ARMINFO News Agency, Armenia
July 13, 2017 Thursday


The head of the Ministry of Transport noted the complete lack of
progress in the implementation of the program for the construction of
the railway "Iran-Armenia"

Yerevan July 13

Naira Badalyan. Minister of Transport, Communications and Information
Technologies of Armenia Vahan Martirosyan assures that the absence of
the government program for 2017- 2022gg. The project of building the
Iran-Armenia railway does not mean that the government refused to
implement it. "It is impossible to include everything in the
government program and, if this is not stated in the document, does
not mean that the project will not be implemented," Vahan Martirosyan
told ArmInfo on July 13 after the meeting of the government.

According to the minister, despite the fact that the government's
program for the next five years specifies in detail the timeframe to
ensure a stable, affordable and competitive transport network, a
street and road network that meets modern requirements for safety and
comfort, and also upon completion of the investment program of the
road corridor "North-South", and not a word about the railroad
"Iran-Armenia", the Cabinet still hopes for the implementation of the
project in the future. Nevertheless, as Vahan Martirosyan stated,
today there is nothing that would be optimistic. "At this stage, there
are problems with the implementation of the project, deciding which,
we will be able to move forward," - noted the heads of the Ministry of
Transport. These problems, as pointed out by Martirosyan, are related
both to investors and the implementation of a number of obligations,
and to the study of the state of roads.

The Minister admits that Armenia is already lagging behind the earlier
deadlines. According to him, there are certain limitations that,
before they are eliminated, do not allow talking about progress. Which
exactly - Vahan Martirosyan abstained to voice.

The fact that the railway project "Iran-Armenia", recognized according
to the assurances of the Ministry of Transport of Armenia,
economically justified, ordered to live for a long time, became clear
already at the beginning of this year, when the government decree of
January 12 eliminated CJSC "Railway Construction Directorate "Under
the Ministry of Transport, Communications and Information Technologies
of Armenia. Then the minister of transport, communications and IT of
Armenia Vahan Martirosyan tried to calm the media representatives,
noting that this will not in any way affect the implementation of the
program for the construction of the Iran-Armenia railway. "As part of
the Ministry operates" Railway Management, which can perform the
relevant functions, "- he said. However, saying that negotiations in
the direction of attracting potential investors in construction
continue, the minister did not name the names and countries - possible
participants in the project. "We are working in this direction, but we
all realize that the project is not an easy one and requires
individual work with each individual investor," he said. It is
noteworthy that the project, which was announced as early as in 2012,
is not completely formed for today. According to the Ministry of
Transport, according to a very approximate calculation, the
construction cost is estimated at $ 3.2 billion. "But this calculation
is very approximate, since there is no final approved project, and we
are waiting for the evaluation of future investors," Vahan Martirosyan
stated then. "The routes of connection with the operating railway are
discussed via the Sevan coast (Sevan station), the other via the
Ararat valley (station Eraskh.) At the moment, the route through Sevan
is preferable," the minister explained. As he said, all for the same
rough estimates, the payback period of the project is estimated at 22
years.

Back in May 2012, the Armenian and Iranian sides signed a concession
agreement, which discussed the feasibility study and the main tasks of
designing, building and financing this project. Thanks to the
cooperation between Armenia and the investment company "RACIA FZE", a
feasibility study for the feasibility of the "Southern Railway"
project was developed. Based on the facts studied, it is proposed to
build a railway for six years. The cost of the project was estimated
at $ 3.5 billion. The total length of the road in Armenia is 305 km.
It will have 86 bridges, a total length of 19.6 km and 60 tunnels with
a total length of 102 km. Construction in accordance with the
submitted program, will be completed in 2022. It is assumed that the
volume of cargo transportation by rail from Gagarin station
(Gegharkunik region) to Agarak (Syunik region) will be 25 million tons
per year. This road, which is 44 km shorter than the planned site of
Gavar-Agarak, will be connected to the existing railway network. The
launch of the projects "Southern Railway of Armenia" and "Southern
Highway of Armenia" (Iran-Armenia) was announced in January 2013. At
the same time, a trilateral Memorandum of Understanding on regional
cooperation aimed at the development of the South Railway of Armenia
was signed between the South Caucasus Railway, the Ministry of
Transport and Communication of Armenia and the company Racia FZE,
registered in the United Arab Emirates by the company. After that,
nothing more substantive about the "Racia FZE" and the results of
negotiations with it was not announced.

It should be noted that, according to economic analysts of ArmInfo,
the economic inefficiencies in the construction of the Iran-Armenia
railway are based on three main factors. This is, first of all, the
deadlock of the Armenian railway and the impossibility of its direct
access to the "Russian expanses"; secondly, even with the hypothetical
possible unblocking of the Abkhaz section of the railway in the
future, the presence of the currently constructed Iran-Armenia section
of the North- Will make the Iran-Armenia railway, in connection with
its insignificant length, inefficient. To this initially low
efficiency, the third, perhaps most important, factor is added: the
railway project of the Astara-Resht-Qazvin railroad realized by the
Railways. This is a transport corridor that will connect the operating
railways of Russia, Azerbaijan and Iran. The project is carried out
within the framework of the international transport corridor
"North-South", whose goal is the integration of the transport and
information highways of Russia, Azerbaijan, Iran, India and Oman. In
the opinion of analysts, the Iran-Armenia railway project is
exclusively politically motivated and that is why during the last few
years it practically did not manage to move from a dead center. The
statements of the Armenian officials on the possibility of China's
participation in this project in the framework of China's
super-bureaucratic program for the revival of the Great Silk Road,
worth $ 40 billion, do not stand up to the claims of the Armenian
officials. Armenia does not exist in one scenario of the new Silk
Road, but the maps show Iran- Azerbaijan and Turkey-Georgia.