ARMENIA

ECONOMIC POLICY

3 BILLS ON REFORMATION OF PENSION SYSTEM TO BE SUBMITTED TO APPROVAL OF ARMENIAN MPs IN AUTUMN OF CURRENT YEAR

YEREVAN. 3 bills on reformation of pension system will be submitted to consideration of the deputies of Armenian National Assembly in the autumn of the current year. The head of the department of social insurance of the Ministry of social security of Armenia Artem Asatrian told an ARMINFO correspondent.

According to him, presently the documents are directed to approval of Armenia's government. The bills envisage, in particular, the creation of both compulsory and voluntary system of pension provision. It is planned to create personal accounts (social cards) for these purposes, in the framework of voluntary system.

As for the compulsory pension provision, it is planned here to accent the length of service and increase the size of annual addition to principal pension. Thus, the pensioners with higher length of service will get more, which, as to Asatrian, much more jus that the current system of pension provision.

MACROECONOMY

ARMENIA'S DEBT TO UN TOTAL $300,000

YEREVAN. As of now Armenia's debt to the UN totals $300,000, the press-office of Armenia's foreign ministry has told ARMINFO.

This year Armenia has allocated $327,700 to repay the debt to the UN. Besides, Armenia has contributed $24,268 to the UN regular budget and $35,732 to maintain peace-keeping forces.

It should be noted that this year's UN regular budget totalled $1.2 bln drams, including the fees of Georgia $60,669, Azerbaijan $48,535, Russia $14.6 mln. The United States' contributions account for the 22% or $266.9 mln.

REAL SECTOR

ARARAT CEMENT REDUCED ITS OUTPUT

YEREVAN. The Ararat Cement closed jsc has produced goods for 1.2 bln drams during the first seven months of this year against 1.3 bln drams during the last year's same period, Armenia's industry and trade ministry has told ARMINFO.

The output has decreased because of the plant's standing idle for 2 months because of not receiving gas during this period. The plant's debt for gas totals 320 mln drams.

IRAN HAS EXPORTED $62 MLN'S WORTH GOODS TO ARMENIA DURING THIS YEAR

TEBRIZ, Iran has exported $62 mln's worth of goods to Armenia during this year, Iran's ambassador to Armenia Mohammad Koleini has told IRNA.

He said mainly dried fruits, nuts, carpets, food, tabocco leafs and buidlign materials are exported to Armenia. Koleini said he is sure that the erxports will grow by the end of this year.

He also expressed conviction that the trade balance between the two countries will be brought from the current 19% to 35-40%. Koleini reminded that during 1998-1999 $8 mln's worth of good was exported from the north-eastern Iran to Armenia and two years later this figure grew to $36 mln.

PRIVATIZATION

ARMENIAN GOVERNMENT DECIDED TO CONDUCT TENDER ON PRIVATIZATION OF "ARARAT CEMENT" PLANT IN THREE MONTHS

YEREVAN. The Armenian government has decided to conduct an open competition on privatization of "Ararat Cement" plant in three month period.

As ARMINFO learnt from State Property Management Ministry of Armenia, results of the competition could be summed up earlier. Holsim Swiss company and Seament Lebanese company have already made offer on privatization of the plant.

The authorized capital of Ararat Cement is 3,170,030 drams ($ 5.7 mln) which makes 317,003 shares under 10,000 dram nominal cost. According the Trade and Industry Ministry of Armenia, the cost of Ararat Cement's production for seven months of this year was 1.4 bln drams (about $ 2.5 mln).

TRANSPORT AND COMMUNICATION SPHERE

GOVERNMENTAL COUNCIL FOR DEVELOPMENT OF INFORMATION TECHNOLOGIES IS GOING TO LIFT VAT FROM IMPORTED COMPUTER PARTS

YEREVAN. Armenian companies specializing in assembling computers will be able to expand their activities. According to the government press-office, during a meeting the governmental council for supporting the development of information technologies considered the issue for lifting VAT from computer parts imported into the country.

In the opinion of Armenia's prime minister Andranik Margaryan, the practice of imposing taxes on computer parts runs counter to Armenia's current legislation and is carried out arbitrarily. Chairman of the state customs committee has been instructed to do his best to prevent this illegal practice.

ENERGY AND FUEL SPHERE

1 MW SMALL WATER POWER PLANT RESUMED ITS OPERATION

YEREVAN. A 1 MW small water power plant "Zovashen" has resumed its operation, general manager of the Gumri water power plant Nara Nagapetyan told ARMINFO.

The plant has been standing idle since 1995. It has been sold directly to the Gumri water power plant, which has invested almost 50 mln drams to modernize it. Repair works were started in Mar 2001. 2 of the 4 units have been restored. The plant can work on irrigation water only in the summer.

The energy commission is considering a tariff for the plant's water.

To recap, the energy ministry gives priority to the use of national energy resources.

UNION OF MANAGERS OF HYDRO POWER STATIONS TO BE CREATED IN ARMENIA

YEREVAN. Union of managers of hydro power station will b created in Armenia. An ARMINFO correspondent was informed in the U.S. Agency of International Development.

The issue on creation of the Union will be subjected to discussion at the seminar, devoted to the prospects of development of native hydro power engineering, which will be held on Aug 16-17 in Yerevan. Representatives of the World Bank, European Bank of Reconstruction and Development, the Commission on power engineering and the Ministry of power engineering of Armenia will take part in the work of the seminar.

The participants of the seminar will also discuss the issue on attraction of investments into development of hydro energetic potential of Armenia, as well as the problems of exploitation of the acting hydro power stations.

ARMENIA REPAYS DEBT TO TURKMENISTAN FOR USED NATURAL GAS

YEREVAN. The debt of Armenia to Turkmenistan for used natural gas in 1994-1996 presently makes $10.936 mln. An ARMINFO correspondent was informed in the press office of the Ministry of finance and economy of Armenia.

It should be noted that in Apr of the current year the total sum of this debt made $12.7 mln. Taking into account the interests on it, in 2005 Armenia will have to pay to Turkmenistan about $15 mln. In accordance with interstate agreements, the debt will be repaid by goods. From Armenian party the debt is repaid by the operator in the person of the "Energoinvestprom" company. Earlier the government of Armenia had made a decision on allocation of $2.5 mln.

RECEIVABLES OF ARMENIA'S ENERGY COMPLEX TOTAL 60 BLN DRAMS

YEREVAN. As of now the receivables of Armenia's energy complex total 60 bln drams, the press-office of Armenia's energy ministry has told ARMINFO.

According to the source, the systems of irrigation and drinking water continue to be the largest debtors. They owe the complex a total of 23 bln drams. The population's debts for electricity total 20 bln drams. Budgetary organizations owe the complex 4 bln drams, the transport sector 1 bln and the industrial complex 6 bln drams.

The energy ministry is going to exercise its legal right to cut fully or partly electricity to the debtors.

SOCIAL SPHERE

VETERANS OF KARABAKH WAR DEMAND PAYMENTS ON THEIR ALLOWANCES

YEREVAN. A group of participants of military operations in the zone of the Karabakh conflict came out in front of the House of Armenia's government with a demand to repay the debt on their allowances.

According to the demonstrators, the allowances, which make about 15,000 drams ($27), have not paid already more than two months. A representative of Armenian government, who met with the participants of the action, assured them that till the Aug 15 the debt on allowances will be repaid.

Earlier the veterans of the Karabakh war tried to solve this problem in the Ministry of finances and economy, however, it did not give results.

CAPITAL MARKETS

ARMECONOMBANK USED 600 MLN DRAMS UNDER GAF CREDIT PROGRAM

YEREVAN. Armeconombank is working very actively under the GAF program aimed at micro- and small crediting of SMEs in Armenia.

As head of the department for crediting international programs Ayk Mkrtchyan has told ARMINFO, the potential borrowers are interested in the program because it has several positive factors. First this is the only program allowing the bank to credit the trade sector and second it approves business-projects very quickly.

Mkrtchyan said Armeconombank has concluded with GAF 2 credit agreements for a total of 600 mln drams ($1.1 mln). In all 150 borrowers have been financed by the bank under this program. 13 business-projects for 40 mln drams were credited during July alone. Armeconombank's share in the credit portfolio totals 460 mln dram. Risk of non-payment has been brought to naught, GAF experts say.

As for the conditions of financing, then they, as to Mkrtchian, are revised by the Fund to make the credits more attractive. Thus, the maximum size of the credit for one borrower has been increased from the previous 21 mln drams (75,000 DM) to 33 mln drams (125,000 DM of $60,000). The interest rate have been reduced from the primary fixed 30% annual to 24% annual - for the trade sector and the sphere of services, and to 19% annual - for industrial enterprises. In the framework of this program the crediting is envisaged in drams. During repeated financing it predicted reduction of the rate to 9% annual - for the trade sector and the sphere of services, and to 15% - for industrial sector. The Armeconombank allocates credits on this program for the term to 2 years.

It should be noted that Armeconombank has been participating in the GAF program since July 2000. The KfW German bank provides the financial resources.

ARMECONOMBANK HAS ALLOCATED CREDITS FOR $320,000 WITHIN FRAMEWORK OF WORLD BANK'S PROGRAM

YEREVAN. Armeconombank has allocated $320,000 under the World Bank's program to finance the development of small and medium-sized business of Armenia, thus using almost half of it's credit line. As the head of Armeconombank's department for crediting under international programs Hayk Mkrtchyan told ARMINFO, 2 more projects for $200,000 are being discussed in the meantime. One of them is pointed to finance enterprises of light industry, the second - to produce fuel-smearing materials (FSM).

Conditions of financing by this program are the following: maximal credit size per one creditor is regulated according to the normative of the Central Bank of Armenia (20% of the total capital), the interest rate is fixed at 18%, an the period of allocation up to 5 years.

Armeconombank has been participating in the WB program to finance SMEs development since 1997, with opening of a credit line for $700,000.

ARMECONOMBANK USED 217 MLN DRAMS UNDER LINCY FOUNDATION PROGRAM

YEREVAN. Armeconombank has used 217 mln drams ($397,000) within the framework of the Lincy Foundation program to credit SMEs in Armenia.

Head of Armeconombank's department for crediting under international programs Ayk Mkrtchyan has told ARMINFO, under this program the bank is financing the sphere of services and the industrial sector. He said the maximum amount of a loan granted to one borrower is regulated in line with the Central Bank's standard (20% of the total capital), and the interest rate does not exceed 15%.

It should be noted that Armeconombank has been participating in the Lincy program since 1999.

AZERBAIJAN

REAL SECTOR

COURT IN NEW YORK CONFIRMS SWISS COMPANY AS OWNER OF GARADAGH CEMENT IN AZERBAIJAN

BAKU.The arbitration court in New York declined the suit brought by the Garadagh Holding company against the Holcim company (Switzerland). So, the court confirmed the legal character of the possession of Garadagh Cement by the Swiss company.

Garadagh Holding had brought the suit against the illegal character of the privatisation concerning the Garadagh Cement joint-stock company. They believe the former State Committee for Property willingly delayed the signing of the contract to deprive Garadagh Holding of the right to possess Garadagh Cement. That is why the ownership right was finally given to Holcim.

The case on the suit was considered by the arbitration court in New York for more than a year. The Holcim company owns 86% of the shares of Garadagh Cement now.

AZERI BREWERY WORKS OUT ITS OWN MAKES OF BEER

BAKU.The Azeri brewery has worked out four makes of the Azeri beer and is going to start the production in September. The beer will be exhibited at the annual exhibition-fair in Moscow. The firm will also take part in the beer exhibition to be organised by Weyermann in Bamberg (Germany) on 27 September.

"We hope our good commodity will receive high rewards at those exhibitions," Kamaleddin Aliyev, Director of Azeri, told TURAN.

He said the firm started the beer production in June 1998, and the annual production had increased from 20,000 decalitres (dal) to 50,000 dal by the year 2000. This year the firm increased its capacity 1.5-2 times and received a license from the Ministry of Agriculture to produce 100,000 dal of beer a year. New tanks and a modern filter machine from Italy have been installed, and "camps" for ready commodity have been built.

Mr. Aliyev said customs protectionism for local producers had helped to increase the production. Thus, the import duties for the raw material have been decreased since this April, and the duty on imported beer has been raised.

This February the firm invited a specialist from Moscow to train the local staff. Zoya Alatireva from Moscow believes the Azeri beer corresponds to the best sorts of German beer.

The raw material (barley) is delivered by Weyermann (Germany). The technology meets the world standards. The microbiological and chemical laboratories at the brewery strictly control the technology.

Mr. Aliyev refuted the rumors recently spread by several newspapers about the suspension of the brewery's activity by the Tax Ministry and the State Sanitation and Epidemiology Centre. However, Mr. Aliyev acknowledged the breaks in the delivery of the commodity to the market. That was caused by the sharp increase of the demand. But any increase of the production above the limit would mean the production of bad commodity. "We want to only produce good commodity. Now the delivery has been stabilized," Mr. Aliyev noted.

* The Azeri brewery was built in the NZS settlement in the Nizami district in 1997. The brewery employs 25 people, some of which are refugees and internally displaced people.

The Azeri firm received a reward from the Ministry of Agriculture of Azerbaijan in December 2000 for the good achievements in processing agricultural products.

INTERNATIONAL BANK ADMITTED TO CONFEDERATION OF BUSINESSMEN

BAKU.The National Confederation of Businessmen of Azerbaijan has received new members recently. TURAN was told in the confederation that the International Bank of Azerbaijan, the Society of Assessors of Azerbaijan, the Van der Vall international transport company, the Gorgud association, the Torcoise joint venture, the Elevatordeyirmanmach company, the Bestcom Group company, the Azerbaijan Farmprogress international centre for scientific and technical relations, the Granite joint venture, the Transauto company, etc. had been admitted as members.

* The National Confederation of Businessmen has nearly 800 collective members.

THEY TRY TO DECREASE UNDERGROUND WATER LEVEL IN BARDA AND TERTER

BAKU."The Azersutikinti joint-stock company (JSC) started land-reclamation work to decrease the underground water level in Barda and Terter. The work will end in a month," a source within the State Committee for Land Reclamation and Water Economy of Azerbaijan told TURAN.

They are also building the head water-receiving facility on the Samur river (Azerenergytikintigurashdirma and Azersutikinti - the contractors), the Khanarkh canal (Azerkerpu, Azerenergytikintigurashdirma and Azersutikinti), the dike on the Araz river crossing the Head Mil-Mugan Collector (the same three companies), the bank-strengthening facilities on the Geokchay river (Azersutikinti), and they are also liquidating the landslide on the right bank of the Mingachevir man-made lake (Azerenergytikintigurashdirma). In January-June 2001, the investment in the construction was 4,964 million AZM. Of that total, 595.4 million AZM were allocated from the state budget, and the rest was allocated by the Islamic Bank for Development and the World Bank.

* The construction of the head water-receiving facility will cost $2.09 million, the construction of the dike will cost $5.8 million (both financed by the World Bank), and the construction of the Khanarkh canal will cost $8.6 million (financed by the Islamic Bank for Development).

CUSTOMS

EXPORT DUTIES OF 111 MILLION AZM COLLECTED

BAKU.The export duty collection in January-June totalled 111 million AZM. The index for ferrous metal was 33.3 million AZM, the index for copper was 18.0 million AZM, the index for aluminium was 55.3 million AZM, and that for lead was 4.3 million AZM. The Cabinet of Ministers decided on 12 April that new export duties would be observed from 16 April on. They concern ferrous and non-ferrous waste and scrap ($5 and $15 per ton respectively).

The President of Azerbaijan suspended the export of ferrous and non-ferrous waste from Azerbaijan on 17 April. That measure had to strengthen the raw material resources and guarantee the efficient activity of the metallurgy industry in Azerbaijan.

According to the former customs order (valid from 1 January 1997 on), exports were not subjected to customs duties.

TRANSPORT AND COMMUNICATION SPHERE

MINISTRY OF COMMUNICATION FULFILLS SEMI-ANNUAL FORECAST

BAKU.During first semi-annual period this year Azeri Ministry of Communication's enterprises have fulfilled plan. Tariff profit has exceeded forecast by 6.7% and totaled 172 billion 182.5 million manat, up 6 billion 746 million manat against the same period last year; volume of services provided to population exceeded forecast by 10.1% and totaled 91 billion 089.1 million manat, up 7 billion 925 million manat against 6 months, 2000 and number of installed telephones exceeded forecast by 15% and reached 29,228, up 8,355 against 6 months, 2000, read Azeri Ministry of Communications' press release.

Tariff profit of Aztelecom enterprise exceeded forecast by 0.4% and totaled 88 billion 986 million manat, services provided to population exceeded forecast by 3.1% and totaled 60 billion 853.7 million manat, number of installed telephones exceeded forecast by 9.5% and totaled 14,188.

In Baku Telephone Network (BTN) enterprise tariff profit exceeded forecast by 6.2% and totaled 32 billion 768 million manat, services provided to population exceeded forecast by 43% and totaled 20 billion 713.8 million manat and number of installed telephones exceeded forecast by 20% and totaled 13,584.

In state-run Azerpocht enterprise tariff profit exceeded forecast by 4.3% and totaled 14 billion 287.2 million manat and services provided to population exceeded forecast by 3.1% and totaled 7 billion 071.3 million manat.

In Teleradio enterprise tariff profit exceeded forecast by 3.8% and totaled 10 billion 124.3 million manat.

AZERCELL'S SUBSCRIBERS TO FIRST KNOW RESULTS OF ENTRANCE EXAMS IN UNIVERSITIES

BAKU.As it has been agreed upon between Azeri state commission for students admission and Azercell JV, students can get to know results of 2001-2002 entrance exams in universities with help of mobile telephones via Azercell operator, reads Azercell press release.

Subscriber can send e-mail with its number to 777 number and he or she will receive a message with number of code of profession, if admitted to university. To get information about profession and university, subscriber must send e-mail with number of code of profession to 778 number.

At first entrance examination results will be announced only through mobile phones and then disseminated via all other sources of information.-

OIL AND OIL PRODUCTS

DRILLING IN INAM OFFSHORE AREA SUSPENDED

BAKU.The drilling of the first exploration well in the Inam offshore area has been suspended (BP Exploration (Inam) Ltd. is the operator). TURAN was told in BP the drilling had been suspended at the depth of 4,550 metres because of the growing pressure in the strata.

The source within BP said the drilling had been suspended for the safety and integrity of the well, and that was especially important at the moment. But the partners within the Inam project intend to perform the exploration work till the end there.

The BP specialists are revealing alternative ways out of the existing situation. They will need a few days to lay up the well. After that the Istiglal semi-submersible drilling rig, that has performed the drilling in Inam, will be transported to the Nakhchivan area to drill the first exploration well.

It is still unclear when exactly they will resume the drilling in Inam.

TURKMENISTAN BRINGS CLAIMS TO AZERBAIJAN OVER NON-EXISTING HYDROCARBON STRUCTURE

BAKU.There is not a prospective structure entitled Geygel on balance of the state oil company of Azerbaijan, said sources in SOCAR about Turkmenistan vice premier Yella Gurbanmuradova's statement on "belonging of a prospective structure Geygel, discovered by the Azeri experts, to Sardar license block" (known as Kepaz in Azerbaijan) and "therefore forming a part of the Turkmen Caspian sector".

Sources in SOCAR report that no prospective structures were discovered south from Kepaz structure as far as Araz-Alov-Sharq structures. It remains unclear which structures Turkmenistan has brought claims for this time.

ENI CONFIRMS INTENTION TO SHARE IN MEP BAKU-TBILISI-CEYHAN PROJECT

BAKU.Vittoria Mincato, chairman of the Council of Directors of Italian oil/gas concern ENI has again stated ENI's intention to enter the Sponsor Group for construction of the Main Export Pipeline Baku-Tbilisi-Ceyhan. He stressed this would happen after the project proved its viability.

Mincato made a similar statement at the History of Three Seas conference in Istanbul in June this year. Sources in the state oil company of Azerbaijan reported back then that negotiations over the Italian concern's sharing in the Sponsor Group would open in the nearest future. However, it seems that the negotiations did not open so far.

It should be reminded that ENI's subsidiary of Agip is operating within the Azeri Caspian sector. The company is operating (25% share) the project for development of prospective structures Kurdashi, Araz Deniz and Gurgan Deniz. Besides, ENI is sharing in large-scale oil/gas projects in Kazakhstan.

Sharers in the Sponsor Group for implementation of the Main Export Pipeline project are: SOCAR (50%), British company BP (25.41%), American company Unocal (7.65%), Norwegian Statoil (6.37%), Turkish TPAO (5.02%), Japanese ITOCHU (2.92%), Saudi Arabian-American Delta HESS (2.03%) and American company Devon Energy (0.6%). Devon Energy will soon withdraw from the Sponsor Group with participation share distributed among other members of the Sponsor Group. The SOCAR leadership numerously stated its readiness to reconcess up to 20% of its share in the Sponsor Group to the third sides. SOCAR in this connection had several rounds of negotiations with American company Chevron, French TotalFinaElf and Canadian Alberta Energy.

REPRESENTATIVES OF AZENERGY TO DISCUSS ELECTRIC POWER EXCHANGE BETWEEN AZERBAIJAN AND IRAN IN TEHRAN

BAKU.A working commission of Azerenergy, established within the agreement on electric power exchange between Iran and Azerbaijan, will go on a visit to Iran . The sides will discuss the problem of safe operation of the existing transmission line Imishli-Parsabad and possible construction of other electricity electricity transmission lines.

Azerenergy daily transmits 4 million kwt-hour of electricity (230 KV) via the Imishli-Parsabad line. Three power blocks at Ali Bayramli state electric power station are engaged in electricity transmission to Iran.

Iran has transmitted almost 50 mega-watt of electricity via Imishli-Parsabad electricity transmission line within the Azeri-Iranian agreement, concluded in February 2001. Azerenergy in April 2001 started to return the similar volume of electric power and compensation of almost 40 mega-watt delivered by Iran to the Nakhchyvan Autonomous Republic. According to the bilateral contract, Iran delivers electric power to Azerbaijan for four months every year. Azerenergy returns the similar volume of electric power to Iran during a period of 8 months. Three swap electricity transmission lines - ImishliParsabad (230 KV), Nakhchyvan (132 KV) and Ordubad-Julfa (20 KV) between Iran and Azerbaijan are operating at present.

SOCIAL SPHERE

AZERBAIJAN TAKES FIFTH POSITION IN COMMONWEALTH ON SALARY LEVEL

BAKU."Azerbaijan was the fifth among the countries of the Commonwealth (CIS) on the salary level in June. The average salary was $56 here," the CIS Committee for Statistics reports.

The entire figures are given in the table below. No figures exist on Turkmenistan, Uzbekistan and Georgia.

GEORGIA

FOREIGN ECONOMY

PRESIDENT'S ADVISOR ON ECONOMIC ISSUES LESHEK BALTSEROVITZ COMING TO GEORGIA

TBILISI. The President of Georgia Eduard Shevardnadze's, Advisor on economic issues, a well-known Polish economist, Head of the Central Bank of Poland Leshek Baltserovitz is coming to Tbilisi to get insight into the current economic situation in Georgia and assess the progress related to the implementation of economic reforms in the country,-reports the representative of Baltserovitz's group in Georgia Eji Miller.

Leshek Baltserovitz was financed by USAID to his position in August last year. The Polish experts plan to terminate their work in Georgia by September this year and so far keep from negotiating with the Georgian government upon continuation of their mission in the country. Over the period of his official mission in Georgia Leshek Baltserovitz visited the country four times presenting the government with recommendations on economic development of Georgia, particularly its fiscal sphere and small and medium business.

Eji Miller says though the economic situation in Georgia still leaves much to be desired and it is not easy to entirely change it within one year, first significant steps has already been made towards its improvement, with decrease in the level of budget debts attesting to the fact. It is important to boost reforms in the country and never relax speeding their implementation,- said the Polish economist.

Before leaving Georgia on August 12, Leshek Baltserovitz plans to hold meetings with representatives of economic coalition of the Georgian parliament and President of Georgia Eduard Shevardnadze.

EX-MINISTER OF ECONOMY BELIEVES GOVERNMENT'S EFFORTS AND ZEAL A NECESSARY ELEMENT FOR SUCCESSFUL REALIZATION OF LESHEK BALTSEROVITZ'S RECOMMENDATIONS

TBILISI. Deputy Parliamentary Secretary, ex-minister of Economy Vladimir Papava assessed as useful the recommendations presented by the group of Polish experts led by Leshek Baltserovitz.

<I approve of all items of the documents set up by Leshek Baltserovitz for the Georgian government,>- said Vladimir Papava. He said recommendations might turn feasible trough the government's zeal and efforts to take active measures aimed at improvement of the situation.-

REAL SECTOR

ELABORATION OF THE CONCEPTION OF TOURISM DEVELOPMENT IN GEORGIA ACCOMPLISHED

TBILISI. The State Tourism and Resorts Department has accomplished elaboration of the Conception on tourism development in Georgia and plans to submit it to the government for consideration in near future.

The Department reports in 2000 the tourism sphere brought GEL 826.7 million in state incomes. In the same year the Department received a budget subsidy equivalent to GEL 62 thousand. This year of the amount equivalent to GEL 330 thousand, meant for financial support to the Department, over the past six months this year the government spent just 44% for the purpose.

CONSTRUCTION OF BAZALETI TOURISM COMPLEX REMAINS IMPOSSIBLE UNTIL GOVERNMENT FULFILLS ITS OBLIGATIONS TO MEET INVESTOR'S REQUIREMENTS

TBILISI. Since the state fails to meet the investor's requirements, <Tsentr> LLC finds it impossible to set down to the implementation of the project on construction of the tourism complex at Bazaleti Lake /Eastern Georgia/,- runs the letter sent by the company to the State Tourism and Resorts Department.

The problem concerns reconstruction of the 8 - kilometer road leading to the lake Georgia was to implement in compliance with the project under the local authorities. The investor proposed to support Georgia financially investing into the rehabilitation of the road provided Georgia introduces tax preferences,- the BLACK SEA PRESS reporter was informed at the Department.

*** <Tsentr> LLC intends to invest $24 million into the erection of the complex, supposed to room up to 1200 persons. The part of the complex, rooming 650 people, will be ready to receive tourists by May, 2002.

REACH HARVEST OF CEREALS IN SHIDA KARTLI SET GOING THE GORI FLOUR MILLING PLANT, OUT OF OPERATION FOR YEARS

TBILISI. Thanks to rather high cereals harvest rate in Shida Kartli the Gori flour milling plant has finally got the opportunity to expand its production capacity, bringing it up to 70%,- the BLACK SEA PRESS reporter was told by the Ministry of Food and Agriculture.

The Ministry expressed its determination to expand operations of all milling plants in Georgia. <Georgia possess large capacities turning possible procession of cereals reaped both inside and outside Georgia in South Caucasus,>- said the Ministry representative. ***35 hectares of land was used this year for the cultivation of cereals in Shida Kartli with the average wheat crop capacity running 2.2 tons per hectare. The area used for the cultivation of barley in the region makes 7 thousand hectares.

CAPITAL MARKETS

REVIEW OF AUGUST 7-9 GSE AUCTIONS

TBILISI. The volume of the week's auctions held at the Georgian Stock Exchange (August 7 and 9) made GEL102, 540.25

In the course of the 63-rd trade session (August 9) six deals were made on 81,653 shares of four companies to the sum total of GEL 41,917. For the first time at the Georgian Stock Exchange traded was <Iveria> hotel. Consequently, two deals were made on its 29 shares at the price of GEL 0.5 per share. Sold were also 29 shares of <Saktransproekti> at the price equaling GEL 5 per share, which is by GEL 0.15 lower than the previous index. 9,601 shares of <Parnavazi> were sold at GEL 0.6 per share. Two trade deals were made on 71,053 shares of <Delita Es> at GEL 0.5 per share.

28 companies were traded at the auction. 8 brokerage companies participated in it.

In the course of 62-nd trade session (August 7) 9 deals were made on 130,714 shares of fivr companies to the sum total of GEL 60,623.15. 16,765 shares of <Sakartvelos Banki> were sold at the price of GEL 2.06 per share. 2 trade deals were made on 349 shares of <Sakkalakmshenproekti> The price made: minimal GEL 4.05 and maximal 4.12 per share). Sold were 93,714 shares of the Tbilisi paper mill at GEL 0.1 per share. Sold were 2,024 shares of <Maspindzeli> at an increased price of GEL 2.1 per share. The previous price made GEL 0.03 per share. 3 trade deals were made on 14 shares of <Bakhtrioni> at GEL 8 per share. Sold were 18,302 shares of <Parnavazi> at GEL 0.6 per share.

26 companies were traded at the auction. 9 brokerage companies participated in it.