An interview with Chairperson of the Association of Georgian Developers Irakli Rostomashvili

How do you assess  a project announced by the Tbilisi City Assembly  which envisages  the demolition of old Khrushchevka buildings   and construction of new and more modern buildings in their place? Was it possible to implement this project without the participation of foreign investors?

This is a very good and timely initiative, if not overdue. Although, I do not understand why we are talking specifically about Khrushchevka buildings in which not more than 5 % of the population of Tbilisi live. Emergency houses of different categories are 70-75 % of the housing stock in the city and 10% live in dire emergency houses. Housing Fund in Tbilisi is in a very bad condition. 

 I do not have accurate information about the project, and only put a few questions that are perceived as oppositioning. And this is despite the fact that in 2007 the Association developed a project to which no one paid any attention.

Does your project involve the demolition of Khrushchevka buildings only, or it refers to the rehabilitation of dilapidated housing ?

Project concerns Khrushchevka buildings as well, but we divided the  emergency housing into several categories. First - a historical part of the city where many buildings are in very poor condition. Then the low-rise emergency fund which is available in a variety of districts outside of the center. Moreover, a situation is catastrophic in residential areas on the city outskirts.

Khrushchevka buildings are included in this list but their share is not very large.

Arab investors, who have to invest  600 million USD in the project , require additional financial guarantees from the state. You say that in the case of state guarantees, Georgian business is quite able to cope with the project without Arab investors. What exactly did you mean?

Georgia's budget is approximately 6 billion and 600 million is as much as 10 % of the budget. The country can’t  give state guarantees to Arab investors at 10% of its budget. Government guarantees  is a very strict document, which must necessarily be carried out. If the country has the opportunity, let it give guarantees to Georgian companies, I assure you, under such a guarantee we will be able to find investments without the Arab company, besides at such a low rate.

Today Georgian banks have accumulated excess liquidity, and this resource is more than enough toobtain the necessary credit. 

 
The main thing is to have the right program and the right calculations. The project of replacement ofKhrushchevka buildings is not so simple. It will take  15-20 years.

Source: commersant.ge