Georgia recently reached consensus on high-priority investments to build a greener transport and logistics network that may help it become an important transit country.
A major dialogue – jointly organized by the World Bank and Georgia’s Ministry of Economy and Sustainable Development – convened various government agencies, state-owned enterprises and private companies to discuss the country’s transport strategies and opportunities.
“Because of Georgia’s geopolitical location, the country has a big potential to be a transit country, and further investments are needed to realize that potential,” said Deputy Minister of Finance David Lezhava in his opening remarks. “It is crucial to have a strategy to develop the country’s capacity in freight transport and logistics, as decisions regarding infrastructure investments require long-term planning.”
Long-term planning can indeed be a challenge in a country like Georgia, where roads are developed by the Ministry of Regional Development and Infrastructure, investments in railways are determined by the state-owned Georgian Railways, and seaports are administered by separate port owners or management companies.
Although effective coordination is critical for achieving impactful results, the reality is that many key stakeholders don’t really speak with each other. As a result, infrastructure investments are not well coordinated, which tends to undermine a balanced development of the transport network and the development of high value-added logistics services. It also creates unnecessary bottlenecks, particularly at intermodal connections. However, the situation in Georgia is changing.
The dialogue workshop organized in Tbilisi, Georgia’s capital city, aimed at breaking the silos between the various entities by bringing together stakeholders of all sub-sectors, including those who use transport infrastructure. Through fruitful and constructive discussions, stakeholders jointly identified investment needs and three main priorities:
- Access railways at major seaports;
- Terminal facilities for trucks on rail and container transportation; and
- Information technologies to support cargo tracking/consolidation and traffic management.
These priorities will become a valuable input to the transport master plan that Georgia is developing with the support of the Asian Development Bank and the World Bank’s Transport and ICT global practice.
“Improving transport logistics for more efficiency and environmental sustainability is hardly a one person or a single agency’s job,” explained Jen JungEun Oh, Senior Transport Economist and task team leader for the project. “This requires a coordinated effort, both financially and organizationally, which can be difficult without an honest broker. By facilitating this dialogue, the World Bank is helping Georgian counterparts, from public and private sectors, achieve their goals.”
Small…but not so simple
Georgia aspires to keep the government small, favoring simple tax codes and minimal regulations. In this context, participants nevertheless agreed on the potential effectiveness of certain fiscal and regulatory interventions that would incentivize the transport sector to become greener and more efficient.
Strengthening the regulatory framework concerning the standards of commercial vehicle fleet and fuel quality, for example, was well supported by the participants as an area where environmental benefits would far outweigh the administrative costs of implementation. This would also be a way to strengthen the competitiveness of Georgian trucking and logistics industry in the international market.
In order to continue on with the dialogue between the government and various stakeholders, participants also agreed to establish an inter-agency commission with a steering committee that would meet regularly. This commission will include members of government and public agencies, as well as the private sector and transport associations.
This would be an effective way to advance the joint decision-making process, and ensure further coordination of respective activities, including capacity building for both public and private entities.
“The workshop was a great opportunity to share ideas and initiatives inter alia on the importance and benefits of green transport to Georgian transport corridor and logistics service providers,” said George Doborjginidze, chairman of the Georgian Logistics Association and professor at the Georgian Technical University. “We also consider that the World Bank is doing a great job in promoting public-private dialogue on freight transport and logistics in Georgia."