American technological university in Georgia: Timeline - საერთაშორისო გამჭვირვალობა - საქართველო

American technological university in Georgia: Timeline

17 March, 2015


The opening of a technological university in Georgia with the cooperation of the US Government has attracted public attention on numerous occasions. To give more clarity to the issue, Transparency International Georgia has studied the issues and conflicts around the university.

Discussions on developing the university in Georgia began in 2011, as part of the US Government Millennium Challenge Corporation ("MCC") cooperation with Georgia, after the first agreement (Compact) between MCC and Georgia expired. MCC is part of the US Government’s fight against poverty by facilitating economic growth. The first Compact, valued at USD 395.3 million, focused primarily on infrastructural projects. On 5 January 2011, MCC selected Georgia as eligible to develop proposals for a second Compact. Nikoloz Mchedlishvili, a representative of the Prime Minister of Georgia, stated that the priorities of the new assistance had yet to be determined, but that one of the main goals would be to establish a technological university in Batumi. However, at this point, MCC and the Government of Georgia had not yet conducted a constraint analysis or had made any determination regarding the direction of the potential compact. Accordingly, the Prime Minister's office started holding consultations with interested parties (see the blog post from 2011 by Transparency International – Georgia: Development of the Millennium Challenge Corporation's Second Compact in Georgia: Next Steps).

The value of the second Compact is USD 140 million. The Government of Georgia analysed key economic sectors to determine the Compact priorities.  They found that insufficient human capital is a factor preventing economic growth, especially in science, technology, engineering and mathematics (STEM).

Therefore, overcoming poverty and facilitating economic growth in Georgia by developing the quality of general, technical, professional and higher education were identified as the Second Compact's goal. Focus was made on development of the natural and exact sciences, technology, engineering and mathematics education programs.

The Georgian Government viewed the establishment of an American university to be the best means to remedy the shortage in capacity to provide higher educations in science and technology. This is discussed in the 4 August 2011 letter sent by MCC's Vice President for Compact Operations to then-Prime Minister Nika Gilauri. According to the document, at that point MCC had doubts about this being the only or best course of action. Their vision was that funding allocated under the Compact should be spent on remedying systemic failures in the higher education field and not on one new institute. The MCC also raised concerns about the low number of potential beneficiaries. Later, on 16 November 2011, MCC notified the Georgian Government that there were concerns about the cost of building a new stand-alone higher education institution. MCC also criticized the limited number of direct beneficiaries of the project, and that the investment would benefit more privileged families rather than poor families. For these reasons, MCC management did not approve the higher education project proposal of the Government of Georgia. Pursuant to the letter, MCC expressed readiness to discuss "alternative investments, which could include an education project that would reach a broader set of beneficiaries, human resource development, and rural infrastructure".

In view of MCC's concerns, on 15 December 2011 then-Prime Minister Nika Gilauri submitted to the MCC a new higher education proposal for the second Compact. The Prime Minister stated that the Government of Georgia had taken into account the concerns of the Americans about the previous project proposal, and in particular over the limited number of direct beneficiaries and high capital costs. According to the letter, setting the education sector as a project goal entirely – including technical and vocational, general and tertiary education – would substantially increase the number of direct beneficiaries. As for the second concern, in order to reduce capital investments for the MCC, the Government of Georgia expressed readiness to contribute land and physical infrastructure to an educational institution.

In February 2012, the Government of Georgia announced a call for expression of interest for higher education institutions to help design the tertiary education investments to be funded by MCC's second Compact. As a result, a shortlist of interested education institutions was drawn up. On 2 June 2012, the Government of Georgia announced a request for proposal for those shortlisted candidates in the higher education sector. August 2012 was the deadline for proposal submissions. The request for proposal required the provision of international bachelor's programs in English. To implement their proposals, the Government of Georgia was offering land and buildings located in Batumi - 18,300 sq/m campus of the Georgian Marine Academy and 7,707 sq/m construction spaces, as well as additional 4,500 sq/m of land and 10,960 sq/m of construction space. This would be provided to interested parties free of charge. However, applicants were free to offer the Government an alternative location. Further, the Government of Georgia would fund student scholarships worth approximately USD 20 million in total over a series of years. MCC’s investment would be USD 25-30 million in total during the 5 year Compact period.

Following the assessment of submitted proposals, the consortium of Michigan State University and University of Missouri, and partnered with the Free and Agrarian Universities (in Georgia), was granted the highest technical score. The consortium was invited for initial discussions. At a meeting on 29 August 2012, the location of the university was discussed along with other details. The Dighomi campus of the Agrarian University in Tbilisi and the Batumi Tower building in Batumi were identified as other possible locations, and the consortium of universities agreed. In a letter dated 10 May 2013 sent to Professor James Thomson (Head of the Advisory Board of Free and Agrarian Universities of Georgia), MCC's Deputy Vice President Thomas Hurley confirms both that the consortium had the highest technical score, and that discussions were underway. He noted further that the selection process was not yet completed, and that significant issues had yet to be decided on, including the viability of partnership and the sustainability and value of the Compact's subsequent terms.

On 22 September 2012, President Mikheil Saakashvili held the presentation of the technological university in Batumi Tower building in Batumi. According to the Ministry of Education, the project was being implemented in partnership with MCC. The university should have been open to students from 2013 (the following year).

After the 2012 elections, the new Georgian Dream Coalition Government requested time to review the compact development process and the details of each of the proposed compact’s components. While the new Government consented to the Compact priorities, it was evident that the new Government had a different understanding of the capacity of state universities of Georgia than the UNM Government. The UNM Government’s actions implicated that they did not believe the state universities of Georgia had the capacity to develop improved curricula in the fields of science, technology, engineering and mathematics (STEM). In contrast, the new Government decided on an approach where the development of state universities’ capacity in the STEM fields was set as one of the goals of the higher education component of the Compact. These universities would be counted as direct beneficiaries of the Compact's investment. Accordingly, in accordance with the terms of the request for proposals, the Georgian government issued a letter that cancelled the original proposal selection and contracting process. Following the cancellation of the process, on 7 February 2013 the Government of Georgia announced a new request for proposals in the higher education sector as part of the second Compact. Pursuant to the document, Georgia has undertaken the obligation to co-fund (approximately 50 million USD) these programs over 20 years. .

Finally, on 26 July 2013, the Government of Georgia signed with MCC the second five-year Compact with a value of USD 140 million. Funds allocated under the Compact will be spent on generalprofessional and higher education fields. To implement the higher education project, as part of the Compact it is planned to invest grants up to USD 30 million. Under the project, the consortium - comprised of US and Georgian state universities - will implement bachelor's programs in Georgia, graduates of which will receive American diplomas in engineering, technology and natural sciences. Together with the winner of the two-stage international tender, San Diego State University bachelor's programs will be provided at Tbilisi State University, Georgian Technical University, and Ilia State University.

Further, on 11 March 2015 it became known that LEPL National Agency of State Property sold the Batumi Tower building for USD 25,004,626. The National Agency of State Property placed the given state object for e-auction for privatization conditionally (404483019). The company is obliged to create a hotel complex and corresponding infrastructure on the basis of the privatized property (including sports and recreation space, entertainment facilities etc.), invest USD 15 million and provide the transformation of the given real estate to at least four-star hotel with 100 rooms minimum. From public information obtained by Transparency International – Georgia from the National Agency of State Property, it is known that in 2012 the state spent 73 740 591 GEL of its budget on the construction of the Batumi Technological University by "Batumi Tower" LLC. As for the building maintenance costs, these amounted to 185 752 GEL in 2012, and 215 989 GEL in 2013.

Author: TI Georgia