Infrastructure

In order to facilitate easy transport of goods through its territory and encourage foreign investment in the sector, the government of Georgia, in cooperation with private enterprise, continues to develop transport infrastructure including roads, railways, sea ports and airports, while simplifying customs and other administrative procedures, such as customs and licensing reforms. 

Electricity

Electricity availability significantly improved throughout Georgia in 2006.  Two years ago 85% of Georgians outside of Tbilisi were without power; today 98% of paying customers outside of Tbilisi have 24/7 power.  In Tbilisi the electricity situation is relatively stable, except for interruptions caused by gas imports, pipeline failures or water treatment stability.

In an article entitled "Georgia to Create Common Electric circle with neighboring Countries" in the July 31, 2007 issue, page 16, of Georgian Business News, a new "common electricity circle" is described.  The participants are Electricity System Commercial Operator (ESCO), the Georgian State Electricity System (GDSE), Russia's RAO, YeES and TGR Energy from Russia, Azerbaijan and Turkey.  The proposed system would allow the four countries to import and export electricity on a seasonal basis, evening out shortages and surpluses and ensuring the free exchange of electricity between the countries.  This concept would allow the system to become more stable and reliable.

Electricity tariffs

Note: Source: GNERC (Georgian National Regulation Commission www.gnerc.ge) Prices are specified excluding VAT, Tetri is the Georgian cent. 

One of the major players in this market is Energy Invest, the leading industrial corporation for 3 years, having invested over $100 million into Georgian energy infrastructure such as a unique air turbine power station in Gardabani with a capacity of 110 megawatts, $20 million in the Rustavi-based Azoti factory.  They have also brought selected international standards from Western markets to their firm. http://www.energyinvest.ge/

Water

There is an abundant source of supply of water in Georgia.  However, the infrastructure situation regarding water treatment has impeded efficient distribution.  Significant amount of foreign investment from Western sources has recently been invested into the infrastructure of water in Georgia.  In Tbilisi for legal entitles the price per cubic meter for water supply is 4.40 GEL, according to Tblisis Tskhali, the major water company in Georgia.

Land - Property Rights

Foreign Investors can own commercial, but not agricultural land, in Georgia.  Projects with a Georgian partner can own agricultural land.  Investors may initiate an expedited, competitive process to privatize land assets needed for an investment project.

Telephones & Communications

The # of landline telephones in Tbilisi is 510,000.  Outside of the major cities of Georgia, the majority of phone communication is done via mobile phones.  The major Mobile Phone Providers are: Magti and Geocell.  They have 2,500,000 clients, as of July 2007. 

# of Internet Connections --   There are 3 major internet providers in Georgia (http://www.caucasus.net/; http://www.online.ge/ and http://www.sanet.ge/.   They provide approximately 87% of the Georgian market. (Data obtained as of July, 2007).  Estimates of the number of internet users in Georgia range from 120,000 - 130,000; the Government in its Telecommunications Strategy is committed to increasing this number in the major cities and rural regions.

Free Economic Zones

On July 3, 2007, to be effective September 1, 2007, the Parliament of Georgia adopted a bill regarding the creation of free economic zones (FEZ).  The bill titled "Free Industrialized Zones" envisages zones located on at least 10 hectares.  The zones may be established by government, a legal entity or private individual.  Companies in the multi-currency zones will be free from profit, property and VAT taxes.   Likely sites are the ports of Poti and Batumi, among others.  Future governmental regulations will determine the criteria for the establishment of the zones.  Enterprises set up in the zones will be free from profit and property taxes and bureaucratic procedures will be minimal.   

Links:

Batumi Sea Port - www.batumiport.com

Poti Sea Port - www.potiseaport.com

Georgian Railway - www.railway.ge

Ongoing Projects:

- Poti Port and Free Zone Development Concept

- Poti Sea Port - Gateway to Caucasus & Central Asia