PM Kobakhidze announces ‘sweeping reform’ of state-owned enterprises

Prime Minister Irakli Kobakhidze has unveiled a reform of Georgia’s state-owned enterprises, “aiming to improve cost-effectiveness” and generate annual budget savings of more than 52 million GEL.

Speaking at a government session on Tuesday, Kobakhidze said the initiative - focused initially on the railway and energy sectors - has already delivered “measurable results” through what he described as “optimization and management changes.” He cited Georgian Railways and several key energy sector enterprises among those restructured.

“In the railway sector alone, we’re saving over 36 million GEL annually. In the energy sector, 16.5 million GEL has been saved. In total, that’s 52.5 million GEL,” the Prime Minister said.

The affected enterprises include the Georgian State Electrosystem, Sakrusenergo, the Energy Development Fund, ESCO, the Oil and Gas Corporation, the Gas Transportation Company, and Enguri HPP. Kobakhidze indicated that similar reforms could soon be extended to other public entities, including Legal Entities of Public Law (LEPLs) and limited liability companies (LLCs), potentially increasing total savings to more than 100 million GEL per year.

“This process has started at a very fast pace,” he noted, framing the reforms as essential not only for domestic efficiency but also in response to international expectations.

Kobakhidze underscored that the overhaul aligned with recommendations from the World Bank and the International Monetary Fund (IMF), saying “foreigners hardly ask us for anything that goes against the national interest. It would be wrong not to implement these recommendations.”

He announced that a legislative package to support the reforms will soon be submitted to Parliament, urging lawmakers to adopt it swiftly to enable full implementation.