Donors Charge Georgia With Commitment Fee Of 6 MLN For Low Absorption Of Donor-Funded Projects

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26.May .2022 15:00

Donors Charge Georgia With Commitment Fee Of 6 MLN For Low Absorption Of Donor-Funded Projects

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Author:Natia Taktakishvili

The State Audit Office has published budget performance report for 2021. The document reviews donor-funded projects. According to the budget performance report, GEL74.2 million should be spent on 12 projects, while only GEL 17 million was spent.

Due to the low absorption of donor-funded projects, the Government of Georgia paid a Commitment Fee of GEL 5,771,000 to the donors. This is a "penalty" imposed by donors for non-compliance with these projects. This amount has increased by almost GEL 1 million compared to 2020.

The list includes Tbilisi Solid Waste Project, which is funded by the EBRD. The implementation of this project was estimated at GEL 25 million, although the actual utilization amounted to GEL 6.8 million. Due to this, Georgia paid GEL 289 thousand to the EBRD as a "fine".
Internet project Log-in Georgia was also included in the list of projects with low absorption. The government spent GEL 187 thousand instead of GEL 2.1 million. Due to this, Georgia paid GEL 325 thousand to the World Bank "as a fine". This means that the fine exceeded the project value.

List Of 12 Donor-Funded Projects With Low Absorption:

1. Professional Education I (KfW) - Budget - GEL 3.4 million, utilization 0 GEL, fine GEL 195,000;

2. Improvement of utility infrastructure in Imereti and Kazbegi municipalities(KfW) - budget 3.45 million GEL, utilization 0 GEL, fine GEL 964,000;

3. Batumi Bus Project (E5P, EBRD) - budget GEL 4.8 million, utilization 0 GEL, fine GEL 20,000;

4. Improvement of water supply and sewerage systems in Khashuri and nearby settlements (AFD, EU) - budget GEL 1.2 million, utilization 0 GEL, fine GEL 1,178,000;

5. Kakheti Infrastructure Strengthening (KfW) - budget GEL 5 million, development 0 GEL, fine GEL 390,000;

6. 500 kV transmission line "Tskaltubo-Akhaltsikhe-Tortumi" (Kfw, EU-NIF) - budget GEL 6.7 million, utilization 0.1 million GEL, fine GEL 1,115,000;

7. Integrated Solid Waste Management Program II (Kakheti, Samegrelo-Zemo Svaneti) (KfW) - budget GEL 3.6 million, utilization 0.2 million GEL, fine GEL 288,000;

8. Log-in Georgia (WB) - budget GEL 2.1 million, utilization 0.2 million GEL, fine GEL 325,000;

9. Tbilisi Solid Waste Management Project (EBRD) - budget GEL 25 million, utilization 6.8 million GEL, fine GEL 289,000;

10. Innovation, Inclusion and Quality Project I2Q (WB) - budget GEL 1.6 million, utilization 0.7 million GEL, fine GEL 856,000;

11. Land Market Development (WB) - budget GEL 15.4 million, development 7.9 million GEL, fine GEL 146,000;

12. Adjara Solid Waste Project (EBRD, SIDA) - budget GEL 2 million, utilization 1.1 million GEL, fine GEL 6,000.

Government of Georgia Irakli Garibashvili Donor-Funded Projects