The Price of the Transfer of “Armenian Railways” to a Foreign State

On February 13, 2008, the Armenian authorities handed the management of the Armenian Railways over to the South Caucasus Railway, a subsidiary of Russian Railways.

On June 1, 2008, the Advisor to the President of Armenia, the former Minister of Transport and Communications of Armenia Andranik Manukyan announced that Armenian Railways CJSC would be transferred to the concession management of Russian Railways OJSC.

On January 16, 2008, Russian Railways was announced to be the winner of the tender for the transfer of the Armenian Railways to concession management. According to the financial proposal made public at the end of 2007, Russian Railways announced its readiness to invest $570 million in Armenian Railways, of which $230 million would be invested over the next five years.

“All current work within the framework of the transfer of Armenian Railways to concession management will be completed by May 15,” said Andranik Manukian.

It was reported that the South Caucasus Railway, a 100% subsidiary of Russian Railways created specifically for this purpose, would manage Armenian Railways.

Armenian Railways used to be in charge of 805km railway lines from the total 1125km lines in Armenia. The company since 2001 had been bringing a steady income. For some perspective, Armenian Railways transported 3 million tons of cargo in 2007 and 2.7 million tons in 2006.

South Caucasus Railway undertook to complete the construction of the Vanadzor-Fioletovo railway, the construction of a suburban line on the Hrazdan-Ijevan section, the construction of a railway section from the Zvartnots airport to the Yerevan railway station, as well as the launch of an electric train line from the Arshaluys station to Yerevan… and a whole bunch of other things.

None of this has been implemented. Only the salaries were raised for South Caucasus Railway’s employees by 20%, but there were reductions as well. Two depots and several locomotives were also partially repaired. This is the price of the transfer of Armenian Railways to a foreign state.