NGO news

TI criticizes handling of privatization process

by | Jul 12, 2013

TBILISI, DFWatch–Transparency International Georgia (TIG) criticizes the process to privatize state property for not being sufficiently transparent, saying this may allow for corrupt deals.

According to TIG, information from the Ministry of Economy and Sustainable Development shows that tens of thousands of square meters of agricultural and non-agricultural land, as well as buildings and a sizable amount of moveable property, have been disposed of at the price of 1 lari during 2007-2012.

Over the years, the state has handed over various types of property to individuals with either certain conditions attached, or else unconditionally. The recipients of state assets include well-known public figures, politicians, government officials, as well as their family members.

Several buildings (571 sqm), located on the governmental residential area in Tskneti, along with the non-agricultural land attached to them (31 696 sqm), and the movable property (equipment) within them, were transferred to the ownership of Nino Burjanadze, then Speaker of Parliament, for a small, symbolic price in 2008.

In 2010, a total of 8 200 sqm of non-agricultural land, and 1 310 sqm of buildings variously located in Zestaphoni municipality, Gardabani, Rustavi, Aspindza, and Tbilisi, were transferred into the ownership of the Georgian Orthodox Church through direct sale.

In 2011, state-owned property was transferred at the token price of one lari without any investment conditions to Megis Kardava’s brother Levan Kardava, head of the 2nd Chief Division of the Ministry of Interior’s Constitutional Security Department (2 501 sqm of non-agricultural land located in Kojori).

The Georgian Orthodox Church paid the token price of one lari for real estate in Tbilisi, Poti, Kvareli, Tskaltubo, Baghdati, Kutaisi, Dusheti municipality, and Oni in 2012. The total amount of real estate transferred amounted to 149 541 290 sqm.

TI says the privatization of state-owned property for a symbolic price is not in itself a violation of the law. In special cases, the law does allow for the transfer of property at a token price and when property is purchased through direct sale for 1 lari, it should be done openly.

“Furthermore, the lack of clarity could allow for corrupt deals to prosper. In terms of transparency, the current practice contradicts the goals and requirements of the law. Justification should be provided for the necessity to dispose of the property. The documents that we have examined, as a rule, do not provide justification for similar cases,” TI writes in a statement.

The organization recommends that the government improves legislative regulations and enhances the accountability of those responsible, to ensure maximum transparency.



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