Home / Business / AYFB Requests Georgia’s PM to Set Personal Control Over Road Infrastructure Projects
AYFB has Released an Address to the Prime Minister of Georgia Asking him to set Personal Control over Implementation of Road Infrastructure Projects

AYFB Requests Georgia’s PM to Set Personal Control Over Road Infrastructure Projects

“Association of Young Financiers and Businessmen (AYFB) has recently launched exploration works for exposing available violations in highway construction process and public monitoring whether  announced tenders and their conditions are fulfilled valuably.

We know that an unprecedented volume of resources will be applied from the state budget and  international donor organizations and this is one of the most important components for space arrangement concept of the country.

Regretfully, at the first stage of research, we received a picture that creates grounds for serious confusion.

Over the past 3 years, we have spent more than 5 billion GEL on this direction, while in the nearest period, 1.3 billion GEL will be spent on only Rikoti section.

We heartily welcome the State Audit Service plan for 2018 that calls for exploring the operation of Road Department, including for auditing compliance with state procurement procedures, however, this issue is very extensive and important and there is much probability that the delayed audit may be inefficient to make essential influence on the existing disastrous outcomes.

Therefore, we, young financiers, believe that the Prime Minister should immediately ensure his personal public and efficient involvement in this situation with the aim to improve the detected violations and shortcomings. Law enforcement structures should also ensure valuable investigation so as the felons be exposed and punished in compliance with legislation timely.

Namely, the AYFB supervision has exposed the following violations:

None of the major road infrastructure projects, such as Rustavi bypass road, Kutaisi bypass road, Kobuleti bypass road, Samtredia-Grigoleti section are being implemented within the preliminarily determined terms. A number of violations are exposed in terms of quality and environment impact.

Namely, Rustavi bypass road has not been finished in practice; Kutaisi bypass road has become a death zone because of invaluably designed project. It became necessary to transform this section into single-lane highway. As a result, bypass driving effect has been zeroed almost.

As to Kobuleti bypass road, the levels between concrete cover  and bridges mismatch each other. As a result, this fault, dangerous for human life, “is improved” by inserting asphalt layers in wild methods. Tunnels and water channels of highways dip deeper into  the ground and they are filled with water; As to Samtredia-Grigoleti section, the most expensive project (254 million GEL) is being constructed by Chinese company SinoHydro, with extremely tainted international reputation, which was blacklisted by the World Bank (because of the same reason, Road Department of Georgia has also included the Chinese company in the Black List).

Asian Development Bank (ADB) has blacklisted the Chinese Company too and it has been banned to participate in infrastructural projects; Transparency International has assessed one of the international projects implemented by this company as “a corruption monument”. The highway built by this company is not accepted by Government of Armenia because of extremely low-quality works;

Lawsuits are underway against the company in Georgia too because of environment damage. Criminal case is underway. The company owes more than 20 million GEL to the state budget of Georgia and the Georgian branch has suspended operation, in practice. Its property and accounts were arrested. Moreover, one of the sharpest problems is that the road built by Chinese company SinoHydro and Railway 23 in Samtredia-Grigoleti section is sinking in marshland in practice, because, instead of piles, as drafted in the initial design (and a major part of the project budget was to be spent on them), the road is being built by use of the so-called PVD, based on the revised project.

The new project did not contain either geological or technical expertise conclusions and accent is made on cheap materials that are inappropriate to the local ground. As a result, this section will not be safe for driving after it is accepted into exploitation!

According to our information, the project was revised without any additional technical expertise and renewed technical requirements!

Our supervision has exposed facts, when companies having won large-scale projects demand for revising projects shortly after the victory and receive consent for making changes without problem.

Frequently, tens of millions are manipulated on the ground of decisions passed by Road Department commissions  and this factor also raises many questions about compliance with the legislation, which enables similar activities.

This signifies that after tenders held under supervision,  procedures and regulations of international donor organizations, Road Department unilaterally revises  the projects after winning tender conditions, without new building permits and consequently, it carries out road construction works illegally, as  the revised projects do not contain technical-economic expertise and this factor generates essential and insuperable problems against safety.

All the above-mentioned causes an purposeless spending of state credits and budget and extremely grows corruption risks and makes negative impact on the reputation of Georgia and specific competitive environment, because elementary principle of competitiveness is violated – companies with questionable reputation win tenders under absolutely different conditions and fulfill absolutely other projects and supposedly companies having lost tenders would bid lower tariffs for implementation of the same projects.

To avoid responsibility, Road Department officials misinform the society and accuse international donor organizations of their own violations. For example, last week Road Department chairman noted that companies had won tenders due to procedures of World Bank and other international donors, while illegality, project revisions are reported after these very tenders, where donor organizations do not participate any more.

Mr. Prime Minister, on July 8, 2014 you inaugurated the construction of the first section of Samtredia-Grigoleti highway. The works were to end in 2 years.

What do we have today? The highway works have not bee finished. Ukrainian company Altcom has disappeared and the Authorities cannot return back the paid money, because the bank guarantee was issued by commercial bank with questionable reputation.

Today, repeated tender is held for completion of the highway construction, but it is doomed to failure, because the tender has been announced with the revised invaluable project. And this signifies that before completion of road construction works, on which hundreds of millions of borrowed GEL will be spent, road infrastructure will be to be built anew.

AYFB continues exploration and will try to finish it as soon as possible and submit due documents to the interested society. We hope that Road Department, Ministry of Economy, Samkharauli Forensics Bureau and Ministry of Agriculture  and Environment Protection will bolster our efforts and issue all requested public information timely and thoroughly (there are signs that this process may be protracted and proceed invaluably), but before, we address to Prime Minister Giorgi Kvirikashvili again – to set personal control immediately and publicly on implementation of major road infrastructure projects and control their fulfillment quality.