CONCESSION OF ARMENIA’S RAILWAYS EFFECTIVE, PRESIDENT SAYS

ARKA
Feb 29 2008

YEREVAN, February 29. /ARKA/. Armenian President Robert Kocharyan
considers the concession of Armenia’s railways to the Russian Railways
Company as effective.

"If we had signed a concession contract for Armenia’s railways five
or six years ago, they would be in a normal state now, just as the
airport, which meets international standards," Kocharyan said at
Yerevan State University.

He pointed out that the reason for the delay of the process is the
expectations from the development of relations with Turkey, which
has closed borders with Armenia until now.

"We expected possible changes in our relations with Turkey, expected
the border to be opened. Under different consequences we will be able
to make our railway more attractive," Kocharyan said.

He pointed out that a decision to settle the issue was later made.

Otherwise, it was not clear whether the issue would be settled at all.

"I am sure that our railway, on which cargoes are transported at
a speed of 15 km/h now, will operate at a quite different level in
two or three years. A large package of commitments exists, and the
Government must supervise their execution," Kocharyan said.

An agreement on the concession of Armenia’s railways to the
South-Caucasian Railway Company, which was founded by the Russian
Railways Company, was signed in Yerevan on February 13.

The Russian company is ready to invest $570mln in the Armenian Railways
Company, with $230mln to be invested within the next five years. The
concessionaire is to launch its activities in the latter half of 2008.

Since 2001, the Armenian Railways Company has been operating with
profit. In 2007, the company transported a total of 3mln tons of
cargo against 2.7mln tons in 2006.

Last year, the company’s profit totaled 12bln AMD against 11bln AMD
in 2006.