Speeches & Statements

President Saakashvili holds energy commission meeting

The Georgian government will have to fulfill two main tasks in the near future. The first task is announcing tenders for the construction of new hydroelectric power stations in Georgia. We should understand that the main future direction of energy sector privatization is in the creation of hydroelectric power resources. In comparison the rest is auxiliary and secondary.

Our first task was to sort out the distribution system and privatize it once that was done. The second task is to extend the process to the construction of hydroelectric power stations. Every ministry should know that hydroelectric power stations are Georgia's future and every additional incentive should be given to this and every obstacle removed. In every discussion with investors the main emphasis is on Georgia's energy security and independence and the construction of hydroelectric power stations.

The second issue is electricity prices. You know that in December Russia doubled the price of the gas it supplies to Georgia. In the winter, with the help of a very large budget subsidy, we managed to maintain the price of electricity for every Georgian family at the old level. Naturally, however, that cannot last for ever. Our task is to create the right policy on energy prices.

Russia's motivation for this is perfectly clear. Russia's motivation, when it increases the price of electricity - or more correctly gas and in turn electricity, most of which is generated from imported gas - is to create even more problems for every Georgian family, to embitter every Georgian family, starting with the wine blockade, the fruit blockade, restrictions on issuing visas and every other economic means it uses against Georgia. The aim of increasing the price of gas was very specific - to make every Georgian family feel that they are being punished because the country has chosen an independent path, the country wants to restore its territorial integrity, be strong and develop economically.

What should our response be? We should continue economic development at an even faster pace, our response should be to continue to develop our system of democracy as we have been doing. The people who prepare such packages of economic sanctions should realize that they will fail to stop Georgia's economic development.

As regards the energy sector, the task is very clear. We must do our utmost to lessen and prevent as much as possible the impact of the targeted blow inflicted by certain people in Russia on every Georgian family.

That is why we should, first of all, do this: The [rise in] prices mainly concern the regions because in Tbilisi the price is generally much higher than in the regions. The first thing is that we instruct the government to ensure that people who use less, pay less. The electricity price increase should be smaller for them because, compared with others, they are vulnerable families. Second, the most needy families in Georgia should not face any electricity price increase. For that purpose, we should prepare a well-targeted and correct subsidy from the budget. In the case of the most needy, who really cannot afford to pay more, we should completely absorb the impact of the price rise by Russia and cover it from the budget. That is our task. Over the next few days the government should calculate everything precisely and make the right decisions.

It is quite clear that, together with the blow, we are also getting an incentive and an opportunity to make Georgia a country that is entirely self-sufficient in energy. The new prices also mean much more investment and that we will be able to get many more investors interested in the development of our hydroelectric energy sector, which is something the Soviet empire did not allow to happen. It did not allow this deliberately. Projects were ready, but it deliberately did not allow the construction of hydroelectric power stations because this would have made Georgia self-sufficient in energy and we would not have been dependent on imported gas and electricity. What the Russian and Soviet empire did not allow, we should implement in independent Georgia.

By the end of my first presidential term, we should, in the main, resolve the issue of Georgia's hydroelectric energy supply. I repeat, it should be resolved in the main. In the next few years, it should be resolved completely. After that we will no longer be dependent on these fluctuations and changes or on political pressure and, sometimes, even blackmail. That is our task today.

This translation is published with permission from BBC Monitoring, Reading UK

Communications Office
of the President of Georgia

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