The Government has yet to transfer Real Estate to local self-government bodies
In spite of a requirement of the legislation and public statements of highest officials of the authorities, the local self-government bodies have yet to receive agricultural and non-agricultural land and other property from the State.
In accordance with Article 162 of the Local Self-Government Code, the Ministry of Justice, the Ministry of Regional Development and Infrastructure, the Ministry of Economy and Sustainable Development, and the Ministry of Finance of Georgia were supposed to draft and submit for approval to the Government of Georgia relevant schedules and procedures for the transfer of agricultural land to municipalities before January 1, 2017, although the Ministries have yet to fulfill this obligation.
Accordingly, the State owns more real estate in the territories of municipalities than local self-government bodies. To illustrate the foregoing, we will present the example of Zugdidi.
The Municipality of Zugdidi owns 263 pieces of real estate, including buildings located on non-agricultural land (97 buildings altogether, with a total area of 24,004 sq. meters), cemeteries, sidewalks, public squares, stadiums, streets, bus stops, etc. It should be noted that the absolute majority of this real estate constitutes core (unalienated) assets,[1] and, therefore, the Municipality of Zugdidi is devoid of the possibility of receiving income from this property.
Meanwhile, the State owns 817 non-agricultural land plots in the Municipality of Zugdidi, a part of which (in 333 cases) contain various buildings (with a total area of 340,513 sq. meters, including schools, outpatient medical facilities, offices of public agencies, etc.).
The situation is much graver with regard to the ownership of agricultural land: the Municipality of Zugdidi owns no agricultural lands in the territory of Zugdidi, while the State is the owner of 23,399,069 sq. meters (2,339.9 hectares) of agricultural land registered in the territory of Zugdidi.
The information presented above makes it clear that the imbalance between the property owned by the municipality and that owned by the State is quite big.
It is also problematic that a part of the state-owned buildings in the territory of the Municipality of Zugdidi (former buildings of village councils, clubs, village drugstores, trade centers, etc.) – whose number reaches more than 100 in Zugdidi – are currently left without a function, have been closed, and are gradually destroyed. In the case of transferring them to the municipality, the local self-government bodies would be given an opportunity to privatize or lease these buildings, which would increase local budgetary revenues.
TI Georgia believes that the Government of Georgia should start the process of transferring agricultural land and other property to municipalities in a timely manner, which will enable local self-government bodies to increase their revenues and, accordingly, to improve the quality of municipal services.
[1] Core (unalienated) assets are the basis for the exercise of the powers of a municipality. Core assets may be used only for carrying out public functions and for the exercise of the powers of a municipality. The Local Self-Government Code, Article 106, Paragraph 4.