RUSSIA HOPEFUL ABOUT RENEWED RAIL LINK WITH GEORGIA, ARMENIA
By Nane Atshemian

Armenialiberty.org, Armenia
Radio Liberty, Czech Rep.
Oct 13 2005

Russia and Georgia are close to reaching a long-awaited agreement on
restoring their direct railway connection which could significantly
benefit the Armenian economy, Russian Transport Minister Igor Levitin
said on Thursday.

But he cautioned that the section of the railway passing through
Abkhazia is in need of serious capital repairs that would take as
many as two years.

The Abkhaz section of the Soviet-built railway was seriously damaged
during the 1992-1993 armed conflict which led to the Black Sea region’s
de facto independence from Georgia. Until recently Georgian leaders
opposed its restoration before a settlement of the conflict.

But the administration of President Mikhail Saakashvili appears to
have softened Tbilisi’s position on the issue.

Levitin said he will again discuss the issue with Georgian officials
during a visit to Tbilisi next week and is optimistic about a positive
outcome of the talks.

“If the Georgian side is prepared for the restoration and confirms that
to us, Russia, Georgia and Armenia will have to set up a consortium,
determine each country’s share of investments in the project and start
restoring the railway,” he told reporters in Yerevan. “According to
our calculations, [the repairs] could last for two years.”

Speaking at a joint news conference with Levitin, Armenian Defense
Minister Serzh Sarkisian said Saakashvili reaffirmed Tbilisi’s
commitment to a quick resumption of rail communication between Russia
and Georgia and Armenia during his recent informal talks with President
Robert Kocharian. “Armenia will certainly participate in the project,”
he said.

Sarkisian added that Russia is ready to cover most of the repair
costs. “We are not talking about tens of millions of dollars,” he said.

The lack of rail communication with Russia and other countries makes
export-oriented Armenian companies less competitive and hampers
foreign investment in Armenia’s struggling economy. It is also a
serious hindrance to Russian-Armenian economic ties. Hence, Yerevan’s
strong interest in restoring the vital transport route.

Sarkisian and Levitin spoke at the end of a two-day session of the
Russian-Armenian intergovernmental commission on economic cooperation,
of which they are the co-chairmen. Officials said the commission
discussed a broad range of economic issues, with the Armenian side
again pressing the Russians to make good on their pledge to revive
Armenian enterprises which were given to them in payment for Yerevan’s
$100 million debt. All of those enterprises except a big power plant
used to be part of the Soviet military-industrial complex and are
now largely standing idle.

“Russia feels its responsibility for those enterprises. That is one
of the obligations which we have not yet fulfilled,” admitted Levitin.

The Russian official said Moscow needs more time to decide what to do
with those industries. “We can’t figure out what type of production
they should have: defense or civilian or both,” he explained.

Russia’s strong presence in the Armenian energy sector was also
high on the agenda of the commission’s session. The two ministers
said they discussed in particular the recent controversial takeover
of the Armenian power grid by Russia’s state-run power monopoly,
Unified Energy Systems, but did not give details.

Levitin was also asked to comment on the Armenian government’s decision
not to grant Russia’s Gazprom giant a contract for the construction
of a pipeline that will pump natural gas from Iran to Armenia. Work
on the Armenian section of the pipeline will be carried out by an
Iranian company and financed with a $35 million loan provided by the
Iranian government.

“We understand the actions of the Armenian side,” Levitin said. “I
consider them logical.”