman really comes down to personality. I’ve always been fiercely independent, confident and determined to succeed.

- What does your employer company give you? What makes your job interesting for you?

- Today it is much pleasure to work by profession, when you get happy to go and spend the whole day at the office. I am happy to work at Kvareli Eden that is always oriented on development and innovations. And I think having a great office makes your company revenue and your business sustainable.

- What makes major discomfort in the working process?

-Currently there are no factors that would make discomfort in my working process. I work in excellent environment. In general, I cannot stand noisy atmosphere.

- Where do you see yourself after 20 years?

- After 20 years I would like to be more successful in my field than today.

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February 20, 2017 #181

AGRO BUSINESS

Why To Invest In Agriculture Business Consulting Company

IRAKLI CHIKAVA Director

G Andria Gvidiani’s Initiative for Bank of Georgia – Rustavi Azot Crisis Resolution Mechanisms Wave of protests burst out after massive dismissal of workers from Rustavi Azot worsens social-economic situation in Rustavi and the whole Kvemo Kartli Region, as well as the condition of fired 350 workers. The mentioned decision has actualized several other important issues. Position of Bank of Georgia, the major commercial bank in the country, towards the current situation in the chemical complex has raised much public interest.

It is also evident that the developments at Rustavi Azot provoked

by Bank of Georgia activities may seriously damage reputation of Georgia in international business circles.

Around Rustavi Azot issues, Andria Gvidiani, analyst for Association of Young Financiers and Businessmen (AYFB), held a briefing at the Reporter press-club and introduced crisis resolution plan for Bank of Georgia.

The initiative for Bank of Georgia proposed

by Gvidiani regarding Rustavi Azot crisis resolution issues is as follows:

1. Unconditional restoration of fired works at job places: – For the purpose of settlement of protests and consequently, stabilization of processes, first of all, it is necessary to restore each dismissed worker at the job place so as to not sacrifice employees rights to the interests of the company, creditors or other commercial organizations. At the same time, minimum living conditions should be ensured for the workers.

2. Results of the mock auction should be annulled – As reported, Rustavi Azot auction was held by many violations. Namely, Bank of Georgia group announced EU Investments as the auction winner. The company had been founded 2 weeks before and its stock capital was only 100 GEL. The bank issued 235 million GEL credit to the mentioned company for purchase of Azot. This decision doubles questions that the mock auction was held. Moreover, after announcement of Rustavi Azot auction, Bank of Georgia sent notification to European Bank for

Reconstruction and Development (EBRD) only 2 days earlier, and only in Georgian language.

Consequently, this step infringed the right of other creditors for preferential purchase. Consequently, it is necessary to abolish results of the auction conducted by similar violations. It was also clarified that the auction was held by the company founded by dummy business operator and this factor makes the auction transparency more questionable and proves considerations about preliminary collusions.

3. Date of New auction should be scheduled – Naturally, it is important that all interested parties be invited to the new auction. First of all, information must be forwarded to European Bank for Reconstruction and Development – and all other creditors. At the same time, the new auction must be organized by an experienced company with focus on arranging similar largescale auctions.

Moreover, valuable and international standard auction will enable Georgia to maintain he status of a stable country.

4. Government of Georgia should resume negotiations with EBRD on allocating 155 million USD credit to Rustavi Azot – We know that in July 2016 Rustavi Azot and EBRD signed a loan agreement of 155 million USD. However, after 3 weeks EBRD refused to issue the mentioned credit.

Consequently, it is important to continue negotiations with EBRD on resumption of 155 million USD loan. European Bank for Reconstruction and Development does not approve 155 million USD loans on daily basis. Therefore, missing of this opportunity may be appraised as a crime.

At the same time, we apply to Government of Georgia to restore workers under permanent contract terms and in full compliance with the law. Ministry of Labor and Social Protection should be actively involved in the process.

The whole Government and, particularly, Ministry of Economy, should provide active negotiations with EBRD for resumption of the loan agreement.

eorgia is traditionally an agricultural country, which has 22 micro-climates varying from cool to dry, warm to humid. These diversified micro-climates allow for a longer than normal harvesting season and a wide range of growing conditions. Soils are of volcanic origin located in the river valleys. They tend to be quite fertile and reasonably easy to cultivate.

Georgia as an agrarianoriented country has a significant rural population. The country was renowned as a quality food supplier during the Soviet times and the Georgian food & beverage products are still well-recognized as healthy and supreme quality brands in CIS region.

Georgia has a quite big opportunity in terms of agricultural development.

Georgia is considered as as an ideal country not only for initial production, but for processing industry, as well.

The scale of exported products grows from year to year. As the most popular exported product, still remains wine, followed by mineral water and nut cultures.

Lately, some products have shown some good grow in export figures, such are berry, meat and vegetables. Though, local demand in most products still remains higher then supply, so investment in Agriculture are still very interesting.

Environment Georgia’s natural resources and various micro-climatic zones are perfect for

production a wide range of grains, vegetables, fruits, etc.

Rich and pesticide-free soil is ideal for organic production.

Meat produced in Georgia is well-known for its taste which is due to the feed consumed by the animals.

Also water, surrounding climate and other local factors play the role in the taste of produced meat. Therefore amount of meat export keeps rising year to year.

Low costs The employees in agricultural sector receive 30%-40 % less wage than the national average. As Georgia has big amount of water resources, the access to water is easy and cheap.

Other utility prices such are electricity and gas are comparably low.

Market size On the one hand, the investors can benefit from the rising consumption on the local market, which is on the other complemented by the Duty-free access to 900 million markets under Free Trade Agreement with Turkey, Ukraine and CIS countries a DCFTA (Deep and Comprehensive Free Trade Agreement) with EU. Incentives for processing plants The projects of building new agricultural products processing plants can get grant from the government with a total value of up to 250 000 USD (maximum 40% of the value of project). Additionally investor can buy state owned immovable nonagricultural property for 1 GEL (symbolic price) if the investment made on processing plant is 4 times more than its market value.

Was prepared according to the information of Georgian National Investment Agency

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BUSINESS

February 20, 2017 #181

Crowne Plaza Borjomi Named first in the Region Among Other Chain Hotels With Guest Satisfaction Intercontinental hotel chain member Crowne Plaza Borjomi, was named the first in the region amongst other Crowne Plaza Hotels, as the highest ranking in guest satisfaction. Hotel service and quality evaluation is done by the IHG program annually, which allows guests to share their recommendations and review the hotel’s service and overall satisfaction. Being the first in the region draws more attention to the newly open Crowne Plaza Borjomi and keeps the employees motivated for improving the score for the years to come.

START-UP

START-UP

Lamazia- Georgian Startup of Warm Clothes FashionSnack in 2010.

How did the history of Lamazia start?

Everything started spontaneously. I saw a beautiful sweater in the journal. I bought threads and necessary materials and it took me a month to make a sweater but it came out really beautiful and it was worth it. A lot of people liked it. This is how an idea of making colourful, high quality knit wear was born. We appeared on the market in December, 2016 for the first time.

Who was working on branding on Lamazia?

I had the name for the brand from the beginning.

The word Lamazia is simple and sounds good and has a very positive

“3 Children can make a big change for any “wellplanned” scenario but at the same time it pushes you to develop more and be open to challenges and become aware that nothing is impossible. All it comes to in the end is the motivation and wish to do it. Tamar Alavidze is the founder of Georgian knit wear brand Lamazia. She talks about the history of her brand.

Tamar, tell us, what was your job before Lamazia?

I am 37 years old and I have 3 children: 8-year old Nina, 3-year-old Kato and a year-old Niko. I have a law education and I have been working in this field for 15 years. I used to be interested in fashion and its history since my early age. I decided to quit my professional field and created a FB blog

NEWS

BRANDING

Wizz Air to Perform Direct Flights from Kutaisi to Great Britain

Hippie Exports Georgian Handiworks to Italy, France and Germany

Wizz Air, the major low-cost airline of Central and Eastern Europe, plans to launch direct flights between Kutaisi and London (Luton).

According to information of LLC Georgian Airports Association, a body under Ministry of Economy and Sustainable Development, flights will be performed starting June 18. Two flights will be performed a week, Thursdays and Sundays. All flights will be performed by Airbus A320 (180 seats) and Airbus A321 (230 seats) airplanes.

Tegeta Motors to Open A New Branch in Baku Tegeta Motors will open a new branch in Baku on 15th of February. The company offers local customers auto tech-service and the biggest choice of automobile products. The local customers in Baku Branch of Tegeta Motors will have an opportunity to purchase world leading brand high quality products, get high quality service in a comfortable environment. Tegeta Motors is the first Georgian company in Automobile industry which will have a representative company abroad.

Handiworks produced by Hippie company were sold in Italy, France, Germany and Turkey. The company founder Lali Tvaliashvili told Fortuna that there is much demand for handmade works on both domestic and foreign markets. “There were about 10 cases, when our products raised interest in European countries and we sent Hippie products by post. As to domestic market, demand considerably exceeds supply here. Brand becomes popular day to day and consequently, the number of orders also grows”, Tvaliashvili said.

Hippie makes handiworks of natural stones, leather substitutes and natural flowers, she said.

“We mainly work on bags and accessories, but we plan to add other things too. As to sales, we sell our products all over Georgia. Clients make orders through social networks and we send products by post”, the company co-founder said.

Besides online shopping, consumers are able to buy Hippie products at the store of the same appellation.

Two weeks ago the company unveiled its own store on Pekini Avenue in Tbilisi. Prices range from 2 to 79 GEL. In the future the company plans to arrange workshop and store in the same space so as customers be able to see the production process themselves, and even to take part in it, Lali Tvaliashvili said.

We remind you that Hippie introduced products a year ago. The company workshop is located in Rustavi, where 2 persons are employed.

meaning. The name itself reveals the product. The L version of Georgian letter has a shape of heart, which demonstrates a positive energy we use while creating the product.

Which are your target groups and where can people buy your product?

In the beginning, we had jackets, hats and scarves for women. However, we already added men hats and we are going to have more products for men. At this stage, our products are sold online, via facebook and we have a delivery service.

Why should we buy your product?

Because it will suit on you and what suits on you looks beautiful!

Georgian Children to Start Producing Soaps Georgian children will start producing soaps. The product has already been made as the first sample for the competition “Diamond Challenge”. The author of business idea, freshman student, Mariam Nozadze declared that she is going to the US with her group to attend world’s young entrepreneur’s competition.

I came up with a soup idea to participate in this competition.

However, later I decided to start a business with it. It is cheap and it only costs 2000 USD to start the business- said Nozadze.

“The soup base is made of milk, honey and aloe. It is the basic material which is necessary to make the soap. To make it wetter, we add oils and other ingredients “- declared the author of business idea.

Mariam Nozadze declared that she is working on the project with three youngsters: Levan Jaliashvili, Lana Elbakidze and Nia Kerelashvili.

“These are people with whom I won the project. However, only two of us can get financial support to participate in the competition in the US. Therefore, we are looking for a financial resource to be able to depart to the United States all together”.

The winners will go to the United Stated on 1th of April to compete with teams from 10 different countries. After they come back, they will start business in Georgia. The soaps will have a shape for Georgian geographical map, Svanuri hat and etc. to promote entrepreneurship for young people.

February 20, 2017 #181

REAL ESTATE

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PUBLICITY

February 20, 2017 #181

WORLD NEWS

February 20, 2017 #181

13

Quotes

“ Around 1 billion euros from the EIB will be provided to BOTAS under the guarantee of the Undersecretariat of the Treasury.

Guaranteed external financing for TANAP can reach $3.7B

E

xternal financing worth $2.15 billion has already been guaranteed for the Trans-Anatolian natural Gas Pipeline (TANAP) and this amount can reach $3.7 billion, Anadolu Agency reported.

The total cost of the project is $8.5 billion.

Anadolu has learned from international financial institutions that three separate financing projects for TANAP have been approved.

The World Bank has approved allocation of $800 million to Azerbaijan and Turkey. Of this amount, $400 million was allocated to Turkey’s Pipeline and Petroleum Transportation Company (BOTAS), which is one of the project’s partners, while the other $400 million was provided to the South Gas Corridor Inc. (SGC), the largest shareholder of this project.

Additionally, the Asian Infrastructure Investment Bank (AIIB) has

approved allocation of $600 million for the SGC. A guarantee of allocation of $750 million for SGC has been provided by the Multilateral Investment Guarantee Agency (MIGA).

Thus, the total amount of foreign financing secured for TANAP has reached $2.15 billion.

Around 1 billion euros from the EIB will be provided to BOTAS under the guarantee of the Undersecretariat of the Treasury.

At the same time, EBRD is expected to approve $500 million loan for the Southern Gas Corridor project. After the approval of loan allocation by EIB and EBRD, TANAP will get additional $1.5 billion of financing and thus, the total amount of loans provided for TANAP will reach $3.7 billion.

TANAP project envisages transportation of gas from Azerbaijan’s Shah Deniz field to the western borders of Turkey.

World’s Biggest Tea Exporter Seeks to Double Sales to Russia

K

enya, the world’s biggest black tea exporter, plans to double annual shipments to Russia to 44 million kilograms within three years, according to its Agriculture and Food Authority.

Russia bought more than 152 million kilograms of tea last year. Kenya provided 18 million kilograms of that, almost a fifth lower than 2015 sales. About 1 million kilograms of the exports was orthodox tea.

“We are putting in place strategies for all our main markets,” said Samuel Ogola, the interim head of Kenya’s tea directorate. “Russia has been one of our major export markets and one of the world’s largest importer of tea, but the values have been going down in the past few years.”

Orthodox, which is popular in Russia, Iran and Western Europe, is a specialty product made from

black tea that’s processed by traditional methods of withering, rolling and oxidization, while regular black tea is manufactured through machines that crush, tear and curl the leaves.

Kenya produced a record 473 million kilograms in 2016. The higher output has forced it to find ways of increasing its share of the global market, Ogola said in an interview in the Kenyan capital, Nairobi.

“We are in the process of creating strategies to grow our markets in Iran, Sudan, China and Japan.”

Only Sri Lanka and India surpass Kenyan tea exports to Russia, according to Natalya Zhivaya, a public relations officer at CROS, a Russian consulting company hired

by Kenyan tea authorities to formulate a three-year market plan.

“Kenya produces good quality and has all the characteristics that the Russian market wants,” Zhivaya said in an interview in Nairobi.

It is not easy to break into or be successful...

Success stories all revolve around extreme passion.

”

“We will not have any problems related to energy supply in the next chapter of our country”

Suzie Wokabi

Armenian Media: Despite Temur Chkonia’s Statements, McDonald’s Has no Plans for Opening Restaurant in Armenia “McDonald’s does not plan to open a restaurant in Armenia”, Armenian media agencies have spread similar statements.

Armenian media is actively discussing perspectives of opening McDonald’s restaurant in the country. Similar plans were announced by Georgian businessman Temur Chkonia, who asserts that he has already obtained a license in Armenia.

Armenian reporters have contacted the central office in Europe to verify information, but the European office rejected the mentioned information.

“McDonald’s examines and analyzes economic and business factors whether to open a restaurant on a new market.

At this stage, we do not plan to open a restaurant in Armenia”, the European office of McDonald’s told NewsArmenia agency.

Ministry of Economy of Armenia has also forwarded an official letter to McDonald’s, but the company rejected the mentioned information repeatedly.

Samsung heir arrested in corruption scandal The heir to the Samsung business empire has been arrested on corruption allegations.

Lee Jae-yong, the de facto leader of South Korea’s biggest conglomerate, has been under investigation as part of the huge political corruption scandal that has rocked the country.

Early Friday, a judge in Seoul approved a request from prosecutors for an arrest warrant for Lee, the prosecutor’s office said. That means Lee will be held at the detention center where he had been awaiting the court decision.

Prosecutors allege that the executive, who’s also known as Jay Y. Lee, pledged tens of millions of dollars to win favor with President Park Geun-hye and secure government support for a controversial merger that helped tighten his grip on Samsung.

They are accusing him of bribery, perjury, concealing criminal profits, embezzlement and hiding assets overseas.

Samsung and Lee have denied the allegations.

“We will do our best to ensure that the truth is revealed in future court proceedings,” Samsung said in a statement Friday after the judge approved the arrest warrant for Lee. The judge rejected a request for a warrant to arrest Park Sang-jin, the president of Samsung Electronics (SSNLF).

Lee is a vice chairman of Samsung Electronics, the crown jewel in the family’s sprawling array of businesses, which also include construction, shipbuilding and even theme parks. Samsung Electronics shares fell as much as 2% in Seoul on Friday after Lee was arrested.

Turkey’s giant gas storage facility opens

T

urkey’s Tuz Lake gas storage facility, which is expected to increase capacity from 1.2 billion cubic meters (bcm) to as much as 5 bcm per year, was opened in an official ceremony on Feb. 10 in the Central Anatolian province of Aksaray. President Recep Tayyip Erdoğan thanked officials and businesspeople who took part in the development of the project, noting that another key investment would take place again in the same area.

“In addition to the facility with a 1.2 bcm of gas capacity, which we have opened today, we are also starting a new investment today. With this new investment, the gas storage capacity will increase up to 5.4 bcm. When this investment becomes online, Turkey’s daily gas storage capacity will rise to 80 million cubic meters,” he said.

The project is composed of 12 wells and is worth $700 million.

From each well, a total of 40 million cubic meters of gas can be pumped into the country’s gas network on a daily basis.

The drilling of the first of the project’s 12 wells began in 2012 by state-run gas grid BOTAŞ and Chinese TTC. BOTAŞ General Manager Burhan Özcan said Turkey’s gas consumption is around 50 bcm per year, from which 10 bcm are distributed to 13 million Turkish households.

“Therefore, we are going to store 12 percent of household consumption here. This has been a long and painful journey,” he said in an interview with staterun Anadolu Agency. Özcan said Turkey’s daily demand for the winter of 2016-2017

was 250 million cubic meters of gas. “This was a record. The amount we can store with the Tuz Lake storage is around 44 million cubic meters per day,” he said. He added that the giant facility will be able to easily support natural gas supplies and provide energy security for the country.

“We will not have any problems related to energy supply in the next chapter of our country,” Özcan said.

The daily capacity of the Marmara Ereğli LNG Facility will be increased from 18 million cubic meters to 27 million cubic meters, while at the same time 20 million cubic meters of natural gas can be supplied to the system at the end of 2016 with the FSRU plant that was commissioned in Aliağa in the Aegean province of İzmir.

The BOTAŞ official noted that the daily capacity of the private sector LNG plant in Aliağa would increase from 24 to 40 million cubic meters this year. Özcan stated that restrictions on gas power plants did not cause electricity interruption because BOTAŞ prioritized supplies to domestic and industrial consumers.

“When the consumption of natural gas increases to a very high amount, we have shortages especially in our power plants so it does not interrupt the gas supplies to residential and industrial facilities,” he said.

He stressed that because of the simultaneous increase in coal, hydroelectric and renewable resources to the Turkish grid system at such high gas consumption periods, no power cuts had occurred.

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PUBLICITY

February 20, 2017 #181

February 20, 2017 #181

Embassy United States of America Embassy 11 Balanchivadze St., Dighomi Dstr., Tbilisi Tel: 27-70-00, 53-23-34 E-mail: tbilisivisa@state.gov; askconsultbilisi@state.gov United Kingdom of Great Britain and Northern Ireland Embassy 51 Krtsanisi Str., Tbilisi, Tel: 227-47-47 E-mail: british.embassy.tbilisi@fco.gov.uk Republic of France Embassy 49, Krtsanisi Str. Tbilisi, Tel: 272 14 90 E-mail: ambafrance@access.sanet.ge Web-site: www.ambafrance-ge.org Federal Republic of Germany Embassy 20 Telavi St. Tbilisi Tel: 44 73 00, Fax: 44 73 64 Italian RepublicEmbassy 3a Chitadze St, Tbilisi, Tel: 299-64-18, 292-14-62, 292-18-54 E-mail: embassy.tbilisi@esteri.it Republic of Estonia Embassy 4 Likhauri St., Tbilisi, Tel: 236-51-40 E-mail: tbilisisaatkond@mfa.ee Republic of Lithuania Embassy 25 Tengiz Abuladze St, Tbilisi Tel: 291-29-33 E-mail: amb.ge@urm.lt Republic of Latvia Embassy 16 Akhmeta Str., Avlabari, 0144 Tbilisi.

E-mail: embassy.georgia@mfa.gov.lv Greece Republic Embassy 37. Tabidze St. Tbilisi Tel: 91 49 70, 91 49 71, 91 49 72 Czech RepublicEmbassy 37 Chavchavadze St. Tbilisi ;Tel: 291-67-40/41/42 E-mail: czechembassy@gol.ge Web-sait: www.mzv.cz Japan Embassy 7 Krtsanisi St. Tbilisi Tel: +995 32 2 75 21 11, Fax: +995 32 2 75 21 20 Kingdom of Sweden Embassy 15 Kipshidze St. Tbilisi Tel: +995 32 2 55 03 20 , Fax: +995 32 2 22 48 90 Kingdom of the Netherlands Embassy 20 Telavi St. Tbilisi Tel: 27 62 00, Fax: 27 62 32 People’s Republic of China Embassy 52 Barnov St. Tbilisi Tel: 225-22-86, 225-21-75, 225-26-70 E-mail: zhangling@access.sanet.ge Republic of Bulgaria Embassy 15 Gorgasali Exit, 0105 Tbilisi, Georgia Tel: +995 32 291 01 94; +995 32 291 01 95 Fax: +99 532 291 02 70 Republic of Hungary Embassy 83 Lvovi Street, Tbilisi Tel: 39 90 08; E-mail: hunembtbs@gmail.com State of Israel Embassy 61 Agmashenebeli Ave. Tbilisi Tel: 95 17 09, 94 27 05 Embassy of Swiss Confederation’s Russian Federation Interests Section Embassy 51 Chavchavadze Av., Tbilisi Tel: 291-26-45, 291-24-06, 225-28-03 E-mail: RussianEmbassy@Caucasus.net Ukraine Embassy 75, Oniashvili St., Tbilisi Tel: 231-11-61, 231-12-02, 231-14-54 E-mail: ukraina_pu@wanex.net; emb_ge@mfa.gov.ua Consular Agency: 71, Melikishvili St., Batumi Tel: (8-88-222) 3-16-00/ 3-14-78 Republic of Turkey Embassy 35 Chavchavadze Ave., Tbilisi Tel: 225-20-72/73/74/76 embassy.tbilisi@mfa.gov.tr Consulate General in Batumi 9 Ninoshvili Street, Batumi Tel: 422 25 58 00 consulate.batumi@mfa.gov.tr Republic of Azerbaijan Embassy Kipshidze II-bl . N1., Tbilisi Tel: 225-26-39, 225-35-26/27/28 E-mail: tbilisi@mission.mfa.gov.az Address: Dumbadze str. 14, Batumi Tel: 222-7-67-00; Fax: 222-7-34-43 Republic of Armenia Embassy 4 Tetelashvili St. Tbilisi Tel: 95-94-43, 95-17-23, 95-44-08 E-mail: armemb@caucasus.net Web: www.armenianembassy.ge Consulate General, Batumi Address: Batumi, Gogebashvili str. 32, Apt. 16 Kingdom of Spain Embassy Rustaveli Ave. 24, I floor, Tbilisi Tel: 230-54-64 E-mail: emb.tiflis@maec.esRomania Embassy

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TBILISI GUIDE 7 Kushitashvili St., Tbilisi Tel: 38-53-10; 25-00-98/97 E-mail: ambasada@caucasus.net Republic of Poland Embassy 19 Brothers Zubalashvili St., Tbilisi Tel: 292-03-98 Email:tbilisi.amb.sekretariat@msz.gov.pl Web-site: www.tbilisi.polemb.net Republic of Iraq Embassy Kobuleti str. 16, Tbilisi Tel: 291 35 96; 229 07 93 E-mail: iraqiageoemb@yahoo.com Federative Republic of Brazil Embassy Chanturia street 6/2, Tbilisi Tel.: +995-32-293-2419 Fax.: +995-32-293-2416 Islamic Republic of Iran Embassy 80, I.Chavchavadze St. Tbilisi, Tel: 291-36-56, 291-36-58, 291-36-59, 291-36-60; Fax: 291-36-28 E-mail: iranemb@geo.net.ge United Nations Office Address: 9 Eristavi St. Tbilisi Tel: 225-11-26/28, 225-11-29/31 Fax: 225-02-71/72 E-mail: registry.geo@undp.org Web-site: www.undp.org International Monetary Fund Office Address : 4 Freedom Sq., GMT Plaza, Tbilisi Tel: 292-04-32/33/34 E-mail: kdanelia@imf.org Web-site: www.imf.ge Asian Development Bank Georgian Resident Mission Address: 1, G. Tabidze Street

Freedom Square 0114 Tbilisi, Georgia Tel: +995 32 225 06 19 E-mail: adbgrm@adb.org; Web-site: www.adb.org World Bank Office Address : 5a Chavchavadze Av., lane-I, Tbilisi, Georgia ; Tel: 291-30-96, 291-26-89/59 Web-site: www.worldbank.org.ge Regional Office of European Bank for Reconstruction and Development Address: 6 Marjanishvili St. Tbilisi Tel: 244 74 00, 292 05 13, 292 05 14 Web-site: www.ebrd.com Representation of the Council of Europe in Georgia Address : 26 Br. Kakabadze, Tbilisi Tel: 995 32 291 38 70/71/72/73 Fax: 995 32 291 38 74 Web-site: www.coe.ge Embassy of the Slovak Republic Address: Chancery: 85 Irakli Abashidze St. Tbilisi, 0162 Georgia Consular Office: 38 Nino Chkheidze St. Tbilisi, 0102 Georgia Phone: 2 222 4437, 2 296 1913 e-mail: emb.tbilisi@mzv.sk

Hotels in Georgia TBILISI MARRIOTT Tbilisi , 13 Rustaveli Ave. Tel: 77 92 00, www.marriott.com COURTYARD MARRIOTT Tbilisi , 4 Freedom Sq. Tel: 77 91 00 www.marriott.com RADISSON BLU HOTEL, TBILISI Rose Revolution Square 1 0108, Tbilisi Tel: +995 32 402200 radissonblu.com/hotel-tbilisi RADISSON BLU HOTEL, BATUMI Ninoshvili Str. 1, 6000 Bat’umi, Georgia Tel: 8 422255555 http://radissonblu.com/hotel-batumi SHERATON METECHI PALACE Tbilisi , 20 Telavi St. Tel: 77 20 20, www.starwoodhotels.com SHERATON BATUMI 28 Rustaveli Street • Batumi Tel: (995)(422) 229000 www.sheratonbatumi.com HOLIDAY INN TBILISI Business hotel Addr: 1, 26 May Square Tel: +995 32 230 00 99 E-mail: info@hi-tbilisi.com Website: http://www.hi-tbilisi.com BETSY’S HOTEL With Marvellous Tbilisi Views Addr: 32/34 Makashvili St. Tbilisi Tel: +995 32 293 14 04; +995 32 292 39 96 Fax: +995 32 99 93 11 E-mail: info@betsyshotel.com Website: http://www.betsyshotel.com

Restaurants CORNER HOUSE Tbilisi, I. Chavchavadze ave. 10, Tel: 0322 47 00 49; Email: contact@cornerhouse.ge RESTAURANT BARAKONI Restaurant with healthy food.

Georgian-European Cuisine Agmashenebeli Alley 13th Phone: 555 77 33 77 www.barakoni.com CHARDIN 12 Tbilisi , 12 Chardin St. , Tel: 92 32 38 CAFE 78 Best of the East and the West Lado Asatiani 33, SOLOLAKI 032 2305785; 574736290 BREAD HOUSE Tbilisi , 7 Gorgasali St. , Tel: 30 30 30 BUFETTI - ITALIAN RESTAURANT Tbilisi , 31 I. Abashidze St. , Tel: 22 49 61 DZVELI SAKHLI Tbilisi , 3 Right embankment , Tel: 92 34 97, 36 53 65, Fax: 98 27 81 IN THE SHADOW OF METEKHI Tbilisi , 29a Tsamebuli Ave. , Tel: 77 93 83, Fax: 77 93 83 SAKURA - JAPANESE RESTAURANT Tbilisi , 29 I. Abashidze St. , Tel: 29 31 08, Fax: 29 31 08 SIANGAN - CHINESE RESTAURANT Tbilisi , 41 Peking St , Tel: 37 96 88 VERA STEAK HOUSE Tbilisi , 37a Kostava St , Tel: 98 37 67 BELLE DE JOUR 29 I. Abashidze str, Tbilisi; Tel: (+995 32) 230 30 30 VONG 31 I. Abashidze str, Tbilisi Tel: (+995 32) 230 30 30 BRASSERIE L’EXPRESS 14 Chardin str, Tbilisi Tel: (+995 32) 230 30 30 TWO SIDE PARTY CLUB 7 Bambis Rigi, Tbilisi Tel: (+995 32) 230 30 30

SH. RUSTAVELI STATE THEATRE Tbilisi. 17 Rustaveli Ave. Tel: 93 65 83, Fax: 99 63 73 TBILISI STATE MARIONETTE THEATRE Tbilisi. 26 Shavteli St. Tel: 98 65 89, Fax: 98 65 89 Z. PALIASHVILI TBILISI STATE THEATRE OF OPERA AND BALLET Tbilisi. 25 Rustaveli Ave. Tel: 98 32 49, Fax: 98 32 50

Galleries ART GALLERY LINE Tbilisi. 44 Leselidze St. BAIA GALLERY Tbilisi. 10 Chardin St. Tel: 75 45 10 GALLERY Tbilisi. 12 Erekle II St. Tel: 93 12 89

Real Estate International Real Estate Company (IREC) Tbilisi. 9 P. Aslanidi St. Tel: +995 32 238 058 Mob: 599 95 76 71 Email: Info@irec.ge www.irec.ge

GSS Car rental offers a convenient service for those who are interested in renting car in Georgia. Rental fleet mainly consist of Japanese made SUV’s, the company has various models of cars including sedans and minivans which are in good technical condition.

Contact information: Email: info@gsservices.ge.

Address: Shalva Dadiani 10

Cinemas AKHMETELI Tbilisi. “Akhmeteli” Subway Station Tel: 58 66 69 AMIRANI Tbilisi. 36 Kostava St. Tel: 99 99 55, RUSTAVELI Tbilisi. 5 Rustaveli Ave. Tel: 92 03 57, 92 02 85, SAKARTVELO Tbilisi. 2/9 Guramishvili Ave. Tel: 8 322308080,

LIMELIGHTTRAVELINFOCENTER Address: 13 Sioni Street, 0105, Tbilisi (at the end of Shardeni Street) Phone: +995 322 999 123 E-mail: info@limelight.ge Web-page: www.limelight.ge Facebook page: www.facebook.com/limelight.ge

Theatres A. GRIBOEDOV RUSSIAN STATE DRAMA THEATRE Tbilisi. 2 Rustaveli Ave. Tel: 93 58 11, Fax: 93 31 15 INDEPENDENT THEATRE Tbilisi. 2 Rustaveli Ave. Tel: 98 58 21, Fax: 93 31 15 K. MARJANISHVILI STATE ACADEMIC THEATRE Tbilisi. 8 Marjanishvili St. Tel: 95 35 82, Fax: 95 40 01 M. TUMANISHVILI CINEMA ACTORS THEATRE Tbilisi. 164 Agmashenebeli Ave. Tel: 35 31 52, 34 28 99, Fax: 35 01 94 METEKHI – THEATRE OF GEORGIAN NATIONAL BALLET Tbilisi. 69 Balanchivadze St. Tel: (99) 20 22 10 MUSIC AND DRAMATIC STATE THEATRE Tbilisi. 182 Agmashenebeli Ave. Tel: 34 80 90, Fax: 34 80 90 NABADI - GEORGIAN FOLKLORE THEATRE Tbilisi. 19 Rustaveli Ave. Tel: 98 99 91 S. AKHMETELI STATE DRAMATIC THEATRE Tbilisi. 8 I. Vekua St. Tel: 62 59 73

THE BEST GEORGIAN HONEY OF CHESTNUTS,ACACIA AND LIME FLOWERS FROM THE VERY HART OF ADJARA MATCHAKHELA GORGE IN THE NETWORK OF GOODWILL, NIKORA AND SMART

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February 20, 2017 #181