Russian Takeover of Armenian Rail Network
Railway Station, Yerevan, Republic of Armenia © Onnik Krikorian / Oneworld Multimedia 2007
Sure to concern many already alarmed at the near monopolization of strategic areas of the economy by Russian companies, RFE/RL reports that the next asset to go will be the railways. However, as the news item says, the railway system has really suffered since independence and is usually a last resort not only for internal travel, but also for visiting neighboring countries.
Specifically this means Georgia as the railway obviously doesn’t run through Nakhichevan or to Azerbaijan proper as well as Turkey. Armenia is also not involved in a regional railway project involving Turkey, Georgia and Azerbaijan because of closed borders with the former and the unresolved conflict over Nagorno Karabakh with the latter.
The director general of Armenia’s rail network on Tuesday effectively confirmed its impending takeover by Russia’s state-run railway, a deal which will place yet another chunk of the Armenian economic infrastructure under Russian control.
The Armenian government called last year an international tender for the exclusive right to manage the struggling network for at least 30 years. Only the Russian railway and an Indian firm showed interest in the bidding, sending relevant proposals to Yerevan earlier this year.
The Indians pulled out of the tender last month, all but predetermining its outcome. Armenian media had for months claimed that the contest is a mere formality as the state-owned Armenian Railway’s handover to the Russians was decided by Presidents Vladimir Putin and Robert Kocharian in Moscow last January.
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The impending deal is certain to be criticized by those government critics who believe that Russia’s growing economic presence in Armenia is turning into a stranglehold. Russian firms already dominate the Armenian energy and telecommunication sectors and are keen to acquire other industries. One of them is understood to have effectively purchased recently Armenia’s largest gold mining company from an Indian operator that fell foul of the authorities in Yerevan in January.
But according to Khrimian, more important is the fact that the new railway manager will have to invest at least $170 million in the Soviet-era network that has been operating at a fraction of its capacity ever since Armenia’s rail communication with the outside world was disrupted in 1992.
“Working in these blockade conditions, we have been unable to generate sufficient revenues to make capital investments in our train fleet and other infrastructure,” said Khrimian. “The investments will considerably improve the condition of our railway,” he added.











