The Smart City Façade: A Systemic Audit of Urban Digitalization in Tbilisi

The global discourse surrounding urban digitalization and the “smart city” concept is often framed in a technocratic and apolitical language of efficiency, sustainability, and improved quality of life. However, this report proceeds from a different analytical premise: that urban digitalization is never a purely technical endeavor but a deeply political one.¹ In any context, the deployment of new technologies for governance involves choices about resource allocation, data ownership, surveillance, and public access that reflect and reinforce existing power structures. In the context of a captured state, as documented in the preceding reports of this series, these technologies are not merely influenced by politics; they become primary instruments for exercising and consolidating power.¹

The objective of this report is to conduct a systemic audit of Tbilisi's digitalization initiatives through the analytical lens of “power indicators”.¹ It moves beyond cataloging apps and projects to interrogate the underlying political economy of the city's technological transformation. The core questions driving this analysis are: Who are the real beneficiaries of multi-million-dollar technology procurements? How are high-profile “smart city” projects instrumentalized as tools for political public relations and patronage? And how do these initiatives serve to reinforce the systemic dynamics of the informal power vertical, architected by Bidzina Ivanishvili and operationalized at the municipal level by Mayor Kakha Kaladze?.¹

This analysis is situated within the immediate context of the October 4, 2025, Tbilisi mayoral election. The electoral cycle provides a time-bound “diagnostic lens” through which the operational mechanics of the ruling system can be observed with heightened clarity.¹ The timing of project announcements, the allocation of resources, the management of media narratives, and the activation of corporate networks during this period offer a real-time case study of how digitalization is deployed as a strategic political asset. By documenting these patterns, this audit aims to produce a durable, evidence-based record of the instrumentalization of urban technology within Georgia’s contemporary political system, providing critical context for international observers, diplomats, and researchers.

As of late 2025, Tbilisi's digital landscape presents a complex and often contradictory picture. On the surface, the city has made demonstrable progress in deploying a range of digital services and has initiated ambitious “smart infrastructure” projects. However, a deeper analysis reveals a significant divergence between the functionality of low-cost, high-visibility citizen applications and the opaque, high-cost processes governing major infrastructure investments. This suggests a bifurcated digital strategy, where a façade of convenient, citizen-centric technology masks a more consequential system of resource allocation that operates with minimal public transparency.

The most visible component of Tbilisi’s digitalization is its suite of citizen-facing e-services, designed to streamline interactions with the municipality and improve daily life. These platforms are central to the administration’s public image of modernization and efficiency.

The city’s digital services are anchored by a unified login account system, introduced in 2022, which allows residents to access various municipal applications with a single set of credentials.¹ This ecosystem includes a portal for online applications, the “Tbilisi Parking” system for managing parking payments, and a service for taxi registration and licensing.¹ The cornerstone of the public transport interface is the Tbilisi Transport mobile application. This app provides users with real-time information on bus and metro arrivals, route planning, and the ability to top up their Metromoney transport cards, offering a tangible improvement in the commuter experience.¹
 
A key initiative launched in May 2023 is the “Fix Tbilisi” mobile application, designed to function as a direct channel for citizens to report municipal problems such as potholes, broken streetlights, or fallen trees.¹ The app allows users to upload a photo and location, which is then registered as a service request, with the user theoretically receiving notifications on the status of the repair.¹ In practice, however, the application serves as a prime example of a “digital façade.” While the reporting mechanism is functional, user feedback and low adoption rates indicate a significant gap between the promise of responsiveness and the reality of municipal inaction. As of September 2025, the application had only 22 ratings on the Apple App Store, with users complaining that reported issues are frequently ignored by the city hall, rendering the app a one-way communication tool rather than a genuine mechanism for collaborative problem-solving.²
 
This pattern — creating a technologically sophisticated channel for input without a corresponding commitment to output — is characteristic of a strategy that prioritizes the appearance of digital governance over its substantive implementation. Other digital conveniences, such as the rollout of electronic utility bills, the deployment of smart electricity meters to a reported 50% of consumers, and an online service by Tbilservice Group for scheduling the removal of bulky waste, contribute to this narrative of modernization.¹ While these services offer genuine utility, they represent the low-cost, high-visibility component of the city's digital strategy. They successfully generate positive public perception and allow the administration to claim progress, while the far more substantial financial resources are directed towards large-scale infrastructure projects where the mechanisms of patronage and political influence are concentrated.

In contrast to the citizen-facing applications, Tbilisi’s “smart” infrastructure projects involve significant capital investment, long-term implementation timelines, and complex procurement processes that are largely shielded from public scrutiny. These initiatives form the core of the city’s long-term development strategy and represent the primary arena for political and economic competition.

The flagship initiative is the Smart Transport System, a €47 million project launched in 2023 with financial and technical support from the German development bank KfW.¹ The project's stated goal is to create a city-wide intelligent traffic management system using a network of road sensors, smart traffic lights, and a central data platform to manage traffic flows and parking in real time.¹ With a four-year implementation timeline, the system is intended to reduce traffic congestion, improve road safety, and give priority to public transport and emergency services.¹ However, the procurement process for the core technology and integration services remains opaque. As of September 2025, key contracts for this multi-million-euro project have not been publicly detailed, making it a “black box” and a prime example of the lack of transparency that characterizes high-value municipal procurement.⁴
 
Another major project central to Mayor Kaladze's political platform is the revival of the city's tram network. In August 2025, the city announced a tender for the construction of a new 7.5-kilometer tram line connecting the Didi Digomi district to the Didube metro hub.¹ With a market-researched estimated cost of approximately €110 million, this project represents a massive infrastructure investment.⁸ As will be analyzed in a later section, the timing of this announcement, just weeks before the mayoral election, underscores its primary function as a tool of political public relations rather than a fully-realized transport solution.¹
 
In the environmental sphere, the city has made more transparent progress. With assistance from the Swedish government, Tbilisi has expanded its network of automated air quality monitoring stations. The data from these sensors is published in real time on an open portal, Air.gov.ge, providing citizens and researchers with valuable environmental information.¹ This initiative stands as a notable and positive example of genuine data transparency. However, its effectiveness in driving policy is debatable, and its openness stands in stark contrast to the opacity surrounding the far more financially significant transport and infrastructure projects, suggesting a strategy of selective transparency.

Tbilisi’s administration has publicly embraced the rhetoric of data-driven governance, participating in international initiatives like the UN's United for Smart Sustainable Cities (U4SSC) program.¹ A 2022-2023 evaluation by the UN Economic Commission for Europe (UNECE) acknowledged the city's strong foundation for e-governance, citing a 93% household internet penetration rate.¹ However, the same report identified a critical systemic weakness: a lack of integrated data across municipal services, which prevents comprehensive analysis and forces many decisions to be made “manually” without the support of modern monitoring systems.¹ This finding points to a persistent gap between the city's data-driven aspirations and its operational reality.

This gap is further exemplified by the long-standing plan to create a centralized “Situational Center” — a municipal command-and-control hub for monitoring traffic, resource consumption, and citizen complaints in real time.¹ While individual components, such as a traffic management dispatch center, are operational, the fully integrated center remains on the drawing board. This pattern of announcing ambitious, technologically advanced projects that are slow to materialize or remain perpetually in the planning phase is a recurring theme in the city's digitalization narrative.

The city’s approach to open data also appears to be more performative than substantive. While national portals like data.gov.ge exist and contain information on Tbilisi's budget and tenders, they often lack the granularity and user-friendliness required for genuine citizen oversight.¹ A key electoral promise made by Mayor Kaladze's campaign was the creation of an interactive “electronic budget” portal where citizens could track municipal spending in real time.¹ However, an extensive review of publicly available information as of September 2025 reveals no evidence that such a dedicated, user-friendly municipal portal has been launched or is in active development.⁹
 
This evidence points to a deliberate strategy of selective transparency. The administration is willing to make non-critical or technically complex data sets public, such as raw environmental data from Air.gov.ge or high-level budgetary figures on national portals. This allows it to claim a commitment to openness and data-driven governance. Simultaneously, the most politically and economically sensitive information—such as the detailed justifications for awarding a €150 million metro contract or the specific bidders for the €47 million transport system—remains shielded within the opaque procurement system. This creates a carefully managed illusion of transparency, providing just enough data to deflect criticism while protecting the core mechanisms of the patronage network that operates within the procurement “black box.” This is not a system flaw; it is a feature of a governance model that uses the language of digital openness as a tool of political management.

The digitalization of Tbilisi cannot be understood as a linear process of technological adoption. It is a contested field where administrative, corporate, and social power dynamics are played out. By applying the “power indicators” framework, this section deconstructs how “smart city” initiatives are systematically leveraged for political gain, how they are integrated into the ruling party's patronage networks, and who is ultimately excluded from their proclaimed benefits.

High-profile, technologically advanced urban projects are potent political assets. They allow an incumbent administration to project an image of competence, modernity, and forward-thinking vision. Within the Tbilisi context, Mayor Kakha Kaladze has masterfully leveraged “smart city” initiatives to build and sustain his political brand as an effective, results-oriented manager, a persona analyzed in detail in the contextual report on his team.¹ These projects are not merely items in a municipal budget; they are the central props in a continuous public relations campaign.

The revival of the city’s tram line serves as a primary case study of this strategy. The project's announcement in August 2025, less than two months before the municipal election, was a strategically timed political maneuver designed to dominate the pre-election news cycle.¹ The mayor's public rhetoric surrounding the announcement was carefully crafted to maximize political impact. He framed the project as a “historic” achievement — the first tram to be built in Georgia's post-independence history — and emphasized its “European standards,” directly appealing to the pro-European aspirations of the capital's electorate.¹⁴ The narrative presented the tram as a panacea for Tbilisi's most pressing urban problems, promising that it would provide “safe, comfortable, and fast travel,” “ease the burden on buses,” “reduce traffic congestion,” and “improve environmental conditions”.⁷
 
This deployment of “solutionism” — the framing of complex social problems as having neat, technological fixes — serves as a powerful distraction tactic. Tbilisi’s chronic traffic congestion is the result of decades of chaotic urban planning, a lack of effective regulation on private vehicle use, and inconsistent enforcement of traffic laws.¹ The tram project, with its projected 4.5-year timeline from tender to completion, offers no immediate relief for these deep-seated structural issues.⁷ However, by focusing the public and media conversation on this ambitious, futuristic project, the administration effectively shifts accountability away from its past and present policy failures. The promise of a “smart” technological solution in the distant future is used to obscure the more difficult and politically costly work of fundamental urban planning reform, land use regulation, and traffic enforcement that is needed in the present. This allows the incumbent to campaign on a vision of a modern, European future without having to answer for the persistent, daily frustrations of the city’ s current reality.

Beyond their function as public relations tools, large-scale digitalization and infrastructure projects serve a more critical systemic purpose: they are the primary channels through which public funds are directed to a network of politically connected corporate entities. This “donor-contractor” loop, extensively documented by anti-corruption watchdogs like Transparency International Georgia, is a core mechanism of the ruling system's power-retention strategy.¹ The process is transactional: companies with ties to the ruling Georgian Dream party make significant financial donations, and in return, they are awarded a disproportionate share of lucrative state and municipal contracts, often through non-competitive or opaque tenders. This ensures the party's financial dominance while creating a loyal and dependent corporate class.

The €150 million tender for 111 new metro cars, finalized in July 2025, provides a clear and compelling case study of this system in action.¹⁸ The contract was awarded to a local company, GT Group, which will supply trains manufactured by the Chinese state-owned rail giant, CRRC Corporation.²⁰ An examination of this deal reveals the deep integration of political, corporate, and even geopolitical interests.

The political connections of the winning local partner are a matter of public record. Investigations by Transparency International Georgia have documented that GT Group's owners, Temur Ustiashvili and Giorgi Gvelesiani, are financial donors to the Georgian Dream party and its supported presidential candidate.²⁰ This fact alone places the procurement process under a cloud of suspicion, suggesting that political loyalty may have been a factor in the contract's awarding. These concerns are amplified by allegations from critics, who claim that the tender's technical specifications were deliberately “tailored to serve someone's interests” and designed to favor CRRC while discouraging potential European competitors like Škoda Group, which submitted a symbolic protest bid.²⁰
 
Furthermore, the selection of a Chinese state-owned firm, funded by the China-led Asian Infrastructure Investment Bank (AIIB), represents a concrete manifestation of the Georgian government's broader geopolitical pivot away from the West.¹⁸ This decision was made after a previous, EBRD-funded deal to purchase trains from a Russian manufacturer collapsed due to international sanctions following the 2022 invasion of Ukraine.²⁰ Instead of seeking another Western financial and industrial partner, the Tbilisi municipality, with the backing of the central government, turned to Chinese state-controlled entities. This move aligns perfectly with the national government's documented strategy of cultivating alternative economic and political partnerships with non-Western powers to reduce its dependency on the EU and US, and the democratic conditionality that often accompanies their financial support.¹ The procurement of metro cars is therefore not just a municipal transport issue; it is a strategic decision that allows the administration to sidestep the potentially stricter transparency and anti-corruption standards of Western financial institutions while simultaneously deepening Georgia's economic integration with a key non-democratic global power.

While the "smart city" narrative emphasizes futuristic technology and efficiency, it often overlooks the fundamental question of equity. The push towards digitalization in Tbilisi risks creating or exacerbating a digital divide, leaving behind significant segments of the population. The city's digital services are primarily accessible through smartphones and require a degree of digital literacy that may not be universal.¹

For marginalized groups—including the elderly, low-income residents who may not own smartphones or afford consistent data plans, and individuals with disabilities—the shift to digital-first services can create new barriers to accessing essential municipal support. The UNECE report notes that while overall internet penetration is high, this does not guarantee equal access or ability to use complex digital platforms.¹ If traditional, in-person service channels are de-prioritized or underfunded in favor of developing new apps, the result is a system that serves the most technologically proficient citizens at the expense of the most vulnerable.

Furthermore, the focus on capital-intensive technology projects raises questions about resource allocation. The €110 million estimated for a new tram line or the €47 million for an intelligent traffic system could alternatively be invested in more fundamental, low-tech solutions that address pressing social needs, such as upgrading dilapidated housing stock, improving accessibility in public spaces for people with disabilities, or expanding social support programs. The current digitalization strategy appears to prioritize high-visibility, technologically impressive projects over less glamorous but potentially more impactful investments in social equity, reflecting a governance model that is more attuned to public relations than to the needs of all its citizens.

The allocation of public funds through state and municipal procurement serves as a primary indicator of systemic governance and power dynamics. This is particularly true for high-value contracts related to urban modernization and "smart city" infrastructure, which are often presented through a public relations narrative of technological progress and civic improvement.¹ This analysis moves beyond that narrative to conduct a systemic audit of the procurement web surrounding Tbilisi's digitalization projects. It proceeds from the analytical premise that these large-scale contracts are not merely technical undertakings but a principal arena where political power is exercised, patronage networks are serviced, and the operational mechanics of the ruling system are revealed.¹
 
The investigation is situated within a paradoxical governance environment. On one hand, Georgia has been internationally lauded for its centralized e-procurement platform, which was designed to eliminate opaqueness and create one of the world's most transparent government purchasing systems.² All tender documentation, bids, and signed contracts are, in theory, publicly accessible, and the system has been credited with reducing low-level corruption.² On the other hand, anti-corruption watchdogs and independent analysts consistently identify the use of non-competitive "simplified procurements" and a persistent lack of transparency in high-value tenders as a primary systemic challenge.⁵
 
This apparent contradiction is not a system flaw but a core feature of the existing governance model. It points to a strategy of "performative transparency," where a façade of openness in routine, low-value procurement serves to generate international goodwill and deflect criticism, while the most politically and economically significant contracts are channeled through less visible or more manipulable processes. The very transparency of the general system can be leveraged as a political asset to obscure the lack of genuine competition where it matters most. By examining a series of high-profile case studies, this report maps the networks and patterns that define this procurement web, using the flow of public money as a diagnostic lens to understand the deeper structures of power in contemporary Tbilisi.¹

The context for any analysis of high-value procurement in Georgia is a well-documented, systemic linkage between political donations and the awarding of state contracts. This “donor-contractor” nexus, extensively monitored by organizations such as Transparency International (TI) Georgia, forms the foundational architecture of the procurement landscape. It is not a series of isolated or coincidental events but a recurring pattern that suggests a transactional relationship between corporate entities and the ruling Georgian Dream party.⁷

The data reveals a consistent and statistically significant correlation. An October 2024 report by TI Georgia found that between January 1, 2023, and October 17, 2024, companies connected to donors of the ruling party received public procurement contracts worth GEL 684 million. During the same period, these donors contributed GEL 3.1 million to Georgian Dream.⁷ A separate analysis covering 2023 found that 14 companies linked to ruling party donors won tenders valued at up to GEL 1.1 billion while donating GEL 1.45 million to the party.⁸ This pattern has been documented over multiple years, with similar findings reported for the 2019-2020 period and for specific quarters within election years, indicating a deeply embedded practice.⁹

Specific cases illustrate the mechanism with clarity. For instance, the company "Gza" LLC was awarded GEL 226 million in public procurement contracts in 2023-2024. The company's owner, Giorgi Chkonia, is a donor to Georgian Dream and was a candidate for the party in the 2024 parliamentary elections.⁷ This nexus extends beyond direct tenders to include other forms of state benefits, such as agricultural subsidies and grants from state programs like "Enterprise Georgia," which also disproportionately flow to entities connected to political donors.⁷

This system functions as more than just a corruption risk; it is a core mechanism for political power retention and consolidation. It creates a self-perpetuating financial and political ecosystem. State funds, channeled through public contracts, flow to a select group of private companies. A portion of these funds is then recycled back to the ruling party in the form of political donations. This financial feedback loop provides the incumbent party with an unrivaled resource advantage, allowing it to vastly outspend all political competitors, particularly in advertising and campaign activities.⁷ Simultaneously, it cultivates a loyal and dependent corporate class whose commercial success becomes intertwined with the political fortunes of the ruling party, thereby discouraging support for the opposition and solidifying the party's control over key sectors of the economy. This transforms the pattern from simple quid-pro-quo corruption into a strategic instrument of systemic political entrenchment. The failure of state bodies like the Anti-Corruption Bureau to investigate these documented patterns, as noted by TI Georgia, further reinforces the conclusion that this is a tolerated, if not officially sanctioned, feature of the political system.⁷

The July 2025 tender for the procurement of new metro cars for Tbilisi serves as a paradigmatic case study, illustrating the convergence of political patronage, opaque corporate dealings, and strategic geopolitical interests within a single, high-value contract. A forensic analysis of this deal reveals how the systemic patterns of the donor-contractor nexus are operationalized in a major infrastructure project central to the city's modernization narrative.

In July 2025, Tbilisi City Hall announced that a €150 million contract for 111 new metro cars was awarded to a local company, GT Group.¹ The trains are to be manufactured by the Chinese state-owned rail giant, CRRC Corporation, with financing provided by the China-led Asian Infrastructure Investment Bank (AIIB).¹³

The political connections of the winning local partner are a matter of public record and align perfectly with the donor-contractor pattern. According to a 2021 report by TI Georgia, GT Group's owners, Temur Ustiashvili and Giorgi Gvelesiani, are documented financial donors to the Georgian Dream party and its supported presidential candidate, Salome Zurabishvili.¹ Between 2016 and 2018, they donated a combined GEL 180,000 (approx. $66,300) to the party and its candidate. The watchdog noted that prior to 2020, GT Group had already secured over GEL 100 million in public tenders, raising "legitimate concerns about corruption and inefficient spending".¹² The awarding of this new, far larger contract to a company with such explicit financial ties to the ruling party suggests that political loyalty may have been a significant factor in the procurement decision.

These concerns are amplified by credible allegations from critics that the tender's technical specifications were deliberately structured to favor the Chinese manufacturer, CRRC, while discouraging potential European competitors. Irakli Abesadze, head of the Center for Civic Participation, asserted that the tender's terms were "tailored to serve someone's interests," leaving no space for fair competition.¹²

The most compelling evidence supporting this claim was the submission of a symbolic protest bid by the Czech-based Škoda Group, a major European manufacturer. Škoda submitted a bid of just one GEL per subway car, a move widely interpreted as a signal that the company was interested in the contract but believed the outcome was predetermined and that a serious bid would be futile.¹ This action from an established industry player lends significant weight to the argument that the procurement process was not a genuinely open and competitive one.

The selection of CRRC as the manufacturer introduces a significant layer of technical and geopolitical risk. CRRC is not a typical commercial entity; it is a massive Chinese state-owned enterprise (SOE) with deep ties to the Communist Party of China and the country's military-industrial complex.¹⁶ It is widely seen as a key instrument of Beijing's "Made in China 2025" industrial policy, which aims to achieve global dominance in key sectors like rail manufacturing, often through state-subsidized, below-market bids.¹⁹

Furthermore, CRRC has a deeply problematic track record in Western markets, raising serious questions about the due diligence conducted by Tbilisi City Hall. In Boston, Massachusetts, new metro cars supplied by CRRC have been plagued by a series of severe safety and quality failures, including a battery explosion, derailments, braking failures, and structural faults that have repeatedly forced the entire fleet to be pulled from service.¹⁹ The company has also been accused of intellectual property theft and has been subject to investigations in Europe over unfair state subsidies.¹² The decision to procure critical public transport infrastructure from a manufacturer with such a well-documented history of performance and safety issues in a Western regulatory environment suggests that technical quality and long-term reliability were not the primary considerations in the selection process.

The final dimension of the metro tender is the strategic pivot in its financing. An earlier plan to purchase 44 cars from the Russian manufacturer Metrovagonmash, with financing from the European Bank for Reconstruction and Development (EBRD), collapsed in 2023 after the Russian firm was sanctioned by the U.S. following the full-scale invasion of Ukraine.¹² Instead of seeking another Western financial and industrial partner, the municipality, with the backing of the central government, turned to the AIIB and CRRC.

This shift is not merely a practical response to sanctions but a clear manifestation of the Georgian government's broader geopolitical reorientation away from the West. It allowed the administration to sidestep the potentially stricter transparency, anti-corruption, and due diligence standards of Western financial institutions like the EBRD, while simultaneously deepening Georgia's economic integration with China, a key non-democratic global power. The procurement of metro cars thus transcends a municipal transport issue, becoming a strategic decision that aligns with the national government's policy of cultivating non-Western partnerships to reduce dependency on the EU and the US.¹ The convergence of these factors—a politically connected local partner, a non-competitive tender, a high-risk state-owned manufacturer, and a pivot to Chinese financing—makes the metro deal a textbook example of how procurement is instrumentalized to serve a complex web of political, corporate, and geopolitical interests.

The following table deconstructs the key actors and dynamics of this procurement process.

Table 1: Deconstruction of the €150M Tbilisi Metro Tender (July 2025)
 
 

In stark contrast to the high-profile controversy of the metro tender, the procurement process for Tbilisi's flagship "Smart Transport System" exemplifies a different tactic: strategic opacity. This €47 million project, launched in 2023, is designed to create a city-wide intelligent traffic management system using a network of sensors and smart traffic lights.¹ While its stated goals are laudable, the project serves as a compelling case study in how the core mechanisms of a major public contract can be shielded from scrutiny, even when funded by a Western development bank with a stated commitment to transparency.

The project is financially and technically supported by the German development bank KfW.¹ KfW, as a state-owned German institution, publicly espouses the importance of transparency in international cooperation, maintaining a dedicated transparency portal and adhering to internationally recognized environmental and social standards in its financing.²⁴ However, despite this high-level commitment from the funder, the procurement process for the core technology and integration services for the Tbilisi project remains, as of September 2025, a "black box".¹ Key contracts for this multi-million-euro initiative have not been publicly detailed, making it impossible for independent monitors or the public to ascertain who the primary corporate beneficiaries are, how they were selected, and whether the process was competitive.

This opacity is particularly noteworthy because it circumvents the very systems designed to prevent it. Georgia's own centralized e-procurement platform was created precisely to make such information accessible.² The fact that a project of this scale and significance can proceed without clear public information on its central contractors points to a systemic ability to bypass transparency requirements.

This situation suggests a significant limitation in the practical oversight capabilities of international financial institutions (IFIs). While an IFI like KfW may have robust transparency policies at an institutional level, its ability to enforce those standards throughout every stage of a complex, locally managed procurement process can be constrained. This creates a critical governance gap. Local procurement bodies may be able to satisfy the formal reporting requirements of their international partners while simultaneously shielding the most politically sensitive aspects of the procurement—such as the selection of primary contractors or, more commonly, subcontractors—from public view. The issue of subcontracting is a known vulnerability in Georgia's procurement system, where a lack of transparency can obscure the ultimate destination of public funds and facilitate the involvement of companies that would not meet the requirements of a direct tender.⁶ The opacity of the KfW-funded project demonstrates that even with Western financing, the underlying mechanisms of the local patronage system can remain intact and operational, hidden within a procurement "black box."

The timing of major infrastructure announcements provides another critical indicator of their political function. In the months immediately preceding the October 4, 2025, Tbilisi mayoral election, the incumbent administration launched the tender processes for two of the largest infrastructure projects in the city's recent history. This synchronized timing strongly suggests that these projects were instrumentalized as a form of electoral capital, designed to dominate the news cycle, project a vision of progress, and secure future opportunities for the patronage network.

In August 2025, less than two months before the election, Mayor Kakha Kaladze announced a tender for the design and construction of a new 7.5-kilometer tram line connecting the Didi Digomi district to the Didube metro hub.¹ The project, with a market-researched estimated cost of approximately €110 million, was framed in the mayor's public rhetoric as a "historic" and "European-standard" achievement.³¹ Kaladze presented the tram as a panacea for Tbilisi's most intractable urban issues, promising it would provide "safe, comfortable, and fast travel," reduce traffic congestion, and improve environmental conditions.¹

This deployment of technological "solutionism" is a classic political tactic. By focusing public attention on an ambitious, futuristic project with a projected 4.5-year timeline, the administration effectively deflects accountability for its failure to address the deep, structural causes of the city's chronic traffic problems in the present.¹ The promise of a "smart" solution in the distant future serves as a powerful campaign tool, allowing the incumbent to run on a vision of modernity without being held to account for the daily reality of urban dysfunction.

Concurrent with the tram announcement, in August 2025, the Municipal Development Fund launched an international tender for the design and construction of a new 70,000-seat UEFA Category IV national stadium near Tbilisi's airport.³³ With an estimated value of GEL 876 million (approximately €290 million or $325 million), this represents one of the most expensive single public works projects in the country's history.³³
The project, which has a 51-month completion timeline, has already proven controversial. The state has begun expropriating private land for its construction under an "urgent public need" justification.⁴⁰ Opposition critics have immediately flagged the project as "corrupt and wasteful," predicting that its final cost will exceed one billion lari and that it will primarily serve to generate illicit kickbacks for politically connected construction firms.⁴¹

The synchronized pre-election launch of these two mega-projects, with a combined estimated value of around €400 million, serves a crucial dual purpose. Publicly, it provides the incumbent mayor with powerful campaign messaging, aligning his political brand with large-scale, visible development, a key theme of his party's electoral platform.⁴² Systemically, it pre-commits vast sums of future public funds to a pipeline of high-value contracts. By initiating the tender process before the election, the current administration effectively locks in the next generation of major procurement opportunities. This ensures that, regardless of the election's immediate outcome, the donor-contractor patronage system will have a secured and lucrative pipeline of projects to sustain it for the next political term. The announcements are therefore not just about winning votes; they are about securing the financial architecture of patronage for years to come.

The involvement of International Financial Institutions (IFIs) in Tbilisi's major infrastructure projects introduces a critical layer of analysis regarding global governance standards and their application in a captured state context. The cases of the AIIB-funded metro tender and the KfW-funded transport system raise significant questions about the robustness of IFI due diligence processes and their ability to mitigate the political and corruption risks inherent in the local procurement environment.

The Asian Infrastructure Investment Bank's financing of the €150 million metro tender is particularly revealing. The AIIB's stated mission is to "foster sustainable economic development" and it operates under an Environmental and Social Framework (ESF) designed to ensure project viability and integrity.⁴⁴ However, its decision to fund a tender won by a company (GT Group) with documented financial ties to the ruling party, which in turn is supplying trains from a manufacturer (CRRC) with a notorious international record on quality and safety, appears to be in direct contradiction with these principles.¹² A review of the AIIB's public project documents for the Tbilisi metro modernization reveals a focus on technical specifications, environmental management plans, and stakeholder engagement, but a conspicuous absence of any specific analysis or mitigation strategy for the widely reported political corruption risks surrounding this particular tender.²²

This stands in contrast to the actions of the EBRD in the previous iteration of the metro deal. The EBRD's financing was effectively halted by an external geopolitical event—international sanctions against the Russian supplier.¹² While not a direct anti-corruption intervention, it demonstrated an enforcement of a clear red line based on the standards and political alignment of its primary shareholders. The subsequent pivot by the Tbilisi municipality to the AIIB suggests a potential for "standard-shopping." When faced with the stringent or politically inconvenient conditionality of Western-led IFIs, recipient governments can seek alternative financing from institutions that may prioritize project execution and geopolitical alignment over rigorous enforcement of anti-corruption and good governance norms.

This dynamic creates a competitive disadvantage for IFIs with higher standards and weakens the international community's ability to promote transparency. While KfW's funding of the Smart Transport System shows that even Western financing is not a panacea for opacity, the AIIB case points to a more systemic issue. It suggests that the AIIB's due diligence framework may be less sensitive to the types of "soft" but systemic corruption—such as patronage and donor-contractor loops—that are documented by local watchdogs. This allows a recipient government to select a financial partner whose risk appetite and priorities align with its own political objectives, effectively bypassing the governance safeguards that Western institutions are designed to uphold.

The evidence synthesized in this analysis leads to a clear and coherent conclusion: the procurement web surrounding Tbilisi's "smart city" and major infrastructure projects functions as a primary power indicator, revealing a mature and systemic mechanism for the consolidation of political and economic power. The patterns observed are not isolated flaws or administrative oversights; they are the consistent and predictable outputs of a governance model where the rhetoric of technological modernization is instrumentalized to serve a deeper, systemic logic of political entrenchment and elite enrichment.¹

The foundational architecture of this system is the donor-contractor nexus, a transactional loop that converts public funds into political capital and corporate profit, creating a self-sustaining ecosystem of power. High-value tenders, such as the €150 million metro procurement, serve as the principal delivery vehicles for this system, demonstrating a clear convergence of political, corporate, and geopolitical interests that overrides considerations of fair competition, technical quality, and long-term risk.

The tactics of strategic opacity, as seen in the €47 million Smart Transport System project, and the politically timed announcement of mega-projects like the tram line and the national stadium, are not aberrations but calculated strategies. They are employed to manage public perception, create electoral capital, and secure the future financial pipeline for the patronage network. Finally, the role of international finance is shown to be complex and, at times, compromised. The potential for "standard-shopping" among IFIs highlights a critical vulnerability in the global governance framework, allowing local political objectives to circumvent international standards of transparency and accountability.

Ultimately, the "smart city" procurement web in Tbilisi is not primarily about building a smarter city. It is about building a more resilient and financially secure power structure for the ruling elite. This instrumentalization of urban development poses significant long-term risks to Georgia's democratic health and sustainable economic future, transforming the promise of a modern, efficient capital into a more sophisticated apparatus for solidifying a captured state.

To accurately assess Tbilisi's progress in digitalization, it is essential to place it within a broader comparative context. Benchmarking against regional capitals reveals the relative ambition and scale of different approaches, while a comparison with leading European cities highlights significant gaps not just in technology, but in the core principles of transparency, citizen participation, and ethical governance that underpin a truly "smart" city.

Within the Caucasus and Central Asian region, capital cities are pursuing digitalization with varying levels of resources and strategic focus. Tbilisi's approach, while notable, is not uniformly ahead of its peers.¹
●       Baku, Azerbaijan: Benefiting from significant state resources, Baku has implemented a highly centralized "Smart City Baku" initiative. Its key feature is a unified command center that integrates data from sensors and cameras to manage traffic, security, and utilities in real time. This model represents a top-down, control-oriented approach to urban management that is more technologically integrated than Tbilisi's current fragmented system.¹
●       Yerevan, Armenia: In recent years, Yerevan has developed a highly ambitious and strategically coherent digitalization plan that may soon surpass Tbilisi's. The city has documented plans to create a "city digital twin"—a comprehensive virtual model for urban planning and simulation—and is explicitly aiming to build a central management platform driven by big data and artificial intelligence.¹ While Tbilisi's projects are often standalone, Yerevan's strategy appears more holistic, with a clear focus on leveraging advanced analytics for decision-making. If implemented, this could position Yerevan as the regional leader in data-driven governance.¹
●       Almaty, Kazakhstan: As the largest city in a major regional economy, Almaty has a more mature and institutionalized approach. Its "Smart Almaty" program is supported by a dedicated municipal Department of Digitalization and has already implemented projects like an "Almaty Data Lake" for urban analytics and an intelligent traffic light system that has reportedly reduced travel times.¹ Almaty's longer track record and dedicated institutional structure suggest a more systematic and sustained commitment to digitalization than is currently evident in Tbilisi.¹

This regional comparison indicates that while Tbilisi has successfully deployed several digital services, its overall approach is less centralized than Baku's, less strategically ambitious than Yerevan's, and less institutionally mature than Almaty's.

When measured against leading European smart cities, the primary deficit in Tbilisi's model becomes clear. The gap is not merely technological but ideological, centered on the principles of transparency, citizen participation, and the ethical use of data and AI.

●       Tallinn, Estonia: Widely regarded as a global leader in e-governance, Tallinn's system is built on a foundation of a national digital identity that provides citizens with seamless and secure access to virtually all public services.¹ This level of integration remains a distant goal for Tbilisi's collection of separate services. More importantly, Tallinn demonstrates a commitment to using open data for tangible policy outcomes. For example, the city deploys hundreds of air quality and noise sensors and uses the collected data, available on a public portal, to make evidence-based decisions, such as where to install noise-reducing barriers.¹ This contrasts sharply with Tbilisi's more performative approach to open data, where data is made available but is not clearly linked to a transparent policy-making process.

●       Helsinki, Finland: The Finnish capital provides the benchmark for the ethical and transparent implementation of artificial intelligence in urban governance. Helsinki was one of the first cities in the world to create a public register of AI systems, allowing any citizen to see what algorithms are being used by municipal services, how they work, and what data they use.¹ The city has also adopted a clear set of ethical principles for AI, including mandatory human oversight of algorithmic decisions.¹ This stands in stark opposition to the situation in Tbilisi, where AI-driven systems like smart traffic management are being procured and planned with no public discourse, no transparency register, and no established ethical framework. The Helsinki model demonstrates that a truly smart city prioritizes building public trust and ensuring democratic accountability over the technology itself.
This comparison reveals that Tbilisi's "smart city" project is fundamentally misaligned with European best practices. While it may adopt similar technologies, it lacks the foundational commitment to open governance, citizen co-creation, and ethical transparency that defines a democratic and human-centric approach to urban digitalization.

 Smart City Scorecard: Tbilisi vs. Regional & European Peers 
The following is a text description for a comparative table that provides a quick visual summary of Tbilisi's standing on key governance metrics relative to its peers.

The digitalization of Tbilisi is a narrative of immense potential constrained by a limiting political reality. The city has successfully laid the groundwork for a modern digital ecosystem, deploying a range of e-services that have brought tangible convenience to many of its residents. Initiatives in environmental monitoring and the modernization of public transport demonstrate a genuine capacity for positive transformation. The high rate of internet penetration and a technologically adept population provide a fertile ground for building a truly innovative, efficient, and citizen-centric urban environment.¹

However, this audit concludes that the "smart city" project, as currently conceived and implemented, is fundamentally shaped and subverted by the political objectives of the ruling system.¹ The potential of digitalization to foster a new era of transparency, accountability, and participatory governance is being systematically squandered. Instead, technology is being instrumentalized primarily as a tool for political public relations, a mechanism for enriching a network of corporate allies through opaque procurement, and a means of projecting an image of modernity that masks a deepening democratic deficit. The gap between the rhetoric of a responsive, data-driven city and the reality of a top-down, patronage-driven system is vast and growing.

The primary risk moving forward is that this instrumentalization will intensify. Without robust democratic oversight from an empowered city council, without independent accountability mechanisms to scrutinize procurement, and without a genuine political commitment to transparency and citizen participation, Tbilisi's "smart city" will not evolve into a platform for civic empowerment. It risks becoming a more efficient and technologically sophisticated apparatus for solidifying authoritarian control—a city that is "smart" in its capacity to manage and monitor, but profoundly unwise in its neglect of the democratic principles that give technology its true value.

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