Armenia Transfers Railways to Management of Russian-Owned Company

Text of report by private Armenian news agency Mediamax

Yerevan, 13 February: An agreement was signed in Yerevan today on the transfer of Armenian Railways to the concession management of South Caucasus Railways, which was founded by Russian Railways.

Mediamax reports that the trilateral agreement was signed by Armenian Transport Minister Andranik Manukyan, the general director of South Caucasus Railways, Aleksandr Kuznetsov, and the president of Russian Railways, Vladimir Yakunin.

In line with the agreement, Armenia is obliged to transfer the right to use and manage the concession assets to the concession holder, South Caucasus Railways, for a 20-year period with the option of extending the agreement for another 20 years. The agreement is underwritten by Russian Railways.

The concession holder is obliged to invest 174.5bn drams [about 600m dollars] in the development of Armenian Railways, of which 53.3bn drams should be spent on renovating infrastructure, and 8bn drams on buying new rolling stock. As a guarantee, Russian Railways should in turn pay 57m dollars to the Armenian side and assume responsibility for the fulfilment of obligations.

According to the agreement, South Caucasus Railways should within 30 days of the signing of the agreement make a lump-sum payment of 1.7bn drams to the concession provider. In addition, the Armenian side will every year receive 2 per cent of the concession holder’s gross revenues.

Originally published by Mediamax news agency, Yerevan, in Russian 1100 13 Feb 08.

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