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  2. 2. GEORGIA INTRODUCES NEW REGULATIONS FOR USE OF FORESTSAZERBAIJAN, GEORGIA, ROMANIA AND HUNGARY EXPRESS FULL SUPPORT TO GAS PROJECT AGRIGOVERNMENTPARTNERSHIP FUND IS FORMED IN GEORGIAIn the words of Prime Minister Nika Gilauri, the Partnership Fund will encourage the privatesector and will finance bug investment projects. “In compliance with the recently adoptedlaw “On Partnership Fund”, the government should found a council, the members of whichwill be Ministers of economic profile”, mentioned the Premier.“Main function of the fund is to implement big energy and not only energy projects, whichthe private sector cannot fulfill independently, but which are very important for stabilizationin the country, economic advance and growth of export’, mentioned Mr. Gilauri.In his words, the talk is on construction of very big hydro-power type. ‘We want the fund tostart work in the near future and within the nearest years to see involvement of the privatesector into economy. Our aim is considerable growth of economic activity in the countrythrough this fund, also promotion to export”, said Mr. Gilauri.COOPERATIONGUAM WORKING GROUP ON CONCEPTION OF TRANSPORT CORRIDORDEVELOPMENTGUAM working group on transport recommended to adopt the agreed variant of the“Conception on GUAM transport corridor development” at the level of heads responsible totransport development in state organizations, is said in the May 31 GUAM press-release.The health session of the working group, which was also participated by the representativesof International Road and Transport Union (IRU) in the Eurasian region and GUAMsecretariat was held on 30-31 May in Kiev and chaired by the Azerbaijan side.On the results of discussion the session participants decided to recommend taking intoconsideration IRU information in regard to the project “Model “Motorway Initiative” and tocontinue discussion with the aim of search for the ways to its implementation. IRU initiative“Model Motorway’ is directed ay use of best modern technologies at border crossings andUN Conventions, which mitigate foreign trade and motor transport functioning, and foreseesdevelopment of road infrastructure at separate strategically important sections of ancient SilkRoad. The present initiative concentrates attention on promotion to trade and eradication ofadministrative barriers in the border crossing points, which face 40% of losses in time duringtransportation. It demands support and joint efforts of international establishments, to befulfilled within state-private partnership as next practical step of IRU on importance ofEurasian transport communications.
  3. 3. At the session, the participants, in particular, exchanged information on observation of theprotocol of the 6th session of the working group, discussed the project “Conception ofGUAM transport corridor development” considering proposals of the Ukrainian side.On the session results the protocol was signed. The participants agreed to hold a regularsession of the working group in second half of 2011. The date and place will be agreed ondiplomatic channels.FINANCECHAMBER OF CONTROL OF GEORGIA POINTS TO UNEVEN DISTRIBUTIONOF STATE BUDGET OF 2010They say in Chamber of Control that on the results of studying the “Report on 2010 statebudget fulfillment” it was disclosed that maximum expenditures from the budget were fixedin the second half of the year, and only last December they made up GEL 584 million.The report says that new obligations shouldered by the government in the end of the year,appearance of unplanned reserves and expenditures, which were not planned in the beginningof the year led to growth of money supply in the country. Chamber of Control proves thatsuch actions of the government are negatively reflected on the growth of inflation and budgetdeficit and point to the need of adopting the new solutions in the state budget management.ECONOMYMOST OF ALL GEORGIA EXPORTS ITS PRODUCE TO AZERBAIJANBy the data of the Georgian National Statistic Service Geostat the volumes of export toAzerbaijan in January – April 2011 made up $96 million, i.e. $31 million more than theindicator of last year analogous period. Nevertheless, Azerbaijan occupies the third place twomonths in succession (from March 2011) in the list of biggest trade partners of Georgia.Import of Azerbaijanian produce to Georgia in January-April made up $178 million, i.e. $52million exceeds the indicator of January-April 2010.Second place is occupied by Ukraine, which is after Azerbaijan in export of Georgianproduce ($40 million), but is ahead on import of its produce to Georgia ($245 million). Atotal volume of foreign trade turnover of Georgia with Ukraine, com pared with theanalogous indicator of last year, increased by $105 million and reached $285 million.The first among the biggest trade partners of Georgia is occupied by Turkey with the volumeof foreign trade of $404 million. It is $107 million exceeds the indicator of 2010 analogousperiod. Export of Georgian produce to Turkey reduced by $2 million ($74 million, andimport increased by $109 million ($330 million).
  4. 4. Foreign trade of Georgia in January-April 2011 made up $2,571 million, i.e. 37% more thanthe indicator of last year analogous period. Export increased by 40% ($656 million), import –37% ($1,915 million).CUSTOMSGEORGIA AND TURKEY SIMPLIFY RULES OF BORDER CROSSINGOn May 31 President of Georgia Mikheil Saakashivli says at an official opening of renewedcustoms checkpoint Sarpi that the citizens of Georgia and Turkey can cross the Georgian-Turkish border with intrastate identification cards without the need of presenting foreignpassport.“I want to congratulate because the citizens of Georgia and Turkey can cross the borderwithout foreign passports, as I promised a year ago. The drivers won’t have to leave the cars,they will cross the border after presenting identification cards, as it is done in Switzerlandand many other countries. All this is an example of what the relations should be like betweentwo civilized European states”, says Mr. Saakashvili.RAILWAY X-RAY SCANNER IS INSTALLED IN POTIThe railway X-ray scanner, produce of the Chinese company NUCTECH, is installed in Potiat the railway junction. It will enable the customs officers to check all the coming freightswithout opening the containers. The system was installed by $30 million grant, allocated bythe Chinese government.In the words of Kakha Baindurashivli, Minister of Finances of Georgia, such modern form ofcontrol is one more step towards protecting of economic borders of the country. He says,“the system will provide secure and quick movement of freights on the territory of Georgia”.X-ray scanner will work 24 hours a day.TAXESENTREPRENEURS TO GET OPPORTUNITY FOR DELAY IN PAYING TAXESIn compliance with the changes into the Tax Code soon the entrepreneurs will be given achance to delay tax payment, but for this they have to pay certain sum. According to the draftlaw, tax agreement can be formed from next taxation period and with the aim of delay inpayment of taxes. In this case, delay can be conducted up to 3 years with payment of annual4%.If the term of delay exceeds 3 years, annual rate of interest is determined by the PrimeMinister on concrete agreement, but it should be lower than 4%.
  5. 5. However, head of incomes service also can now refuse the tax agreement. By the actingnorm, a taxpayer appeals to the incomes service with the application to conclude a taxagreement, and the incomes service, in its turn, sends it, supplied with accompanyingdocuments to Minister of Finance for presenting it to discussion of the government.2% OF UNREGISTERED COMMODITY NOT TO BE FINED BY TAXATIONSERVICEIt is planned to introduce new amendments into Tax Code. According to them amnesty willbe declared on definite volume of produce and an entrepreneur won’t be fined taxationbodies. Thus, in the words of Gia Khuroshvili, government parliamentary secretary, ifunregistered commodity doesn’t exceed 2% of the registered volume, then Taxation Servicewill pardon the present violation by an entrepreneur.“In regard to unregistered produce the entrepreneurs have arguments that they had notenough time to register or the produce has just been brought in. In some cases, it’s necessaryto think whether this argument is true, or an entrepreneurs wants to avoid taxes. That’s whywe introduce regulation, according to which we won’t use sanction of the volume ofunregistered produce doesn’t exceed 2% of the registered commodity of the same definition.If in case of checking it is disclosed that an entrepreneurs has bought raw material and he hasregistered 98% of it, then 2% will be pardoned for him”, mentions Mr. Khuroshvili. In hiswords this can be considered technical mistake.DELAY IN PRESENTING INCOMER DECLARATION NOT TO BE FINNEDHis is foreseen in the amendments to Tax Code, adopted by the parliamentary committees inthe first hearing. According to the draft law, the amount of some fines will be also reduced,which were foreseen fro some activities. For example, a person who rents a flat and isobliged to present income declaration till the end of the year, after the amendments areintroduced he can exceed the term and he won’t be fined. In case of having unregisteredgoods, the fine will be twice lower and in case of announced price discount on produce, theamount of tax will also be lowered.Up to 40 such amendments are planned to be introduced into Tax Code, which will make itmore liberal and convention for natural and legal entities.REGIONSGEORGIA INVITES ARMENIAN BUSINESS PEOPLE TO COOPERATE INSAMTSKHE-JAVAKHETIThis was stated by Ambassador Extraordinary and Plenipotentiary of Georgia to ArmeniaTengiz Sharmanashvili on May 30. “A month ago Tbilisi hosted a business forum devoted todiscussing ways to develop Javakheti. Over 40 business people expressed wish to take part inthe project”, he said, adding that all the proposals of the Armenian business people will beconsidered.
  6. 6. According to him, the program’s focus is on developing local tourism industry throughconstruction of winter resorts. “I hope that very soon a large construction will kick off inJavakheti and Armenian business people and investors will take part in the projectrealization”, the Ambassador said.He also said that the government of Georgia is determined to resolve the problems of theArmenian population. “We understand that the biggest problem is lack of jobs andinfrastructute development can provide jobs”, stressed Mr. Sharmanashvili.As an example of successful cooperation he cited construction of a brewery in the region’scapital Akhalkalaki by Armenian and American business people of Armenian origin, whichhas created 400 jobs.As Mr. Sharmanashvili said, Georgian business persons also want to invest in Javakheti.“But to attract both Armenian and Georgian investors it is necessary to create favorableconditions for doing business in the region”, stressed the head of the Georgian embassy inYerevan. In this regard, it is not excluded that in the near future Javakheti can become a freeeconomic zone. “This cannot be ruled out, and I think that Javakheti free economic zone willstimulate the region’s development”, concluded the diplomat.According to the ambassador, the overall situation in the majority of Georgian provinces,especially in mountainous regions is poorer than in sea resorts, which is all over the country.REHABILITATION OF SAIRME RESORT INFRASTRUCTURE GOES ONThe project is being implemented by municipal development fund of the Ministry ofInfrastructure and Regional Development with financial support of the WB and thegovernment of Georgia. It is planned to rehabilitate a motorway by the resort session inSairme, also three passenger and two motorway bridges. Concrete fortifying walls are beingbuilt on both banks of the river Tsabolara. Street lighting of the European design are beinginstalled, and special lamps will be put on bridges and in public gardens. Special touristicsigns will be put of German produce in the public gardens, and on the roads – road signs.Paths and recreation zones will ne arranged in the public gardens as well.
  7. 7. Rehabilitation of sewerage and water supply systems is also ongoing. New filter station isbeing built and 500 meter reservoir. Such station was not in Sairme before and the localpopulation and tourists had to use unfiltered water.The German specialist designated thermal baths and their upgrading has already started. 25%of thermal medicinal baths resources will be mastered this year already. In 2012 50% of suchbaths will start functioning, and in 2013 the thermal baths will start work at full capacity.RUSSIAN HOLDING NOVAPORT TO BECOME MANAGING COMPANY OREVEN CO-OWNER OF SOKHUMI AIRPORTRussian and Abkhazian officials intensively discuss the issues of granting the Sokhumiairport the status of a reserve airport during 2014 Olympiad is Sochi. By some information,the issue of mobilizing investments into Sokhumi airport was discussed by therepresentatives of de-facto Ministry of Economy of Abkhazia and Ministry of Transport ofRussia on May 30 in Moscow. Main claimant to the Sokhumi airport management is theRussian holding Novaport of Roman Trotsenko, who will probably get a share in theSokhumi airport complex as well. Now share in the Sokhumi airport complex as well. Nowthe only Russian airport company, which has projects abroad is Basel Aero (the owner OlegDeripaska), a owner of the Kharkov airport.The amount of this share has not been specified yet, because a final decision has not beenadopted yet and will demand on the volume of investments. The Russian specialists considerthe Sokhumi airport demands serious reconstruction, and the resources for conducting theconstruction works will be mobilized through the credits of the Russian state banks.Participation in the Sokhumi airport reconstruction project was offered to all the biggestRussian airport companies. However, practically all of them refused because they consider ittoo risky to invest into the airport of non-recognized republic. “The political aspect attractsRoman Trotsenko. For him it is an image project, strengthening of relations in necessarycircles”, say the source close to him.In the experts words, billion roubles will be required for full – scale reconstruction, in resultof which the Sokhumi airport will satisfy the status of a reserve airport within the SochiOlympiad. These are expenses for purchase of light-signal equipment and terminalsreconstruction. By the Abkhazian legislation a private company cannot own take off-landingstrip and land within the airport (the same rubles act in Russia), but a legal entity (amongthem with the participation of foreign capital) can own the terminal. Elena Guryanova, headof public relations department in Transstroy (reconstructed the airport in Gelenjik, says theproject will cost Novaport more than 3.5 billion rubles.Chairman of additional board of the journal “Aviatransport Review” Alexei Komarov saysthat from the geographical viewpoint Sokhumi is really optimal as a reserve airport for theSochi Olympiad of 2014: it is the nearest to Sochi. “But this, probably, is the only plus”, saysthe expert. There are far more minuses in this issue. Thus, the Russian investors will have toinvest not only into the aerostation, but also intro high – speed motorway connecting Sochiand Sokhumi. Mr. Komarov also mentions the problems may appear with the visa regime forforeign citizens, arriving to Russia for the Olympiad through Sokhumi. “The border betweenRussia and Abkhazia is semi – transparent, but still it exists”, the expert says. In his words,
  8. 8. the airports in Anapa, Gelenjik and Krasnodar, though are far from Sochi but have all therequired infrastructure.Majority of foreign sportsmen and fans won’t wish to cross the Russian border on the riverPsou, as in this case it is a gross violation of the Georgian legislation and in case they’ll wantto visit Georgia after that, they will risk to be imprisoned or fiend with much honey.BANKSFROM JUNE 1 ADDITIONAL REGULATIONS ON PROTECTING CLIENTSSTART OPERATIONGiorgi Kadagidze, National Bank president, says that a new rule is in effect from June 1,which will maximum regulate the relations of commercial banks with clients. Thus,commercial banks were obliged to deliver clients full information on banking services. Therule concerns all the contracts to be concluded from 1 June, when the credit sum exceedsGEL 300 and is less than GEL 50,000, also all the deposit contracts, the first payment onwhich is less than GEL 50,000.Mr. Kadagidze says the banks are obliged to point in the contract all the financial expenses,connected with credits or deposits, real rate of interest, information on currency risks, termsof contract change, etc.“Very often the credit product, in addition to expenses on application, is connected withother expenses a swell, which exceed the final cost. Sometimes a client is not delivered thisinformation. From now on the banks have to deliver the client the information about all this,which will enable a consumer to compare the products and to choose those acceptable forhim/her”, mentions Mr. Kadagidze.He also points that in case of the items is violated by banks or a client is not satisfied withhis/her claims to the bank orally, in writing or by e-mail. The bank is obliged to answer theclient within the fixed terms. But if the consumer is not satisfied with the response, he/shecan appeal to the NB department of clients’ rights protection. Of after relevant study,violation is disclosed on the part of a commercial bank, the later will be punished.PROCREDIT BANK SIMPLIFIES AGRO-CREDIT RECEIVINGProCredit Bank suggests simplified procedure fro receiving the credits to clients, engaged inagro sphere, especially, for businessmen, engaged in cattle-breeding and nuts production.These clients can use simplified procedures and get credits quickly, is said in the ProCreditBank press- release.“As agricultural sector is a very important sector of the economy in Georgia, ProCreditBank, as a development-oriented bank, has always focused on financing agro businesses.Georgia has a good potential in developing its agricultural sector, due to favorable climaticand soil conditions. The bank is contributing to the development of the sector, as thedevelopment of agriculture will lead to the growth of local production and creation of
  9. 9. employment opportunities for the rural population”, is said in the ProCredit Banks messageextended on June, 2.It is mentioned also, to further facilitate the growth of agro businesses, ProCredit Bankcontinues to provide loans both for working capital and fixed assets and offers seasonal andflexible repayment schedules, which are of key importance to the agricultural businesses.“ProCredit Bank is one of the leading banks in Georgia, the “house bank” for small andmedium-sized enterprises, offering a full range of banking services to legal entities andprivate individuals. The bank was established in 1999 and has 58 branches throughout thecountry”, is said in the message.BANK OF GEORGIA SUGGESTS COMPANIES NEW TERMS OF BUSINESS-CREDITSOn May 30 Giorgi Chiladze, Deputy CEO of the bank, said at the press-conference that “thecompany, which though August 31 in the amount of up to $500,000, won’t have to pay 3-month interest payment, which will enable entrepreneurs to direct spared sum to expand theirbusiness.In Mr. Chiladze’s words, all legal entities can use the credit, who want to get main financialresources, to buy real estate and to conduct repair works.“The client, who already owns business, can finance his/her consumer goals, currentexpenses. The sum of business-credit is determined from $1,000 to $500,000. Credit can beused also in lari and euro”, mentioned Mr. Chiladze.He also informs that in addition to special proposal on business-credit Bank of Georgiasuggests small and medium – sized business owners a new credit product – revolveroverdraft, which foresees light, only considering turnover existing in the bank, determinationof a single limit for the company. Revolver overdraft can be used by private entrepreneursand legal entities. The overdraft term is up to 2 months, and the sum is from GEL 5,000 up toGEL 40,000.BANK OF GEORGIA GETS AMERICAN EXPRESS AWARDBank of Georgia, within marketing award of American Express Global Network Services,won in the nomination “Best Program of Loyalty and Inclusion” for the programMembership Rewards. Bank of Georgia was also mentioned in the nomination “Best Issue ofNew Card” for Blue Card American Express.Nominees of American Express are named annually among 129 banking institutions of 131countries.POWER ENGINEERING
  10. 10. GEORGIA STARTS EXPORT OF ELECTRICITY TO EUROPE FOR FIRST TIMEThe first European country, which started to receive Georgian electricity is Serbia. Export ofelectricity is conducted through the territory of Turkey. Several European countries are alsowish to buy electricity. Electricity, already sold to East Europe, makes up 38 MWt. They sayin the government about increase of this amount soon.“Georgia plays an important role in development of European energy policy, and it has beenalready fixed now – Georgia is electricity exporter to EU”, said Prime Minister of GeorgiaNIka Gilauri. In his words, it will attach additional function to Georgia, as the country hasreal potential to become a part of system of energy supply to Europe. Mr. Gilauri considersGeorgia thus can move to absolutely another stage in relations with Europe, which is of greatimportance for Georgia not only in economic, but also in political sense.“This will attach Georgia additional function because the country possesses potential to beenergy partner of Europe. EU Energy Commissar Otinger named Georgia one of the energyresources of Europe, as it’s of great importance for EU now from where it can get cleanelectricity and where it can reserve hydro-energy. In this plane, EU discusses four countries:Spain – for West Europe, Switzerland – for Central, Norway – for South Europe and Georgia– For East”, mentioned Mr. Gilauri.NORWEGIAN COMPANY CLEAN ENERGY INVEST TO BUILD HPP INGEORGIABy the information of the Ministry of Economy and Sustainable Development of Georgia, theagreement between the company and the government will be concluded on June 9. Butbefore that the project details were specified in Oslo, where the Georgian-Norwegianbusiness-forum was held. In particular, it was announced that to build hydro-power plant onthe river Acharistkali, Clean Energy Invest will invest $314.3 million.According to the memorandum, signed with clean Energy Invest, Executive chairman of theBoard of the company Bard Mikkelsen plans to visit Georgia, namely, Adjara in June to signseveral agreements.In the words of clean Energy Invest representatives, Georgia, like Norway, is a reformercountry with the greatest prospects and is very attractive from the viewpoint of makinginvestments into it.The Oslo forum was attended by up to 60 Norwegian companies. Magnhild Meltveit Kleppa,Minster of Transport and Communications of Norway announced at the forum that Georgia-Norway relations kept deepening and mentioned that the Norwegian companies alreadyexpressed interest in energy sector of Georgia. In his words, this cooperation is important forboth countries.GBW note: It is mentioned on Clean Energy Invest site that its founders are “some mostrespected persons in Scandinavian electric energy sector”. The company plans to invest thecapital to develop the projects of hydroelectric energy in the countries with vital energystructure and unused energy potential. At the initial stage of the activities the company willfocus on Georgia.
  11. 11. OILSATELLITES DISCOVERED OIL NEAR GEORGIAN BLACK SEA COASTAccording to the Engineering Technology Center SKANEKS (Russia), which was spread onJune 2, within the frames of monitoring of oil pollution of the Black Sea was discovered anatural source of oil in the southeastern part of the Sea city Poti. It is reported that the sourcehas been identified on the basis of images made by different satellites of Institute ofOceanology after P.P. Shirshov together with SKANEKS specialists.The analysis of radar-tracking images (RTI) has allowed establishing connection of naturaldisplays of the oil observed on a surface of the sea, with processes of formation andmigration of petrohydrocarbons in a sedimentary complex of a southeast part of the Blacksea. On the basis of the analysis of the stains which have been found on 16 different RTIs,received during 1993-2011 in web cartographical appendix GeoMixer position of a sourcehas been defined at the bottom of the sea. The source is located at coordinates 41º5859Nand 41º0730E at a depth of 1,050 meters and works with the periodicity of 0.3-5 hours. Thefirst significant observation of the griffin from space with Space Radar was held inDecember 1993.According to specialists, the unloading of petroleum reservoir in the southeastern part of theBlack Sea only from this source can provide a supply of an average of 1 to 8 tons per day orfrom 400 to 3,000 tons per year. The highest possible amount of natural oil discharges fromthe bowels of this place according to the Space Radar could reach 7 thousand tons of oil ayear.Detailed bathymetric data showed that at this point at the bottom there is a positive form ofrelief of Pechora, which obviously is a source of oil discharges. This is confirmed by datafrom independent geophysical studies IFM-GEOMAR (Kiel, Germany) together withRussian specialists. Besides, the radar in the area revealed a number of small spots, confinedto secondary structures, suggesting the presence of a number of other natural sources of oil.They are also of interest and require further research.Using several radar pictures can significantly help finding natural sources of oil in the sea.For analysis and research of natural oil, which has been found while using radar images, inparticular, GIS approach has been used. With the use of GIS natural sources of oil have been
  12. 12. found in the Caspian Sea, on the northeast shelf of Sakhalin Island and in Lake Baikal, thereport said.AGRICULTUREEU CONSIDERS INCONSEQUENT STRATEGY OF AGRICULTUREDEVELOPMENT OF GEORGIAIt is said in the report for 2010 on fulfillment of the plan of activities by Georgia, which waselaborated within the European policy of neighborhood that last year the volume ofagricultural produce kept reducing in Georgia. EU names the factors causing this to be lackof consistent sectoral policy, limited accessibility of bank credits, outdated technique, etc.“The government has not adopted any important measure to make crediting more availablefor farmers”, is mentioned in the report. According to the document, limited financingimpedes the Ministry of Agriculture in conducting such traditional arrangements in supportof this sector as financing of the program of mechanization, and subsides for grapes harvest.BILBERRY GROWING STARTS IN WEST GEORGIABy the information of Bakur Kvezereli, Minister of Agriculture of Georgia, the project isbeing implemented by the Ministry of Agriculture of Georgia jointly with the Americancompany Fallcreck. In Samegrelo region (West Georgia) demonstrative plantations will bemade seedlings brought from the USA will be planted. The project, being implemented onthe principle of co-financing, costs GEL 3 million.It should be mentioned about great demand on bilberry in Europe, where only severalcountries are seriously engaged in bilberry-growing. For example, a typical farm in the USAoccupies 300-400 hectares of land and up to 50 persons work there, who gather bilberry bylands or machines. At each plantation there are from 1 million up to 20 million bilberrybushes. The USA produces more than 200 million pounds of bilberry per year. Americanfarmers annually earn $14.3 million from export of bilberry, mostly, to Canada and Japan.TRANSPORTDIRECT AIR COMMUNICATION BETWEEN ANAKARA AND BATUMI
  13. 13. President of Georgia Mikheil Saakashvili and Prime Minister of Turkey Recep TaiypErdogan on May 31 visited in Batumi opening of a new air flight. In Mr. Saakashvili’s wordsthis air route confirms the fact of economic and transport communication development. “Wealready have air routes from Istanbul and now geography of flights keeps growing”,mentioned the President.From June 8 the flights between Ankara and Batumi will become regular and will beconducted twice a week – on Mondays and Saturdays. The ticket price starts from €82. TheBatumi airport will serve Turkish regions bordering Georgia as well.REGULAR FLIGHTS START BETWEEN TBILISI AND ALMATYKazakh National Airline Company Air Astana started on June 2 regular air flights Almaty-Tbilisi. Direct air flights are conducted by airliner “Embraer 190” three times a week – onMondays, Thursdays and Saturdays. Duration is 3 hours 40 minutes. Those who wish can gofrom Almaty to Deli, Peking, Bishkek, Kuala and other cities of the Asian region.Air Astana was registered in 2001 and on May 15, 2002 conducted its first flight Almaty-Astana. Now its air stock consists on 24 planes. The route network involves more than 50internal and international flights.GPS TABLES APPEAR AT BUS STOPS IN TBILISIAt the public transport stops in Tbilisi installation of new electronic tables started on whichthe time of arrival and route of buses are indicated. By the information of Municipalityrepresentatives, at the first stage 20 GPS tables will be installed. By the end of August at 450stops most overcrowded with passengers, the citizens can know exact time of arrival of busesthey wish.COMMUNICATIONFROM JUNE 4 TELEPHONE NETWORK OF GEORGIA MOVES TO NEWSYSTEM OF NUMBERINGFrom June 4 subscribers’ numbers of fixed local telephone networks of Georgia change.Telephone system in Tbilisi becomes seven-figured and in the regions it is now six-figured.By the information of Georgian National Communication Commission, to the actingnumbers the figure 2 is added. The other figures remain the same. For example, asubscriber’s number in Tbilisi 99-99-99 will be 299-99-99, Batumi number 7-99-99 becomes27-99-99. The length of number remains unchanged only in Rustavi, where figure 1 of thesix-figured fixed local telephone networks will be changed with 2, other figures remainunchanged. For example, number 15-99-99 will be 25-99-99.From June 20 in Georgia the numbers of cellular communication networks change, and fromJune 27 – numbers of fixed telephone networks working on cellular principle.
  14. 14. From November 25, 2010 the decree of the Georgian government was in effect “On provingthe provision of national system of numbering of electronic communication networks”.According to the document the process of transfer to a new system of numbering will finishtill the end of 2011 in compliance with the plan of the government.REAL ESTATEIRANIAN INVESTORS ARE INTERESTED IN FORMER STUDENTS CITYLOCATED IN VAKE DISTRICT OF TBILISIBy the statement of head of Fast Plus company (big importer of road bitumen and exporterof sheep to Iran in particular) Nazi Alasania, the Iranian holding Farasat plans to build onthe territory of the former students’ city in Vake district of Tbilisi a 24-storey multifunctionalcomplex: habitation, restaurants, hotels and trade centers. The project total cost makes up$50-55 million. Construction is supposed to start in this July and to finish for two years.GBW note: Holding Farasat is 100 % private company and uses exclusive support of thebanking system of Iran and all the structures of power. Thanks to this unique position, thecompany implements large-scale projects worldwide. Farasat unites about 80 Iraniancompanies, engaged in construction, industry, transport, oil, gas, energy, etc. collectiveannual turnover of a group of companies makes up billions of USD and they are thestrongest Iranian companies in these fields.FOREIGN BUSINESSQATAR COMPANY MAWASHI TO INVEST INTO GEORGIAFrom May 30 through June 3 Georgia was visited by big Qatar company for meat andlivestock trading Mawashi.Within the visit on June 2 Deputy Foreign Minster of Georgia David Jalaghania met therepresentatives of Mawashi company headed by Sheikh Nayef Bin Eid Al Thani, chairmanof board of directors. At the meeting they discussed potentials of investing into agriculturalsector of Georgia by the company.UKRAINIAN BEER OF “SARMAT” AND “SARMAT ZHIGULEVSKOE” BRANDSAPPEARS AT GEORGIAN MARKETBeer is imported by T&D (Trade & Development) company, from 2011 became exclusiverepresentative eon the territory of Georgia of the brands “Sarmat” and “SarmatZhigulevskoe” of the Ukrainian factory Miller Brendz Ukraine (till March 2011 – JSCSarmat).In the words of T&D representatives, beer “Sarmat” in Ukraine is most popular and at thepresent stage it masters Tbilisi trade network and soon this beer will be sold all over Georgia.
  15. 15. “We think this product will compete at market with the produce of Georgian and foreignproduction”, they say in the company.They explain this beer was delivered to Georgia earlier as well with some regularity and nowit will be of regular character. It is planned to hold large-scale advertisement campaign.According to Georgian Business Consulting information, 100-110 million liters of beer arebeing sold annually at the Georgian market, 60% of which come on Natakhtari, 8-10% – onKazbegi, 10-12% – on Castel, and the rest – on imported produce. Very small segment(1-2%) of market is occupied by different local brands of beer.GBW note: Miller Brendz Ukraine is a brewery, production capacities of which are locatedin Donezk. From July 2008 is a subsidiary of the group SABmiller, which owns more than100 breweries in 75 world countries, producing over 210 million hectoliters of beer peryear. SABMiller bought 99.84% of shares of JSC Sarmat. Among the brands sold by thecompany in Ukraine, there are local, (“Sarmat”) and international brands: “Miller GenuineDraft”, “Zolotaya Bochka”, “Velkopopovicky Kozel”, “Amsterdam Mariner”. Miler BrandzUkraina now is a member of four leaders of national beer market of Ukraine – with speciallystrong positions in Eastern regions of the country.COMPANIESBIG CAR SELLING CENTRE – “CAUCASIAN AUTOCENTER” OPENS INRUSTAVIIberia Business Group invested GEL 4 million into building of the autofair. By the companymanagement information, the autofair with flexible terms of registration and low prices willbe without competition, and the first two weeks will serve clients free of charge.The territory occupies 46,000 sq meters. It has four zones and one terminal and can serve intotal 2,000 cars.In the words of Tariel Khechikashvili, president of Iberia Business Group, the fair suggestsclients several services, banking, customs and there is a refreshment room, motel, repairworkshop.
  16. 16. Iberia Business Group is formed in 1999 and is a distributor of such concerns as “Audi”,“Volkswagen”, “Skoda”, “Mitsubishi”, “Peugeot”, “Renault” end “KIA”.The ceremony of centre opening was participated by Prime Minster of Georgia Nika Gilauri,who stressed that by car export Georgia is on the first place in the region and opening of thenew centre will promote export growth far more.“Opening of one more auto fair is very important for us, as Georgia is on the first place inexport of cars in the region. 5-6 years ago main export product was scrap metal and morethan 50% came on it, today the first place in export is occupied by cars. We are leaders in thegiven business and its success will enable to form additional working places. Developmentof this business is caused by simplified procedures both in cars registration and customsprocedures. Such quick are in no other country in the region. In “Caucasus Autocenter”within an hour one can take credits, buy and form a car and because of such simplifiedprocedures, many countries arrive to us and buy cars”, mentioned the Premier.INSURANCE MARKETGEORGIAN INSURANCE COMPANIES IN 2010 RECEIVED AWARDS FOR THESUM OVER GEL 300 MILLIONAccording to the National Bank of Georgia, Georgias insurance companies in 2010 receivedGEL 361.46 million insurance awards, which almost corresponds to the index of 2009 (GEL360.44 million). Georgian insurers in 2010 transferred GEL 53.86 million in reinsurance.As to the market structure, life insurance had – GEL 10 million, travel insurance – GEL 2.21million, accident insurance – GEL 3.02 million, health insurance – GEL 245.8 million, motorvehicle insurance – GEL 27.13 million, compulsory third party liability insurance – GEL3.52 million, railway transport insurance – GEL 0.65 million, aircraft insurance – GEL 6million, marine insurance – GEL 0.38 million, cargo insurance – GEL 3.1 million, propertyinsurance – GEL 35.15 million, financial risk insurance – GEL 1,25 million, liabilityinsurance – GEL 7,26 million. The volume of insurance payments in 2010 amounted to GEL188.76 million.According to the results of 2010, the company Aldagi, according to attracted awards cededthe first position and occupies the second position. Market leader was Imedi L. It isnoteworthy that the most important place in the awards of those companies is the medicalinsurance and the means from it.HOSPITAL BUSINESSNEXT YEAR UP TO 150 NEW CLINICS AND HOSPITALS TO OPEN INGEORGIA
  17. 17. Prime Minster Nika Gilauri announced about it at the governmental session. “You allremember that several months ago we presented to the community the 10 item strategic planof engagement and modernization. What we are now implementing in the healthcare systemis a part of this plan. Within several months you’ll see that more than 60 new clinics andhospitals will open and next year in Georgia we’ll have up to 150 new clinics. Small andmiddle-sized hospitals will be built both in the regions and big cities. In particular, 15-20 bedclinics will be in the regions, and 70-100 bed clinics in the cities”, stressed the Premier.GAMBLING BUSINESSGEORGIA TOUGHENS LEGISLATION ON GAMBLING BUSINESSSeveral amendments are planned to be introduced into the law “On lottery, chance andgambling games”. One of the amendments foresees GEL 10,000 fine for violation of theterm of paying charges for a permit on upgrading of the slot-machine halls. Charges increaseon a permit for upgrading the salon of slot machines. According to the amendments to thelaw “On charges on permits and licenses”, charges on upgrading slot machine salons in self-governed cities (Tbilisi, Kutaisi, Poti, Batumi) will be GEL 20,000, on other territories –from GEL 50,000 to GEL 100,000 instead of GEL 12,000 per year. A permit for gamblingbusiness will be given for a year and not for five years.Permits, the term of functioning of which expires from January 1, 2012, will be continuedonly up to this time. And from January 1, 2012 even if the permit is taken recently, it will becancelled.ECOLOGYGEORGIA INTRODUCES NEW REGULATIONS FOR USE OF FORESTSAccording to changes introduced into “Code of Forestry of Georgia”, new regulations areintroduced on use of forests on the territory of state forestry fund. The present issue wasdiscussed today at the session of the parliamentary committee on environment protection andnatural resources held in Dmanisi.By the new regulation, the procedures are simplified required for personal use of forest. Thelegal regulations are determined anew in regard to timber transportation and primaryprocessing. Account of lags will be conducted by marking, which will prove their legalorigin. Strict control is imposed on resources, obtained in result of timber processing on theterritory of state forestry fund.By the new legislation, availability of wood is simplified for the population. On the forestterritory special fenced places are forward, where the population can cut trees pointed byrangers. If up to now, the law enabled one family to cut up to 5 cu meters of fire wood, bynew legislation, the present limitations are removed and one family can cut required amountof fire wood. Akaki Bolkvadze, the committee chairman, explains if the trees are cutcorrectly, it will promote growth of young trees and forest development.
  18. 18. NEWS FROM ABROADAZERBAIJAN, GEORGIA, ROMANIA AND HUNGARY EXPRESS FULLSUPPORT TO GAS PROJECT AGRIThe representatives of Azerbaijan, Georgia, Romania and Hungary expressed full support tothe project AGRI (Azerbaijan, Georgia, Romania Interconnector) at the ministerial meetingin Bucharest. The project foresees Caspian gas supply in liquefied form through the BlackSea coastline in Georgia to East Europe.“At the ministerial meeting the representatives of four countries proposed to start feasibilityfor AGRI project as soon as possible”, mentioned a member of AGRI LNG Co companymanagement staff Vitali Beglyarbekov. In his words, at the ministerial meeting therepresentatives of the countries listened to presentations of commercial companies fromJapan, Norway, Turkey, Korea and France, which expressed wish to prepare AGRO projectfeasibility.The tender the project feasibility preparation will be announced in summer 2011. At presentAGRI LNG Co board of directors continues work on the company budget and workingprogram, is engaged in collecting the staff.Azerbaijan, Georgia, Romania and Hungary on February 14 signed the protocol withinAGRI project implementation. The document stressed the need to support the projectparticipant companies and to drawn required financing for feasibility preparation. It was alsomentioned that intensification of work within AGRI foresees search for the shortest route ofAzerbaijan gas delivery to European market, formation of interconnector Romania –Hungary (Arad-Sheged).Registration of joint venture was held earlier within the project in Hungary. The JV will beengaged in project feasibility preparation and search for the sources of financing. The JVparticipants are Romanian ROMGAZ Georgian Oil and Gas Corporation, SOCAR ofAzerbaijan and MVM. Each of them owns 25% share participation.
  19. 19. The new energy project foresees transit of Azerbaijanian gas on the territory of Georgiathrough the Black Sea into Romania, from where the energy carrier will come to Hungaryand other east-European states. The gas will be liquefied in Kulevi and then transportedthrough the Black Sea to Romanian port Constanta, where a de-liquefying process will takeplace. Natural has from Azerbaijan will be delivered to the Black Sea coast for condensationin special terminals, then by tankers it will be delivered to the terminal, in the port Constanceand further through existing gas infrastructure on the territory of Romania to satisfyrequirements of this country and other European states. It is foreseen in the future to buildtwo separate gas pipelines from Constanta to Bulgaria and Hungary for export ofAzerbaijanian gas into the EU member countries.Turkmenistan, participating in the project as a supplier, could have supplied liquefied gas onthe Caspian Sea to Azerbaijan for its further transportation to Europe.AGRI project cost may fluctuate from €1.2 billion to €4.5 billion.