RUSSIA RAILWAYS TO MULL PARTICIPATION IN ARMENIA RAILWAYS TENDER

ITAR-TASS News Agency, Russia
October 11, 2006 Wednesday

The Russian Railways joint-stock company will consider the issue of
participation in a tender for the concession of Armenian Railways,
the public relations department of Russian Railways reported with
reference to the company president Vladimir Yakunin.

According to the department, Russian and Armenian railwaymen have
always been united by fruitful cooperation and Russian Railways
continues to fulfil all obligations it assumed on the provision and
development of railway connection. "We undoubtedly will consider the
issue of Russian Railways’ participation in the international tender,"
Yakunin pointed out, Prime-Tass reports.

Armenian Transport and Communications Minister Andranik Manukyan
announced on Wednesday at the opening of the 44th meeting of the
Council of Railway Transport of the Commonwealth of Independent
States (CIS) that concession of Armenian Railways will be leased to
a foreign investor or railway administration for 40 years. "We would
like major rail companies to take concession of the Armenian Railways,"
the minister said.

Armenia’s railway was built by the Russian empire government in the
second half of the nineteenth century. At present, the total length of
Armenia’s railways is 1,500 kilometres. Out of its 75 stations four are
junction points linking Armenia with Georgia, Azerbaijan and Turkey.

The carrying capacity of the Armenian railway is three million
tonnes of cargoes and five million passengers a year. According to
forecasts made by experts of the transport sphere, volumes of railway
transportation in Armenia will double by 2010.

The Armenian railway is fully electrified and equipped with a modern
automatic block systems and communication equipment.

After restructuring Armenian Railways got the status of a closed
joint-stock company owned by the state. Within the framework of the
country’s economic reforms the Armenian government follows the path
of raising the efficiency of this kind of transport.

According to international law, concession is a form of the attraction
of foreign capital when the state leases the enterprise to foreign
firms of individuals for exploitation for a specified term and for
value. The state has the right to terminate the concession after the
agreement term expires.