Georgia's New Presidential Residence Deemed Top Secret

Roughly two years in the works, President Mikheil Saakashvili's new residence has been designated a state secret, with officials declining to discuss financing for the project and begging ignorance of construction details. The information shutdown comes even though, according to one government official, the construction is largely financed by proceeds from the sale of state-owned property.

Once touted as a symbol of the new, reform-minded Georgia, the presidential residence has sunk into relative obscurity since President Saakashvili's inauguration in 2004. Over the course of several months, both the presidential administration and the mayor's office have maintained that they have no information about the project and do not know who is supervising the construction. Similarly, the construction company currently in charge of work on the project, Inzhmsheni, has refused to talk to the media.

President Saakashvili's residence is a state secret, officials maintain. In an interview with EurasiaNet on March 6, Kakha Todua, head of General Service LTD, a state company attached to the economic development ministry, which is involved in construction of the presidential residence, stated that information regarding the project and its funding "represents secret information."

"I will not be able to share much information," Todua said. "It is [classified as] secret, according to current legislation." Citing Georgia's Law on State Secrets, Todua stated that the residence has been included on a list of state sites deemed too sensitive to warrant public disclosure of information.

According to The Georgian Young Lawyers' Association (GYLA), a local non-governmental organization, Saakashvili issued a presidential order in July 2004 that classified information about the residence and about technical equipment used for the construction project. The site was included as an amendment to a 1997 presidential decree that defined a list of high-security state buildings.

While the GYLA states that concealing information about the residence's construction is legal, the NGO argues that the government should share information about its financing. "We believe that the financial information should be public," said Nino Lomjaria, a member of a GYLA working group that monitors presidential and governmental reserve funds intended to finance special expenditures. "Other information, which is not linked to security and the president's security, should be made public as well."

Georgian officials, however, maintain that no state budgetary funds are involved in the construction project. Finance ministry spokesperson Keti Akhalkatsi told EurasiaNet that Georgia's 2006 state budget does not include funding for the residence's construction. Nor have funds been allotted from the Tbilisi city budget, according to Papuna Petriashvili, head of the city finance department. "Not a single tetri [Georgian coin]" has been given to the residence project since 2004, when President Saakashvili came to power, Petriashvili stated.

State funds, however, appear to be involved. According to Todua, most of the residence's construction costs have been financed from the sale of the Krtsanisi state residence, which was sold to the Basel Group, an American financial consulting firm, in December 2004 for $15 million.

At the same time, considerable city funds have been allocated to development of the district, one of Tbilisi's oldest neighborhoods, that includes the presidential residence. According to Petriashvili, the 2006 city budget projects expenditures of 2,250,000 lari ($1.23 million) for work on the area's water, gas and electricity grids, plus for payment of "compensation fees to local residents." Petriashvili said that he was unsure how compensation would be paid, but added that the fees make up the biggest part of the funds set aside for the Avlabari district, some 200,000-250,000 lari, ($109,361 - $136,705).

Financial questions have long dogged the presidential residence project. In a January 2004 interview with this reporter, then employed for Caspian Business News, Irakli Rostomashvili, then chief architect of Georgia, stated that the residence project would not be expensive since the president only intended to repair the building. Rostomashvili put project costs at "some 2,000 to 3,000 lari ($1,094 to $1,641)."

The original plan was to reconstruct a 19th century building that served for years as the headquarters of the Tbilisi traffic police. According to official information released at the time, the residence was intended to contain two floors for the presidential administration, in addition to space for the president's living quarters.

However, since then, both the scope of the work and the associated costs appear to have changed. Last summer, the Evra construction company, which started work on the project in 2004, claimed that the state owed it 4 million lari ($2.187 million) for work completed between January 2004 and June 2005.

Georgian media have speculated that that demand for payments has had consequences. In July 2005, Evra CEO Valeri Gelashvili was severely beaten by unknown armed assailants – an attack that he claimed was connected with his company's work on the residence. In a March 4 telephone interview with EurasiaNet, however, Gelashvili, who now lives in Lithuania, stated that most of the government's debt had been repaid, aside from "some 300,000 to 400,000 lari [$164,077 to $218,770] only." Gelashvili, a member of the opposition Republican Party, said that he had no information about the state investigation into the attack on him, but maintained that it was connected to his company's operations.

Not only financial aspects of the project remain obscure. Given the secrecy of the project, city officials also say they have no idea when the construction work will end, or even when it began. The archive of construction permits for the residence has been classified as secret, and "sent to state security bodies," according to Gocha Zekalava, head of the permits office in Tbilisi's department of urban development.

Todua stated that work on the building began in June 2004, though neighbors claim that construction began in early January 2004, on or around January 4, when Saakashvili was elected to office.

At a news briefing four days after Saakashvili's election, then presidential spokesperson Giorgi Arveladze stated that construction of the new residence would not entail significant spending. Arveladze said that no budgetary funds would be used for the project, adding that he assumed that the sale of summer homes belonging to state officials who had worked under former President Eduard Shevardnadze could provide the necessary funds. The press briefing was the last public discussion of the project by government officials.

In a January 9, 2004 article in the Russian daily newspaper Izvestiya, Saakashvili was quoted as saying that "if repaired, this beautiful building could become the new symbol of Georgia."