RUSSIANS SET TO TAKE OVER ARMENIAN RAILWAY
By Ruben Meloyan

Radio Liberty, Czech Rep.
Dec 11 2007

The director general of Armenia’s rail network on Tuesday effectively
confirmed its impending takeover by Russia’s state-run railway,
a deal which will place yet another chunk of the Armenian economic
infrastructure under Russian control.

The Armenian government called last year an international tender for
the exclusive right to manage the struggling network for at least 30
years. Only the Russian railway and an Indian firm showed interest in
the bidding, sending relevant proposals to Yerevan earlier this year.

The Indians pulled out of the tender last month, all but predetermining
its outcome. Armenian media had for months claimed that the contest
is a mere formality as the state-owned Armenian Railway’s handover
to the Russians was decided by Presidents Vladimir Putin and Robert
Kocharian in Moscow last January.

The Armenian Railway chief, Ararat Khrimian, told RFE/RL that the
tender’s winner will be officially announced "after January 2008." He
said Russian management of his company would be "natural and correct"
given that it used to be part of the Soviet Union’s vast rail network.

"It’s easier to work with a company of which used to be a part
than with others," said Khrimian. "In my view, it will be easy and
beneficial for us to work with the Russians."

The impending deal is certain to be criticized by those government
critics who believe that Russia’s growing economic presence in Armenia
is turning into a stranglehold. Russian firms already dominate
the Armenian energy and telecommunication sectors and are keen to
acquire other industries. One of them is understood to have effectively
purchased recently Armenia’s largest gold mining company from an Indian
operator that fell foul of the authorities in Yerevan in January.

But according to Khrimian, more important is the fact that the new
railway manager will have to invest at least $170 million in the
Soviet-era network that has been operating at a fraction of its
capacity ever since Armenia’s rail communication with the outside
world was disrupted in 1992.

"Working in these blockade conditions, we have been unable to generate
sufficient revenues to make capital investments in our train fleet
and other infrastructure," said Khrimian. "The investments will
considerably improve the condition of our railway," he added.