МИНИСТЕРСТВО ЭКОНОМИКИ И УСТОИЧИВОГО РАЗВИТИЯ ГРУЗИИ ДЕПАРТАМЕНТ ТРАНСПОРТНОЙ ПОЛИТИКИ Ra sexvedraa, misha daamate Workshop on Investment, Financial and Technological Aspects of The Model Highway Initiative (MHI) Implementation Thessaloniki, Greece, 6-8 March, 2012 Ministry of Economy and Sustainable Development of Georgia Gogita Gvenetadze – Deputy Head of the Transport Policy Department 1 Land Transport Policy and Priority of Georgia

Outlook Country overview; Transport priorities; Transport reforms; Key figures of transport; The largest trade partners of Georgia; Development of Transport Corridor (TRACECA); Road Infrastructure; Customs Reforms/BCP Sarpi; Model Highway Initiative (MHI); Free Industrial Zones in Georgia. 2 Transport Policy Department

Country overview Area: 69,700 sq km Population (2010):4.4mln Life expectancy:76 years Official language:Georgian Literacy:100% Capital:Tbilisi Currency (code):Lari (GEL) GDP 2010 (E):US$11.7 bln GDP real growth rate 2010 (E):6.4% GDPCAGR (E)4.9% GDPper capita2010(PPP):US$5,057 Inflation rate (e-o-p)2010:11.2% External Public debt to GDP 2010:33.6% (E) Nominal GDP (mln GEL)8,56420,791 GDP per capita (GEL)1,9724,646 Total budget revenues (mln GEL)1,3685,778 3 Transport Policy Department

Transport priorities Integration of Georgia into international transport system and increasing of transit potential; Integration of Georgia into international transport system and increasing of transit potential; Active cooperation in the framework of TRACECA programme and future integration of Georgia into Trans-European Transport Networks (TEN-T); Active cooperation in the framework of TRACECA programme and future integration of Georgia into Trans-European Transport Networks (TEN-T); Development of transport infrastructure links of regional significance with main roads; Development of transport infrastructure links of regional significance with main roads; Harmonization of legislation with international standards; Harmonization of legislation with international standards; Development of a sustainable transport system through maximizing the use of existing infrastructure; Development of a sustainable transport system through maximizing the use of existing infrastructure; Elaboration of safety policy in the land transport field. Elaboration of safety policy in the land transport field. 4 Transport Policy Department

Ministry of Economy and Sustainable Development of Georgia – Policy-making power Civil Aviation Agency, Maritime Transport Agency and Land Transport Agency The United Transport Administration of Georgia under the Ministry of Economy and Sustainable Development was responsible for civil aviation, maritime and land transport in Georgia. On 15 April 2011 the Parliament of Georgia approved the relevant laws providing establishment of three legal Entities of Public Law – Civil Aviation Agency, Maritime Transport Agency and Land Transport Agency – that serve to technical regulating authorities of these fields and are under the umbrella of the Ministry of Economy and Sustainable Development of Georgia, whereas the elaboration of transport policy directions have been delegated to the transport policy department of the ministry. Structure of Transport Policy Department Main Functions of the department: Elaboration of main directions of state policy; Support of transit potential development; Cooperation with international structures and organizations; Elaboration of international agreements; Participation in bilateral intergovernmental commissions; Harmonization of Georgian legislation with international and European standards. Reforms Transport Corridor Development Division Civil Aviation Division Maritime Transport Division Land Transport Division 5 Transport Policy Department

Key figures of transport 6 Transport Policy Department

The largest trade partners of Georgia Import to Georgia, thousand tons Export from Georgia, thousand tons Transport Policy Department Note: *data includes transported cargo by Railway and Truck 7

International Truck Transportation (unit) Truck Transportation Tendency via Georgian Check Points (Unit) Note: Data includes only loaded trucks 8 Road Transport Main figures In 2011 transit figures through Georgia increased by 19% compared to 2010 In 2011 transportation figures in Georgia increased by 10% compared to 2010 Transport Policy Department

Development of Transport Corridor (TRACECA) Bearing in mind the geographical location of Georgia and the policy officially declared by the Government, Georgia aims: Serving as transit country; Support of the regional projects for land, maritime and civil aviation transport; To create hub for international carriage of the goods and passengers; Identify problems hindering the development of trade and transport systems; Promote TRACECA projects in aim to attract loans from IFIs and private investors; Georgia is a member of TRACECA since Transport Policy Department

Road Infrastructure International importance – 1563 km Internal importance– 5446 km Local importance– km Total – km 89% of roads of international importance are in good condition; During last few years: 80 kms of highway is constructed; 80 kms of highway is constructed; 3000 kms of roads are reconstructed; 3000 kms of roads are reconstructed; Investments – 1,2 billion USD; Investments – 1,2 billion USD; 10 Transport Policy Department

Georgia is a party to the 12 main road transport multilateral Agreements and Conventions; Note: On the basis of the Decree of the president of Georgia #187 of , Georgia acceded to the European Agreement concerning the Work of Crews of Vehicles engaged in International Road Transport (AETR). 11 Road Transport Agreements Georgia has a bilateral Agreements with 21 states in the road transport field; Transport Policy Department

Before 2005 import procedures required: After 2009 import procedures require: 54 documents 4 documents Customs Reforms 12 Creation of Customs Clearance Zones in Tbilisi, Batumi, and Poti Transport Policy Department

BCP Sarpi 17 gates; Infrastructure corresponding modern requirements; Border control procedures conducted according to,,Single window (one shop stop) principle; On the whole territory of BCP, luggage/hand baggage moved on special carts; Opportunity to declaration in a simplified manner; Checking done according to risk criteria; Submit documents electronically (without using stamps and seals). 13 Transport Policy Department

Model Highway Initiative (MHI) 14 Model Highway Initiative (MHI)–Project s main directions are: Attraction of international investment for development of road infrastructure (modern auto stations, hotels, safe parking areas et.c.); Harmonization of international experience based custom procedures; Arrangement of international road border crossing points according to modern technique demands; Program results: Development of middle and small businesses; Creation of new working places; Mite in national economics; Fighting with corruption in borders and roads; Acceleration of cargo transportation between Europe and Asia regions and reduction of their transportation cost. Transport Policy Department

Free Industrial Zones in Georgia RAKIA has signed a management concession with the Government of Georgia to develop a free and industrial zone near the existing Port of Poti; Poti Free Industrial Zone is the first in the south Caucasus region and it lies on the historic silk route linking the east to the west; 300 hectares of land around the port will be used for a state-of -art free industrial zone. Free industrial zone is the type of free zone envisaged by Customers Code of Georgia where the business-friendly regulations and favourable tax and customs system apply. FIZ is singled out during the limited time period for economical activity and the companies operating therein are subordinated to the special regime, which is more favorable from legal and commercial point of view. More than employed people Development of industry Production is already exported in different countries Poti FIZ – Rakia Georgia FIZ Kutaisi FIZ – Georgian International Holding More than 105 mln USD in More than employed people Development of industry, logistic parks, business centres 31 companies are already registered 15 Transport Policy Department

Thank your very much for your attention Gogita Gvenetadze Deputy Head of Transport Policy Department Ministry of Economy and Sustainable Development of Georgia Address: 12 Chanturia St Tbilisi, Georgia Tel: + (995 32) Mob: + ( ) Transport Policy Department