ARMENIA’S TRANSPORT MINISTRY: "RR" CONCESSION PROPOSALS ON MANAGEMENT OF "AR" ADVANTAGEOUS

ARKA News Agency
Jan 10 2008
Armenia

YEREVAN, January 10. /ARKA/. The concession bid proposals of the
"Russian Railroads" (RR) open joint stock company are very good,
Armenia’s Minister of Transport and Communication Andranik Manukian
said at the government briefing in commenting the transfer of "Armenian
Railroads" (AR) closed joint stock company for concession management.

He said that the RR is expected to repair the most dangerous sections
of the railroad and the infrastructures, Ayrum-Giumri, Dilijan-Ijevan
in particular.

The Minister reported that the RR suggest building a new branch line,
rehabilitating Akhurian terminal, bringing the Armenian railroads in
line with the modern technical requirements, increasing the volume
of transportation and capacity of the railroads.

The Minister also said that the Armenian Railroads will remain a
state-owned company that is managed by the Russian company. "In
our opinion, they will be more efficient managers, particularly
because we would not be able to make such extensive investments,"
the Minister said.

Manukian reported that 805 of 1,125 kilometers of Armenia’s railroads
are within the competence of the AR. The company provides steady
profit. In 2007, 3mln tons of cargos were transported through the AR
against 2.7mln tons in 2006.

Two companies – the "Russian Railroads" and Indian RITES (Rail
India Technical and Economic Services) – have been pre-qualified
for participation in the tender on concession management of the
"Armenian Railroads" closed joint stock company. Later RITES refused
to participate in the tender as it decided to take part in a tender in
Africa; consequently, the "Russian Railroads" became the only bidder
in the tender held in Armenia.

According to the investment package opened on December 21, the RR
plans to invest $570mln in the AR, including $230mln in the next five
years. If the blockade around Armenia is raised, the Abkhazian railroad
is opened and railway communication rehabilitated, investments will
reach $2bln 130mln.

In its bid package opened on January 8 the "Russian Railroads" offered
bulk payment of 1.7bln Drams concession fee to Armenia’s state budget
and this proposal is not under consideration currently.

The "Armenian Railroads" closed joint stock company is 100% state
company that owns the main part of the country’s rolling stock and
practically the entire railroad infrastructure (930.8 km as per the
information of Armenia’s National Statistical Service). ($1=307.09
AMD).