Exclusive Interview with Ivanishvili - New Opportunities for Georgian Business
EXCLUSIVE INTERVIEW - The Social Entrepreneur Phenomenon: The Social Impact of Bidzina Ivanishvili’s Projects on the Economy, Business Environment, and Future Development of Georgia - New Opportunities for Georgian Business
The concept of the social entrepreneur is becoming more and more established in the modern world. Who are social entrepreneurs?
A social entrepreneur is a person whose efforts are directed at the implementation of business model-based projects of a scale that is designed to change the social environment. Projects implemented by social entrepreneurs are charitable in nature because of the resolution of important problems, the implementation of positive changes, personal risk, and innovative initiatives.
They measure their success not according to their profits but according to the extent to which they were able to solve the existing problem and change the country for the better!
The extent to which they were able to reduce poverty through the best possible use of their main asset – their financial resources!
Social entrepreneurs are able to link and integrate social and commercial issues and to solve the problems facing the public by using the best practices of business.
Entrepreneur Georgia took an interest in the business and charitable activity of the main entrepreneur of the country, Mr Bidzina Ivanishvili, and tried to determine the purpose and motivation behind his implementation of multi-million GEL projects. Does he expect profits? Could he have invested the same funds in other, significantly more profitable businesses? Where is the line that divides business and charity?
Bidzina Ivanishvili’s initiative regarding the revival of the Tskaltubo resort is of a particularly grand scale and may well be the best example of social entrepreneurship and a true change for the better in many directions. However, before we asked him about it, we asked him where he saw that line between charity and business.
“As concerns charity, my vision in this regard is based on the brilliant Rustaveli’s philosophy of ‘what you give is yours, what you do not is lost,’” he told me. “I developed this vision dozens of years ago and about 15 years ago, it was published in the Georgian press as well. I was a firm believer (and I believe this to this day) that charity only has value when it is done without advertising, nearly anonymously. I was faithful to precisely these principles for years while engaging in this activity, until politics entered my life which, it can be said, turned everything upside down. All that was done over the years in this direction became public knowledge through the efforts of the opposition at the time. However, I will say without any false modesty and coquetry that in my opinion, my participation in politics is the most valuable thing that I have done in terms of charity, since in addition to selflessness, which is the essential postulate of true charity, participation in politics in that situation, under that government, amounted to risking my life and the lives of my family members, let alone property. Even if we were to assess this in terms of results, since my participation in politics made possible and facilitated the peaceful removal from power of the regime that was based on the oppression of the people, entering politics probably really is the most valuable thing that I have done in my life.
"As regards the charitable projects implemented from then on, since the situation changed in 2011 and everything became clear, restricting the flow of information about them became pointless and took the shape that has been tried and tested across the world; the public now receives information regarding these projects with a certain periodicity. By the way, since the Tskaltubo rehabilitation project was the reason for this interview, this is a good coincidence and I will tell you that Otia Ioseliani, who is a resident of Tskaltubo – the most famous native of Tskaltubo and a poet beloved by all – responded to my publication in the Georgian press and had a very interesting reaction.”
Tskaltubo was once a unique resort that was devastated and could not be rehabilitated even though the authorities repeatedly tried to attract investors. Incidentally, I too attended the investment forum in Dubai several years ago, where the Government of Georgia attempted to spark Arab investors’ interest toward Tskaltubo, and there were innumerable other attempts as well, though the fact remains that this did not work. The idea, whereby Mr Ivanishvili is initiating the project and is prepared to complete it unilaterally, was voiced once again in his statement; and if Georgian businesses are to respond to his initiative and decide to take part in the project, he says he is prepared to transfer the ownership of any facility at a significant discount. Incidentally, he expressed a similar approach earlier as well, regarding the tourism-related facilities that are being developed under the aegis of the Tourism Development Fund (TDF), be it the Paragraph Hotel, the Panorama complex, or the planned construction of a hotel in Ganmukhuri, regarding which he stated that he was prepared to donate the land that he had purchased to any investor that would agree to build the hotel complex. We asked him to explain in more detail what business model is under discussion here and what the ultimate goal is of the investment that he has made in this segment of the Georgian economy.
“It is a basic truth that profit is the ultimate goal of entrepreneurial activity,” he answered. “From a business perspective, an investment is deemed effective if it is distinguished by a high degree of cost-effectiveness and if said cost-effectiveness is achieved in a short period of time, the effectiveness of the investment increases significantly. These are the criteria for the assessment of business and you, who write about business, know this well. As regards our tourism-related projects, both of these components – profitability and a high degree of cost-effectiveness – have been completely omitted or deemed to be of secondary importance. After all, the time it takes to turn a profit is one of the components of cost-effectiveness. This is precisely why the Tourism Development Fund (which, in contrast to other projects by the Co-Investment Fund, is directly coordinated by our family) was established as a separate structure.
"As you know, the Co-Investment Fund, which receives all of its funding from our family, is run by effective management and this fund, in turn, is engaged in very useful activities supporting Georgian business, which I will not discuss in detail here. It is largely focused on different issues of a specific character – it assists the projects that are backed by the universal criteria of business. The Tourism Development Fund’s projects, on the other hand, are socially oriented and characterized by a low degree of cost-effectiveness, which was a source of discomfort, to a certain extent, for the management of the Co-Investment Fund. This is why we made it a separate entity. Incidentally, the idea of detaching tourism as a separate direction belongs to my spouse, Eka, and time has shown that this was the optimal decision.”
Could you talk about the Tourism Development Fund (TDF)’s specific objectives in more detail, perhaps using one project as an example?
Very well. Take, for example, the Paragraph Hotel, which is located in Shekvetili. If we were to consider it as an isolated, separate business project and assess it according to the aforementioned universal criteria, the project is a priori unprofitable. Experts in the field will agree that in the hotel business, the amount of investment is calculated based on the funds spent per room. That is, the entire investment is divided by the number of rooms. In the case of highest-class, five-star hotels, expenditure should not exceed 200-250 thousand dollars per room – otherwise, it is possible that the facility in question will never turn a profit.
The Paragraph has 240 rooms, while total investment has already exceeded 120 million dollars and is continuing to increase. Basic arithmetic shows that the funds invested per room exceed the established criteria twofold, surpassing 500,000 dollars. Correspondingly, the market value of the Paragraph Hotel equals half of the funds invested, that is, 60 million dollars, and it might not sell even at this price. We even joked in our family that we would have been in a great deal of trouble were we not spending our own funds, rather than taking someone else’s money. The project was rendered more expensive by the extraordinary exclusive features that the Paragraph offers its guests, and will continue to offer in the future. An ordinary investor would not have invested in these features.
So, why are we doing this? To answer this question in a meaningful way, we must begin from afar. Two objectives of utmost importance must be achieved in order to make our seaside competitive – the tourist season must not be limited to the summer months (it would be desirable for the duration to reach 5-6 months) and it must become attractive to tourists with high spending power.
These two goals can be achieved only if we offer potential tourists high-class, exclusive services within the hotel and diverse, well-developed entertainment and excursion infrastructure outside the hotel – services and infrastructure of a type and quality that is not offered by our regional competitors. This is why the investment made in the Paragraph Hotel exceeds the established criteria twofold. The winter garden, the grand aquarium, the large pool of artificially heated seawater, the solarium, which is under construction, and other exclusive features that the Paragraph already possesses, or will definitely possess in the future, are being created precisely for this reason – to prolong the duration of the tourist season and to prevent tourists from going elsewhere.
Within this framework, we are also considering the construction of a high-quality sports complex on the territory between the Paragraph Hotel and the Black Sea Arena. This would enable us to host the “gatherings” of the national teams and clubs from foreign countries. In general, tourists with high spending power (who can spend up to two or three times as much money in the country and not just the hotel, which will stimulate the entire economy) are mainly attracted by quality and reputation, and the Paragraph Hotel was successful in this regard. As you know, this year, the Paragraph Hotel was named the best hotel in Europe among the Marriott chain of hotels, which is the biggest brand in the world. This further increased the competitiveness and attractiveness of our seaside.
Therefore, to sum up, the goal of our investment was the development of quality tourist infrastructure and the development of the region in general, rather than the usual aim of businesses, that is, the rapid achievement of highest possible profits, which would have been business as usual for any other investor. However, since our family has the means to view certain problems from a broader perspective, as well as the desire to help the country to overcome them, we took the liberty to view these goals from this perspective and to plan accordingly.
Similar models are in place in the cases of the Abastumani and Tskaltubo development projects. As regards Ganmukhuri, it is good that you recalled this. I think that any sensible person understands the state significance of the project, which is planned on a location adjacent to the so-called administrative boundary line, as well as the fact that this project might not have anything to do with business at all.
This model can be practically assessed as a subsidy of the tourism sector, and it truly is charitable in nature.
Yes, it can be assessed as such…
However, the question regarding Cartu Bank still remains. If the projects implemented by the TDF are charitable in nature and aim to resolve public problems, create new opportunities, and ensure the inclusive development of the country’s economy, rather than to turn a quick profit, what can you say about your commercial banking activities?
I have said on numerous occasions that I have never done business in Georgia in the classic sense – that is, business for profit. Cartu Bank is the sole commercial organization and it too, had a different function since the day it was created. It was the first investment bank and I had the same attitude toward it as well – I founded it in order to help the country as the banking system was very weak in Georgia at the time; the system needed help.
Similar to my activities in other fields, Cartu Bank has not conducted aggressive business, which is generally typical for the banking sector, particularly when it comes to new players entering the market. Cartu has hindered no one. On the contrary, when Absolut Bank went bankrupt and there was a risk that this would have negative impact on the entire banking system, I purchased this bank without a commotion and Cartu assumed responsibility for its hopeless obligations. In contrast to other Georgian banks, Cartu has never turned excessive profits.
I have also been trying to sell Cartu for three years and I only have one condition – the bank must not be closed, the two existing powerful players on the market must not absorb it, and a third strong bank must exist. This is precisely why I refused to sell Cartu at a profit and I am prepared to sell the bank for a nominal price, that is, for the price that I initially put into the capital. Liberty Bank expressed interest in buying Cartu while observing the proposed condition, which is to be welcomed. This will be good for the banking system as the country needs a strong third bank.
Your Tskaltubo initiative has led to many questions: How and under what conditions are you planning to purchase the hotels that exist in Tskaltubo? It emerged that only 15 out of the 22 hotels that you listed are owned by the State. How do you plan to buy out the remaining seven hotels from private owners? In general, what model of cooperation do you offer businesses?
“The initiation of the Tskaltubo project was largely determined by the positive experience in Abastumani. It can be said that the Abastumani example emboldened me and allowed me to decide to implement a project that is of the same type but on a larger scale.
“As I have already stated, I am building only one hotel in Abastumani – the Paragraph Hotel. Naturally, at the same time I am also assisting the state in the implementation of the infrastructural projects that are already underway. The problem of the tuberculosis hospital was the most difficult one there. The building’s state of utter disrepair and the fact that it was a source of extreme contamination, a place where apertures in the walls were barricaded with mattresses, precluded the involvement of any private investors. This is why I dealt with this problem in the first place. We built a new hospital very quickly, in one year. And in its place, I am planning to restore the monument that used to be located there many years ago, according to the locals.”
Of note, this interviewer remembers that the State tried to deal with this problem. The situation was so severe that if someone were to appear and undertake the construction of a hospital to replace the old one, the State would have been prepared to transfer the ownership of the territory where the old hospital was located free of charge. However, no investor appeared since even these conditions were deemed to have been risky. I noted that Mr Ivanishvili did not take advantage of this concession; however, he built the replacement hospital and paid the market value of 3,485,000 GEL for the land.
“Our family approach remains unchanged – when you have the resources, you must help the state rather than make use of concessions,” he said. “What would have been normal for another businessman, we considered to have been inadmissible in our case. The money has gone into the budget and will be spent on public affairs.”
Let us go back to the Tskaltubo and Abastumani analogy.
As you can see, Georgian business responded positively to my activity and today, five new high-class hotels are being built there: Rooms, Radisson, Crown Plaza, and two hotels belonging to Redix Group. Furthermore, eight medium and small hotels, as well as residential apartments, are also being built. The restoration of unique baths has also begun and cafes, restaurants, and retail facilities are being constructed. Total investment in Abastumani has reached 1.5 billion GEL.
The construction boom will likely last one year. In the meantime, the improvement of infrastructure will also be completed. I promised the local population that I will purchase and hand out electric vehicles. We will use electric vehicles even for municipal services. This process will conclude in 2021.
This is the model that proved to have been very successful in Abastumani. The process, which was properly planned and initiated, gave a strong impetus to new private investment and as a result, all parties involved – the local population in particular – will benefit from this. Precisely this is the positive experience that emboldened me in connection with the Tskaltubo project and I am sure that a very significant process of revival will begin here as well.
As for your question regarding purchasing the facilities that exist in Tskaltubo – naturally, the hotels will be sold on an open auction, on strict terms of investment. I will have only two main conditions and requests – this concerns the deadlines, whereby the facility in question must be completed within three years, and the rehabilitation [of the buildings], which must entail the preservation of the existing cultural and historical appearance.
The investment package should be announced soon. It would be right, and we must try to ensure that the facilities are presented separately, so that anyone can buy whichever one they want. The state will determine whether a tender or an auction will take place, as envisaged by law and naturally, I, as well as all interested parties, will abide by this decision.
I say this in advance, and I say this to the businesses as well – this will be an activity that will be very interesting and profitable for everyone as these hotels will be busy all year round.
I think that during this process, all the hotels might possibly be sold to other private investors and I might not need to purchase any of them.
As for the ones that will not be sold, I will be the one who buys them and renovates them within three years!
To summarize my role in this project – I act as the guarantor as well as the insurer, making certain that the Tskaltubo revival project will definitely be implemented. This is the model – I will buy whatever fails to be sold. I think that businesses will become interested during the construction process as well. As I stated in the letter, I am prepared to transfer the ownership of these facilities to any investor, at any stage – whether it be during planning, design, construction, or after completion, once the facilities are operational. The maximum price will equal the funds that were spent on the project.
Within the same process, I will also help the businesses that already own hotels there and are unwilling to sell. Maintaining high quality is the main issue here, and this will require additional investment. I might assist some of them with the help of the Co-Investment Fund, and I might assist others by providing access to cheap resources, or in any other way, depending on what the business might require.
If this does not happen and businesses decide to refrain at this stage, I will purchase all the facilities and complete them.
Most importantly, I will help the state improve the general infrastructure and I will pay for whatever it cannot afford, using my own resources.
The entire infrastructure needs to be improved there through the correct use of water resources and the creation of a unified spa system. Creating one or two hotels is pointless – everything needs to be done simultaneously and within the framework of a unified plan.
When businesses see that infrastructure has been fully improved and serious revenue can be generated in three years, there are very many talented businessmen in Georgia and I am certain that they will express a great deal of interest. Just like in Abastumani.
As concerns the opponents’ favorite phrase, "Ivanishvili bought everything," I would like to disappoint them – everyone will see that I will not own a single hotel in three years and thousands of people will benefit from this project.
The main issue is to ensure the constant monitoring of this process. The investment commitments, the conditions for the preservation of the architectural and cultural value of the buildings, and the completion dates for the facilities, as stated in the unified concept for the project, must be strictly observed.
You have implemented significant charitable projects in tourism – the Black Sea Arena, the amusement park, the Miniature Park, the Park of Musicians, over $2mln spent, and which you donated, free, to the State. Could you not have implemented the Paragraph Hotel and other tourism-related projects using the charitable model as well?
No, and I will tell you why. There are two reasons for this.
Firstly, the hotel, which will be sold sooner or later even if it sells for less than half the price (and I am prepared for this eventuality as well), must continue to function under the new owner using a normal business model. Otherwise, it will simply be impossible for it either to maintain its quality, or to develop. I was prepared in advance to “lose money,” in the ordinary, everyday sense of the expression. I will explain the reason for this in more detail in the second part of my answer to your question. The Paragraph Hotel already fulfilled its function; it created quality together with the Black Sea Arena and the other projects that you listed. Our seaside became competitive and gave a strong impetus to the development of other, neighboring businesses in the region.
All other projects that our family is implementing within the framework of the Tourism Development Fund serve the same function and their design, operation, and the transfer of their ownership will be implemented using the same algorithm: The investment made will be sufficient to achieve the aforementioned economic and state objectives, and ownership will be transferred at the price offered by the market and the economy. In some cases, the price might be relevant to the investment, while it might be much lower in others.
Panorama Tbilisi, which is one of the most important projects for me, is being built using the same model. This project precipitated a most unhealthy and absurd commotion.
In truth, Panorama will become the calling card of Tbilisi, similar to how the Paragraph Hotel and the infrastructure surrounding it became the calling card of our seaside.
I am certain that Panorama will attain a special place worldwide with its exclusivity, just like the Paragraph, which was named the first hotel in Europe among Marriott hotels, which is the biggest chain of hotels in the world.
Panorama unites three unique hotels with different advantages:
The first one, which is located in the city center, on Freedom Square, is designed with high-ranking, high-income guests in mind. You may recall that the building of the Central Union of Consumer Cooperatives of Georgia, which had been empty and abandoned for years, caused the greatest commotion.
I will not go into detail; I will only say that we built a modern and distinguished hotel in a very short amount of time.
The second hotel will be completely focused on business tourism. Modern conference rooms of a grand scale will be located there, the likes of which do not even exist in our country today.
I would like to recall that several years ago, up to 3,000 high-profile guests visited Tbilisi for the annual EBRD conference. Conference halls did not exist and so-called single-use spaces were set up for this event to avoid the disruption of an event of such significance.
This second Panorama Hotel will rid the country of this problem for good. It will also create new opportunities – this hotel will allow us to host any high-profile and large-scale conference or meeting.
In general, the construction of conference spaces is the least cost-effective activity as the profits are low and for this reason, under normal circumstances, businesses do not focus on this and do not construct such spaces at this scale.
But we know that the country needs this, do we not?!
Today, we claim to be a country of tourism and we must develop even further. How should we move forward? Precisely like this – we must offer high quality and valuable infrastructure to attract tourists with high spending power in order to become a center of business tourism, so that high-level conferences and large events can take place here. This is in our interest and the Panorama project serves precisely this purpose.
I will tell you exclusively that this hotel will also feature a unique aquarium, which will provide it with additional appeal.
And the third Panorama hotel – the one that is located on the Tabori Mountain, which also caused a commotion. Its exclusivity will take the shape of unique golf courses that will also aim at high-income guests.
As concerns the commotion, I would like to say that the location will feature ten times as many trees as there were prior to the implementation of the project. Furthermore, a large part of the vegetation that existed there prior to the project was already diseased, and this also required rectification.
As I have already mentioned, these three Panorama hotels, which feature different levels of exclusiveness, will be linked via cableway. This too, will serve as an additional source of appeal for the project.
It is clear from the outset that this project cannot be cost-effective compared to its prime cost. That is why I have the same approach here: If they build it using the existing concept and plan, I am prepared to transfer the project to an interested businessman at any stage. In case of sale, I will probably have to offer a 10-30 percent discount. The same principle that applied to Tskaltubo also applies to Panorama.
Our interest in the matter is for Tbilisi to have a new calling card, a project that is exclusive and unprecedented on a global scale, which will provide it with an additional, long-term function – it will develop business tourism in our capital and this will affect the entire city.
I still cannot see the purpose of transferring ownership. What is stopping you from managing these tourism-related facilities in the long run, in order to avoid guaranteed losses? The market conjuncture might change and the market might offer you an adequate price, or it might even become possible to recoup your investment in the very long run.
In general, you are right, of course. But now, we have come to the second part of the answer to your previous question. The point is that I am planning to devote no less than 90 percent of my property to public affairs, that is, to charity, which I have stated on numerous occasions and I reaffirm this once again. By the way, our opponents, who are focused on lies and slander, seemed to have disliked this statement and have tried their best to cover it up. Given precisely this decision, I would prefer to recoup, albeit with significant losses, a part of the investment that has already fulfilled its role as catalyst, and to direct these funds in a timely manner to broader objectives of public importance, than to leave these resources in one project for a long period of time.
However, I do not have the illusion that many people will have the desire to purchase such expensive projects that are associated with such large volumes of investment. I might have to manage them for a long time to come but the principle remains unchanged – any revenue generated by these facilities, including revenues generated from their operation, will be spent using the same ratio that was in place in case of sale – 90/10. By the way, the opponents can impose effective monitoring on the fulfillment of this condition; it is clear, however, that they will not do this. They cannot handle facts and the truth. For this reason, I am assuming that they will once again choose lies and slander as their method of opposition.
Bera’s donation to the Amazon rainforest caused a stir in certain circles. What are your thoughts on this issue?
I think that everything that took place after Bera’s absolutely sincere step does not even deserve a comment. All of this is beyond good and evil and paying special attention to their unhealthy reaction constitutes stooping to their level. However, they were so engrossed in the negativity that they even got to the issue of the relief works after the natural disaster in Tbilisi, and they embarrassed themselves in this, as well as in everything else. Our people know what took place and how it happened. But this was not enough for them and they raised the issue of the Borjomi-Kharagauli National Park and forest, as if I neglected to pay sufficient attention to this problem. In reality, in the very first days, I expressed readiness to personally undertake, in full, the restoration of the forest that was damaged as a result of the fire, let alone to participate in this process. However, I have not advertised this as this is not my style and my signature.
There is a great man by the name of Temur Tkemaladze, a true caretaker of our nature, a specialist of the highest level, and an old friend of mine. For three years, Temur and I observed together how the processes developed, whether or not nature would be able to deal with the results of the fire on its own. Temur conducted regularly control fly-bys using my helicopter. After the latest fly-by, he announced that no intervention was necessary and that nature had begun to restore itself. It should be said in favor of Temur that he designed and proposed a unique project to plant vegetation on the slope of Mtatsminda, which I would like to discuss in some detail.
In the period between 1940 and 1960, tremendous work was done to plant vegetation on the slopes of Tbilisi, from Mtatsminda to Kus Tba [Turtle Lake]. However, many imported, alien plant species such as the thuja, the cypress, and the black pine were planted there. These species had decreased lifespans and often succumbed to diseases due to unaccustomed climate conditions and rocky soil. For this reason, the Mtatsminda slope looks faded and burnt. We will replace all the withered and diseased plants on the entire slope with species that are native to the Caucasus – field and mountain maples, the Caucasian pine, the Persian turpentine tree, the oak, the nettle tree, and the ash. Additionally, trails and rest areas will be created on the mountain ridge. Lebanon cedars, Atlas cedars, and Himalayan cedars, which are distinguished by their long lifespans, will be planted alongside the trail. Thousands of flowering lilacs, almonds, and red cherry plums will be planted and this will significantly revitalize the view from Tbilisi as well as its ecology.
I think the project is of a historic magnitude and will elicit positive feedback from the residents of Tbilisi. And Temur planned this project in a way that will make it possible to our Sacred Mountain to bloom in different colors during any season.
What is the scale of this project?
“The territory stretching from Sololaki to Kus Tba measures approximately 400 hectares and the estimated total value of the project will amount to 12-15 million GEL. Additionally, I would like to remind the public that for three years, new trees were constantly being planted within the framework of the Tabori Mountain project. However, it would appear that the species were not chosen correctly and this process did not turn out to have been completely successful. I hope that together with Temur, we will successfully conclude this project and present the residents of Tbilisi with a great gift.
“I really do not feel comfortable when I talk about future projects in advance. It has been said that actions speak louder than words and I have always followed this principle but life has made adjustments here as well. Our opponents have become so proficient at presenting white as black, good as evil, and development as devastation that I am forced to announce certain projects, including the Tskaltubo project, in advance, in order to ensure that the public receives correct and impartial information from the outset.”
I invited Mr Ivanishvili to a live meeting with young and interesting Georgian entrepreneurs and startuppers under the aegis of the Entrepreneur magazine, noting that the audience is sure to be very interested and will benefit greatly from his sharing his business and life experience. Georgia is rich in creative, progressive people who are focused on creating something new, who are eager to learn and develop at any age, and who do not shy away from new challenges and discoveries. I feel he might also find it interesting to discover what the new generation of business breathes, what it aspires to. This meeting could take the shape of a field trip, and the discussions between Mr Ivanishvili and young Georgian entrepreneurs might take place on location – in Tskaltubo, Abastumani, or Shekvetili. I put the idea to him.
“With great pleasure!” he enthused. “I confirm that I am ready for the meeting. I would be delighted to meet with the business leaders of the young generation who will build the strong and competitive economy of future Georgia. I am ready to share my experience and support their development.”
At Bidzina Ivanishvili’s request, we would like to publish his specific offer to businesses, which he did not discuss in detail during the interview:
Mr Ivanishvili is prepared to transfer the ownership of the Paragraph Hotel, in which over $120 million have already been invested, for $60 million, even though he plans to invest several additional millions of dollars for the exclusive features that he discussed, in part, during our interview.
At the same time, if a buyer were to discover, as a result of an audit, that any expenses out of the $120 million that were invested in the hotel are unjustified, purposeless, or artificially inflated, Bidzina Ivanishvili is prepared to subtract those funds from the nominal price of $60 million.
As concerns the Panorama Tbilisi project, it will be possible to purchase it at a 10-30% discount and the aforementioned condition that applied to the Paragraph Hotel will also apply in this case – a strict audit of the expenses paid.
In addition, Bidzina Ivanishvili is prepared to sell all eight hotels that are being constructed by the Tourism Development Fund at prime cost, or at a discount, with only one condition – their construction and opening for business must not be delayed (two years at the latest) and the approved projects must not be changed without prior agreement.
Interview by George Sharashidze, Editor-in-Chief, Entrepreneur Magazine Georgia
Originally published on entrepreneur.ge.