SECOND FERRYBOAT LINE TO LINK ARMENIA WITH RUSSIA

Armenpress
Jan 09 2007

YEREVAN, JANUARY 9, ARMENPRESS: Armenia has been posting double-digit
economic growth rates in the last several years with its foreign trade
growing 20-25 percent annually. Armenpress asked Arsen Ghazarian,
chairman of the Armenian Union of Industrialists and Businessmen,
(he is also director general of Apaven forwarding company), to
share his views on whether the current external transport and road
infrastructures are sufficient to meet the demands of the expanding
business.

A. Being constrained by a partial blockade and being unable to use
some of major roads, for example the railways conduits towards Russia,
Iran, Turkey and Europe, Armenia has managed through these years
to adapt to working in these conditions and its economy has been
expanding by double-digit rates in the last 5 years with forwarding
companies making their contribution to the overall GDP growth. These
companies are trying to improve their services and make them conform
with international standards. But transport infrastructures-sea
ports, railways and terminals may fail in several years to meet the
demands of expanding economy. Nevertheless I believe we will be able
to resist in upcoming years regional competition challenges, posed
also by transport infrastructures.

Q. What routes Armenian businessmen are using now to conduct foreign
trade and are there prospects for new routes that could open any
time soon?

A. Now there are two major roads linking Armenia to the external
world. One of them is through Iran from where Armenian businessmen
can reach the Persian Gulf and further towards East and the second
route lies through Georgian ports of Poti and Batumi on the Black Sea.

Armenian businessmen use seaways to transport their cargo batches
to Russia, particularly, by Poti-Novorosiysk and Poti-Ilichevsk
ferryboats. A program envisaging foundation of a second ferryboat line
with a Russian port, by the way, this program has been elaborated in
the last 10 years, is set to materialize soon and in all likelihood
in March or April we shall have a second ferryboat line between the
port of Poti and the Russian port of Kavkaz.

Vessels with required displacement have been constructed to
operate this new route as the Russian port Kavkaz is in shallow
waters. Operation of this new route will enable Armenian businessmen
to transport their goods to Russia by freight cars and this in turn
will decrease all costs by 20-25 percent and will fill also the gap
that was caused by the closure of Azerbaijani and Abkhazian railways
for Armenia.

This new road will also boost development of facilities in Georgian
sea ports- construction of new terminals and mooring lines. We also
appreciate the decision of the government on handing the Armenian
Railway to a concessional management that will be accomplished in
2008. The company that will win the right to run the Armenian Railways
will have to make serious investments to improve its overall operation
and management.

Reopening of the Abkhazian section of the railway and of another
railway from Turkish Kars to Armenian Gyumri offer alternative
options but they are possible only after the settlement of the
Georgian-Abkhazia conflict and normalization of Armenia-Turkey
relationships. Given this Armenia will regain its once status of a
transit transport juncture.

Q. Several years ago a new $20 million worth terminal was built for
Zvartnots airport to make Armenia a transit country for transportation
of goods by air. Does it serve this goal?

A. The terminal was built on a $20 million credit and in conformity
with European standards. It is supposed to become a transit juncture
for both passenger and cargo aircrafts. A government decision that has
adopted the so-called ‘5th free corridor’ for cargo transportation
will give a fresh boost to these plans. In view of a tough struggle
launched by Lufthansa, British Airways, Austrian Airlines and Russian
carriers for Armenian air market and in view of a new terminal which
is being built for the airport we can say that real opportunities
are opening for invested money to serve their goals.