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Georgia Transport Sector Assessment, Strategy, and Road Map

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Georgia Transport Sector Assessment, Strategy, and Road Map Georgia Transport Sector Assessment, Strategy, and Road Map The Asian Development Bank (ADB) is preparing sector assessments and road maps to help align future ADB support with the needs and strategies of developing member countries and other development partners. The transport sector assessment of Georgia is a working document that helps inform the development of country partnership strategy. It highlights the development issues, needs and strategic assistance priorities of the transport sector in Georgia. The knowledge product serves as a basis for further dialogue on how ADB and the government can work together to tackle the challenges of managing transport sector development in Georgia in the coming years. About the Asian Development Bank ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains home to two-thirds of the world’s poor: 1.7 billion people who live on less than $2 a day, with 828 million struggling on less than $1.25 a day. Georgia Transport Sector ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration. Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main Assessment, Strategy, instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. and Road Map TRANSPORT AND COMMUNICATIONS. Georgia. 2014 Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines www.adb.org Printed in the Philippines Georgia Transport Sector Assessment, Strategy, and Road Map © 2014 Asian Development Bank All rights reserved. Published in 2014. Printed in the Philippines ISBN 978-92-9254-411-9 (Print), 978-92-9254-412-6 (PDF) Publication Stock No. RPT136127-3 Cataloging-In-Publication Data Asian Development Bank. Georgia transport sector assessment, strategy, and road map. Mandaluyong City, Philippines: Asian Development Bank, 2014. 1. Georgia 2. Transport sector. 3. Assessment. I. Asian Development Bank. The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area. ADB encourages printing or copying information exclusively for personal and noncommercial use with proper acknowledgment of ADB. Users are restricted from reselling, redistributing, or creating derivative works for commercial purposes without the express, written consent of ADB. Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines Tel +63 2 632 4444 Fax +63 2 636 2444 www.adb.org For orders, please contact: Public Information Center Fax +63 2 636 2584 [email protected] Contents Tables and Figures iv Currency Equivalents v Abbreviations v Acknowledgments vi Executive Summary vii I. Introduction 1 II. Sector Assessment: Current Status and Strategic Issues 2 A. Sector Performance 2 B. Strategic Issues 4 C. Cross-Sector Issues 17 D. Conclusions 21 III. Current Sector Strategies 23 A. Government Strategy 23 B. ADB Strategy, Support, and Experience 23 C. Other Development Partner Support 24 D. ADB’s Forward Strategy and Program 24 IV. Transport Sector Road Map and Results Framework 26 Appendixes 1. List of Stakeholders Consulted in June–September 2012 27 2. Major Roads and Rehabilitation Status 28 3. Road Projects Funded by ADB and Development Partners 29 4. Strategic Links 31 5. Indicative Investment Pipeline 32 References 33 Tables and Figures Tables 1. Transport Sector Governance Framework 5 2. Transport Sector Strengths, Weaknesses, Opportunities, and Risks 22 Figures 1. System-Wide Traffic Growth in Georgia, Year-to-Year Percentage to 2011 3 2. Skills, Experience, and Training Required of Ministry of Economy and Sustainable Development Staff 6 3. Condition of International Roads in Georgia 9 4. Passengers and Freight Handled at Georgia’s Airports 16 iv Currency Equivalents (as of 27 December 2013) Currency Unit – lari (GEL) GEL1.00 = $0.577 $1.00 = GEL1.732 In this publication, “$” refers to US dollars. Abbreviations ADB – Asian Development Bank BP – British Petroleum EWH – East–West Highway GDP – gross domestic product JICA – Japan International Cooperation Agency km – kilometer LTA – Land Transport Agency MCC – Millennium Challenge Corporation MESD – Ministry of Economy and Sustainable Development MRDI – Ministry of Regional Development and Infrastructure MTA – Maritime Transport Agency teu – twenty-foot equivalent unit TRACECA – Transport Corridor Europe–Caucasus–Asia US – United States v Acknowledgments This report was initiated by Prianka Seneviratne, principal transport specialist, Central and West Asia Department (CWRD), Asian Development Bank, and by consultant Amal Kumarage. Klaus Gerhaeusser (director general, CWRD), Hong Wang (deputy director general, CWRD), and Kathie Julian (resident representative, Georgia Resident Mission) provided guidance and advice. Xiaohong Yang (director, CWRD’s Transport and Communications Division [CWTC]) and Narendra Singru (senior transport specialist, CWTC) supported the finalizing of the report. Staff members of the Ministry of Economy and Sustainable Development, Ministry of Regional Development and Infrastructure, and Georgian Railway; port operators; academics from the Georgian Technical University; and ADB staff members provided information and suggestions during the preparation of this report. Muriel Ordoñez (operations communications specialist, CWRD), consultant James Unwin and his editorial team, and Nancy Bustamante (senior operations assistant, CWTC) helped publish the report. vi Executive Summary This sector assessment, strategy, and road map as in international sections of the network. was prepared to guide the dialogue between In fact, rural bus services, passenger rail, and the Asian Development Bank (ADB) and the secondary and local roads do not meet the Government of Georgia on transport sector demand or expectations of the economy. Lack development and the country partnership of transport options is considered a contributor strategy, 2014–2017. Urban transport is not to the high national unemployment rate, which covered in this assessment, since it forms part of stood at 15.2% in 2011. Workforce limitations the urban sector development. are also hampering sector improvements, as less It reveals that Georgia, since 2005, has than 30% of key staff members in the Ministry revised regulations and legislation on many of Economy and Sustainable Development aspects of transport-related infrastructure and the Ministry of Regional Development and services to facilitate rapid development and Infrastructure have the required practical of its transport sector. Increased economic experience and specialized education in activity, following these reforms, has led to transport. more intensive use of the sector, particularly for Annual capital investment in all modes international links, and the sector’s contribution of transport reached $362 million in 2011, to gross domestic product has been growing including $131 million of foreign direct about 10% annually. All modes of international investment. Much of this has gone into transport (i.e., road, rail, air, water, and improving Georgia’s international roads, pipelines) indicate growth in demand, ranging following attempts to make Georgia’s transport from 5%–15% a year. However, improvements system an integral part of the Transport in overall national mobility are not as visible Corridor Europe–Caucasus–Asia and the vii Executive Summary Central Asia Regional Economic Cooperation implemented is dependent on financing, modal corridors and a regional logistics hub. integration and public transport, and the In its national plans, the government has creation of a cohesive national transport policy. three aims related to transport: (i) make Georgia ADB has strongly supported Georgia’s a regional and logistics hub, and business sector priorities. It provided a $500 million platform; (ii) upgrade multimodal infrastructure; multitranche financing facility for improving and (iii) develop professional and higher about 200 kilometers (km) of secondary roads education centers. However, the capacity of the and for building the Roads Department’s major seaports on the west coast will remain capacity to manage road assets and to improve constrained until the rail and road capacities safety. The first and third tranches amount in the east–west corridor are increased. to about $260 million, which are currently Accordingly, improvement of the East–West being used for project 1, constructing a new Highway (EWH), which requires removing 30 km two-lane road and upgrading 2 km of some of the bottlenecks and introducing a two-lane road to a four-lane road by passing advanced traffic management systems, remains Kobuleti, a Black Sea resort. This road is the priority for public investment. scheduled to be operational in 2016. Placing EWH improvement at the top The
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