Georgia is facing challenges in utilizing funding allocated for water supply and wastewater infrastructure projects, First Deputy Finance Minister Giorgi Kakauridze told Parliament in response to questions about delays in budget execution.
Kakauridze said GEL 280 million is allocated for water projects this year, while total funding under the Regional Development Ministry’s portfolio amounts to GEL 565 million. Including a separate project managed by the Autonomous Republic of Adjara, approximately GEL 620 million has been allocated for water supply and wastewater infrastructure.
He attributed delays partly to unrealistic tender pricing, explaining that some companies submitted bids below actual market costs, ultimately failing to complete projects. He also noted that Georgia lacks enough construction companies capable of implementing multiple large-scale infrastructure projects simultaneously.
To address the problem, the government has introduced changes to procurement and pricing procedures. The Bureau of Expertise has started publishing market prices, allowing tenders to be announced using updated monthly cost estimates. An indexation mechanism has also been introduced to protect contractors against rising costs by adjusting payments in line with price increases, following practices used by the World Bank and other international financial institutions.
