HOW DO THEY SPEND THE INVESTMENTS OF ARMENIAN RAILWAY?
K.Beglaryan

Hayots Ashkhar Daily
11 Nov 08
Armenia

1,8 Million Dollars For The Reconstruction Of The Electric Locomotive

According to available information "South Caucasian Railway" is
going to say a new word to the history of the world economy. The
reconstruction of one electric locomotive, which is realized in
Georgia, is more expensive than the reconstruction of a plane. How
can this be explained? Does the principle of "kickback" work here?

The Wagons Reconstructed By Four Times More Expensive Price

Besides purchasing dozens expensive cars and apartments (we have
already touched upon this issue) the company has sent another part of
the invested dollars for the refreshment of the rolling stock. Alas
there is an impression that this was done not for solving the primary
problems faced by the railway, but for money-laundry and exaggerating
the investments.

Otherwise it is unclear why they did this work by four times more
expensive price.

The wagons of Armenian railway have been reconstructed in Georgia. They
have signed an agreement, which is four times more expensive than the
reconstruction of Georgian or any other country’s wagons. Of course
the leadership of the company can reason that there are different types
of reconstruction: depot, capital, etc. and the costs of course differ.

But the problem is far not here. The conversation is about the
wagons in the same technical state. If in case of other companies the
reconstruction of half-wagon cost 8-10 thousand dollars, the Armenian
wagons were reconstructed for 40 thousand dollars.

The Armenian electrical locomotive has also been reconstructed
in Georgian locomotive depot, for 1,8 million dollars. It is more
expensive than the reconstruction of a plane. Whereas according to
the specialists 200 thousand dollars is quite enough for the work of
similar volume.

Let’s explain what is "kickback". For example the work X costs 2
dollars. But the two parties come to an agreement to do the work for
10 dollars. They share the remaining 8 dollars. The documents are ok,
everyone is pleased.

But why?

The concessionary manager has got investment obligations, which must be
fulfilled. So we can presume that these exaggerations were intentional
to show later that they have done more than they have promised.

But it is difficult to say whether or not the Armenian railway will
benefit from it. By the way we have similar precedents.

To Be Continued