MINISTRY OF ECONOMY
AND SUSTAINABLE DEVELOPMENT
OF GEORGIA

Minister of Economy and Sustainable Development of Georgia Giorgi Gakharia introduced the new investment project to the representatives of the private sector and the international financial institutions at Tech Park. The project aims to develop logistics centers in Tbilisi and Kutaisi.

One of the components of the East-West Express Highway Project implementation (which is being implemented with the financial support of the World Bank) implies the development of the logistics centers in Georgia.

“You all well know that the Georgian Government concentrates investments in the infrastructure development, because we consider that the infrastructure is one of the most important factors for rapid economic development of the country. We understand that mobility of the population is the key element that should promote rapid economic growth. We also realize that the function of the hub is the key factor for our small and open economy, which should facilitate sustainable economic growth. We all understand that in the region where Georgian economy belongs to, many of our trade partners defend their markets in different degrees. We do not see the possibility of repeating the similar approach in our country, so we try to overcome the challenges this small and open economy has through the Free Trade Regimes. Therefore, the function of the transit center and the hub is of outmost importance for our country, because the main factor of economic growth should be a service oriented economy – the business environment we need to establish in the country to support the trade between the countries with large economies. At the same time, export is one of the most important components of our country’s economic growth. We strongly believe and we are confident that these logistics centers will contribute greatly to the growth of the export and the increase the export capacity,” – Giorgi Gakharia stated.

The Minister of Economy and Sustainable Development expressed gratefulness to the World Bank, which responded to the initiative and supported the feasibility study with one million grant contribution.

“The Project will be developed in several stages. The next stage is the announcement of the expression of interest, where interested candidates from the private sector will be able to participate in the development of the Project,” – the Deputy Minister of Economy and Sustainable Development, Giorgi Cherkezishvili noted.

In order to develop two modern logistics centers in Georgia, the feasibility study was conducted. The document was prepared by a well-known German company Dornier Consulting International.

“The World Bank prepared a feasibility report upon the request of the Ministry of Economy and Sustainable Development. We offer the concept of development of the two modern logistics centers in Georgia: one is supposed to be located near Tbilisi and serve local and regional requirements, especially of neighboring countries (Azerbaijan and Armenia), while the other will be provided in Kutaisi, in western part of Georgia,” – Martin Booth, the Logistic Director of the Dornier Consulting International commented.

According to the feasibility report, two best locations were selected - one in eastern Georgia, in the village Kumisi and in the other in the west, nearby the Kutaisi Airport. The report also covers the conceptual design of each logistics centers, business models, market analysis, social and environmental impact assessment, optimal model of operation, the number of employees needed and the required qualification of the employees.

“It should be noted that the Project is a part of the Georgian Government’s consistent policy aiming at the usage of Georgia’s geopolitical location and comprehensive realization of the country’s transit capability. To achieve this goal, as you well know, we have launched such important projects as the East-West Highway, the Anaklia Deep Sea Port, the modernization of the existing railway system and the construction of the Baku-Tbilisi-Kars new railway line. I strongly believe that all those projects will create synergy effect and transform the country into a transit-logistic hub,” – the Minister of Economy and Sustainable Development noted.

The total value of creating the Tbilisi Logistics Center equals to 80.3 million USD while the total value of the Kutaisi Logistic Center amount to 72.5 million USD.

Development of the Logistic Centers will facilitate the development of the logistical services including the value-added services, the increase the country’s transit and logistic capability and, at the same time, it will encourage export. In addition, both logistics centers will generate over 800 direct new jobs and the country will receive additional direct foreign investments.

The Ministry of Economy and Sustainable Development of Georgia, on behalf of the Government of Georgia, will announce the expression of interests on construction of the Logistic Centers in Tbilisi and Kutaisi in the near future. All the interested companies or the groups of the companies (consortiums) will have the opportunity to submit the application under the terms determined by the Government of Georgia. The expression of interest will be announced via the website of the Ministry of Economy and Sustainable Development of Georgia: www.economy.gov.ge