New wave of privatisation underway

The Ministry of Economic Development has announced an auction of 33 large public buildings. It appears to consider that now the protest rallies have ended this is a good time to do so. Further privatisations could have aggravated the already tense situation in the streets, but now the sale can be conducted in a quiet and businesslike manner. There is also a need to increase budgetary revenues.

The most important aspect of this privatisation is that is it is a test for foreign investors, to see whether they are willing to put their money in Georgia. Large properties are being sold, for instance the buildings of the Samshoblo publishing house, the Institute of Physics, the Sports Academy, the Karishkhala sports complex, the former Ministry of Finance, the Hotel Gudauri in Gudauri, the Kopitnari Airport near Kutaisi and so on. Some of these buildings are occupied by IDPs but this is the concern of the buyer. The investor has to meet the needs of the IDPs in the event of a sale.

Analysts suggest that most of the attractive public properties in Georgia have already been sold and those now on sale are not greatly important and should not therefore have such a great attraction for buyers. Presumably the auctions will not bring in much money. The most acute problem the country faces now is budgetary revenues, so the money acquired will enable the Government to fill its income gaps and foreign participation in the auctions will show how interested investors could become in Georgia.