STRATEGIC FACILITIES NOT TO BE NATIONALIZED IN ARMENIA

ARKA News Agency, Armenia
Feb 7 2008

YEREVAN, February 7. /ARKA/. Facilities of strategic importance are
not to be nationalized in Armenia, Armenia’s Prime-Minister Serge
Sargsian said at the Parliament. Nationalizations conflicts with the
current economic policy, he said.

The Prime-Minister pointed out that the nationalization is usually
brought up by people who do not understand the problem and particularly
consider the construction of a new nuclear power plant in Armenia
very dangerous.

"But there is no difference is the energy produced from nuclear
material or from water and whether the state or a private person
deals with it: the safety requirements are mandatory for everyone
regardless of the form of property," Sargsian said.

He also said that the Armenian Nuclear Power Plant (NPP) is under
supervision of the International Atomic Energy Agency (IAEA) and the
country’s President-headed Commission for Atomic Energy. Previously
state-owned facilities that were privatized work more efficiently now,
the Prime-Minister added.

Speaking of the transfer of the Armenian NPP and the Armenian railroads
to Russian companies, the Premier said it would be desirable to
maintain the state ownership for these facilities. But about 1.8bln
dollars are required for construction of the new NPP and 1bln dollars
is needed to connect Armenian railroad with the Iranian one: the
state is short of this money, he said.

"Is there any sense to keep these facilities as state property and
spend the money to be spent on social programs to develop these
facilities or it is more expedient to hand the "Armenian Railroads"
company to the "Russian Railroads" maintaining the government
co-financing," Sargsian said.

The Armenian Nuclear Power Plant (NPP) was commissioned in 1976
(the second unit – in 1980).Currently only the second unit operates
providing 40-50% of the overall power produced in Armenia.

In September 2003, the financial flows of Armenian NPP were transferred
to trust management of INTER RAO EES Closed Joint Stock Company –
the daughter enterprise of RAO "EES Russia" (60% of the shares) and
"Rosenergoatom" concern (40%). According to experts, the plant can
operate till 2016.

On January 18 the "Russian Railroads" open joint stock company
was declared as winner in the bidding on handing over the "Armenian
Railroads" for concession management. The Russian company has already
stated its intention to invest $570mln in the Armenian Railways, with
$230mln to be invested within the next five years. Apart from that, the
"Russian Railroads" will be transferring 2% of the overall revenue from
the Armenian Railroads to the state budget of Armenia every year.