Subject: RE: Conditions for EU macro-financial assistance
From: Tamar Avalishvili <[email-masked]>
To: "[email-masked]" <[email-masked]>
Cc: Nikoloz Gagua <[email-masked]>, Salome Chakvetadze <[email-masked]>, "[email-masked]" <[email-masked]>, "[email-masked]" <[email-masked]>, "[email-masked]" <[email-masked]>, "[email-masked]" <[email-masked]>, Davit Shoshitashvili <[email-masked]>, Aleksandre Revia <[email-masked]>, Ketevan Goginashvili <[email-masked]>, Tamar Barkalaia <[email-masked]>, Teimuraz Gabriadze <[email-masked]>
Date: Mon, 01 Jul 2019 14:05:25 +0000

Dear Martynas,

Please see the answers of your questions below. Some issues are still outstanding, so we will get back to you as soon as we have feedback on them.

Best Regards,

Tamar

From: [email-masked] <[email-masked]>

Sent: Monday, June 17, 2019 5:03 PM

To: Davit Shoshitashvili <[email-masked]>

Cc: Nikoloz Gagua <[email-masked]>; Salome Chakvetadze <[email-masked]>; Tamar Avalishvili <[email-masked]>; [email-masked]; [email-masked]; [email-masked]; [email-masked]

Subject: Conditions for EU macro-financial assistance

Dear David,

Thank you again for your help during the meetings in Tbilisi last month.

In the meantime, we have received additional information from the Georgian authorities on some of the MFA conditions and would like to use this opportunity to touch base on all outstanding issues:

-
On public investment management (condition 1), we refer to our email to you (Niko) of 29/05/2019. Could you please respond on the issues raised in that email (the institutional setup of the PIM system,
as well as the timeline and the scope of project evaluation), also in view of a recent mission by a World Bank expert to Tbilisi?

Waiting for the feedback

-
On PPPs (condition 2), could you please provide an update on the establishment of the independent PPP unit/agency and the fiscal risk unit at the Ministry of Finance (at the time of our mission, the hiring
of staff of both units was ongoing), as well as on the start of their operations?

• The PPP Agency became operational in Feb 2019

• Currently, the Agency is staffed with the following four core employees: head, deputy head, senior advisor and project manager. Additionally, we have hired a part-time accountant.  We are in the process
of hiring one more core staff member.

• Together with the international partners (ADB and USAID) and the MoF the Agency have finalized the draft of the technical requirements of the new PPP framework, including the updated PCN, the assessment
methodology as well as relevant guidelines. Using the latest methods, the Agency has already received, reviewed and communicated back the information regarding two projects received from the Ministry of Economic and Sustainable Development.

• The Agency is incorporating the UNECE’s People first approach (PfPPP) into the PPP framework of Georgia.

• Recently the Agency organized a two-day, high-level event: an inaugural conference and a workshop. About two hundred delegates attended the event. During the workshop, we have invited government officials
from the ministries, other central bodies as well as from the municipalities and regions of Georgia. In total, we have shared information on new methodology and procedures and provided hands-on training and exercises for
up to 80 professionals - the people who will be identifying and initiating potential PPP projects.

-
On public procurement (condition 3), we refer to our email to the SPA of today, 17/06/2019 (copied to you), which covers two specific exceptions allowing direct procurement and the review body.
Waiting for the feedback

-
Have there been any new developments relating to the
MTPL law (condition 4) and company law (Law on Entrepreneurs; condition 10)? In particular, could you please reconfirm your plans to submit the company law to the Parliament by end-July?
Waiting for the feedback

-
On healthcare (condition 6), could you please provide an update on the progress with the adoption of the strategy for strategic purchasing?
Before adoption of the Strategic purchasing implementation strategy by the Government of Georgia, strategy will be discussed at the Health care and Social Issue Committee of the Parliament of Georgia on June 27, 15.00.
Strategy will be adopted in July by GoG.

We also have a specific question to the relevant authorities on section 3.4 of the draft strategy, which refers to selective contracting as part of the improvement of payment and contracting mechanisms. Do we understand
correctly that the increase of inpatient specialised care services purchased through selective contracting, as a share of total expenditure, from 4% in 2017 to 7% in 2019 is mainly explained by the extension of selective contracting to emergency services in
January 2018 and congenital heart diseases in March 2018? In new version of SP strategy inpatient specialized care services purchased through selective contracting, as a share of total expenditure in 2019 is planed 15%. Selective
contracting is implemented into 3 large cities Tbilisi, Batumi and Kutaisi.  Total amount of inpatient specialized care services purchased through selective contracting was 12% in 2018. After adoption of Strategic purchasing implementation strategy, share
will be increase dramatically.

-
Could you please provide an update on the additional stakeholder consultation relating the
labour market strategy (condition 7), which we understand is ongoing, as well as on the timeline for the adoption of the strategy and a more detailed action plan?
Labor Market Strategy has been elaborated and its final version is sent to Delegation for review.  Once we get confirmation from the Delegation, we will upload it for approval.

-
On land registration (condition 9), we have received the attached data from the NAPR on 12/06/2019. Could you please provide an update on the adoption of the action plan for systematic registration?
Please see attached required documentation.

-
On the judiciary (condition 11), we are waiting for additional information from the High Council of Justice on the allocation of cases and the publication of rulings, in response to our email of 18/05/2019
(attached). You have got the feedback from Ms. Shorena Mezurnishvili

We would also appreciate if you could clarify a couple of procedural issues relating to the grant element of the first instalment, in response to our email to you (Tamar) of 06/06/2019.

Regarding the grant conversation, it is proceeded according to our internal procedures; could you please clarify your interest in this particular issue.

Thank you in advance.

Martynas