Georgia’s Ministry of Finance plans to increase the state subsidy allocated for passenger transportation on Georgian Railway, with the total amount exceeding 8 million GEL this year. Deputy Finance Minister Giorgi Kakauridze told BMG that the goal is to fully cover the railway’s passenger transport costs in 2026 and ensure the company no longer carries quasi-fiscal burdens from next year onward.
In 2025, Georgian Railway spent 56.4 million GEL on passenger services. Of this, around 31 million GEL came from ticket revenues, while 8 million GEL was compensated by the state budget. Kakauridze explained that the increased subsidy in 2026 is expected to fully fund the railway’s passenger operations for the entire year, eliminating the need for the company to absorb losses.
According to the Deputy Minister, shifting quasi-fiscal activities directly onto the state budget is part of a broader reform aimed at increasing transparency. When such costs are carried within state-owned enterprises, they remain less visible and harder to evaluate. Bringing them into the budget makes public scrutiny possible and creates incentives to reduce unnecessary or inefficient spending.
Kakauridze noted that the government has already coordinated this transition with Georgian Railway. “This year’s subsidy should fully cover their quasi-fiscal expenditures. From next year, the railway should no longer have such costs,” he said.
The reform of state-owned enterprises involves identifying and gradually reducing quasi-fiscal activities—such as companies financing social, political, or other non-commercial obligations that diminish their revenues or profit.
