By Tsira Gvasalia

The largest pharmaceutical company in the Republic of Georgia has big plans for a choice piece of property it bought five years ago at a bargain price.

In 2009, Aversi-Pharma snapped up a huge Soviet-era hospital complex in Tbilisi when the National Agency for State Property Managementconducted a privatization auction. For US$12.5 million, Aversi-Pharma bought 58,175 square meters of land and the 18 buildings on it.

An independent assessor says the land alone was worth nearly twice that.

The independent assessment by the Levan Samkharauli National Forensics Bureau, commissioned by the Organized Crime and Corruption Reporting Project (OCCRP) in August of 2013, said that the land would have been worth US$20.5 million in 2009—and that’s without counting the buildings.

Bargain prices are not unusual in privatization deals, but in most cases they are accompanied by contract language that orders the winning bidder to make major improvements to the land and property within a certain time span.

That was not the case with Aversi-Pharma, which the year before had given more than US$113,000 to then-President Mikheil Saakashvili’s ruling political party. The 2009 deal did not require the pharmaceutical company to make any improvements at all.

According to the Georgian constitution in effect at that time, the president had the right to issue orders to sell land and buildings owned by the government.

When Saakashvili gave such an order, the procedure was for Tbilisi City Council to list an assessed price for the value of the land and for an independent assessment to be made. The final auction starting price would then be set, considering both the City Council’s and the independent auditor’s assessments, according to a Ministry of Economics spokesman.

The 2009 independent assessment, by a company called Auditescort, valued the land and buildings at US$11.1 million.

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