The economic growth of the country is directly related to the development of infrastructure. A huge number of infrastructure projects are being implemented and are planned to be implemented in small Georgia, which are capable of forever changing the balance of power in the Caucasus region and the structure of the market in this part of the world as a whole.
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In 2017-2019 more than 2.5 thousand infrastructure projects were registered in Georgia. We are talking about the construction of bridges, hospitals, various structures. But all of them are rather projects of regional importance. In this article, we will consider only the most ambitious projects of international importance, which are already being implemented in Georgia or will be launched in the next 2 years.
Current and planned global infrastructure projects in Georgia
Development of tourism
Tourism in Georgia is an important component of the economy, providing more than 7% of the country's GDP. Tourism has an indirect but huge impact on strategic industries such as construction and trade. The Georgian authorities are counting on the development of tourism, and in the coming years, they will plan to double the performance of the industry. The adopted complex government program of the development of tourism strategy contains very ambitious goals.
Until 2025 in Georgia it is planned:
To increase the annual tourist flow to 12 million people.
To reach the level of revenues from the tourism of 6.6 billion dollars.
Tourists on the streets of Tbilisi
This program refers to projects of national scale. Today, when there are no official statistics on the results of 2019 (it will appear only in the first quarter of 2020), we can analyze the performance of the industry for 2018. Last year 8.5 million tourists visited Georgia, and the budget revenues from tourism amounted to 3.4 billion dollars. For Georgia, these are truly huge figures and very impressive dynamics. 10 years ago the number of international tourists was no more than 1.5 million people a year.
According to the Head of the Association of Tour Operators of Georgia Maya Lomidze, the most promising regions of Georgia in terms of tourism are Svaneti and Mestia. Even very sophisticated tourists, who have traveled all over the world, come to this corner of Georgia and say that they have never seen something like that anywhere else in the world. Along with the designated region, Tbilisi, Kakheti, Batumi, and the entire Black Sea coast also remain popular tourist destinations. The most important thing is that the country manages to get the planned results and improve the indicators annually.
One of the main methods of implementing a tourism development program in Georgia is to promote and improve the country's image on the world stage. For this purpose, the authorities of the state do a lot. The largest authoritative international media are involved, press tours of foreign journalists are regularly organized, printed materials are published, films are made, stories are released on various TV channels. Concerts of world-class musicians, major sports competitions and cultural events are held in Georgia. More and more Georgian sites are becoming monuments of the tangible and intangible cultural heritage of UNESCO.
The implementation of this program and the systematic achievement of its goals entails the development of related industries, thereby accelerating the pace of economic development and the welfare of the population. GEOLN.COM also makes its contribution to the development of Georgia as a tourist country and a country for investment, highlighting the professional aspects of the issues most acutely concerned investors from different countries. In particular, Georgia is particularly popular among the citizens of the Russian Federation, both in the tourist and investment segment.
Nevertheless, it is worth assessing the contribution to the popularization of Georgia beyond the former CIS countries, a lot of work has been carried out in Europe, America, China, the results of which we will discuss later.
The Anaklia Deep Sea Port project
The Anaklia Deep Sea Port is called the project of the century in Georgia, the main step in the revival of the legendary silk road that connected the East and the West. It will be the first deep water international port on the Georgian Black Sea coast. The process of implementation of the largest project in Georgia will be carried out in 9 stages. The grandiose construction will be finished in 50 years. The total cost of the project is $ 2.5 billion.
Results of the day, Georgia - construction of the port of Anaklia. Kazakhstan - Georgia Cooperation
The uniqueness of this port consists in its strategic importance. Today, the leader in cargo turnover in the Black Sea basin is the port of Novorossiysk in the Krasnodar Region, owned by the Russian Federation. It is estimated that 120 to 140 million tons of cargo pass through it.
In Anaklia, a free industrial zone will be created, an airport and a railway will be built. And the eponymous satellite city, which will be built here, is already called the city of the future. The Georgian government is confident that the new port will give a new powerful impetus to trade relations between Georgia and the world.
Now Georgia cannot take 75% of vessels to its berths due to insufficient infrastructure. The largest port of the country Poti can accept ships with a capacity of up to 1.5 thousand containers. The new port of Anaklia will completely solve this problem – after the completion of the first stage of construction, it will be possible to receive multi-tonnage vessels with a capacity of 10 thousand containers.
Building of the port was started in 2017, since summer 2018, work is underway to deepen the bottom to 16 meters. It is planned that Georgia will take the first vessel in its deep-water harbor in 2021.
This highway will connect three countries Iran, Armenia and Georgia. The concept of the project "One Belt One Road" involves the creation of a strategic land corridor between the Persian Gulf and the Black Sea. This will open up new opportunities for trade between Europe and Asia.
To date, the project has not been finally approved and is constantly under approval by the governments of these three countries. But some activity on local sections of the future route is already observed. On the territory of Georgia, the first technical and research works have begun on the Bavra – Ninotsminda section, more work is to be performed on the interval from Ninotsminda to Batumi. Now this site is a completely broken mountain dirt road.
According to the leadership of the Asian Development Bank (ADB), which allocated a loan of $ 415 million to Georgia for this project, the first part of the large-scale plan was the construction of a new Georgian Expressway leading to the Russian-Georgian border. And the implementation of this project will begin in the near future - until the end of 2019.
The new road will be an alternative to the Georgian Military Road – the only road connecting Georgia and Armenia with the Russian Federation. The problem is that this 35-kilometer road, the capacity of which today 3.5 thousand cars is, more than 40 days a year is closed because of the threat of avalanches. This causes real logistical collapse and entails tangible financial losses to the economies of the three States.
The construction of another major transport highway of historical importance for Georgia will also begin before the end of this year. It is about the Kobi-Gudauri Expressway. The road is expected to be one of the most complex engineering structures in Europe, including one of the longest tunnels on the continent. Its length will be more than 9 kilometers and it will lie under the Jvari pass.
Development of winter resorts
Georgia strives to make the tourist season in the country year-round, and special priority is given to the capacity development of winter resorts. Today there are 5 ski resorts in Georgia. The main ones are Gudauri and Bakuriani, which will host the world freestyle and snowboard Championships in 2023.
3 new resorts, which have been opened recently, have a great potential for development. These are Pacaveli, Tetnuldi, and Goderdzi. Currently, there is an active development of infrastructure at these facilities. Implementation of plans for the development of winter resorts will have a positive impact on the delivery of apartments for rent to tourists, which will increase the payback period on investment and positively impact on the growth of property value.
Cooperation with the European Union
Georgia's aspiration to join the EU can also be called a large-scale national project. This is a very long-term prospect, but as a result, it will entail a whole range of changes in the legislative and regulatory framework, bringing them into line with European standards. It also denotes the creation of a certain social and industrial infrastructure.
The partnership between Georgia and the EU is developing dynamically. In July 2016, the Association Agreement between the EU and Georgia came into force, and the free trade area agreement (FTA) was signed separately. And since March 2017, Georgian citizens have received the right of visa-free travel to the Schengen area.
In the process of interaction with the European Union, the attractiveness of Georgia's image on the world stage increases and its investment rating significantly improves. Already, the EU is Georgia's largest trading partner, and the amount of financial and technical assistance to the country exceeds 100 million euros annually.
In addition, European investors are spending billions of dollars on infrastructure projects in Georgia-logistics centers, airports, roads, bridges are being built. Currently, cooperation between the EU and Georgia continues to strengthen-more than 25 specific joint projects have been agreed. The program is designed until 2030.
Cooperation with China
One of Georgia's most promising partners on the world stage is China. In addition to trade relations, cooperation in other areas is rapidly developing. In particular, the government of Georgia approved a project to build a plant for the collection of electric vehicles in Kutaisi. It will be a joint production of Georgia and the Chinese company "Changan Automobile".
The production capacity of this plant will be 40 thousand cars per year. The first batch of machines should come off the Assembly line in late 2019-early 2020. It is planned that 50% of cars will be exported, 50% will remain in the country. The media even reported that the Chinese have already agreed with the Europeans to buy their cars. This will create hundreds of jobs and develop the infrastructure of Kutaisi.
Presentation of the company " Changan Automobile»
In recent years, Georgia has been actively preparing for the appearance of electric vehicles on its roads. For them, separate lanes are already allocated, free charging is installed, free parking is provided, there is no state duty for customs clearance.
Within the cooperation project with China, a railway connecting the three countries has already been built. Its route begins in Baku, the capital of Azerbaijan, then passes through Tbilisi, Georgia, and ends in the Turkish city of Kars. The project began almost 10 years ago with the signing of a construction agreement.
Today, the volume of cargo transportation along this route makes up 5 million tons, in the future it is planned to reach the figure of 17 million tons. Thanks to this road, not only international trade will develop, but also the tourism sector – it is planned to carry more than 1 million passengers annually.
The project participants also expect to increase the volume of mutual investments and strengthen the geopolitical importance of the three countries. The railway is of strategic importance for the entire region. The Turkish leader Recep Tayyip Erdogan said it had created a direct rail link between London and China.
Energy security of Georgia
In the coming years, Georgia plans to build its own underground gas storage facility with a capacity of 300 million cubic meters of gas. This will allow the country to reach a completely new level of energy security. Several global companies are interested in Georgia's energy sector, some of them are already successfully operating in the country.
This sphere of economy is definitely very promising. Today, about 80% of Georgia's electricity is generated by hydroelectric power plants, and only 20% is produced by thermal power plants. The construction of hydroelectric power plants continues annually. According to experts, the potential capacity can reach 30 and even 40 gigawatt-hours. Georgia currently produces only 2.7 gigawatts.
If we talk about the rest of the region – the East of Turkey is also experiencing an annual energy shortage. Negotiations on the construction of large power lines are already underway between the countries. The launch of all planned energy projects will make Georgia the largest energy exporter in the region.
Free trade zone
Zero tariffs: China and Georgia have signed a free trade agreement.
Georgia's intention to sign a free trade agreement can also be called a large-scale material project, leading to quite tangible results. Agreements are already in force with such major world markets as the EU, China, Hong Kong, Turkey, and Norway. Negotiations are underway on strategic cooperation with India and the United States.
Georgia is firmly integrated into world trade and in the future it will give a good result.
Today, China is among the TOP 5 main trading partners of Georgia. According to experts, the trade turnover with China has already reached $ 1 billion a year. But in the very near future, a significant revival in trade between the countries is expected – 94% of Georgian products and services will be exported to the Chinese market without paying customs duties. This was made possible by the agreement on a free trade area between the two countries. Experts expect a 30 % increase in imports from Georgia and a 7 % increase in exports in the opposite direction as a result of the introduction of the duty-free trade regime.
Georgian authorities expect a strong flow of Chinese investments into their country. Whereas Beijing hopes that the agreement between China and Georgia will allow Chinese companies to produce goods directly on the territory of Georgia and help companies from China to gain a foothold outside the Caucasus.
The EU and Georgia have an Association agreement under which almost all Georgian goods are imported into the EU at a zero customs tariff. Georgia is also one of the 8 member countries of the CIS free trade agreement. All this will ensure the access of Chinese products produced in Georgia to the European market and the markets of some CIS countries.
Construction of airports
Such a revival of the economy and tourism will inevitably lead to an increase in passenger traffic at Georgian airports. In this regard, the authorities are already considering options to increase the capacity of their air harbors. Experts say that the airports of Tbilisi and Batumi are already working at the limit of their capabilities.
The authorities are already considering the possibility of moving or expanding the airport in Batumi. We wrote about this in detail in the article " Large-scale transformations in Batumi – what should investors expect and what should the residents of the city prepare for?»
They have already decided to build a new terminal in the international airport in Kutaisi. It will increase passenger traffic by 4 times. In addition, Kutaisi airport will get its own cargo terminal.
The project of the new terminal of the airport of Kutaisi.
Georgia is on the verge of great changes, and in the near future, we will see the results of large-scale international projects. Follow our publications, GEOLN.COM will keep you informed of the most important events.
Are you interested in Georgia?
Let us draw your attention to the research and step-by-step navigation guide - "Real estate in Georgia". In this article, we answered all the questions you wanted to ask about the real estate and prospects of Georgia. For those who want to see a property, we suggest to use a search engine of real estate from developers and owners and see the catalogue of proven real estate online, but wishing to start their own business in Georgia is definitely worth to learn about investment projects, business stories and features in the section "Business of Georgia".
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