From July 2017, a parking system was put in place in Zugdidi, although it is fraught with deficiencies that contain risks of corruption and need to be redressed. The parking system in the territory of the city of Zugdidi is operated by JSC Town Park, which was registered in 2016. The company obtained the operating rights as a result of an auction that was conducted by the now-defunct Municipality of the City of Zugdidi in July 2017.  

Despite the fact that Town Park has started to arrange the infrastructure, parking in the streets of Zugdidi remains problematic due to the disorderly system of payment of parking fees – the lack of an effective, transparent, and law-established system of payment of parking fees creates risks of corruption and inefficient use of financial resources. In addition, ineffective monitoring of the municipality’s fulfillment of contractual obligations hinders orderly organization of the parking system.

An auction with one bidder

As a result of the auction conducted in July 2017, JSC Town Park received a land parcel with an area of 12,300 sq m for arranging parking places (the annual rental fee was set at GEL 203,000). It should be noted that Town Park was the only bidder in the auction. The municipality didn’t set any qualification requirements for potential bidders at the time of announcement of the auction.

Soon, in September 2017, Town Park received an additional land parcel with an area of 704 sq m, already by way of direct disposal, from the Zugdidi Municipality, the rental fee for which was set at GEL 5,400. This issue was discussed twice at sessions of the City Council – at first, the City Council refused to transfer the land parcel to the Zugdidi City Hall by way of direct disposal, while at the time of the second discussion the majority supported the City Hall’s initiative.

Opposition political parties have opined several times that Davit Shengelia, the leader of a paramilitary group active in the 1990s, has unofficial interests in JSC Town Park. We were unable to obtain supporting evidence for this opinion, although the following circumstance is noteworthy: Nodar Esatia, the director and owner of a 100% stake in JSC Town Park, owns a 40% stake in LLC Mcvane Ocneba (Green Dream), and Marina Shengelia, daughter of Davit Shengelia owns a 20% stake in the same company.

Unclear system of determining the parking fee

The lease agreements concluded with Town Park fail to provide for a pricing system of parking, as well as the upper limit of the parking fee.

The agreement on the use of common parking places only contains a general reference to an obligation to agree systems of payment of the parking fee with the City Hall of the Zugdidi Municipality and indicates that the foregoing should be in conformity with the Georgian legislation.

However, the information we received from the Zugdidi Municipality shows that the City Hall does not have specified information about parking fees and about the form in which drivers should pay these fees.

In addition to the foregoing, the following circumstances are problematic:

• JSC Town Park has not established different fees for parking for different durations of time, and drivers have to pay the fee every time they park a car. Unlike Tbilisi, drivers in Zugdidi cannot buy a parking ticket that will be valid for a week or several months. After signing the agreement, in September 2017, Town Park made a promise to issue long-term tickets, although it has yet to fulfill this obligation;

• Drivers who were interviewed noted that they often have to pay GEL 10-15 for parking a car in various places during a day;

• Drivers pay the money to parking supervisors, who, apart from rare exceptions, don’t give drivers receipts in return for the payments, which also creates risks of corruption, because failure to issue relevant receipts makes it impossible to register the amount of money paid; it should also be noted that the supervisors don’t have any identification documents confirming that they are representatives of the company;

• Parking supervisors noted in conversations with us that they have to give a certain amount of money to JSC Park Town on a daily basis. The amount of money varies from GEL 10 to GEL 40 according to location, while on several locations (for example, on Kedia Street) parking supervisors have to pay JSC Town Park GEL 30 per day for eight parking places;

• As noted by parking supervisors, they don’t have a fixed salary and their remuneration is made up of the difference between the sum they receive from drivers during the day and  the sum they pay to JSC Town Park;

• Yet another important problem is that no special parking places are allocated for persons with disabilities.

Representatives of TI Georgia have made several attempts to talk with representatives of JSC Town Park, but without any results.

Conclusion and recommendations:

TI Georgia holds the position that the agreement concluded with JSC Town Park contains a number of deficiencies, while the method of payment of the parking fee established by the company is extremely vague and creates risks of corruption.

It is important that the City Council of Zugdidi exercise effective control on the fulfillment of contractual obligations by JSC Town Park.  

It should be noted that the Municipality of the City of Zugdidi was abolished in October 2017. According to an ordinance of the government, ordinances adopted by the municipal councils of abolished municipalities were to be valid for a period of six months after the day of the official announcement of the results of the following local self-government elections in 2017, which expired on May 14, 2018 in the case of Zugdidi. Accordingly, the City Council of Zugdidi is obliged to adopt a new ordinance regulating parking rules, and it is important to ensure that it address all the deficiencies revealed by the present study.

In addition, changes should be made to the agreement between the municipality and JSC Town Park, and the system of payment of parking fees should also be changed completely. In particular, we recommended to:      

• Introduce a transparent system of payment of parking fees;

• Determine the fee that drivers should pay for one-time parking, as well as to establish fees for 1-week, 1-month and longer-term parking tickets;

• Make it possible to pay parking fees through cashless mode of payment in banks, as well as by means of quick payment boxes;  

• Equip all parking supervisors with cash registers until their work is needed by the company, so that drivers are given relevant receipts when they pay a one-time parking fee.