TRACKING A DEAL: IS RUSSIA’S RAILWAY INTERESTS ECONOMICS OR POLITICS?
- Armenia has conceded the last of its strategic infrastructures, the Armenian Railroads, to Russia for a 30 year period. The Minister of Transport and Communication Andranik Manukyan qualified this new deal as successful and profitable for the country. The Canadian CPS consulting company gave the Russian offer 94 points out of 100. Two companies – the Russian Railroads and Indian RITES (Rail India Technical and Economic Services) – took part in the tender announced in November. However, the Indian company withdrew its application in December and the Russian side won it without a competition.
The Russian side proposes a number of investment projects, and on the 30th year of management the contract may be prolonged for another 20 years.
If nothing changes in the region and Armenia remains in blockade, the Russian side offers investing $570 million, 220 of which will be invested within the first five years.
“They expect opening of the railroad connection with Turkey in 2009. In that case the investments will make $610 million. In 2010, the total amount of investments will make $1.8 billion, if the connection with Azerbaijan opens, and in 2012, in case the Abkhazia railroad problem is settled, the investments will be more than $2 billion,” minister Manukyan says.
He says the deal has both economic and political importance.
“If the Russian railroads come, they will play a serious role because they have serious leverage to influence both the Azerbaijani and the Turkish railroads. I suppose, this is what conditions their optimism,” the minister says.
Others, though, do not share the optimism of the minister and the Russian side, despite many emphasize the fact that Armenia simply did not have any alternative.
“Definitely, economic dependence is dangerous and here we have appeared in that very situation, but because of the blockade and the technical depreciation of the railroad it could not interest any company from another country and this is the only possible way to restore our railroad connection,” former Member of Parliament, Doctor of Economics Tatul Manaseryan told Armenianow.
Economist Eduard Aghajanov qualifies this deal as an end of Armenia’s independence:
“A state can’t be called independent if it does not manage at least one strategically important infrastructure. Armenia is no more an outpost, but a simple annex. We have appeared in Russia’s pocket, and we rent our own home. We are guests in our own home,” says Aghajanov insisting Russia has made the deal not for economic but for political purposes to get as much leverage on the Armenian economy as possible.
With the railway deal, Russia now controls (either owning or managing) the communications and telecommunications spheres, more than 80 percents of the country’s energy sources and system, including the 5th energy bloc of the Hrazdan Thermal-Electric Station, the Sevan Cascade, distribution network, and the Metsamor Nuclear Power Plant.
Russian newspapers say the deal is of no economic interest.
The Russian Vedomosti newspaper says the annual volume of cargo of the Armenian railroads equals to the daily volume of the Russian one. Igor Nikolayev, director of the FBK audit company department found it difficult to evaluate the profit of the Russian Railroads expected from the project.
Political analyst, lecturer at the Caucasus Media Institute Sergei Minasyan qualifies this deal having political aspirations profitable for Armenia.
“Russia does not have any economic interest in it. But it is very profitable for Armenia because no other country would invest in this sphere and Armenia had no alternative,” Minasyan told Armenianow.
Ararat Khrimyan, director of the Armenian Railroads CJSC, says the future of the Armenian railroads that have not been repaired for the last 25 years give way to optimism, because they have landed in good hands.
“Armenia was unable to restore this huge railroad alone. Unlike the past years when it carried 30 million tons of cargo a year, its annual volume does not exceed 3 million tons at present, which is not favorable for the economy,” says Khrimyan.
He says, however, a progress has been registered since 2000, when 190,000 tons of cargo was transported. In 2006 the volume reached 513,000 tons.
The transfer to the Russian side has caused the most concerns with those who work within the company system, who are afraid of the repetition of the situation with the Hyapost [handed over to a Dutch company], when the deal was followed with large scale job cuts.
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- 1830 Following Sultan Mahmood's decree and the advice of the French, British, and Russian ambassadors, the Armenian Catholics in Turkey were given a Patriarchate and their own administrative organization.
- 1888 Birth, in Constantinople, of the actor Vahram Papazyan. He is considered to have no equal in the Armenian theater.
- 1906 Birth of composer Ashot Satian. He died in 1958.
- 1911 Birth of theater personality Gevorg Ashughyan.
- 1990 Start of hostilities between Armenian and Azeri Turkish forces near Raskh.
- 2001 The French Senate recognizes the 1915 Genocide of the Armenians in the Ottoman Empire.
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