15 March, 2012

‘Subsidizing of small ads by the government puts newspapers in unfavorable condition’ – this is the conclusion made by ‘International Transparency – Georgia’ on March 6 after studying the joint project of Public Registry and newspaper ‘24 Hours’. 80-page advertisement newspaper published by newspaper ‘24 Hours’ on governmental subsidy costs 20 tetri that is much lower than market price and puts other publications in unequal condition. If, like me, the cheap price of this rather thick publication sold at the

so-called governmental kiosks amazes you too, they will ‘educate’ you and say that this issue is cheap because it’s governmental(?!)


‘Sitkva da Saqme’, ‘Rezonansi’, ‘Akhali Taoba’, ‘Kviris Palitra’, ‘Versia’, ‘Sakartvelos Respublika’, ‘Asaval-Dasavali’, ‘Alia’- this is an incomplete list of publications that publish small ads. Mutual publication of a newspaper by Public Registry and ’24 Hours’ that is fully financed by state money is delivered to people for dumping price. But for independent mass communication facilities the income gained from ads is one of the means for existence and retaining objectivity.

‘The tender announced by the state on publishing of ads in newspapers was meant to fit only one concrete newspaper. In the whole media market it turned up to be the only newspaper ’24 Hours’, says the survey of ‘International Transparency – Georgia’.

Mamuka Andguladze, Media analyst of ‘International Transparency – Georgia’: ‘It’s worth paying attention that for some reason only one and the same companies win the tenders. You may remember that the tender on printing of school text-books was won by printing house of ’24 Hours’. Such subsidizing puts other mass communication facilities in unequal condition. The main thing is that it’s our money, the sum allocated from state budget that is actually directed against private business and creates uncompetitive situation. One of the main incomes of printed media is ads and when the state interferes in this too we have an impression that it may serve another purpose. It’s difficult for press without financial stability to keep independence.

We contacted Paata Veshapidze, publisher of ’24 Hours’ newspaper but he abstained from making comments and declared that he could add nothing new that would differ from that sent to ‘International Transparency – Georgia’. In that letter he doesn’t doubt legitimacy of the tender.

The 24 Hours newspaper has been well endowed with sympathy and financial backing of the Authorities. For years it enjoys the exclusive right to publish texts of state tenders. However, this is just a minor case in the string of violations that the state officials make in extreme favoritism showed towards this highly privileged newspaper.

National Agency of Public Register announced a public tender at the end of the work day – at 17.02 - in the Friday evening of 29 July 2011. The tender opened for bids from 00.09am off Saturday to 12.00 noon of Monday. Not surprisingly, other newspapers were not aware of the tender and hence could not have submitted bids. Accordingly, MVP LTD which owns 24 Hours newspaper was named a winner of the tender grabbing the contract worth of 120960 GEL. The Georgian Law on Public Procurement clearly states that “the tender commission places the announcement of simplified electronic tender and associated documentation in the unified electronic system at least 3 work days before the end to the process of bid acceptance. Obviously, the tender was held in grave violation of the law. Unfortunately, this was not the last one in the chain of illegal moves by the Public Register. Namely, it changed details of the already awarded contract with MVP LTD by increasing the award sum up to 131040 GEL in spite of the law forbidding any change to awarded contracts that increases the total value of the contracts.

After information about this illegal behavior surfaced thanks to Transparency International Georgia, things got even more horrendous. The Public Register did not bother to hold a new tender anymore and concluded a direct procurement contract with 24 Hours.

Paata Veshapidze claims that Weekends are ordinary work days for majority of newspapers in Georgia (!). There is nothing to say about this remarkable argument. We are ordered to forget the truism that Saturdays and Sundays are recognized by the entire world as weekend holidays.

Baffled by low retail price of the multi-page newspaper, I enquired about the cost of production with the publisher of 24 Hours. He cut it short by saying that I should perhaps approach the printing house because they count paper used for the newspaper. The suggestion was worth it. It’s just I went to a different printing house and asked them to calculate cost of publishing 80-page newspaper including printing expenses. It turned out that only the service of a printing house for the publication of such a voluminous newspaper costs 95 Tetri and excludes transportation and distribution expenses. So, it appears that the State spends more than it can derive from selling this newspaper and does so at the expense of the budget money. To put it simple, the State loses public money on nothing instead of funding many significant social projects which are crying for help.

The fact is that the State rudely interferes in the private sector. It seems by discriminate funding of particular media outlets it tries to get a hold of the print media in the same way as it did with television and outdoor advertising.

According to another study of International - “Transparency Georgia”, the advertising market of Georgia is monopolized by 2-3 companies mainly controlled by relatives and friends of Davit Kezerashvili, former Defense Minister. The share of the print media on the advertising market is generally small constituting 4-5%. Therefore it is unlikely that the Authorities and their cronies have commercial interests in their intention to get a hold on it. They just strive to restrict free print media to create an information vacuum in the country.

At the Public Registry they confirmed that on January 3, this year by means of simplified purchasing procedure an agreement between the agency of National Public Registry and ‘MVP’ ltd. was drawn up on obtaining services of placing information in the newspaper.

According to one more study of ‘International Transparency – Georgia’ the advertizing market of Georgia is monopolized by two or three companies and it is mainly controlled by ex-Minister of  Defense Davit Kezerashvili’s kinsmen and circle of friends.

P.S. Meanwhite, Governmental representatives are becoming more and more outspoken about death of corruption in Georgia. The opposite is proved by the reality though. Violation of tender rules and the law and throwing money around strongly resemble the acts of State corruption, taken either separately or in their entirety, implemented in accordance with a well devised scheme. Two possible interests can be discerned behind this corruption scheme: outflow of budget resources into private pockets, including those of state officials or harming certain publishers who are fallen out of favor with the State powers or both. We will try to open up these corruptive deals to the observation of the readers in the next editions of our newspaper.

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