Rostom Chkheidze: “In 2019, the Georgian Dream presented a car project with fanfare, although the pledge still remains a pledge.”

Verdict: FactCheck concludes that Rostom Chkheidze’s statement is TRUE.

The construction of an electric car factory in Kutaisi was announced as early as in 2019 by the then Prime Minister Mamuka Bakhtadze. According to his pledge, the electric car factory was to be built in cooperation of Chinese Changan corporation and the I-Group company which were supposed to start selling electric cars already in 2020.

To this end, the government transferred a 100 ha land plot for the symbolic price of GEL 1 with conditions of privatisation. According to these conditions, the company was to create an enterprise producing electric cars in no more than 24 months after signing the deal and it was to produce at least 5,000 electric cars either on its own or through the third party within a period of no more than 18 months. In addition, it was also supposed to employ 300 people for at least 18 months. In accordance with the assessment of the Levan Samkharauli Forensics Bureau, the market value of the aforementioned non-agricultural land plot was GEL 86 million.

Project implementation was hindered as a result of the COVID pandemic. In April 2021, the government prolonged the contract with the company and extended the factory construction time from 24 to 36 months. The year when production was to be started was set at 2022.

In October 2021, the Georgian Prime Minister, during his visit to Kutaisi, stated that the production of electric cars would start soon. In two months after this statement, the then Minister of Economy, Natia Turnava, was already speaking about the production of electric batteries instead of electric cars. In April 2022, the Prime Minister still raised the issue of electric cars and claimed that there were active negotiations with the Chinese side on the extension of the project.

One and half years have passed since the Prime Minister’s latest statement and there is still no progress in terms of the construction of the electric car factory. Therefore, the production of electric cars that was pledged years ago did not start either in 2020 or in 2022 and the pledge still remains a pledge.

Given these circumstances, FactCheck concludes that Rostom Chkheidze’s statement is TRUE.

Analysis

At the session of the Parliament of Georgia, Rostom Chkheidze, MP, talked about the electric car factory project that was announced to be built in Kutaisi and stated: “The Georgian Dream presented an electric car factory project in Kutaisi with fanfare. The then Prime Minister stated that the electric cars that were to be produced there were going to be Georgia’s major export item. The land plot, worth of GEL millions, was transferred to the I-Group, having close ties with the Georgian Dream. According to the project, the electric car factory was to be built in 24 months on the 100 ha territory. The pledges still remain pledges.”

In April 2019, the then Prime Minister Mamuka Bakhtadze announced the construction of an electric car factory in Kutaisi. In June 2019, a grand presentation was held in Kutaisi where the Prime Minister talked about the project and stated: “For the first time in our region, the production of electric cars begins in Georgia. The Changan company, which is the world’s largest producer of electric cars, having a strategic partnership with such giants as Volvo, Volkswagen and Ford, decided that the electric car factory will be built in Georgia and from as early as 2020, we will be able to provide the market with electric cars.”

The then Prime Minister Mamuka Bakhtadze also added: “The factory’s production capacity will be 40,000 cars. Of that amount, 50% will be intended for the domestic market and 20,000 will be exported to the EU. This is a huge success as the electric cars under the Made in Georgia trademark will be a major export product to the European market from Georgia.”

The government transferred a 100 ha land plot with all existing constructions to the I-Group company (legal name Big Service) to build a factory for the symbolic price of GEL 1. In accordance with the assessment of the Levan Samkharauli Forensics Bureau, the0market value of the aforementioned non-agricultural land plot was GEL 86 million. According to the privatisation conditions, the company was to create an enterprise to produce electric cars in no more than 24 months after signing the deal and it was to produce at least 5,000 electric cars either on its own or through the third party within a period of no more than 18 months. In addition, it was also supposed to employ 300 people for at least 18 months.

The pandemic broke out in 2020 which hindered project implementation and the production of the electric cars was postponed.

On 5 April 2021, the contract with the company was prolonged (source: iFact) and the factory’s construction time was extended to 36 months. According to the contract, the Kutaisi electric car factory was supposed to start the production of cars already in 2022.

In October 2021, Prime Minister Irakli Gharibashvili, during his visit in Kutaisi, stated that the electric car project was hindered due to the pandemic and implementation was delayed.

In particular, the Prime Minister stated: “I would like to inform Kutaisians that as per my instructions, we have already renewed and started negotiations with the investor company. A Large part of the factory equipment has already been delivered here and we will everything in our capacity to finalise this project. We will start to produce electric cars here very soon and I will do my best to make this happen.”

In two months after this statement, the then Minister of Economy, Natia Turnava, said that the government started to work on the production of electric batteries at the factory site since the pandemic hindered the construction of the electric car factory.

In April 2022, Irakli Gharibashvili again talked about the electric car factory and stated that the government was seeking to renew the project with the Chinese company and that there was active work in this direction.

One and half years have passed since the Prime Minister’s latest statement, although the electric car factory has still not been built in the city of Kutaisi. What is more, there is not even a remote perspective that the production of the vehicles will even start.

Taking into consideration the aforementioned circumstances, FactCheck concludes that Rostom Chkheidze’s statement is TRUE.