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Government’s Debts: Neither Funds nor Flat

February 12, 2008
“People living in rented flats for 20-years” 

Flats were supposed to have been constructed for sixty employees of fishing co-operative at Pushkini Street #35 in Batumi. However, construction is being erected at this site that was designed for the employees. Batumi’s City Hall decided instead to sell the property and put it up for auction back in 2005. The sixty employees of the co-operative are left without flats and they only have broken promises in place of the long awaited flats. To add insult upon injury upon, the hard earned money that they invested into the construction was never returned to them.

#52 Flat-building co-operative was established in 1987 and the construction of the building commenced in 1990. “Tresti”, a LCC, was responsible for carrying out the project.  The company had several other projects at this time it was working. The locals transferred money to the account of building company in order to pay for the project.

They paid upfront 30% of the value of the flat in 1990 years; the rest of the money should have been paid in installments according the terms of the agreed contract. The contract was drawn up in collaboration with the executive committee of the co-operative. Several families even paid the total sum by the order of the government in 1992, which would have forced the builders to be responsible for the total sum.

Valer Dartsmelidze, chairperson of #52 co-operative tells, “People paid money because they needed flats, as they did not have a place to live. Just imagine the way that these people have been living for years. It has been 20 years now since this problem has existed. They are still forced to live in rented flats and will never have a place to really call home.”

In 1992 when there were political and economic disturbances in Georgia (it was the time of Eduard Shevardnadze’s first presidency), and all building stopped for the short term, then Aslan Abashidze came to power as the head of Adjarian  government. That was the end of all work on building, and nothing has been done since then,” recalls Khusein Mamuchadze; he is very tired from the waiting.

According to the resolution of Georgian parliament that was passed on 1 June in 2005, all flat-building co-operative were closed.  The resolution then follows about providing compensation,”Parliament should reach a decision about existing commitments because there many uncompleted co-operative flat-buildings in Georgia. Moreover, as  the Georgian government decided, “Regarding Georgian 2005 State Budget”   as on the basics of the demands foreseen under Georgian legislation, Article 9 talks about concrete projects and about privatized properties (buildings, plots), and these are divided according to special purposes. Members of flat-building co-operative must be prepared in time and the materials provided to the president for his affirmation”. All this has been done according to the rules envisioned in the law but the members of the flat-building co-operative #52 have not received their compensative as of yet.

We asked for compensative from the Georgian Ministry of Finance and our request is based upon the president’s order to provide the required compensative, which was to have been paid before 31 December in 2005. However, only now they have remembered about Achara, and the timing is just before the next election period,” say the locals.

Minister Lekso Aleksishvili who was the chairperson of the commission tells about how Ministers who came after him announced that they had to work out the plan for paying off the debts and this would be the first thing that they did.  Now even the ministry says that the committee had not been properly directed. Why could they not have worked out a plan for paying debts after such a long period of time?”- asks Dartsmelidze, chairperson of the cooperative.

The case of cooperative society #52 is now being adjudicated in the court. Members of the cooperative society are demanding compensation from the Ministry of Finance of Georgia and for it to fulfill its duties, particularly to pay compensation to the plaintiffs: 450 Dollars for one square meter of flat that they were to have received years ago.

Nana Tsikarishvili is the third person in the case. She is the president of the Association for Georgian Housing and Constructing Cooperative Member Rights Protection.

Nana Tsikarishvili: “The Commission has been working for 3-4 years on how the government must remunerate the cooperative members for the amount paid money to the government (builder of the houses at that time). However, they have did not receive either money or have been provided with a flat. We met with Lado Gurgenidze, Georgian Prime Minister. He told us that he will solve our problem as soon as possible, but unfortunately, no active steps have been made yet. Housing and constructing cooperatives in Batumi are in the worst situation, nothing has been done to satisfy the requirements of the cooperative members there. Whereas in other cities, the ice started to melt in this regard and problems are being resolved.”

Batumi City Hall announced tender on the 2140 square meter plot that belonged to the Housing and Constructing Cooperative #52.The terms of the tender were that bidder had to take the responsibility of building and running a tenement-house on this site. To participate in the tender, a fee of 25, 038GEL was required. The City Hall estimated 11.70 GEL as a price for one square meter of the flat, which is rather low for the plot, and considering the actual market value. The tender was conducted under the headship of Murman Beridze, interim Batumi Mayor. Batumshen-investi was the only bidder and it naturally it won the tender.

Gela Makharadze, head of the Legal Division of Batumi City Hall explains why the plot of the Cooperative #52 was sold for the second time: “The Housing and Constructing Cooperative did not use the plot and that is why the City Hall decided to announce a tender on it.”

The members of the Cooperative #52 addressed Mikhail Saakashvili, President of Georgia. Housing and Constructing Cooperation and demanded that they be returned of the plot. Several constructing cooperatives face the similar problems in Adjara, having purchased property that was not legally sold.

Tornike Ananidze, lawyer of the Human Rights Center states that the members of co operations should have received compensations from the government a long time ago. She explains:  “The Program on Step- by-Step Compensation of the Protracted House Construction Debts” defines when and how much money the government will be forced to compensate to the members of co-operations. The president issued a decree # 592 in 1999 approving the program, and under the stipulated terms, the government should have finished the paying compensations as far back as 2005.”

Maka Malakmadze, Batumi

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