Zurab Lalazashvili, managing partner of the audit company BDO Georgia considers that the effectiveness of state-owned companies should be measured, along with the evaluation their profit and loss.
"Municipal enterprises can never become commercially profitable, for example a transport company, a cleaning service, etc. In fact, their main goal is to provide services to the population and not to make a profit.
However, there must be some kind of indicator: if we do not measure the profitability of these companies, then what do we measure?! It is important to set the efficiency indicator: how the service is received by the population and how much does it cost the state to provide this service to each citizen?” said Zurab Lalazashvili.
According to him, we must accept that some state-owned companies will never be profitable, but the services provided by them are necessary for the population, so their privatization is most likely impossible. The managing partner of the audit company says that such a company can be considered a "United Water Supply Company".
"The water supply company must provide water to all municipalities, villages, and no private investor can do that and no population can finance it," said Zurab Lalazashvili.
State-owned companies in Georgia are working at a loss for the last few years. For example, in 2020, their losses exceeded one billion GEL.
