CENN – September 13, 2004 Daily Digest – Armenia

CENN – SEPTEMBER 13, 2004 DAILY DIGEST – ARMENIA

Table of Contents:
1. Presentation of Armenian Culture Portal Took Place in Yerevan
2. Robert Kocharian: Sure That Realization of Armenian-Iranian Energy
Projects to Obtain Regions Importance
3. Armenia, Iran sign $30-mln Credit Agreement for Pipeline Construction
4. A critical Moment for Lake Sevan
5. Who is Destroying the Forests in Tsaghkadzor?
6. Armenian Government Seeks to Tighten Food Safety Regulations
7. Construction of Armenian Sector of Gas Pipeline with Iran to Begin by
Late October
8. RJSC UES of Russia Earns Some $80 mln Yearly in Armenia, $15 mln in
Georgia: Andrey Rappoport
9. Construction of Meghri HPP on River Araks to Start in 2005

1. PRESENTATION OF ARMENIAN CULTURE PORTAL TOOK PLACE IN
YEREVAN

Source: /ARKA/, September 8, 2004

Presentation of Armenian culture portal took place in
Yerevan. According to the Chairman of Association of Film Journalists
and Critics Susanna Harutyunian, the site is created on the base of
Internet page of Arvest magazine. “During two years of life of this
page, we understood that Internet has a lot of opportunities”, she said.
According to Harutyunian today the site contains news of culture,
articles, schedules of seminars and exhibitions, data base of culture
organizations of Armenia, legal articles and Government’s decisions in
given field and forum. “We hope that soon the number of visitors of our
site will grow”, she said. The site was created on the
initiative of the Association in assistance with Open Society Institute
Armenian branch.

2. ROBERT KOCHARIAN: SURE THAT REALIZATION OF ARMENIAN-IRANIAN ENERGY
PROJECTS TO OBTAIN REGIONS IMPORTANCE

Source: /ARKA/, September 8, 2004

RA President Robert Kocharian is confident that realization of
Armenian-Iranian energy projects will obtain regions importance, he
stated this at the briefing in Yerevan. According to him, energy is one
of the most important spheres of bilateral cooperation of Armenia with
Iran. “In given sphere we already accumulated certain experience on the
base of which we can develop steps on cooperation of infrastructures in
the sphere”, Kocharian said. Today the Presidents of Iran and Armenia
Mohammad Hatami and Robert Kocharian signed the agreement on basis and
principles of cooperation. Iranian delegation headed with the President
arrived today in Yerevan. It is the first visit of Iranian President in
Armenia.

3. ARMENIA, IRAN SIGN $30-MLN CREDIT AGREEMENT FOR PIPELINE CONSTRUCTION

Source: Interfax, September 9, 2004

Armenia and Iran signed a $30-million credit agreement on Wednesday to
finance the construction of the Armenian section of the Iran-Armenia gas
pipeline.

Energy is an important sector in cooperation between the two countries,
which have already gained a wealth of experience in cooperation in this
sphere, Armenian President Robert Kocharian said at a press conference
following the signing of the agreement.

“More serious steps will be taken based on this experience on the path
to unite the infrastructure of both states and raise mutual relations to
a qualitatively new level,” Kocharian said, adding that the construction
of the pipeline has an important regional significance.

Iranian President Mohammad Khatami, who was at the press conference,
also said bilateral cooperation was important in the energy sphere.

According to the agreement, Iran is to provide Armenia with a credit of
$30 million to build the Armenian section of the Iran-Armenia gas
pipeline. The credit will be provided for 7.5 years at 5% per year. The
funds will be used to finance the construction of a pipeline from the
border town of Megri to Kajaran.

Construction of the Armenian section of the pipeline should begin at the
end of 2004. Armenia will finance work to reconstruct and change parts
on the Kajaran-Yerevan gas pipeline.

Armenia and Iran signed an agreement on May 13 for the construction of a
pipeline between the two countries. The pipeline is 141 km long,
inducing 41 km in Armenia and 100 km in Iran. The total cost of the
project is estimated at $210-$220 million. The pipeline is expected to
be launched before January 1, 2007.

Gas should start to arrive in Armenia from January 2007 and will be used
at Armenian thermal power plants to produce electricity for export to
Iran. Iran will supply 36 billion cubic meters of natural gas to Armenia
over 20 years according to the document.

4. A CRITICAL MOMENT FOR LAKE SEVAN

Source: , September 8, 2004

The six-meter increase in the water level is not based on science

Lake Sevan was once a reservoir of water fit for drinking, according to
physical, chemical, and biological indices. But today, as a result of
the intensive exploitation of the lake over the years, its ecological
system has been disturbed, with falling water level and resultant
swamping bringing about qualitative changes, and the state of its native
fish life, the most sensitive index of the health of the lake, has
changed. There used to be three kinds of fish native to Sevan – ishkhan
(trout), koghak (carp) and beghlu (barbus).

Beghlu is a species peculiar to Lake Sevan. It has never had any
economic significance, much less so today. The quantity of Koghak has
decreased catastrophically as well, to the point where scientists plan
to declare it an endangered species. Of the four types of Ishkhan, two
used to spawn in the lake, and two in the rivers. Two of these have
disappeared, since their spawning grounds have vanished as the water
level has fallen, and the other two are on the verge of extinction.

Today only two kinds of fish of industrial significance remain in Sevan
– Sig (whitefish) and lake sazan.

Four years ago a project to restore Lake Gilli , in the southeast of the
Sevan basin, was launched, and it was expected to play a vital role in
saving the Sevan eco-system. Lake Gilli had dried up as a result of the
drop in Sevan’s water level. Since then, 110 kinds of birds have
disappeared from the basin, and the republic as a whole has been
deprived of 35 kinds of birds.

The Gilli project failed, and it is not clear yet what the fate of a
second project, recently started with an impressive initial investment
of $1 million, will be.

The most striking evidence of the government’s mishandling of the Sevan
problem is the complete absence of purifying stations on the lake. But
even if they were in operation, they would have trouble preventing the
damage to Sevan caused by agriculture. Irrigation is not the only
problem. The inability of villagers to utilize fertilizers correctly
contributes to the free flow of nitrates and phosphates into the lake,
the majority of which come from industrial and household wastewater.
Twice in the past, a decision was made to build in a purification
station in Gavar. Both times, the decisions were reversed and new
enterprises were built.

Delays in putting the Vorotan River-Arpa River hydro-system into
operation have played a role as well. It has come to light through the
2002 annual report of the Ministry of Ecology that although 1.4 billion
drams (about $2.7 million) was allocated for the construction of a
tunnel, no work was carried out.

There is another factor threatening the stability of the level of Sevan
which is beyond human control, the negative impact of evaporation on the
water level over the past few years. The volume of water lost through
evaporation has been greater than the volume of water flowing into the
lake.
And although there has been heavy rainfall in the last two years,
scientists predict that in connection with global warming, evaporation
will increase in the future. Some even hold the pessimistic view that no
matter what is done, the lake will eventually evaporate completely.

But at least this year, unprecedentedly abundant rains have helped
revive the beautiful mountainous lake. Today, Sevan seems to be waking
up, its dead green color gradually turning healthy and vivid. It is
expected that when the Vorotan – Arpa hydro-system goes into operation,
165 million cubic meters of water will flow into Sevan each year. This
will be a miracle cure for the lake, now at death’s door. The Law on
Sevan stipulates that the level of the lake must rise by six meters.
Compared to 2000-2001, the water level has already gone up one meter and
seventeen centimeters.

But a real battle has begun between ecologists and the government over
goals for the lake. Scientists say that emphasizing the six-meter mark
not only is unfounded scientifically, but also might have very dangerous
consequences for the lake. The chairman of the NGO For Sustainable Human
Development, Karine Danielyan, explains, “The ecological system of the
lake will become healthier if the lake water returns to its level in the
nineteen-sixties, i.e. 1,908.5 meters, when the processes of decline had
not yet begun and the lake was in its natural, balanced state. That’s
the only way that the water quality will improve, the flora and fauna
will revive, and it will become possible to talk about saving Sevan.”

“This six meters won’t do anything for the lake,” says the
deputy-director of the Institute of Hydro-ecology and Pisciculture of
the Academy of Science, Bartugh Gabrielyan. “Maybe it will hold up the
swamping process, but it will not improve the water quality, and Sevan’s
most important problem is water quality. People were talking about six
meters at a time when the lake’s water level had fallen by eighteen
meters. Since then the water level has kept falling, up to twenty to
twenty-two meters, but now the same figure is being mentioned again. ”

Minister of Ecology Vardan Aivazyan says that the figure of six meters
appeared as a result of a study by experts from the World Bank. The real
story is somewhat different. At one time, the Institute of Hydrology of
the Academy of Science of Armenia, together with institutes in Moscow
and Rostov ( Russia ), developed a mathematical model to find out what
would happen in the lake after the water level increased, and what level
would be necessary to return the water quality to its previous grade.
The mark of six meters was found as a result of applying this model.
Accepting these dated findings, without taking the trouble to do new
research or ask the opinion of local scientists regarding the current
situation, international experts merely reiterated the six-meter mark.
The fact that the ecological system of the lake has changed for the
worse, with new problems raising their heads, has been completely
ignored.

The reason that the government doesn’t want to consider raising the
level of the lake by more than six meters may simply be that a rising
water level will become a real threat to dozens of lakeside vacation
houses owned by the nouveaux riches with positions and connections.
Waves are lapping at the walls of Gagik Tsarukyan’s lakeside “cottage”,
and dozens of other buildings are already under water. So today,
stubborn attempts are being made to reduce even the six-meter mark. The
marzpet (governor) of Gegharkiunik, Stepan Barsegyan, says he receives
unofficial instructions that the water level should not go up by more
than four meters. The director of Sevan National Park , Gagik
Martirosyan, employs doubtful arguments to suggest that an increase of
even by one meter would be enough for Sevan. This could mean that the
quantity of water entering the lake will be controlled, in order to
protect the owners of lakeside buildings.

There are 350-400 structures along the coast today, owned by individuals
and organizations, the majority of them illegal. The government will not
compensate the owners of illegal constructions if they go under water.
But the government will have problems with the landlords whose houses
were built with permits from town-planning authorities. These landlords
are understandably furious, since none of the local officials or
ministers dropped a hint about the water level increase as they handed
out these permits. But the strange thing is that construction work is
still going on all around the lake, even though local officials now warn
builders that their projects might one day be under water.

The fifteen to twenty hectares of lakeside forests that have been
planted over the last fourteen years will be absorbed into the lake as
well, a sad but unavoidable loss.

Today for the first time in years, there is a real possibility that the
lake will be saved. The Vorotan – Arpa hydro-system, the twenty-eight
rivers that flow into the lake, and the reconstruction of the Yeghvard
Reservoir all hold real promise for Sevan. The unprecedentedly heavy
precipitation of the last few years was an unexpected gift. Some
ecologists believe that even without the hydro-systems Sevan may come
back from the brink of death. If, of course, its salvation is not
sacrificed to the interests of the oligarchs.

It’s a critical time for Lake Sevan once again. The general public has
been deprived of information about what has been going on around Sevan.
It has been deprived of the right to participate in deliberations over
the fate of the lake that plays such an important role in the life of
generations to come. Perhaps this is because both our government and our
society are lacking in environmental awareness. People sit by silently,
uninformed, as their rights and interests are threatened.

5. WHO IS DESTROYING THE FORESTS IN TSAGHKADZOR?

Source: , September 8, 2004

As we reported on August 28th, a number of media outlets organized a
joint protest in which ninety journalists went to Tsakhkadzor in
nineteen cars. They drove around the town taking pictures of the forests
that have been cut down and the houses of various government officials
and businessmen that have gone up.

Pictured here is the wall surrounding the house of Levon Sargisyan, a
member of parliament. We remind you that it was Sargisyan’s bodyguard,
Gagik Stepanyan, who beat photojournalist Mkhitar Khachatryan of the
news agency PhotoLur and reporter Anna Israelyan from the newspaper
Aravot. Stepyanyan is currently under arrest. It makes sense that an MP
who walks around with dozens of bodyguards has to build a wall like
this, though only he knows who or what he is so afraid of.

This mansion belongs to the head of the State Customs Committee of
Armenia, Armen Avetisyan.

The path through the forest has been widened to enable Robert Kocharyan
to drive a snow mobile here. “Maybe some twenty trees were cut down
there,” says the mayor of Tsaghkadzor, Garun Mirzoyan.

When reporters had presented him with evidence that trees had been cut
down Tsaghkadzor the mayor made the following statement twice, “In this
area only ten or fifteen trees were cut down”.

Now that the forest has been occupied by the owners of these mansions –
government officials, MPs, oligarchs – ordinary people can’t even pick
berries there. On August 7, 2004, Samvel Baghdasaryan, a resident of
Hrazdan, was shot and wounded while picking gooseberries. Haykakan
Zhamanak reported that according to one theory, it was a bodyguard of
Olympic Committee Chairman Ishkhan Zakaryan who pulled the trigger. An
investigation into the case by the Hrazdan prosecutor’s office is
underway, although there are no suspects so far.

6. ARMENIAN GOVERNMENT SEEKS TO TIGHTEN FOOD-SAFETY REGULATIONS

Source; RFE/RL NEWSLINE Vol. 8, No. 173, Part I, 10 September 2004

The Armenian government approved a set of measures on 9 September to
significantly tighten food-safety standards, RFE/RL’s Yerevan bureau
reported. The proposed measures, covering both domestic and imported
food products, would impose stricter quality and packaging requirements,
including new health warnings and detailed labeling.

According to Mikael Grigorian, the head of the Agriculture Ministry’s
food-safety department, the proposals are necessitated by the inadequacy
and poor enforcement of current food-safety regulations.

The availability of low-cost but inferior foodstuffs that fail to meet
minimum health standards in Armenia was confirmed by a recent inspection
by the Health Ministry that revealed widespread noncompliance with basic
safety requirements by many domestic agribusiness producers.

7. CONSTRUCTION OF ARMENIAN SECTOR OF GAS PIPELINE WITH IRAN TO BEGIN BY
LATE OCTOBER

Source: Interfax, September 10, 2004

The construction of the Armenian section of its gas pipeline with Iran
is expected to begin by the end of October, Armenian Ambassador to Iran
Geram Garibdzhanian told Interfax.

A contract envisioning an Iranian credit for building the gas pipeline’s
Armenian sector and a treaty on construction works at this sector by
Iran’s Sanir company are only the first steps in Iran’s assistance to
Armenia in this project, the ambassador said, declining to provide
further details.

Three Armenian-Iranian intergovernmental documents were signed during
Iranian President Mohammad Khatami’s official visit to Yerevan on
Wednesday. They include a memorandum on mutual understanding and
cooperation between the Energy Ministries of Armenia and Iran, an
agreement on a $30 million credit to be issued by Export Development
Bank of Iran to the Armenian Energy Ministry and a treaty making the
Iranian Sanir company subcontractor of the project aimed at building the
Armenian section of the gas pipeline.

8. RJSC UES OF RUSSIA EARNS SOME $80 MLN YEARLY IN ARMENIA, $15 MLN IN
GEORGIA: ANDREY RAPPOPORT

Source: ARMINFO, September 10, 2004

RJSC UES of Russia earns some $80 mln yearly in Armenia, in Georgia
aggregate assets will bring $15 mln profits, the member of the Board of
the Russian energy holding Andrey Rappoport told “Gazeta” Russian
newspaper. The interview is published by the Department for Mass Media
of RJSC UES of Russia.

A.Rappoport said that the energy holding spent a total of $50-60 mln for
purchase of assets in Georgia and Armenia in conformity with preliminary
data, as not all calculations have been carried out yet. He added that
there are no problems with payments for energy resources in Armenia,
while in Georgia the debt of the “Wholesale Energy Market” to the
Tbilisi city electricity distribution network (assets of RJSC UES of
Russia) totals some $27.6 mln. He said: “I see no special problems in
Armenia. Their attitude to us is very good, and if any difficulties
arouse, they overcome them along the way. While in Georgia, there are
real problems in relations with local authorities. We have felt some
aggressiveness to us recently. We do not understand it, as the Georgian
leadership comes out for attraction of investors to the country,
promising comfortable conditions for them. During the recent
negotiations with Georgian leaders, I directly stated that as an
investor I feel uncomfortable in Georgia. In such a situation, there can
be no special interest in making serious investments in Goergia.”

9. CONSTRUCTION OF MEGHRI HPP ON RIVER ARAKS TO START IN 2005

Source: ARMINFO, September 10, 2004

Construction of a joint Armenian-Iranian hydropower plant in Meghri on
the Riven Araks will start in 2005, Armenian Energy Minister told
journalists on September 9, 2004.

He said that a relevant agreement was reached on the last day of Iranian
President Seyed Mohammad Khatami’s visit to Armenia in the course of his
meeting with Armenian President Robert Kocharyan, Measures on
feasibility study of the given project are planned to be completed
before 2005. The minister said that HPP would become the most powerful
in the territory of the Transcaucasus. It should be noted that the
established capacity of the HPP will total 140 megawatt, with the
electricity generation to make up 150 mln kW yearly. The project is
estimated at 160 mln USD.

http://www.hetq.am/
http://www.hetq.am/eng/
www.arvest.am
WWW.ARVEST.AM
www.arvest.am
www.arvest.am