Opposition paper wary of Russia’s plans for Armenian power plant

Haykakan Zhamanak, Yerevan
23 Jun 05

Text of Hayk Gevorkyan’s report by Armenian newspaper Haykakan
Zhamanak on 23 June headlined “The Russian full stop”

A regular session of the Armenian-Russian commission for economic
cooperation in Moscow has passed unnoticed as there was almost no
interest in the work of the commission.

The point is that the property-for-debt deal was the main result of
this commission’s activity. But almost no change has taken place in
the Armenian enterprises given to Russia under the deal. After the
deal was signed the commission turned into a meaningless
structure. But one could notice a scandal arising as a result of the
recent session of the commission.

Russian Transport Minister [and Russian Co-chairman of the commission]
Igor Levitin made a remarkable statement at a press conference after
the session yesterday [21 June]: “The fifth unit of the Razdan power
plant is a topical issue today, and I think that during the next
session, which will take place in Armenia, an end will be put to this
problem.” The next session of the commission will take place in the
autumn. Why is this statement remarkable?

The Razdan power plant was handed over to Russia under the
property-for-debt deal. But no decision was made regarding its
unfinished fifth unit. They only made an arrangement to give
preference to Russia when privatizing the fifth unit. For a long time
Russians paid no attention to the unit. But last year Russians said
they wanted to buy the fifth unit. The terms of the purchase were as
follows: Russia would issue an about 150m-dollar loan to finish its
construction and then it would become Russian property.

Quite unexpectedly Iran also showed interest in the same unit. Iran
made an offer that we could not turn down. Tehran suggested that it
invest money to put into operation the fifth unit and that later
Armenia repay its debt by exporting to Iran part of the electricity
produced by the Razdan plant. What was more important was that the
fifth unit was to remain Armenian property.

Incidentally, in accordance with the option suggested by the Iranian
side, twice as less investment is required and it will be easier to
repay it. Over the recent months Iran has made more positive changes
to its suggestion. Iran will fund the construction of a section of the
Iran-Armenia gas pipeline to the Razdan power plant. It will also
build a power line to export electricity to Iran, an additional gas
turbine will be installed in the generator of the unit and as a
result, the fifth unit’s capacity will exceed that of the Armenian
Nuclear Power Plant.

The [Armenian] Energy Ministry believes that apart from economic
reasons, these favourable proposals from the Iranian side also have
political ones. Iran aims to reduce Armenia’s dependence on Russian
energy sources and become the main player in the country. Later this
will help Iran’s energy sources enter other countries as well.

Against this background, Levitin suddenly called for “an end to” the
issue of the fifth unit. This statement came as a surprise to the
Armenian Energy Ministry and it does not know how to deal with it. The
point is that recently Armenia and Iran signed a memorandum approving
the abovementioned suggestion. A group of Iranian experts are expected
to arrive in Armenia today. The Energy Ministry hopes that Russia will
make a more favourable suggestion and that Levitin’s statement was
evidence of this.

But we have clarified that the Russian party’s suggestion has not
changed in principle. Everything is still vague in this issue. If we
hand over the fifth unit to Russia, this will mean “putting an end”,
as Levitin said, but not to the issue of the fifth unit but to
Armenia’s future.