Georgian Railway completed last year with the loss of 354.1 mln GEL

In the first half of the year, the state company Georgian Railway generated the income of 198.5 mln GEL, which is 4.2 mln GEL more than in the same period last year. The largest portion of the incomes is generated from cargo shipment, which in January-June brought the railway the income of 140.4 mln GEL, however, compared to the same period of last year, the income generated through cargo shipment reduced by 11.5 mln GEL. The income generated through logistic services increased by 32.6 mln GEL, and through passenger services – 9.4 mln GEL. By renting out cars the Georgian Railway earned 12 mln GEL in the first half of the year.

Revenue of the Railway reduced and made 74.4 mln GEL in the first half of the year.

The Georgian Railway finished the year 2017 with the loss of 354.1 mln GEL. What was the reason for such a loss? – We asked this question to the representatives of the Georgian Railway however at the present stage, they refrain from commenting on this situation. The head of the Transport Corridor Research Center Paata Tsagareishvili presumes that the reason for such a loss could probably be the works being carried out on the mountain crossing, which works are financed from the Railway’s own budget.

“The current works on the mountain crossing are financed by the Railway’s own sources. Quite big funds are used for the project which reduces the revenue. However, the Railway hasn’t had such a loss before. There can be only one explanation: the reason is the tunnel reconstruction works on the mountain crossing.”

Besides, the incomes of the Georgian Railway are significantly influenced by lari exchange rate since the majority of the tariffs are denominated in USD. In its managerial observation, the Railway notes that last year, with the difference between the exchange rates the company lost 112.3 mln GEL.

Besides, another major project is related to the Georgian Railway - Tbilisi Railway Bypass Project. For the construction of the Tbilisi Railway Bypass, up to 210 mln USD was spent before 2012. The project was suspended in 2013.

By the order of the government of 9th of August 2016, the final decision on the form of project implementation was supposed to be made by the Georgian Railway within 4 months after the order came to effect, the latest on the 9th of December 2016, however, the government was not able to make the decision on project implementation form within the above term.

“There still is a significant uncertainty about the project. The management does not expect that in future the project will be of economic benefit for the Railway,” – reads the Railway annual financial audit report. 

In 2017, the Georgian Railway shipped 10,672,568 tons of cargo, which is 1,209,166 tons or 10% less than in 2016. Last year, particularly reduced the volume of transit cargo and made 4,976,434 tons while in 2016 the volume was 6,183,037 tons.

Last year, the amount of shipped crude oil and oil products reduced by almost a million tons compared to 2016 and made 4,347,371 tons. The rates of grain and grain products shipment rates also reduced and made 302,277 tons instead of 448,128 tons.

The rate of iron and manganese ore shipment reduced by almost million tons and made 462,087 tons. 507,335 tons of non-ferrous metal ore was shipped which is a rate increased by almost 13,000 tons.

The rate of chemical and mineral fertilizer shipment has also increased and made 565,912 tons annually. Last year the Georgian Railway transported 41,392 TEU containers.

The incomes of the Georgian Railway by years:

• 2012 - 469.8 mln GEL; income generated through cargo shipment – 350 mln GEL

• 2013 - 481.7 mln GEL; income generated through cargo shipment – 364 mln GEL

• 2014 – 511.5 mln GEL; income generated through cargo shipment – 382.7 mln GEL

• 2015 – 574.7 mln GEL; income generated through cargo shipment – 440 mln GEL

• 2016 – 439.9 mln GEL; income generated through cargo shipment – 292.6 mln GEL

. 2017 – 434.5 mln GEL; income generated through cargo shipment – 312.9 mln GEL.

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