Deadline for Kobuleti Hotel scheme extended

”The deadline for the submission of hotel construction projects promoting the development of Kobuleti’s “Free Touristic Zone” has been extended from October 30 to December 15,” Vera Kobalia, the Minister of Economy and Sustainable Development of Georgia announced on November 8. Chairing the first sitting of the Commission of Kobuleti “Free Touristic Zone” Promotion, Kobalia said that both local and foreign companies have expressed serious interest in participating in the project even following the official deadline, which is why the special commission decided to prolong the deadline.

“The Ministry continued accepting new projects after October 30. We wanted to give a chance to all potential investors, thus we have extended the initial deadline to participate in the project,” Kobalia told the media. This project, according to the Minister is one of the best ways of creating new jobs for Georgians at 30 new hotels in Kobuleti instead of 27. “1000 men will be employed during the construction and approximately the same number of jobs will be created after the construction of the hotels is complete,” she added.

The Ministry has so far received 52 statements of interest from both Georgia and abroad. The commission has already discussed the projects of companies that are already able to begin construction. Three Armenian, one Belarusian and four Georgian companies and physical entities will begin constructing fifteen hotels in Kobuleti from this month according to information released by Vazha Bolkvadze, the Minister of Finance and Economy of Adjara. “The State Commission has already revealed the eight winner companies which will build fifteen hotels in Kobuleti while the names of the other investors will become known later,” he said adding that the commission will discuss the projects of other contestants on its next sitting.

The project, initiated by the President of Georgia Mikheil Saakashvili earlier in September enables companies investing more than 1 million Lari to obtain a plot of land for the symbolic price of 1 Lari, and releases them from all kinds of taxes for the following 15 years. Interested investors should have finished building hotels no later than August 1, 2011. Investors may have an additional 3 months for improving the hotels if necessary, but in all other cases their property will be confiscated. Within the free tourism zone, the potential investors will be given some special privileges from the Government of Georgia – the companies will be able to choose which of three types of hotel they would like to build.

MPs had their doubts about the initial deadline. The law on the free tourist zone in Kobuleti which came into force on October 26 now enables the State Commission both to discuss the cases of participants in a fortnight’s time as well as define the deadline for completing the construction work. Extending the deadline for submitting an application to participate in the project may affect the date of completion of the hotels. All the details about the possible changes will be made public at the next Commission sitting. They were worried that August 1 might frighten potential investors as they might not finish the hotels.

Activities in the tourist market should be followed by relevant positive results, commented analyst Gia Khukhashvili. “Tourism development needs the establishment of a well-planned investment environment free of any political risks. Today Georgian tourism can only be discussed within the local regional market despite the propaganda boom. The lack of competitiveness with the neighboring countries is obvious. Unstable weather conditions and the frequency of sediment in Adjara shows that we still have to develop the appropriate infrastructural environment because the inefficient waste of invested capital may have a very negative impact on Georgia’s development at an international level,” Khukhashvili told The Messenger.