GEO

Nomination of MP Jachvliani as head of state company shows signs of corruption

20 August, 2016

At the session of the Government of Georgia held on 24 August, Prime Minister Giorgi Kvirikashvili announced a plan to create a new state-owned limited liability company which will operate under the Mountain Resort Development Company with the aim of developing the Tetnuldi resort. The prime minister also said that this company would be managed by Soso Jachvliani who is currently a Member of Parliament and a deputy chairman of the Georgian Dream Faction.

The existence of state-owned companies per se is common practice in developed democratic states. However, the corruption risks related to such companies are also recognized, which generates the need for proper regulation of their activities. One of the important international good practice principles of governing state-owned companies is the prevention of political (party) intervention in their activities and management.

One of the main corruption risks related to state-owned companies is that these companies could become an instrument for "rewarding" people linked to the ruling party or the government at the expense of the state budget instead of directing their work at fulfilling legitimate and important public tasks. The nomination of Mr Jachvliani for the aforementioned post raises suspicions that the state-owned company is being used precisely as such an instrument as it is unclear as to what criteria the Government of Georgia used for his selection. If we recall the appointment of former leader of the parliamentary majority, Davit Saganelidze, as the head of the Partnership Fund, it can be said that such decisions are becoming a kind of a trend. We could also recall the employment of the politicians from the former ruling party, the United National Movement, in the boards of the companies owned by Tbilisi City Hall after the 2012 parliamentary elections.

It is noteworthy that Transparency International Georgia expressed similar suspicions with regard to the creation in 2015 of Tbilisi Entrepreneurship Support Centre and the appointment of Aleksandre Margishvili as its head. The fact that the centre was abolished one year after its establishment also points at the problematic nature of such decisions. The state never conducted any monitoring of whether the GEL 2m allocated for the funding of the centre was spent efficiently.

Next month, Transparency International Georgia will publish detailed recommendations concerning the prevention of corruption risks in state-owned enterprises. We call on the Government of Georgia to make its decisions with regard to state-owned company management as transparent as possible and on the basis of clear criteria. Otherwise, the risks of both corruption and inefficient management of state resources will increase significantly.

Author: „საერთაშორისო გამჭვირვალობა – საქართველო“