Issue #781

Aug. 28 - Sep. 3, 2015

WEEKLY

PUBLISHED EVERY FRIDAY

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Georgia Today 24 p., Travel Today 4 p.

Geor gian Silence as Georgian BUSINESS HEADLINES

Gr een Buda pest: Green Budapest: Read y ffor or You to Select eady the Final Touc hes ouches P.12

Russia-Abkhazia Rail way is R estor ed ailw Restor estored

ISSUE No.781

IN THIS WEEK’S ISSUE

Geor gia Georgia Implements Waste Mana gement Code Manag Based on EU Regula tions gulations Cleaning up Georgia: The New Code deals with collection, transportation and recycling of waste, obliging waste producers P.15 to take responsibility.

Supr a ffor or the Supra Scots - Tar tan artan Ar my Guide to Arm Tbilisi A guide to the Georgian table for the Tartan Army expected to arrive for the Euro 2016 qualifier in Tbilisi on September 4.

P.23

A new headache for the government or a planned restoration of the Sokhumi-Tbilisi-Yerevan railway route?

P.6

Will J ens Stoltenber g’ s Jens Stoltenberg’ g’s Visit to Geor gia Ha v e An y Georgia Hav Any Gr and Implica tions?

Grand Implications?

OP-ED: As the security situation appears to worsen in the region, some say it is time for NATO to make some tangible and daring decisions.

P.4

FLIGHT SCHEDULE

P.4

GOGC - Ensuring Ener gy Security Energ of Geor gia Georgia P.8

Travel Today

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AUGUST 28 - SEPTEMBER 3

NEWS

Georgia’s Nor malization of Relations with Russia Mur ky as Ever

By Zviad Adzinbaia Last week, Zurab Abashidze, the Georgian PM’s special envoy in relations with Russia, claimed Georgia will continue its pragmatic relations with Russia.

As the ambassador says, it is a wellknown fact that western partners support dialogue between Georgia and Russia and James Appathurai, NATO Secretary General’s special representative, confirmed this in an interview with the Georgian Public Broadcaster (GPB).

“Our partners realize that a dialogue has no alternative, no matter how difficult it is. At the same time, they try to help us avoid new threats and difficulties. It means they care for our country, its security and regional stability,” Abashidze believes.

However, the ambassador calls it unfortunate that “some opponents of the government have completely different goals, aimed at encouraging the govern-

sary but hope the government will lose patience before the forthcoming elections and make terrible mistakes. This is their main task.”

Appathurai, when talking with the GPB, stated that despite not witnessing any progress at this stage with Russia, the dialogue may serve as a pre-condition for avoiding negative processes in the future. Abashidze commented that the Georgian government will continue its pragmatic policy towards Russia and nerves won’t be an issue.

ment to make fatal mistakes in terms of relations with Russia, such as the ones Georgia made in 2008.”

According to Abashidze, there is a

real reason why some do not share the messages of [our] western partnerson sustaining tough dialogue with Russia, adding: “They know dialogue is neces-

ANALYSIS BY GEORGIA TODAY’S ZVIAD ADZINBAIA It has many times been declared by the current government of Georgia that normalization with Russia has no alternative. While this argument might have some reasonable ground, at the same time, the ruling forces of the Georgian Dream believe in Russia’s loyalty despite Georgia aspiring to democracy, forgetting Russia’s grand strategy, which

does not even envision Georgia as a sovereign country in the region.

Moreover, recent events have made it clear that even the US and the EU talking with the Russian side concerning the war in Ukraine have achieved no palpable results. Taking into account the GD claims, one may reason that the Georgian government has found its unique recipe with Russia to ‘Muzzle the Bear’ finally and win the war against it.

However, the reality speaks differently and louder. The Russian Federation continues its creeping occupation in Georgia, keeping the conflicts of the country frozen. Moreover, it has activated its powerful hybrid warfare strategy, which involves diverse non-state actors and, importantly, Russian media sources, disseminating misinformation among Georgian citizens and discouraging western aspirations.

But where can the Georgian government turn to normalize relations with Russia?

Ukr ainian Filmmak er Ole g Sentso v Sentenced to 20 y ear s Ukrainian Filmmaker Oleg Sentsov year ears

By Eka Karsaulidze The military court in the southern Russian city of Rostov-on-Don has jailed Ukrainian filmmaker Oleg Sentsov for 20 years for plotting terrorist acts in Crimea. His co-defendant, the activist and anti-fascist Alexander Kolchenko, was sentenced to 10 years.The verdict concerning both defendants was announced on August 25.

Oleg Sentsov, best known for his 2011 film ‘Gamer,’ was arrested in May 2014 during a protest against Russia’s annexation of Crimea. According to in-

vestigators, Sentsov ordered his accomplices to blow up the monument to Lenin in Simferopol after Crimea was annexed to Russia, and planned a terrorist attack at the ‘Eternal Flame’ in the city on May 9, 2014. Alexander Kolchenko is accused of setting fire to the office of the current ruling political party in Russia United Russia in Simferopol, and several other terrorist attacks carried out under the leadership of Sentsov.

Sentsov denies the charges against him. When Judge Sergei Mikhailyuk asked whether they understood the verdicts, Sentsov and Kolchenko responded

by defiantly singing the Ukrainian national anthem.

The Ukrainian government says he is being punished for being a Crimea-based pro-Ukrainian activist. The Russian side denies that he is a political prisoner.

Pedro Almodovar, Mike Leigh, Agnieszka Holland, Stephen Daldry, Bela Tarr and Wim Wenders are among filmmakers and representatives of the European Film Academy who are calling for the release of the jailed director.

Russian directors are also repeatedly appealing to Russian President Vladimir Putin to release Sentsov.

Oleg Sentsov and Alexander Kolchenko.

Stor my Geor gia: R egions Suf Storm Georgia: Re Sufffering Hea vil ya tur e ture Heavil vily att the Hand of Na Natur

By Nino Japarashvili

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Georgia is a frequent victim of natural disasters, it seems. In the last week alone both the western and eastern regions of the country were affected by heavy rain falls, floods, hail and lightening.

In Western Georgia, around 300 calls were made to the Batumi emergency call center 112 on the night of August 26, as several streets flooded as a result of heavy rain in Georgia’s Adjara Region.

Severe rainfall flooded ground floors of numerous houses in the city; and a further 10 houses were damaged by water in the nearby village of Feria.

The same day the electricity supply was suspended for several hours after lightning hit one of the power stations in Poti, in Georgia’s Samegrelo Region.

Heavy rain flooded central streets in the city and floodwater damaged the ground floors of a number of houses, destroying household appliances.

Over in Eastern Georgia, heavy rain and hailstorms damaged farmland and houses in some parts of the eastern region of Kakheti on August 21. Kvareli and some of its nearby villages, including Sanavardo, were among the most heavily affected areas. Hail damaged crops, roofs and cars. 1,500-2,000 hectares of vineyard were damaged according to preliminary estimates.

Basements of houses in some of the villages of Lagodekhi municipality were flooded and a landslide in Akhameta municipality damaged a road the same day. Tourists stranded in Tusheti as a

result of the landslide were air-lifted out of the area by helicopter on 23rd of August. An additional 620 people were evacuated from the zone when several road sections were damaged due to heavy rainfall and hail.

As a response to the continued hail, early this year 83 points where selected by the Georgian authorities in which officials installed a revolutionary antihail system. These points covered the eight municipalities in Kakheti. However, an anti-hail system is effective when clouds are still forming, and, facing a fully developed storm, they can-

not fully prevent the hail. This week was another example of their inefficiency.

The natural disasters in the Georgian regions come after the major flood on June 13th which hit Georgia’s capital Tbilisi, killing 20 people and leaving up to 40 families without shelter, as well as destroying several enclosures at Tbilisi Zoo. Prior to that flood, on June 7, Kakheti and Shida Kartli regions were also affected by severe rain and hail which brought serious damage to vast amounts of agricultural land, destroying a number of streets and house roofs.

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AUGUST 28 - SEPTEMBER 3

POLITICS

Empty Words or Plausible Progress on Georgia’s NATO Track?

By Steven Jones Georgian Defense Minister Tina Khidasheli, during her visit to the US last week,claimed that the war in August 2008 occurred because NATO refused to enlarge.

She said the decision of NATO not to expand was perceived by Russia as a green light to launch military activities in Georgia.

“Subsequently, in 2009 the [world] began to forget about all of this and started discussions with Russia anew, a fresh partnership,” she underlined, adding Russia was once again considered a partner. “However, since the Ukrainian developments took place, it is obvious that no partnership with the Russian side is possible,” she maintained.

It seems that the first female defense minister in Georgia, who is sometimes criticized for her diplomatic approach to Russia, calls on NATO to take pal-

pable steps toward eventual membership for Tbilisi at the Warsaw Summit of the Alliance, next year.

“Georgia was promised eventual membership at the NATO summit in Bucharest in 2008, but did not receive what it hoped would be a clear first step toward membership - a Membership Action Plan (MAP) - at either of NATO’s two most recent summits, in 2012 in Chicago and 2014 in Wales,” the minister says, adding that this sends “a very wrong message” to Moscow.

In this position, it might be forgotten by the Minister that the Georgian Dream’s Russian appeasement politics and the government’s obscure messages towards the alliance and lack of proactive politics in this respect, may have hindered Georgia in its NATO ambitions.

The Georgian Minister spoke during her visit to Washington where she met with U.S. Secretary of Defense Ashton Carter, which was, she claimed, a visit

Tina Khidasheli, Georgian Defense Minister during her visit to the US last week, seen here with U.S. Secretary of Defense, Ashton Carter.

aimed at “strengthening the partnership”’ with the United States and “searching for answers, advice, and support” for Georgia’s NATO path.

She has said previously that Tbilisi would like to see the NATO Warsaw summit recognize that Georgia has already put in place all of the mechanisms for cooperation with the alliance that are envisioned by a MAP, which offers assistance and support to countries wishing to join the alliance. She has also called for the Warsaw summit to make a “political statement that Georgia has passed one step and now is on the track to membership.”

Is the Republican Party preparing grounds to run an independent campaign in the forthcoming elections of 2016?

Since the Free Democrats departure from the ruling coalition, the Republicans are believed to be the single prowestern team in the GD, even then with some pro-Russian members.

Will Jens Stoltenber g’s Visit to Geor gia Have Any Grand Implications?

NATO Secretary General Jens Stoltenberg arrived in the Georgian capital for a two-day official visit on August 26.

By Zviad Adzinbaia NATO Secretary General Jens Stoltenberg arrived in the Georgian capital for a two-day official visit on August 26.

Foreign Minister of Georgia, Tamar

Beruchashvili, and Head of NATO Liaison Office, William Lahue, greeted the high-ranking official of the Alliance at Tbilisi International Airport. It is known that Stoltenberg’s visit, besides meeting with some high governmental officials

and policy makers, was mainly dedicated to opening the NATO Training Center at the Krtsanisi Military Base.

Giorgi Margvelashvili, Georgian President hosted Stoltenberg at the Presidential Palace. Reportedly, the two as-

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sessed the achieved progress of Georgia on its path to integration in the alliance.

The Georgian President, with the NATO delegation, discussed some regional security issues and Georgia’s occupied territories, including the ongoing so-called borderization process by Russia.

The Secretary General paid tribute to the soldiers fallen for Georgia’s freedom and laid a wreath at the Memorial of Heroes.

For the main event during the visit, the NATO-Georgia Joint Training and Assessment Center was opened in Krtsanisi on August 27. The Secretary General also met with the soldiers of the armed forces who had been trained for NATO’s Rapid Response Forces (RRF).

“NATO Secretary General Jens Stoltenberg’s visit is a clear demonstration of NATO’s support for Georgia,” Tamar Beruchashvili told media.

The Minister emphasized that the visit is the continuation of a high-level political dialogue, which has been intensive in recent years.

“The visit is very important and is a clear demonstration of the fact that Georgia is a significant part of the alliance’s agenda. It is very important for NATO to get familiar with the ongoing processes in the region, including Georgia’s reforms,” Beruchashvili maintained.

Analysis by Georgia Today’s Zviad Adzinbaia:

This is the first time Jens Stoltenberg has visited Georgia as NATO Secretary General. The visit and the opening of the Training Center are of high importance and reflects support towards Georgia. At the same time, Georgia, which has successfully implemented an array of reforms throughout the past decade, is expecting more than words this time as the security situation in the region has worsened due to Russian aggression.

Looking back to the Bucharest Summit of 2008, Georgia, after what Ron Asmus called a ‘Diplomatic Shootout’, was promised its eventual membership in the alliance, a decision which was followed by full-scale Russian military aggression in Georgia to destroy the progress achieved by the country.

In addition, current developments in Ukraine have lucidly demonstrated that if a security umbrella of the west does not cover Georgia, she will probably be a dessert cake for Russia. It is widely believed that NATO can even be enlarged without granting a Membership Action Plan (MAP), which is considered a roadmap for the alliance. As Georgia has implemented diverse packages, including the Annual National Programs (ANP), it is time for the alliance to make some tangible and daring decisions.

Will Stoltenberg’s visit change the picture and prepare Georgia for better news at the forthcoming NATO Warsaw Summit next year?

Tel: (995 32) 2 45 08 08 E-mail: info@peoplescafe.ge

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AUGUST 28 - SEPTEMBER 3

POLITICS

Georgian Silence as Russia-Abkhazia Railway is Restored

By Zaza Jgharkava Parallel to the devaluation of the national currency, the government has a new headache. Russia started restoring the railway near the occupation line in the occupied Abkhazia. According to the deputy defense minister of the Russian Federation Dmitry Bulgakov, railway works are underway on 33 kilometers of track from Sokhumi up to the Enguri River. According toBulgakov’s information, 9 kilometers are already completed. After this statement of Bulgakov, the entire Georgian political elite is searching for answers to the following questions: why is the Kremlin emptying an already empty pocket and, most importantly, why was the Georgian government hiding this information for almost a month?

The Kremlin’s interest in restoring the railway infrastructure in the South Caucasus is not new. Back in 2013, at the dawn of the Georgian Dream government, the then Prime Minister Bidzina Ivanishvili told a Radio Liberty journalist in Yerevan that it would be possible to restore the railway: “It is possible to restore the railway but of the hindering factors the main are big problems between Russia and Georgia and the problem of territorial integrity. This problem will probably not be solved very quickly but the railway issue can be solved sooner if there is will from all sides,” Ivanishvili said. President Putin responded to this statement of Ivanishvili and expressed readiness to support the restoration of the SokhumiTbilisi-Yerevan railway route. “We believe that with other partners it is possible to think and in case of common agreement implement projects such as

transit railway transportation to the directions of Sokhumi and Tbilisi and then to Yerevan and to Russia. Implementation of such a project will create conditions for the development of cooperation among all interested parties in the region,” he said. President Putin made the decision after signing the cooperation document with the de-facto president of occupied Abkhazia Raul Khajimba. The issue of the railway on the agenda of the Georgian Dream did not end there. When the government presented the list of sites for privatization, the Minister of Economy said with regret that the Georgian Railway was not on the list. “It would be good to put 25% of the Georgian Railway for privatization. It would largely increase the income from privatization. However, at the same time we should treat the issue carefully and approach possible owners of the railway shares selectively,” Giorgi Kvirikashvili said without specifying the names of possible owners.

Concerns of analysts followed these statements about the railway on why the government was hiding its restoration for almost one month. Of the many versions of possible reasons covered by the media, the main opinion was that Russia has either already convinced the Georgian government to open the Abkhazian railway or hopes to convince them in the near future. It is noteworthy that statements on the possible opening of the railway in Abkhazia on the Russian side were made by the deputy Foreign Minister Gregory Karasin during negotiations for the purposes of discussion but the Georgian side was not amenable. A recent topic at the KarasinAbashidze negotiations was activation of the Georgia-Russia agreement signed

Russia is restoring the railway track near the occupation line in Abkhazia. Photo from www.observer.com.ge

in 2011, which considered putting Swiss customs officers on the Georgia-Russia border (at thePsou River). It is not ruled out that Russia will attempt to link the restoration of the railway in Abkhazia with this agreement. Interestingly, in the polemics in the press, the government reacted with enthusiasm, starting with the Defense Minister and finishing with the Probation Minister, everyone tried

to guess what Russia had in mind but no minister managed to give answers to the main question – why was the government hiding the railway restoration?

The most interesting aspect in this railway saga is that information has spread already that Azerbaijan has already transferred money to the Swiss company Stadler Rail Group to buy 30 passenger carriages of international stan-

dards. These carriages will move on the Baku-Tbilisi-Kars railway, which according to vesti.az, should be launched at the beginning of next year, i.e. in a few months, after the Russian railway troops finish railway works in the occupied Abkhazia in December. Therefore, it is easy to guess why the Kremlin is trying to restore the railway and what alternative it is offering to Tbilisi.

ECONOMICS

Geor gian Cur y: Wor st Georgian Currrenc ency: orst Dr op Since Mar ch 2015 Drop Marc

Ar menia: Dram or Drama?

By Karen Tovmasyan

Georgian currency depreciated by a record 1.3%, falling to 2.40 against the US Dollar this week.

On Monday, the National Bank of Georgia (NBG) set the biggest singleday drop rate since March 2015; and by Tuesday, August 25, exchange kiosks in the country were selling the US dollar for about 2.44 GEL. The same day, commercial banks in Georgia sold the US dollar for about 2.44 – 2.48 GEL “Naturally, ongoing geopolitical problems influence Georgia,” said Archil Mestvirishvili, NBG Vice President. “The main factor is negative expectations concerning the GEL depreciation in autumn.”

“Economic shocks and expectations have already influenced the national currency and the monetary incomes that impact the GEL have already been reflected in imports dynamics. We do not expect any additional fluctuations in the GEL exchange rate,” he added.

Economic Minister Giorgi Kvirikashvili said on Tuesday at a Government meeting that Georgia’s macro-economic parameters showed external shocks that have put pressure on the currency. This included the falling of Georgia’s external earnings from remittances and exports which have already been “completely offset,” along with declining imports.

Minister Kvirikashvili further continued that this record single-day drop was a result of “speculative transactions” and “stirring” among market participants.

Following the remarks of the Economy Minister, Georgian Prime Minister Irakli Garibashvili said: “We can conclude that we are facing obvious speculation and stir; that’s an emotional-psychological factor.”

The PM went on to ask businessmen and the general population to disregard the stir caused by media and experts, and to take into consideration only the information the government provides.

Residents of Armenia are expecting another currency crisis in the hours following signs of position loss of the Armenian Dram (AMD) which yesterday stood at 1$ to 479 AMD and today stands at $1 to 489 AMD. The fall in the rate of the AMD came as no great surprise for economic circles in Armenia; just days ago Bloomberg named the Armenian Dram one of the 10 riskiest currencies in the world which can be expected to lose position as a result of global developments.

Many citizens began to sell their last drams trying to buy US dollars yet many exchange points have begun turning people away, claiming there are no dollars left to sell.

Armenia’s former prime-minister, MP Hrant Bagratian (1993-1996), strongly criticized the government for the current condition of the AMD, stating tha:t “Instead of gradually shifting the free market exchange rate, we have a fixed rate which is crashing in just 1-2 years- all because the managers of our Central Bank are acting only with a ‘butcher’s knife and axe,’ having no other tools available to them.”

The last collapse the Armenian Dram experienced took place in December 2014, when the Armenian currency lost 15% of its value.

Armenian man and boy beside an exchange rate board. Photo by: PhotoIur on www.rferl.org.

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AUGUST 28 - SEPTEMBER 3

ECONOMY

The Galt & Taggart Research team comprises Georgian and Azerbaijani finance and economic experts who have broad experience of covering the macro and corporate sectors of the two countries. Our current product offering includes Georgian and Azerbaijan macroeconomic research, Georgian sector research, and fixed income corporate research.

For free access to Galt & Taggart Research, please visit gtresearch.ge or contact us at gt@gt.ge.

GOGC - Ensuring Energy Security of Georgia

By David Ninikelashvili Fixed income research is one of the key directions of Galt & Taggart Research.

We currently provide coverage of Georgian Oil and Gas Corporation and Georgian Railway, two state-owned entities with Eurobonds listed on the London Stock Exchange in the amount of US$ 250mn and US$ 500mn, respectively. In this article, we provide an overview of the Georgian Oil and Gas Corporation and its key role in ensuring energy security of Georgia, as well as a brief outline of the sector.

Georgian Oil and Gas Corporation (GOGC) is a state-owned company (under the Partnership Fund) committed to ensuring the energy security of Georgia.

GOGC holds the legal status of a National Oil Company (NOC) and represents the state’s interests in upstream crude oil and natural gas projects in Georgia.

GOGC was established to consolidate Georgia’s energy assets under single management. The company has five core activities: · Ensuring long-term and sustainable development of the wholesale natural gas market; · Managing the preparation, storage, transportation and sale of the state share of natural gas and oil; · Commissioning, constructing, rehabilitating and replacing oil and gas pipelines on the Georgian territory; · Implementing the projects aimed at transporting oil and gas from the Caspian and other regions via trunk pipelines on the Georgian territory; · Participating in and implementing national and international projects aimed at exploration, transportation and supply of energy resources.

Georgia’s auspicious strategic location makes it a transport corridor for natural gas and crude oil supplies to European markets. The transport corridor through Georgia allows the EU to diversify its supply, increasing energy security. In addition, Georgia is the only route for the transportation of Russian natural gas to Armenia. Georgia’s favorable location has prompted significant investments into its oil and gas sector. To that end, GOGC represents the state in international energy transit projects. Georgia’s main natural gas pipelines are: · Main Gas Pipeline System (MGPS) that stretches across the country and is comprised of: · North-South Gas Pipeline (NSGP), extending 235km and transporting gas from Russia to Armenia; · East-West Gas Pipeline (EWGP); · Southern branch; · Kakheti branch;

· South Caucasus Pipeline (SCP) that stretches 692km (249km in Georgia) and transports natural gas from Azerbaijan to Turkey through Georgia and from Turkey further to the EU. The Southern Gas Corridor project, aimed at improving the security and diversity of EU energy supply, will bring additional volumes of natural gas from the Caspian region to Europe. It is comprised of several separate energy projects, including the expansion of the SCP pipeline, which should bring additional volumes to GOGC as the pipeline capacity is poised to triple by 2021.

As of end-1Q15, the SCP expansion project was 31.0% completed and ahead of schedule.

Georgia’s main oil pipelines are: · Western Route Export Pipeline (WREP) that stretches 833km (375km in Georgia) and transits crude oil from Azerbaijan to the Black Sea coast (Supsa) for onward shipping to global markets; · Baku-Tbilisi-Ceyhan Pipeline (BTCP) that stretches 1,768km long (249km in Georgia) and transits crude oil from Azerbaijan to Turkey on the Mediterranean Sea. GOGC has long-term contracts with the operators of SCP and NSGP pipelines, through which the company receives gas at a favorable price and as an in-kind payment, respectively. GOGC also has a new contract with SOCAR for additional gas volumes at below-market prices. In 2014, GOGC imported 55.8% of

Georgian national gas consumption (the remaining 44.2% was imported by SOCAR directly). The imported gas is then sold to the wholesaler, SOCAR Gas Export Import, which resells the gas to distribution companies. GOGC’s natural gas import and its further wholesale distribution is mainly aimed at supplying the household and power generation sectors, while the commercial sector is mostly supplied by SOCAR directly. Apart from the sale of gas and pipeline rental activities, GOGC also engages in upstream activities pursuant to its NOC status, in addition to receiving fees for the oil transported through the WREP pipeline.

Through 2011-14, GOGC’s revenue grew by a remarkable 12.5% CAGR. The growth has been driven by sale of gas and pipeline rental activities, accounting for 75.4% and 14.2% of the top line in FY14, respectively. In general, GOGC posted promising FY14 results, given the high regional uncertainty in 2014, especially in the oil and gas sector. In addition, a 14.3% y/y surge in national natural gas consumption last year suggests further upside potential for the company. Moreover, Gardabani CCPP is poised to start operations in late 2015 and boost profitability from the sale of electricity.

To facilitate Georgia’s energy security while diversifying the company’s revenue sources, GOGC initiated a major capital project in 2012, the Gardabani Combined Cycle Power Plant (CCPP).

To finance the US$ 230mn project, GOGC placed a US$ 250mn, 5-year Eurobond on the London Stock Exchange.

With a sizable 230MW installed capacity, Gardabani CCPP is the first power plant of its kind in the country. Gardabani CCPP has the reserve capacity to supply the country’s energy grid in 25 to 30 minutes in case of a power failure.

Construction of the plant began in early 2013 and was completed ahead of schedule. The power plant is expected to commence operations in late 2015, providing a profitable revenue stream for GOGC and ensuring energy security for Georgia.

The government of Georgia, in line with its privatization plan, is considering the

sale of Gardabani CCPP. A final decision regarding the sale is expected by the end of November 2015.

Two new major capital projects are in the pipeline for GOGC. The first one is building an underground gas storage reservoir in Samgori. It would be a strategically important gas storage facility for Georgia, increasing energy security by ensuring gas supply in critical situations and by mitigating the seasonal imbalance between supply and demand.

The storage capacity would be 230-250 mmcm, about 10-15% of current annual consumption. Notably, Georgia is currently the only country in the region with no gas storage. A feasibility study should be completed by early 2016. If a decision is made to proceed with the project, the construction would commence in 2016 with expected completion in 2019.

The estimated project cost is around US$ 250mn.

GOGC is also considering building a new combined cycle power plant, Gardabani CCPP II, with similar technical characteristics and in proximity to Gardabani CCPP. Given the experience gained in building Gardabani CCPP, which was completed ahead of schedule, GOGC is likely to benefit from significant savings on the construction of Gardabani CCPP II. The final decision will largely depend on whether Gardabani CCPP is sold.

GOGC’s mid-term outlook looks promising on the back of a profitable gas supply business, stable income stream from oil and gas transportation activities, and an attractive opportunity to enter the electricity generation segment. Minor capex requirements for projects in process, an experienced management team, and limited FX rate exposure further support our optimistic outlook.

Keeping in mind the company’s track record, we expect GOGC to build on its successes in its crucial role in the oil and gas sector at both national and regional levels.

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Betsson Acquires Europe-Bet in $85 million Deal

By Joseph Alexander Smith Stockholm-based Betsson AB has acquired Georgia’s second-largest gaming company Europe-Bet in a deal worth up to $85 million. The purchase gives Betsson a 30% share of Georgia’s local gaming market and further strengthens the company’s ongoing expansion into Eastern Europe.

Speaking to the press on his first visit to Georgia since the deal was struck in June, CEO of Betsson Malta, Ulrik Bengtsson spoke of the “island of stability” offered by Georgia in a sometimes volatile region which made expansion into the country so attractive.

“This [acquisition] fits quite well with our portfolio of brands, and our acquisitions strategy, because it’s in a region which we know” says Bengtsson. “We have a big office in Kiev, where we operate software development and we have one of our business-to-business partners that runs a business in Turkey. [Another] reason why it made sense is that Georgia actually has a very robust, predictable, fair and commercially viable license regime which we really liked.”

Since its formation by a group of private entrepreneurs in 2010, Europe-Bet has established itself as a leading brand in Georgia’s gaming market, clipping at the heels of market-leader Adjarabet. Like

most gaming companies, Europe-Bet does most of its business online, offering customers a range of gaming experiences from online poker and backgammon to live casino gaming.

In 2014, Europe-Bet’s revenues amounted to $52.4 million, with online operations accounting for $40.8 million, and the remainder coming from landbased business. The company’s EBIT margin was 38.1% and the company has managed to achieve solid double-digit growth in the few last years.

Betsson’s acquisition of Europe-Bet brings a company with 50 years’ experience in the gaming industry into the Georgian market. The company has been investing heavily in software development, counting 400 developers and software engineers within its group. Bengtsson is optimistic that expansion into Georgia can signal a step forward in sharpening its competitive edge in online customer experience.

“There are opportunities for us to over time move some of our central development to Georgia as well.

However this requires a good talent pool of engineers” – Bengtsson explains – “if we think that the environment is good enough for us to do that, both in terms of the regulation for our existing business, but also in terms of having good cooperation with universities and the education system to provide the talent we need for build-

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ing something like that. For a technology company in 2015, there is always a shortage of engineers. If we find them in Georgia, no one’s happier than me.”

According to Bengtsson, Georgia’s domestic market is made all the more attractive by a regulatory regime which is robust, fair and commercially viable even by the standards of many EU member counties: “If you look at France, for example, it has a regulation which is completely not viable commercially and not particularly fair. It’s purely rigged to protect the local monopoly, so in that sense

Georgia is actually quite advanced.”

The stability of Georgia’s regulatory regime is a key factor in Betsson’s decision to expand into a new market. Europe-Bet was purchased from shareholders for an initial consideration of $50 million, with a further $35 payable after one year should Georgia’s gambling regulation remain unchanged. Meeting with government representatives during his time in Tbilisi, however, Bengtsson is confident that the Georgian government is committed to keeping the country open for business.

Given the success of Europe-Bet over the last few years, Betsson is also keen to keep majority of the current management in place, “We intend to keep the business here” says Bengtsson, “and we don’t want to move a lot of things outside of Georgia, we want to keep the Georgian business and the 750 people that are employed here.”

Betsson’s other key priority will be the continued growth of Europe-Bet and the continued improvement of customer experience: “We’re a growth company” Bengtsson explains, “and we expect this brand to grow at least at the same pace as the rest of Betsson, if not more. We’re going to do that by continuing to improve the product and customer experience and to launch more features for the sites to improve the customer journey.”

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AUGUST 28 - SEPTEMBER 3

BUSINESS

Green Budapest: Ready for You to Select the Final Touches

Hotel Sympatia

4, V. Daraselia Str. Tbilisi, Georgia

Hotel’s network “Sympatia”

Tel: (995 32) 2 99 55 88, 2 37 05 90 Tel./Fax: (995 32) 2 37 62 63 www.sympatia.ge E-mail: contact@sympatia.ge

Car Rent Tel: 599 16 16 70

By Meri Taliashvili Residential Complex Green Budapest construction is steaming ahead at top quality.

The construction of the frame of the building has been completed and the internal repair work and façade coverings has begun.

Maqro, the company behind the construction, is inviting its customers to help complete the project on time in August by asking them to choose the color of their decorative materials and furnishings (floors, walls, tiles and kitchen furniture).

The Company has been able ensure client satisfaction once again thanks to the effort and hard work of its employees. In

an unprecedentedly short period of time, four months ahead of schedule to be exact, they will be delivering completed renovated apartments. This means that in May 2016, instead of the planned September 2016, clients will already be able to use all the services and enjoy the comfort they were promised by the company, namely, renovated apartments in a 11, 700 sq. m Euro-standard isolated residential complex consisting of four buildings of 15, 17, 22 and 23 floors.

All apartments will be delivered with a full bathroom set, kitchen furniture and builtin appliances.The complex is surrounded by 3,500 square meters of green, well-equip-

ped, protected and isolated yard with a basketball court, treadmill, skateboard ramp and children’s playgrounds. The residential complex will further be equipped with a child care center and fitness room. Besides this, residents will enjoy their own parking spaces. The housing is provided with protection and security systems, water tanks and electrical generators.

Maqro’s management is offering its residents free services throughout an entire year that include residential area protection, cleaning, green area care-protection and use of the fitness center.

What’s more, even though construction will be completed

earlier than originally planned, the Company’s management will still allow those clients taking advantage of the internal credit system to cover their loan according to the planned chart in September 2016.

These and many other pleasant surprises are given to customers by international company Macro Construction, whose main priority is to create high quality and maximum comfort for residents of its complexes.

The proof of the pudding can now be seen in residential complex “Green Budapest”- unprecedented in Georgia in terms of construction pace, quality, safety, and environment, as well as in its consideration of resident health.

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BUSINESS

Study Finds Huge Benefits in Georgia-China Free Trade

By Joseph Larsen Georgia has been an economic bridge between East and West for thousands of years. The country was a key section in the “Silk Road,” by which exotic goods from China like silk and spices stopped off on their way to Europe. Now, Georgia’s political and business leaders are working to revive that historic relationship.

China is currently Georgia’s fourthlargest trading partner and third-largest source of foreign direct investment. Bilateral trade reached USD 823 million and Chinese companies invested USD 195 million in 2014. In June of this year Georgia became a founding member of the Chinese-led Asian Infrastructure Investment Bank. The EUR 500 billion fund will funnel investment capital into developing economies, including Georgia. Last month Prime Minister Irakli Garibashvili declared “Georgia is not just looking West” while touting the importance of strengthening trade and investment ties with China. According to the Tbilisi-based consultancy Policy and Management Consulting Group (PMCG), a closer relationship would benefit both countries.

The “Joint Feasibility Study on China-Georgia Possible Free Trade Agreement” by the PMCG projects that a Georgia-China free trade agreement would boost Georgia’s annual exports to China by 9 percent, and China’s by 1.7 percent. The study was produced in collaboration with the University of International Business and Economics, the Ministry of Economy and Sustainable Development of Georgia and the Ministry of Economy of China, and finds that a free trade deal would increase bilateral trade in goods as well as foster trade in services and foreign direct investment.

Such an agreement would work by reducing or eliminating tariffs and other barriers to trade between the two countries. “Georgia’s foreign trade policy is already one of the most liberalized in the world, so no important changes are expected in this regard,” Lasha

Chochua, an economist at PMCG and author of the study, told Georgia Today.

Georgia’s 1.5 percent average Most Favored Nation tariff (the tariff rate applied to goods from WTO members it doesn’t have preferential trade agreements with) is significantly lower than China’s average rate of 9.8 percent. Georgian producers are looking forward to accessing a 1.3 billion-person economy with ample room for tariff reduction. According to Chochua, a free trade agreement “will crucially decrease trade barriers for Georgian products to China.”

Georgia’s biggest winners would be producers of wine and non-alcoholic beverages. The study projects annual export increases of 28.5 percent and 36.7 percent in each respective sector. These products have become popular with China’s growing consumer class, but the existing 21.33 percent tariff on wine currently limits Georgia’s share of the market. The study also predicts a 4 percent gain for copper scrap, which is currently Georgia’s single-largest export to China. Exports topped USD 25 million in 2014.

Chinese producers also stand to benefit albeit on a smaller scale. Currently the main Chinese products imported in Georgia are electronics, steel and shoes.

These industries would see modest gains, and the study projects an increase of USD 1.37 million in the import of doors and door frames. China’s agriculture sector is also expected to benefit, with frozen meats and dried vegetables

being of particular note.

The Joint Feasibility Study emphasizes that a free trade deal would cover much more than goods, however. It finds that an agreement would also facilitate trade in services and FDI, the latter being of particular importance to Georgia. An agreement could streamline regulations in services and project financing, making it easier to do business across borders.

Twenty-five Chinese companies currently operate in Georgia, and ChinaGeorgia FDI rose by 117 percent from 2013 to 2014 to account for more than 15 percent of the USD 1.273 billion total. Chinese company Hualing Group is currently developing a USD 40 million free industrial zone in Kutaisi, and staterun PowerChina is a leading bidder for the Anaklia Deep Water Black Sea Port Project. The port will handle 40 million tons of cargo per year, including large amounts of Chinese goods bound for European shores.

Negotiations have yet to begin on a Georgia-China free trade agreement.

However, the PMCG study makes clear that a deal would benefit both countries and serve as a catalyst for Georgia’s continued economic growth. According to Chochua, free trade with China is yet another reason to be optimistic about Georgia’s future: “Free access to one of the world’s largest and fastest growing economy [sic] together with the FTA with EU … All these together create stable potential long-run economic development for Georgia.”

WMTR Program Launches Second Season of Eco-Camps

By Baia Dzagnidze Aiming to increase awareness among the young generation of environmental issues, in particular on sustainable waste management topics, the Waste Management Technologies in the Regions (WMTR) Program has started its second season of eco-camps for Adjara and Kakheti school students. A total of 70 students, winners ofWaste to Craft competitions, participated in 10-day eco-camps held in CENN Bulachauri Green Center betweenJuly 29 and August 27.

The WMTR Program, implemented by the International City/Country Management Association (ICMA) and the Caucasus Environmental NGO Network (CENN) and financed by the USAgency for International Development (USAID), assists central and local governments, local businesses, communities and municipalities in developing integrated waste management systems for its targeted regions - Kakheti and Adjara.

In order to create interest, the program was designed with a very attractive, diverse and interactive agenda full of informational lectures, team building exercises, crafting and a hiking trip to various parts of Georgia. Before going on the hike, students were informed of safety measures during camping and traveling in the outdoors, and were also taught how to put up a tent.

The camp included lectures on Georgia’s waste management strategy and legislation, landfill management, environmental education on mineral recourses, climate change, composting, civil society and the importance of self-governance in schools. According to the evaluation forms, students indicated that composting, waste management, climate change, energy efficiency and the Aarhus Convention were the most memorable and interesting topics.

Additionally, students unanimously stated that the team building exercises hadbeen very exciting and life changing, while the knowledge and experience acquired will give them the opportunity to share the information withtheir peers. Giorgi Orkodashvili from Kakheti stated that the entire 10 days were quite significant, especially the games designed to educate youth.

During the first hiking trip to Khada

Valley, students looked for pieces of waste, collected themand later oncreated short stories about their livesinto the wild. The most interesting and unique stories were voted for and five authors were asked to write a play, while the second group crafted puppets and the third staged a play.

“The most memorable thing for me would be the smiley faces of those 24 students,” noted Lela Sharadze from Adjara adding that the camp was very different from those which she hadattended before,especially in terms of gaining knowledge via a new method – games. “Generally, I thought I was helping the environment with small steps, however after listening to the experts I was embarrassed of my littering habits, like throwing chewing gum on the ground for instance. The camp motivated me enough to share my knowledge and plan some activities in Batumi when I get back,” she continued.

AUGUST 28 - SEPTEMBER 3

13

ProCredit Bank Introduces Modern 24/7 Zones ProCredit Bank continues to offer its customers exciting developments and innovative services. On Friday, 21 August at 12:00pm, a press conference was held at the Freedom Square Branch of ProCredit Bank to present the new 24/7 Zones to the press. General Director Asmus Rotne and the members of management discussed the 24/7 Zone concept, the high-tech machines available at these locations, and their advantages. Currently, the bank is actively setting up 24/7 Zones with stateof-the-art equipment in order to provide its customers with the maximum convenience and to make financial services available around the clock. Asmus Rotne, General Director of ProCredit Bank:“Currently, the introduction of 24-hour services is actively being carried out throughout the banking sector.

However, ProCredit Bank offered the first self-service area to its customers a few years ago. Our clients expressed interest in having access to banking services around the clock. This has encouraged us to further improve our 24/ 7 Zones. We have been working on the convenience and design of the 24/7 Zones and it has ended up being a huge project which has completely changed the look of our Service Centres. The main section of each Branch has become a modern 24/7 Zone equipped with innovative devices that meet the needs of our business and private clients.” To make banking services more flexible and faster for both business and private clients, ProCredit is installing multifunctional devices at the 24/7 Zones, where its customers can perform 80-90% of their transactions (such as cash deposits/cash withdrawals, payments, transfers, etc.) at their convenience.For the first time in Georgia, clients of ProCredit Bank have the exclusive opportunity not only to withdraw money from ATMs, but also to deposit cash into their accounts, with the new Cash-in ATMs. One of the

main advantages of this new equipment is speed: clients do not need to place notes in the ATM one by one, as the Cash-in ATM can process up to 50 notes at a time. In addition, the amount deposited is credited immediately to the account.Furthermore, ProCredit Drop-Boxes have been placed in 24/7 Zones. This service is designed for business clients and enables them to deposit large amounts of money into their accounts. The amount deposited using the ProCredit Bank Drop-Box is credited to the client’s account within seconds, making this service unique.

It is important for ProCredit Bank that clients using 24/7 Zones can access banking services easily and independently. Therefore, another device - an Information Terminal - has been placed in 24/7 Zones. Besides conducting banking transactions, clients can query the locations of all ProCredit Bank Branches and ATMs, receive information about the bank’s fees, and use Internet Banking. Clients can also contact the Call Center using this device.

In addition to being convenient and multi-functional, the 24/7 Zones are designed to provide clients with maximum comfort, so that they almost feel “at home”.

ADB Extends $20 MILLION to Protect Vulnurable Batumi Coastline The Asian Development Bank (ADB) has approved a $20 million loan to stem coastal erosion around the popular Black Sea tourist destination of Batumi.

Batumi, the capital of the Autonomous Republic of Adjara, with a population of more than 150,000, is one of the fastest developing cities along the Black Sea coast and plays a significant role in the country’s economy and tourism sector. This coastal area attracts visitors from throughout Georgia and neighboring countries.

“This investment will help halt coastal erosion at one of the country’s most popular summer seaside resort areas,” said Anand Chiplunkar, Director of the Urban Development and Water Division of ADB’s Central and West Asia Department.

This loan, the fourth under a $300 million Sustainable Urban Transport Investment Program, a multitranche financing facility approved by ADB in 2010, is earmarked for coastal protection works along the 5 kilometer Ba-

Batumi. Photo from: bestandfirst-ge.com

tumi coastline where erosion threatens beachfront, roadways, bicycle lanes and buildings.

“The project will support tourism and benefit urban residents and the local economy,” said Bertrand Goalou, Urban Development Specialist in ADB’s Central and West Asia Department.

“This investment, financed from ADB’s commercial resources, complements ADB’s substantial support to Georgia for water supply and sanitation, road and energy infrastructure,” says Kathie Julian, ADB’s Georgiabased Country Director.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth and regional integration. Established in 1966, it is owned by 67 members – 48 from the region. ADB has supported Georgia since 2007. As of 2014, ADB assistance to Georgia totaled more than $1.6 billion, including approved loans and technical assistance grants.

SOCIETY

AUGUST 28 - SEPTEMBER 3

15

Geor gia Implements Waste Mana gement Georgia Manag Code Based on EU R egula tions Re gulations

By Baia Dzagnidze Prepared by USAID’s Waste Management Technologies in the Regions Program The intense growth of the population across the world is directly linked to the amount of waste we produce, which negatively impacts on the environment and human health via emissions in the air, land and water. Consequently, a few decades ago waste management and its reduction became a world priority.

However,this trend in Georgia is being embraced quite slowly, while Europe has established the view that waste is a potential source of raw materials and energy and recycling would bring significant social and economic benefits to the country.

According to the Ministry of Environment Protection and Natural Resource’s National Report on State of Environment, as of last year there are around 60 landfills officially registered in Georgia covering 203 hectares of the country’s territory most of which do not comply with international standards, nor do they include separation or waste-based energy production. Additionally, there are hundreds of unofficial dumpsites in rural Georgia where municipal waste services are inadequate or nonexistent creating health and environmental problems for local inhabitants.

After signing the EU Association Agreement, Georgia is required to implement a number of environmental activities including the development of the waste management sector. Despite the fact that the country has adopted a new

Waste Management Code in January 2015 Georgia still does not have a unified strategy and an action plan.Consistent with the AA requirements, both sides should promote longterm goals for “green” economic development. Article 302 of the EU requirements states that Georgia should advance air and water quality, develop waste management, nature protection, industrial air pollution and chemicals management at an international level.

The EU’s 2005 Waste Framework Directive perceives waste as a resource, while its concept and principle is based on waste management hierarchy (WMH), where waste prevention is prioritized.

Following thisarereuse, recycling, recovery and disposal. With this principle, the EU intends to recycle 50% of municipal waste and 70% of construction waste by 2020. Moreover, the directive obliges member states to promote high quality recycling and introduce separate collection systems at leastfor paper, metal, plastic and glass.

In order to implement the principle of WMH, European countries have different regulatory and incentivized policies.

For example, the landfill is taxed by the public authority according to the weight or volume of the waste and the fee is paid by the service provider. Such actions consequently reduce the amount of waste on landfills as the tax varies from 3 Euros per ton (Bulgaria) to 107 Euros (Netherlands). Part of the tax revenues are used for waste reduction and other environmental actions.

Moreover, the manufacturer who introduces the product to the market is obliged to pay for waste collection and

its recycling fee. According to EU estimation, this forces the manufacturer to take into consideration the product’s entire life cycle.

Besides, separate waste collection systems are widely used by EU countries which helps to make the highest quality materials and maximize theirvalue. In addition, containers are put inretail shops where the citizens get some kind of reimbursement when bringingcertain types of waste. For example, the inhabitants of the city of Forli (Italy) get public transport tickets or stationery items when delivering waste to the containers. The EU directive also includes the “polluter pays” principle – whereby the waste management costs are paid by the waste generator.

Despite the fact that EU member states are at varying stages in waste management systems, the tendency to im-

prove its waste management is still noticeable. Today, Europeis aimed towards creating a “circular economy” where reusing and recycling is a norm, while the word “waste” is outdated. This system allows for economic changeso that it benefits the environment and improves the quality of life.

The situation in Georgia is quite complex, but with the help of various NGOs, donors and the state, the country is on the right direction in terms of implementing a waste management system. The Waste Management Technologies in the Regions (WMTR)Program implemented

by International City/Country Management Association (ICMA) and the Caucasus Environmental NGO Network (CENN) andfinanced by the USAgency for International Development (USAID), assists central and local governments,

local businesses, communities and municipalities in developing integrated waste management systems for Kakheti and Adjara.

The new Code, which was created based on the examples of Germany, Austria and Bulgaria,is structured around relevant issues and touches upon dangerous and harmless waste collection, transportation, recovery and disposal issues, as well as obligations on waste management planning, accounting, issuance of permits, registrations and control issues.

In line with the requirements of the Code, the government should develop a national waste management strategy, which should define the policies and goals of waste management for the next 15 years. Additionally, each municipality should have its own 5-year plan for municipal waste management, while those companies, who annually produce more than 200 tons of non-hazardous waste or 1,000 tons of inert waste or any amount of hazardous waste annually, are obliged to develop a waste management plan which will be revised every 3 years.

According to the Code, Georgia should have the same waste management hierarchy as the EU and involve several principles such as precautionary, “polluter pays”, “proximity principle” and “self-sufficiency principle.”The bill also obliges the waste producer and owner to process waste himself or to transfer it to a special agencies dealing withcollection, transportation and recycling. Additionally, the law bans waste burning outside ofa licensed incinerator.

It must be noted that the billdoes not introduce new fees but brings in administrative penalties.

CULTURE

Book R evie w: Vano and Nik o Re view: Niko

By Joseph Larsen The literary critic Franco Moretti defines prose by “the rule of order over mood, of the permanent over the momentary, of quiet work over genius fed by sensation.” Poetry, by contrast, is a primal method of expression that dances around us with flowery flourishes and metaphors. Prose is direct and to the point – it derives from the latin root prosa orati (“direct speech”). If the purpose of poetry is to make us feel, the purpose of prose is to make us think.

What if a work of fiction could do both? Fill our brains and feed our hearts at the same time? Vano and Niko is exactly such a work. A novel by Georgian author Erlom Akhvlediani, this collection of short parables blurs the boundary between poetry and prose.

Akhvlediani is a follower of George Orwell’s rule: “if it is possible to cut a word out, always cut it out.” Vano and Niko features little character development, has no long descriptive paragraphs and is nearly free of adjectives.

Akhvlediani has discovered that, in literature as well as in life, actions speak louder than words.

This book certainly isn’t light reading, however. Nothing is handed to the reader. Everything must be understood.

Some readers will find this book difficult. Translator Mikheil Kakabadze, anticipating that, asks readers to take a unique approach: “I would like to ask the reader, when he or she comes across something apparently incomprehensible in these stories, instead of trying to dig too deeply for meaning, to think in images.”

Each chapter of this book is a parable in its own right. Vano and Niko –

Written during the 1950s, Vano and Niko is a masterpiece of literary fiction.

polar opposites and the story’s only recurring characters – interact to reveal life lessons or universal truisms. Vano is gentle, kind and deferential. Niko is severe, selfish and quick to anger. In one memorable parable, “Stupid Vano and Clever Niko,” the contrast between these characters is expressed in particularly beautiful language. “Vano loved. Vano loved and cried,” the story reads. “Vano cried and laughed. Vano laughed and was still stupid.” And what of Niko?

“Niko wasn’t stupid, since he did not love.”

It took a special author to produce this unique work. Akhvlediani was born in Georgia in 1933 and enjoyed a career as one of Georgia’s most cherished authors and screenwriters. He wrote 18 screenplays between 1962 and 1999.

Vano and Niko was written during the 1950s and, due to its deep subject matter, has occasionally featured in university philosophy curriculums.

Akhvlediani’s purpose in writing this novel is to teach us about ourselves.

Vano and Niko represent the inner struggle for self identification that persists within each of us. Their relationship is constantly shifting; Vano isn’t always good and Niko isn’t always bad, and sometimes those labels mean nothing at all. But the story is a tug-of-war between our gentle, romantic self and our baser self, and in the end, Akhvlediani makes his choice.

The two characters switch roles in the novel’s final chapter, “Vano and Niko and Niko and Vano.” Niko becomes Vano, who was “a good person and always did good things to others.” The now-transformed character is treating people with kindness for the first time and realizes that he has become who he wants to be, Vano. Vano becomes Niko, who was “an evil person and did evil things to others.” He decides that evil doesn’t suit him and desires to go back to being Vano. Ultimately, both characters are Vano, and the reader is left with a world in which people are good and do good things to others.

This is Akhvlediani’s attempt at instructing the reader, showing that while a Jekyll and Hyde struggle goes on inside each of us, we have control over which comes out the winner. The story indeed has a message. But it’s more important for that message to be felt than to be understood.

(Note: Vano and Niko was first published in English in 2014 by Dalkey Archive and was translated by Mikheil Kakabadze)

AUGUST 28 - SEPTEMBER 3

17

Sa ving Var dzia: Saving ardzia: Wor ks On-Going orks

Mikheil Giorgadze, Minister of Culture and Monument Protection of Georgia, held a meeting with Vardzia rock art and research project donor foundation, Jackson representatives Pitt Brown and Amanda Taylor, and Vardzia wall art protect program head, David Park.

By Meri Taliashvili Within the project “Save Vardzia” strengthening and conservation of the most damaged areas of the complex has started. The diagnostic work of the ancient wall painting has come to its final stage and upon its completion at the end of this year the government will have an analysis of the state of Vardzia’s oldest paintings as well as full documentation to assist in research and accurate methods of conservation.

In order to preserve the cave complex, works are going on simultaneously in several directions: surveying the walls, rock reinforcement and conservation, studying the monument’s archaeology, wall painting diagnosis, and tourism infrastructure amenity analysis.

During the continuing archeological studies, two unprecedented large-size

new tiers were discovered and 10 caverns within. In the ancient residential and agricultural facilities there are remains of a bakery, storage areas and pitchers where a dozen centuries ago, wine and grain were stored, glazed and unglazed ceramic utensils - bowls, pots, and iron spearheads dated to the XIII-XIV century by archeologists.

The Vardzia painting study is being carried out with the collaboration of the Tbilisi Academy of Arts and The Courtauld Institute of Art, aiming to enhance and develop Georgian students’ qualifications.

The project “Save Vardzia” launched last year on the initiative of Georgian Prime Minister Irakli Garibashvili and will last for four years. The Georgian government allocated 570,000 GEL for the first stage work from the Government Reserve Fund.

CULTURE

AUGUST 28 - SEPTEMBER 3

Ali and Nino Monument in Batumi Damaged During R eloca tion Reloca elocation

International Festival “Night Serenades” Coming to Tbilisi

By Nino Melikishvili Music lovers in Georgia will be once again pleased with the staggering international festival “Night Serenades” which opened on August 25 at the Z.Paliashvili music school in Batumi. The festival is directed by internationally renowned Georgian violinist, Liana Isakadze, and is being held in Georgia for the seventh time since re-opening.

On the first day, the festival’s base orchestra World Chamber Ensemble “Virtuosi” performed overtures from various operas by W.A. Mozart. Conductor of the evening was Mr. Cesar Alvarez from Spain, who is considered as one of the strongest values of orchestral conducting according to international critics.

During the second part of the evening 69-year-old Liana Isakadze performed a magnificent Violin Concerto in E minor by F. Mendelssohn.

On August 26, music lovers in Batumi had the chance to enjoy chamber music as World Chamber Ensemble “Virtuosi” opened the concert performing “Night Serenades” by W.A. Mozart, conducted

by Lavard Skou Larsen from Austria. The concert continued with string trio, Jan-Erik Gustafsson (cello), Yuri Zhislin (viola) and Anna-Liisa Bezrodny (violin), performing “Goldberg Variations” by J.S. Bach. The concert finished with a Concerto for violin, piano and string quartet arranged for string orchestra by Larsen.

On 26 and 30 August, concerts are to be held in Batumi, before the event moves to the Tbilisi State Conservatoire Grand Hall on 2nd and 3rd September.

The Final Charity Concert will take place on September 4th at the Radisson Blu Iveria Hotel in Tbilisi. All funds from the concerts will go to the Georgian Solidarity Fund to finance vital medical

treatment for children with cancer. John Losasso, General Manager of Radisson Blu Iveria Hotel said he is glad to host the charity event to support children with cancer and pleased that illustrious musicians from all over the world will hold a concert in the hotel’s Ballroom.

“I am glad that the festival started with great success. As always, the festival is hosting many world famous musicians and this year we have such great musicians as Cesar Alvarez, Muhai Tang, Maxime Tortelier and others. I want to thank everyone who supported this idea and now the festival can be known as the “Batumi-Tbilisi International Festival,” said Liana Isakadze. She also thanked the general manager of Radisson Blu Iveria for allowing their Ballroom to be used for the charity concert.

“I invite everyone who wants to take part in this charity event and support children with cancer,” she added.

Liana Isakadze promised that they will always aim to make music lovers happy with classical music masterpieces as the festival will continue in the following years and many more famous musicians are sure to take part.

The festival was first set up in the 1980s. In 1991 it was stopped due to social turmoil but was renewed in Batumi at the initiative of Liana Isakadze and with the support of Batumi City Hall, in 2009.

Since 2015, the festival has expanded and now the Night Serenades Festival is known as the TbilisiBatumi International Festival.

Liana Isakadze has been awarded the title of People’s Artist of the USSR (1988), Meritorious Artist of the Georgian SSR (1970), the State Prize of Georgia (1975, 1983, 2002), and the Order of Honor of Georgia (1998, 2002).

19

The sculpture of ‘Nino’ of the famous ‘Ali and Nino’ monument, situated in Batumi, has been damaged while being relocated.

According to eye witnesses, a cable was severed during the relocation and several wings of the sculpture were damaged.

Batumi Boulevard Administration Director Giorgi Zirakishvili said the damage is minor.

“I spoke with the head of the company, who told me that it will be restored within a week and everything will be all right,” he added.

The monument, created by Tamar Kvesitadze, was installed in Batumi in 2011. Internet sources said Batumi Boulevard administration took the decision to move the monument to a different place after a recent storm damaged its foundation.

“According to an experts’ report, it was impossible to reinforce that part of the seashore and therefore it was necessary to relocate the monument,” Zirakishvili said.

WHAT'S ON IN TBILISI CINEMA AMIRANI CINEMA Address: 36 Kostava St. Telephone: 299 99 55 www.kinoafisha.ge VACATION Directed by John Francis Daley, Jonathan M. Goldstein Cast: Ed Helms, Christina Applegate, Skyler Gisondo Genre: Adventure, Comedy Language: English Start time: 19:50 Language: Russian Start time: 12:30, 15:00, 17:30, 20:10, 22:40 Ticket price: 7.50 – 12.50 Lari THE MAN FROM U.N.C.L.E. Directed by Guy Ritchie Cast: Henry Cavill, Armie Hammer, Alicia Vikander Genre: Action, Adventure, Comedy Language: Russian Start time: 17:15, 22:30 Ticket price: 9.50 – 12.50 Lari IRRATIONAL MAN Directed by Woody Allen Cast: Joaquin Phoenix, Emma Stone, Parker Posey Genre: Drama, Mystery Language: Russian Start time: 12:00, 17:35, 20:00, 22:20 Ticket price: 9.50 – 12.50 Lari MISSION: IMPOSSIBLE - ROGUE NATION Directed by Christopher McQuarrie Cast: Tom Cruise, Jeremy Renner, Simon Pegg, Rebecca Ferguson, Alec Baldwin Genre: Action, Adventure, Thriller Language: Russian Start time: 14:20 Ticket price: 8.50 – 9.50 Lari SOUTHPAW Directed by Antoine Fuqua Cast: Jake Gyllenhaal, Rachel McAdams, Oona Laurence Genre: Action, Drama, Sport

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Cast: Nat Wolff, Cara Delevingne, Austin Abrams Genre: Drama, Mystery, Romance Language: Russian Start time: 14:30 Ticket price: 8.50 – 9.50 Lari MISSION: IMPOSSIBLE - ROGUE NATION (Info Above) Language: Russian Start time: 19:30, 22:20 Ticket price: 11.50 – 12.50 Lari MUSEUM MUSEUM OF SOVIET OCCUPATION Address: 1 Rustaveli ave.

Telephone: 2 99 80 22 THE EXHIBITION IS DEDICATED TO THE HISTORY OF THE ANTIOCCUPATIONAL, NATIONAL-LIBERATION MOVEMENT OF GEORGIA AND TO THE VICTIMS OF THE SOVIET POLITICAL REPRESSION THROUGHOUT THIS PERIOD. SIMON JANASHIA MUSEUM OF GEORGIA Address: 3 Rustaveli Ave. Telephone: 2 99 80 22 ARCHAEOLOGICAL TREASURE June 27 – October 31 “GEORGIANS IN WORLD WAR II” IS AN EXHIBITION DEDICATED TO THE 70TH ANNIVERSARY OF THE VICTORY OVER FASCISM. IOSEB GRISHASHVILI TBILISI HISTORY MUSEUM - KARVASLA Address: 8 Sioni St. Telephone: 2 98 22 81 SERGO PARAJANOVI – “21ST CENTURY DREAM”

SHALVAAMIRANASHVILI MUSEUM OF ART Address: 1 Lado Gudiashvili St. Telephone: 2 99 99 09 www.museum.ge

Start time: 20:30 Ticket price: 10, 15, 20 Lari

THE EXHIBITION “MADE IN KALLININGRAD” Artists participating in the project: Oleg Bliablias, Yury Vassilev, Aleksej Èhebikin, Alexandr Podoprigov, Elena Tsvetaeva, Evgeni Umansk, “San Donato” Group, “Gentle Woman” Group, “Common Wince” Group, Danil Akimov, Dmitry Selin, Evgeny Palamarchuk, Topp & Dubio (Nederlands)

August 30 VAKULA / ZURKIN / KVANCHI @ VITAMIN CAFE Start time: 19:00 Ticket price: 10 Lari

GALLERY THE NATIONAL GALLERY Address: 11 Rustaveli Ave. www.museum.ge PIROSMANI’S 150TH BAIA GALLERY Address: 10 Chardin Str Telephone: 2 75 45 10 GEORGIAN ART XX-XXI CENTURY MUSIC KAKHA BAKURADZE’S MOVEMENT THEATRE Address: 128 Agmashenebeli Ave., Mushtaidi Garden Tel.: 599 43 63 60 THURSDAY JAZZ SESSION Movement Theatre Start time: 21:00 Price: 1 Beer VIP Tickets: 1 Whisky Balcony: Free BATUMI STATE MUSIC CENTRE Address: 1 Odisei Dimitriadi St. VALERIAN SHIUKASHVILI AND NUKRI KAPANADZE

VITAMIN CUBES Address: Turtle Lake

TBILISI OLD HIPPODROME Address: Saburtalo St. Tel.: 591929215 August 28 MINIBUS AND SHOWPRO PRESENTS MINUS SHOWCASE: RICHIE HAWTIN MATADOR Live WHYT NOYZ Support by GREENBEAM & LEON Start time: 00:00 Ticket price: 50 Lari ONE CAUCASUS FESTIVAL 2015 Address: Tserakvi, Marneuli district, Kvemo-Kartli region.

August 27-29 ONE CAUCASUS FESTIVAL Main Stage: For the three festival days One Caucasus Main Stage will host new international music projects including: WARSAW HORNS (Poland) + NATURAL BORN LOVERS (Georgia) + SHOTA ADAMASHVILI (Georgia) MAMADOU DIOUF (Senegal/ Poland) + THE MARNELI BAND (Georgia) PAKO SARR (Senegal) + New Caucasus Project (Armenia/ Azerbaijan/Georgia) + GORDELA (Georgia) THE BAMBIR (Armenia) Tents available for rent.

Tel.: +995 595 234 503 onecaucasusfestival@gmail.com FREE TRANSPORTATION Tel.: 593 03 09 99

CULTURE

By Tony Hanmer I’m writing this from Tbilisi, a day before I return home to Etseri in Upper Svaneti. My wife is waiting for me there, and it’s a good time to recall a trip we took together to her ancestral homeland.

The Skhirtladzes are from this province, and Lali is one of them, although she was born and raised in Kakheti. Our honeymoon, in May 2009, gave us the opportunity to go to Racha, just east of Svaneti. First stop, its capital: Oni. Insert a joke. A guy gets into a taxi in Racha. “Is it far to Oni?” he asks.

“No,” says the driver. An hour later: “I thought you said it wasn’t far!” “Well, it’s far now...”

The Jewish synagogue, and the museum, in Oni were treasures. The former was locked but we could see it from outside and peer through the windows of what used to be a much more thriving house of worship than it is today. Evidence to support the claim that the Jews were comfortable in Georgia, as seems to have been the case since about 2500 BC. Oni’s museum, in 2009, was still not in prime condition for housing and showing the items it contains. But at least it was open, and allowed photography. Some of the ancient art I found there was wonderfully “primitive,” or in the style of folk art, while one wood carving reminded me more of an extraterrestrial being than anything else. Curiouser and curiouser.

We walked to Mravldzali next, the Skhirtladzes’ actual home village, at about 2000 m above sea level claiming to be the second highest village in Geor-

AUGUST 28 - SEPTEMBER 3

Racha, Really

gia (after Ushguli). Here, Lali’s light croc shoes, which she’d had for a few years already, shone. It was 10 km up, nary a downhill, on a road mostly of rock; overnight with her delighted relatives; and then the same distance coming down the next day. The crocs are still going strong as I write this, as is their wearer. The clan have an annual gathering here at about the time of Mariamoba, the Feast of the Virgin Mary, at the end

of August. One day we must attend this.

We were also able to go further north, closer to the Russian border, to see mineral springs, forests, a picnic location which we made use of for making mtsvadi (shish kebabs), and more of the fantastic mountain scenery which is the whole point of Racha. It isn’t nearly as well known as a tourist destination as Svaneti is, but there is as much beauty here as anywhere in diverse Georgia.

Everywhere you go, there’s something different and glorious.

Another thing for which Racha is famous is its small output of Khvanchkara red wine, from grapes found in one small

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place near Ambrolauri. Rich, highly sought after, unmatched; unique to the place due to the special combination of the vines’ variety itself, as well as the soil and climate.

Vittorio Sella’s late 19th century photographs of this region display a surprising amount of Svan watchtowers among the villages of certain parts. Apparently land changed hands; few of these towers now remain, sadly, victims of neglect or perhaps deliberate attempts to cover over part of history and let it lie.

I know that I have only scratched the surface of Racha; what could one expect of a few days’ trip?! We came away with a cowbell which I had found on the Mravldzali road, nice melodious souvenir, which finally our cow has started wearing these six years later for when I need to find her on the faraway summer mountain grazes. It’s made from an old car part, I think, so nothing ancient. But it works well, and I always know it’s hers.

A more through exploration awaits us. There are even hiking trails connecting Racha and Upper Svaneti, and many more villages to discover or examine.

Like the rest of Georgia, Racha will bountifully reward such study, displaying its charms for all the senses to appreciate. Take your time; this is the spirit of a local people who are not known as hasty. You won’t regret it.

Tony Hanmer runs the “Svaneti Renaissance” Facebook group, now with over 1100 members, at www.facebook.com/groups/SvanetiRenaissance/ .

He and his wife also run their own guest house in Etseri: www.facebook.com/hanmer.house.svaneti

SPORTS

AUGUST 28 - SEPTEMBER 3

23

Supra for the Scots - Tar tan Ar my Guide to Tbilisi

By Alastair Watt The people of Tbilisi should be preparing themselves for an invasion…

Fear not though Tbiliselebo, the boots on the ground will largely be Timberland, and the only assaults will be on your eardrums as this is not the Red Army, but a far gentler, affable though seldom sober unit known as the Tartan Army.

For those of you still oblivious, the Tartan Army refers to the supporters of the Scottish national football team which plays a crucial Euro 2016 qualifier in Tbilisi against Georgia on September 4.

It will be the first visit to Georgia for the Scots since 2007 where a humbling 2-0 defeat played a significant part in destroying Scotland’s hopes of reaching the European Championships. Eight years on and the scenario is similar.

Georgia have nothing but pride to play for while Scotland, rejuvenated under former Aberdeen and Leeds United legend Gordon Strachan, have realistic aspirations of making France 2016.

Doing so would see the Scots qualify for a major tournament for the first time in almost two decades. And with the huge importance of the match for the Scots, combined with fond yet hazy, booze-fueled memories of the previous visit to Georgia, the Tartan Army are mobilizing in their thousands, set to make landfall from the beginning of next week.

As a Scot myself, with a Georgian wife and Scottish-Georgian son (or Georgian-Scottish, depending on who you ask), who has lived in Tbilisi since 2010, I feel it my duty to offer the Tartan Army, of which I was once a loyal servant, a handful of tips for “The City that Loves You”….

Having experienced a few Tartan Army missions myself, I know how fu-

tile it would be to list museums, galleries and theaters (of which Tbilisi has many fine examples). Instead, I’ll cut to the chase. The Tartan Army survives, almost entirely, on one thing – ‘bevy’.

Or ‘alcohol’ to the layman.

The good news for the visiting Scots is that Georgia is rich in this area, both in terms of production and consumption.

However, while the beer in Georgia is perfectly acceptable (and I recommend a trip to the Ossetian restaurant Alani near the sulfur baths for, in my view, the best beer in town) if you truly want to soak up the national way of life, opt for wine.

I’ll spare you details of wine’s centuries-old history in Georgia, as there are countless articles written by far more qualified connoisseurs than I. However, if you have the good fortune to get friendly with a group of Georgians, and with their devotion to hospitality and your kilt and replica top giving away your identity as a foreigner there is every chance you will, then you may encounter a supra.

A supra is one of the most celebrated Georgian traditions. It is essentially a feast accompanied by an endless supply of Georgian fayre and a similarly bountiful helping of alcohol – more often than not, Georgian wine. And not any kind of Georgian wine. It tends to be white wine, but not as most Westerners will know it, largely because the color is amber and the strength, if it is proper Kakheti (region of east Georgia renowned for winemaking) wine, is of Buckfast proportions.

Once the table is almost entirely covered in dishes and jugs of aforesaid vino, the toasting may commence. A tamada (toastmaster) will then lead the table through a number of toasts, after which everyone drinks and, if you hear the word “bolomde” you drink to the end.

Fill in the grid so that every row, every column, and every 3x3 box contains the digits 1 through 9.

See answers in the next issue

www.sudoku.com

Answers to previous puzzles

That’s right, you down a glass of Buckfast-strength wine. What’s more, the toasts, much like the food and wine supply, are vast in quantity.

One of my first nights in Georgia involved such a supra, and led to dancing on tables at an erstwhile quiet restaurant. No Georgian experience is complete without the supra (and the hangover that inevitably follows).

The deplorable phrase “eating’s cheating”, a moronic slogan thrown around by gallus young Scottish (and English) drinkers suggesting that a marathon drinking session is not sufficiently dangerous on its own and that one should also abstain from nourishment of any kind, is thankfully a soundbite never heard in Georgia.

And the Scots are encouraged to eat well here, as the food is hearty and delicious. Your staple diet for your time in Georgia will be khachapuri (a pizzashaped cheese bread), khinkali (dumplings of pork, beef, lamb, mushroom, cheese or potato), mtsvadi (better known internationally by the name ‘shashlik’, basically barbecued pork) and badrajani nigvzit (eggplants with walnut sauce). This quartet of the nation’s cuisine will keep your stomach lined for the ubiquitous refreshments of a Scotland trip abroad.

When travelling in the city, particularly after a supra, it may be wise to hail a taxi. This normally takes approximately 10 seconds almost anywhere in the center of the city, which is saturated by cabs. In-keeping with the rest of the city’s drivers, the taxi custodians motor along at pace with scant concern for anything else in their vicinity. Indeed, it may be worth necking a bevy or two

beforehand.

If you opt to walk, keep an eye out for said drivers and never assume that a car will stop for you. In Scotland, flashing of the lights translates as “after you sir/madam”. Here, it means “get out the f#####g way!”

Curiously, there are zebra crossings in Tbilisi but these are purely decorative. The safest thing to do is to pretend they aren’t there.

But roads aside, Tbilisi is a very safe city – far more so than any of Scotland’s major cities on a weekend night. The

kilts will be met with bewilderment by some, laughter by others and infatuation by many.

I have been incredibly warmly welcomed here, not least by my wife and her generous family. Although Scottish fans probably won’t end up tying the knot, I hope every one of them gets a real taste of this mysterious, hospitable land and its endearing people.

I confess also that this time I dearly hope that, unlike 2007, the Scots have three points to declare on their journey home…

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EDITOR-IN-CHIEF - Katie Ruth Davies COPY EDITOR - Alastair Watt JOURNALISTS: Alastair Watt, Tony Hanmer, Tamar Svanidze, Joseph Alexander Smith, Zviad Adzinbaia, Joseph Larsen, Beqa Kirtava, Meri Taliashvili, Eka Karsaulidze, Baia Dzagnidze, Zaza Jgharkava, Teona Surmava, Ana Lomtadze, Maka Bibilashvili, Nino Melikishvili, Nina Ioseliani, Tatia Megeneishvili, Karen Tovmasyan, Nino Gegidze, Dimitri Dolaberidze, Nino Japarashvili, Maka Lomadze, George Abashvili PHOTOGRAPHER: Zviad Nikolaishvili TECHNICAL SUPPORT: Misha Mchedlishvili CIRCULATION MANAGERS: David Kerdikashvili, David Djandjgava

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