07TBILISI2267, GEORGIA BI-WEEKLY UPDATE SEPTEMBER 7

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Reference ID Created Released Classification Origin
07TBILISI2267 2007-09-07 12:06 2011-08-30 01:44 UNCLASSIFIED Embassy Tbilisi

VZCZCXRO1057
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHSI #2267/01 2501206
ZNR UUUUU ZZH
R 071206Z SEP 07
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC 7532
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 TBILISI 002267 
 
SIPDIS 
 
SIPDIS 
 
E.O 12958: N/A 
TAGS: PREL PGOV PHUM ECON GG
SUBJECT: GEORGIA BI-WEEKLY UPDATE SEPTEMBER 7 
 
REF: TBILISI 2169 
 
1. This cable contains current items of political, 
economic, and social interest concerning Georgia during the 
weeks of August 18-September 7. 
 
Government Adopts New Agenda 
---------------------------- 
2. Parliament is expected to adopt the government's new plan action, 
entitled For a United and Strong Georgia, in its first plenary 
meeting of the fall session September 7.  The document focuses on 
steps to promote more jobs in the private sector, transparent and 
efficient government, an effective judiciary and law enforcement, 
adequate defense capability, energy security, and other goals.  The 
opposition has strongly criticized the program as a "wish list" and 
a collection of "toasts," rather than a concrete plan.  President 
Saakashvili rejected the criticism, and in explaining the main 
directions of the program at a government meeting September 5, he 
pointedly gave concrete tasks to almost every minister, stressing 
their collective and individual responsibility for the success of 
the program. 
 
Controversy Surrounds Refugees Minister 
--------------------------------------- 
3. Following the government reshuffle announced August 29 (reftel), 
media speculation has swirled on the possible dismissal of another 
minister, Gia Kheviashvili, Minister for Refugees and Accommodation. 
 According to allegations leaked to the press, Kheviashvili and MP 
Beso Jugeli were involved in a corrupt deal with Minister of Health, 
Labor and Social Security Lado Chipashvili, in which both 
Kheviashvili and Jugeli improperly received government funding for 
expensive medical treatment abroad.  Chipashvili and Kheviashvili 
denied the allegations, although in the Cabinet reshuffle 
Chipashvili lost his ministerial position (and was nominated for the 
position of Ambassador to the Czech Republic).   While Kheviashvili 
remains at his post, some publications are now reporting new 
allegations that he was involved in illegal transfers of Ministry 
funds.  According to these reports, Minister of Finance Lexo 
Alexishvili personally confronted him about these transactions. 
 
Georgia Upgrading Radar Systems 
------------------------------- 
4. Tests are underway on a new modern radar system, to be installed 
in Poti, that will oversee an area with a radius of 450 kilometers 
and also be able to track objects flying over parts of Russia and 
Azerbaijan.  Several employees of the Georgian Air Traffic Control 
authority have undergone special training in Paris to learn how to 
operate the French-made radar system.  In parallel to that, the 
media is reporting that Georgia will join the NATO radar network in 
several months.  The Georgian radar system will transmit data to a 
NATO database in a real-time regime.  According to Georgian 
officials, the political decision to this effect has been reached 
and talks on implementation are currently underway. 
 
Georgia Amends Budget Due to High Revenues 
------------------------------------------ 
5. Prime Minister Noghaideli has announced an increase in Georgia's 
budget expenditure by GEL 450 million (USD 272 million), crediting 
strong economic growth and investments into the country.  The 
additional expenditures will be made in five areas: defense reform, 
financing investment measures, promoting agriculture, and expanding 
the budgets of the Interior Ministry and Justice Ministry.  The 
Defense Ministry will receive the largest share - GEL 320 million - 
of the increase, in connection with Georgia's drive to integrate 
into NATO.  This brings the defense budget up to GEL 1.3 billion, 
out of total state budget of GEL 4.7 billion, or 7.8% of country's 
GDP.   The parliament is expected to adopt the changes in its fall 
session. 
 
Local Officials Arrested for Corruption 
--------------------------------------- 
6. In the last two weeks there have been new examples of the 
government's anti-corruption campaign, which President Saakashvili 
has pledged will continue even if the wrongdoers are high officials 
well-connected to the ruling party.  Law enforcement officials 
detained the head of the local government of Telavi, in eastern 
Georgia, on a charge of extortion of USD 75,000 from a businessman 
to guarantee his success in an auction.  If found guilty, the 
official could face 15 years in prison.  Another high profile 
detention was a former mayor of Poti, a port city on the Black Sea 
coast, who was arrested on corruption charges, including 
embezzlement of money allocated for port reconstruction. 
 
British Investor to Manage Georgian Railway 
------------------------------------------- 
7. The Georgian government has announced it will transfer management 
rights for Georgian Railways to the British company Parkfield 
Investments for an 99-year period.  As explained by Minister of 
Economic Development Giorgi Arveladze, the railroad will remain 
state property, and the British company will invest USD 1 billion 
over 10 years, with most of the money being spe
nt in the first 3-4 
years.  Critics of the deal have stressed the strategic importance 
of the railroad and demanded more information on the new owner.  The 
 
TBILISI 00002267  002 OF 002 
 
 
company reportedly does not have railroad management experience, and 
intends to delegate management responsibility to a separate company. 
 Existing passenger and cargo tariffs will be maintained until 2009, 
Arveladze said, and for five subsequent years tariffs will be 
determined jointly by the state and the company. 
 
TEFFT

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