The Georgian construction and infrastructure sector is facing a serious liquidity crisis, according to “Insi” CEO Zviad Toidze, who says companies are still struggling with financial losses accumulated during the pandemic and the post–Ukraine war global economic shocks. He notes that many firms remain unable to recover from these disruptions.
Toidze explains that rising material costs during the crisis period were not covered by contract-based price indexation mechanisms, leaving contractors with significant losses. As a result, the industry is now dealing with a shortage of cash flow, which he describes as the sector’s most pressing problem.
Another major issue, he says, is accumulated penalties and fines, which in many cases were imposed due to delays not caused by contractors but by changes or delays from clients. These additional financial burdens have further worsened liquidity conditions.
Toidze argues that measures such as debt relief or an “economic amnesty” for penalties could help stabilize the sector. Without financial relief or liquidity support, he warns that ongoing problems may continue to affect the execution of infrastructure projects across the country.
