A Breakthrough for Carriers
23 January, 2014
A Breakthrough for Carriers
Georgian carriers, opposed to a state-supported monopoly, have finally broken through. A year ago the Ministry of Finances (MoF) granted Georgian Post a monopoly. But those regulations have been canceled, and private carriers are back in business beginning 20 January. Carriers believe political will has shifted, and have hopes for the future, but still worry that the monopoly has compromised Georgia as a regional transit hub.
According to Tea Machavariani, a founder of a private carrier, Stargroup LLC, that started litigation
against the state, out of original 25 small carriers operating in the business only 3 remain.
Others now operate through Georgian Post; it is hardly possible they can start up independently in the near future; they have financial obligations to the Azeri cargo shipping company VAGO, which offered support to small Georgian carriers if they would operate through Georgian Post. Small carriers agreed who otherwise faced bankruptcy. As a result, VAGO was able to dominate the sector almost completely.
The Georgian carriers’ problems started in 2006, when the former government gave cargo shipping to Georgian Post, which normally handled only parcels; its justification was that this would prevent smuggling. But some carriers and analysts regarded this as a loophole for corruption, saying that Georgian Post could not handle cargo clearance transparently since it had only the capacity for post parcels, and it is not connected to the international customs network identifying and providing complete data on transported cargo.
Carriers hoped the new government would make changes, but it continued the policy. In January 2013 MoF required stricter licensing, making customs clearance available at Georgian Post only. Ultimately 10 carriers stopped activity, facing bankruptcy. Two sought answers to questions about the policy through the court and Transparency International Georgia, which found the new licensing terms to be a violation of competition rules and contrary to Georgian legislation.
In April 2013 MoF canceled the licensing terms effective 1 January 2014. This allowed the disputed regulations to remain in effect for another eight months, during which some small and medium-sized shippers were ousted from the market. However, on 31 December 2013 MoF issued a new order prolonging the regulations until January 20 of this year. Customs could not insure needed technical support to carriers earlier, MoF explained. Carriers believed eight months was plenty of time to effect this, and wondered if MoF did not plan to admit small carriers to business again. They expected more difficulties after the regulation deadline expired, but got a green light instead.
“This is a real breakthrough that we are admitted to the business at last,” Machavariani said in an interview with Georgian Journal. “This is a merit of the current authority and it means that the new government is really disposed to listen to business; that was impossible during the former regime. As a matter of fact, Georgian Post was put into the monopolistic position by the previous authority who acted in a deal with Azeri companies. The latter were interested to win the key transit hub function for Azerbaijan and control the freight shipping business. And they achieved the goal in fact: out of 25 private carriers there are just 3 of us remaining able to act independently. Those ten companies who operate through Georgian Post very likely cannot start independent operations until they pay off their financial obligations to the Azeri company.”
She plans to go ahead with the fight against the Georgian Post monopoly and put it out of the cargo shipping business so Georgia can fulfill its function as a regional transit hub. Moreover, lack of competition affected consumers when prices doubled.
“This is beyond the best international practice. You find no other civilized country where the state company handles cargo shipping; it undermines competition and sends prices up,” Machavariani said. Other carriers who suffered also plan to calculate losses and ask the state for compensation.
Other Stories
Everything of comfortable life in one space – Second part of construction of one of the largest apartment complexes finished in Tbilisi
Apartment in ecologically clean environment, thousands of square meters of green yard, swimming pools, places for various sports activities, treks for walking and running, commercial spaces – all these available in one space is not a fantasy.
Batumi awarded Europe's Leading Emerging Tourism Destination 2019
World Travel Awards Europe Gala Ceremony 2019 took place on the 8th of June in Madeira, Portugal.
Coca Cola to open new factory in Georgia, will hire female drivers
Coca Cola is opening new factory in Georgia in December.
World's best party supply company now on the Georgian market
The largest party supply store in Georgia - MyDay is launching as the official distributor of AMSCAN from 2019.
Live as a marketing tool and an unprecedented live stream launched by Livetag
Sharing information has become smoother and more versatile in today’s technological world. Recently, live streaming, an online streaming media has become especially popular.
Theme and program of Caspian Energy Forum Tbilisi – 2019 changed
“The 8th International Caspian Energy Forum Tbilisi – 2019, scheduled for June 21, will focus on the development of the Azerbaijan-Georgia relations in the field of economy and energy”,
Misunderstanding over Poti deep sea ports
There was misunderstanding around deep sea ports in Georgia – in Poti.
High demand for dollars or the investment decline – Why Georgian Lari depreciates
$1 equals GEL 2,7470 in the official rate set by the National Bank of Georgia (NBG).
PSP Group confirms negotiations regarding purchasing of GEO Hospitals
PSP Group confirms negotiations regarding purchasing of GEO Hospitals.
New life to be given to Dashbashi Canyon
Georgia’s Agency of Protected Areas is planning to give new life to Dashbashi Canyon in Tsalka (southeastern Georgia).
Who is constructing “Khadori 3” Hydropower Plant in Pankisi Gorge?
Clashes broke out in Pankisi Gorge, Georgia’s northeastern region between special forces and residents
Business Positive – Successful radio program from Radio Positive
Starting point of radio program Business Positive is to meet interesting people, communicate with them and deliver information that is interesting for the audience.
A factory of electric vehicles to be built in Kutaisi
Prime Minister Mamuka Bakhtadze stated that a factory of electric vehicles will be built in Kutaisi at the presentation of the Aigroup business group.
Qvevri-shaped hotel complex to be built in Telavi
A Qvevri-shaped hotel complex is scheduled to be built in the village of Shalauri in Telavi, Kakheti (east part of Georgia).
Georgian designers presented at Fashion World Tokyo 2019
The products of 11 Georgian designers are showcased at Fashion World Tokyo 2019,
Silknet raises $200 million in Eurobond issue
27 March 2019 - JSC Silknet (“Silknet”), one of Georgia’s leading telecommunications operators, has successfully priced a debut $200 million 5-year 11% senior unsecured bonds issue (the “Notes”).
Pistachio trees will be planted in Georgia
Dozens of hectares of Pistachio are planned to be planted in Georgia this year.
Toyota Safety Sense and Hybrid Technology
Toyota Caucasus, has presented two new models the 5th generation RAV4 and the 12th generation Corolla at Rustavi International Motorpark, several days ago.
Bidzina Ivanishvili “became number one oppressor of businesses in Georgia” - ICC Georgia chairman Fady Asly
Mr. Ivanishvili promised the business community to protect them from harassment and pressure, unfortunately his words died with the sunset of that day
The best brands of Belarus will be exhibited on a large-scale exposition in Tbilisi
"The Belarusians like to come to Georgia to relax near the sea in Batumi as well as to stay in sunny Kakhetia."
Don’t treat business like a hooker! - Georgian businessman Vasil Soprpmadze addresses politicians
Businessman Vasil Sopromadze, founder of the company "Fresco", addresses politicians
RAV4 No Compromise and Corolla Set to Impress – Two New Cars Presented by Toyota
Toyota Caucasus, the company constantly aspiring to greatness, has presented two new models the 5th generation RAV4 and the 12th generation Corolla.
Mamuka Khazaradze quits TBC bank, does not sell the TBC Bank share
I made a decision to leave TBC bank where I spent 27 years of my life
10 Reasons to buy an apartment in the suburbs
There is a tendency for Tbilisi dwellers to move from central parts of the capital to the suburbs.
Georgian citizens are granted the right to work in France
The French Embassy in Georgia made remarks on granting Georgian citizens the right to work in France
GEL Exchange Rate
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
July 2019
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31