GEO

Questions Over Mushtaidi Park Management Rights

26 October, 2012

As we wrote last year, the Property Management Agency of the Tbilisi Mayor’s Office rejected TI Georgia’s request to provide a copy of the contract that had been signed between the Tbilisi Mayor’s Office and the Geo Gold company and whereby the latter was granted management rights over the city’s Mushtaidi park for a period of 49 years. According to media reports of the time, the company had an obligation to invest USD 1 million in the park over the next five years, although other details of the agreement remained unknown to the public because, according to the Property Management Agency, the contract was a commercial secret.

Later, in February 2012, Tbilisi Mayor Gigi Ugulava said that these types of contacts were not secret and the Mayor’s Office was prepared to publish them. TI Georgia subsequently sent a second request to the Property Management Agency of the Mayor’s Office but we were, once again, unable to obtain a copy of the contract.

One aspect of the agreement between the Tbilisi Mayor’s Office and Geo Gold is particularly interesting. Before this contract was signed, the Mushtaidi park was managed by LLC Mushtaidi Culture and Recreation Park, established by the Mayor’s Office which was the company’s sole owner. The Mayor’s Office had given this state-owned company the entire territory of the park via usufruct and Leri Shanidze was its director as of Feburary 2011. According to the Public Registry records, Leri Shanidze was, at the same time, director of Geo Gold -- the very company that was granted management rights over the state-owned company (and consequently over the park too) for a period of 49 years a few months later. It is also worth noting that Aleksandre Nikolaishvili, a member of the Tbilisi City Council from the National Movement party, is the sole owner of Geo Gold.  

Whether public parks should be transferred into long-term private management is a complex issue that requires public discussion. Regrettably, the Tbilisi Mayor’s Office made this decision without public discussion and without taking public opinion into consideration.

However, in any event, whenever public property is transferred into private management, it is necessary to follow the principles of transparency and integrity during the transfer process. The information provided above clearly shows that both requirements were violated in Mushtaidi’s case and we might also be dealing with a case of corruption. Such a suspicion is certainly valid and there is a need for further inquiry where a private company acquires management rights over a state-owned company responsible for the management of public property and both companies are headed by the same person at the time of the transfer (while the private company is also owned by a public official from the same constituency where the property in question is located). Transparency International Georgia calls upon the Tbilisi City Council and the State Audit Office to review the process of management of Mushtaidi park and communicate the findings of this investigation to the public.

Author: TI Georgia
corruption