Georgia’s state-owned enterprise (SOE) reform is progressing unevenly, with shortcomings in corporate governance, financial oversight, reporting and privatization planning, according to a State Audit Office report covering 2023, 2024 and part of 2025. The 2023–2026 reform strategy remains incomplete, several required progress reports were not prepared, and the 2025 action plan had not been approved. The Audit Office also referred its audit of the Asset Management and Development Company to the Prosecutor’s Office after identifying irregularities.
State-owned enterprises classified within the general government sector recorded combined losses of GEL 527 million in 2024, compared with GEL 515 million in 2023. The United Water Supply Company of Georgia accounted for GEL 375 million of the 2024 losses. Although state corporations’ aggregate net profit increased to GEL 393 million, incomplete reporting and insufficient disclosure of quasi-fiscal activities continue to obscure financial risks.
The audit found that the 2024 budget execution report included information on only 82 of 113 relevant enterprises. It also identified weak monitoring of subsidiaries and budget transfers, alongside governance problems at state-run healthcare facilities. Some medical institutions reported losses despite receiving public funding, while the medical holding company lacked a unified strategy for managing clinics.
The National Agency of State Property also lacks a clear privatization plan and criteria. The Audit Office recommended improving financial reporting and fiscal-risk assessments, strengthening oversight of public funds, updating the reform action plan and establishing transparent privatization rules. It warned that persistent governance and accountability failures could expose the state budget to additional financial risks.
