ICCA: Strengthening the Construction and Business Sector

The role of construction companies in the country’s economy and infrastructure development was one of the main topics that was discussed at the presentation of the Infrastructure Construction Companies Association (ICCA).

The presentation of the new Association took place at Holiday Inn on October 8. The NGO was founded in June by 18 companies which work on infrastructure projects including roads and bridges, reconstruction and the construction of state-owned buildings.

The head of the ICCA, Zviad Toidze, discussed issues which led to the formation of the Association and its goals. He spoke about the importance of strengthening the construction sector with the agreement of the government, international organisations and the business sector; institutional development of the companies involved in the sector; also the pro-active role of the business sector in the economic development process of Georgia.

“There are some gaps in the law that the previous government failed to eliminate. The goal of the Association is to work on these issues with the appropriate agencies. We have to involve international experts to adjust the procurement law,’’ Toidze said.

Everyone has the right to participate in tenders for construction. However, gaps in the law were revealed which hinder healthy competition. For example, for most of the companies in the ICCA it is impossible to participate in online (electronic) tenders as many have limited budgets following the depreciation of the Georgian Lari.

Some companies take advantage of this situation and even decrease their prices sometimes by 50%. This results in damage which is ultimately sustained by the state when projects are not completed or can only be completed with poor quality. In many cases it turns out that the tender commission is focused on low price and the issue of quality is insignificant.

“Many strong construction companies are capable of ensuring better quality. These companies point to this gap in the law where price has more significance than quality. Of course, we are working on this,” said Eka Sepashvili, Deputy Minister of Regional Development and Infrastructure of Georgia. “Quality should be the main goal. Georgia signed the Association Agreement last year. There are a lot of technical regulations and quality requirements in the Agreement that apply to the construction sector that should be introduced in some years. The terms of the Association Agreement are strictly defined.’’

Another issue is that no Georgian company is involved in large international tenders due to a lack of experience. This is another of the reasons why the ICCA was founded.

“All the construction companies have the same problems,” said Davit Choladze, the founder of ‘Construction Company N1’ and member of the ICCA board. “The preparation of tender documents, procurement law, providing experts for facilities, national currency devaluation, the standardisation of materials, quality control and many other issues. If we want European standards we should work with the government and agencies. The goal of the Association is to help builders to solve these problems,” he added.

“Different construction companies want to join the ICCA every day. The only restriction is that they have to be conscientious and have a good business reputation. This is the main requirement that we, the board members, consider,’’ Toidze said.

The presentation was attended by government and business sector representatives (banks, insurance companies, construction companies), international organizations (USAID, EBRD, World Bank), NGOs and other associations.

Ana Akhalaia