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How much for the President’s palace?

By Messenger Staff
Friday, July 31
There are continuous speculations about the cost of the new Presidential residence in Avlabari. The Labour Party says hundreds of millions of dollars have been spent on building it. The administration however says that the cost was rather modest and it was not a great expense for the budget. No exact figure has been given however.

President Saakashvili himself touched upon the issue some time ago, before the official opening of the residence, when up to 70 school children were invited to the building. He guided them round and even gave them the very difficult task of guessing how much it cost. He told them, “the construction of the palace cost less than 1/5 of 1% of the total budgetary expenditures, -0.17%. Since I became President our annual budget has increased to approximately 10 times the size it was before.” The President left it up to the children to calculate how much had been spent.

We have no information as to whether the schoolchildren actually made these calculations as part of their homework but some adult economists have taken the President’s words seriously and tried to estimate much would have been spent on the basis of the percentage given. Soso Archuadze has made rough but very complicated calculations, considering total budget expenditure and so on, and has declared that 0.17% of total expenditure is around USD 30 million. However Archuadze challenges the correctness of this figure. By making a very simple comparative analysis, he says that the construction of a new airport cost USD 65 million and a superficial comparison of these two buildings leads to the conclusion that the President’s palace is much the more expensive. Therefore instead of giving puzzles to schoolchildren or the population it might be better to release the official figures, because withholding the facts will simply let rumour and speculation flourish. This will give the opposition additional grounds for making accusations against the administration.

Economist and member of the National Forum Niko Orvelashvili suggests that the construction of the President’s residence cost USD 800 million. One way or another accurate information will become available sooner or later, and we will see whose claims come closest to reality. One good thing we know for certain however: Presidents come and go but the residence will stay.