State-owned companies completed 2018 with a total loss of 805,335,800 GEL. The Partnership Fund had the largest loss 609 million GEL, which currently holds 100% of the Georgian Railway, Georgian Oil and Gas Corporation, State Electricity System and ESCO.
Why is Partnership Fund unprofitable? – Davit Saganelidze, head of the Partnership Fund has the similar answer:
“It is wrong information. Excluding 2 subsidiaries Georgian Railway and State Electricity System, the Partnership Fund’s profit was 192 million in the last year. The PF does not manage those companies and it is very difficult to talk about unprofitability of the Partnership Fund”.
BM.GE has been able to ask the management of the Georgian Railway, why the railway is unprofitable. Davit Peradze, General Director of the company has been interviewed by Giorgi Isakadze, anchor of “Business Morning".
Davit Peradze explains the loss of the company for several reasons.
“Georgian Railway’s loss is considerable, but our operating activities are profitable. The main cause of the loss is the Bypass Railway Project, which has started in 2010 and suspended in 2014. Hereby, I want to note that Georgian Railway has taken liabilities of 500 million in Eurobonds in 2010 and the paradox is that cost of the modernization project of Tbilisi-Makhinjauri section (which is meant to increase the throughput), is about 200-300 million USD and we are getting the second part of the loan, which is directed to the bypass railway project.
Due to the fact that this project did not get the final image, it was unprofitable, the asset was revalued and automatically it had been written to our Company as unearned income. It was added by small difference of exchange rates. Overall, this has given us a very voluminous number, and this was recorded in our profit and loss statement”, Peradze explained.
