CENN — NOVEMBER 16, 2004 DAILY DIGEST
Table of Contents:
1. “Investigative Journalists” Still Have a Chance to Win The Suit
Against Yerevan Municipality
2. IMF to Release Another $13 Million to Armenia
3. School is Built in Maralik on Assets of Hayastan All-Armenian Fund
4. Alternative Energy in Armenia
5. Unlimited Electricity for Tbilisi
6. Awkwardly Successful
7. Water Supply Improves in Gegharkunik
8. SCADA System to be Installed by the End of November
9. Foreign Investments to Amount to $260-280 Million in Armenia This
Year
10. Experts fear Armenian Chernobyl
1. “INVESTIGATIVE JOURNALISTS” STILL HAVE A CHANCE TO WIN THE SUIT
AGAINST YEREVAN MUNICIPALITY
Source: Yerevan Press Club Weekly Newsletter, October 29 – November 4,
2004
On October 29, 2004 the RA Court of Cassation secured the suit of
“Investigative Journalists” NGO versus the municipality of Yerevan. On
September 23, 2004 the organization challenged with the supreme
jurisdiction body of the country the ruling of the RA Court of Appeals
of September 16, 2004, that had left the decision of the court of
primary jurisdiction of Center and Nork-Marash communities of Yerevan of
June 21 unchanged. As it has been reported, the courts of primary and
secondary jurisdiction did not secure the demand of the plaintiff to the
Yerevan administration to provide it with documents necessary for
journalistic investigation: the resolutions of the municipality of
1997-2003 on the constructions in the public green zone around the
National Opera and Ballet Theater (see details in YPC Weekly Newsletter,
September 17-23, 2004).
The Court of Cassation ruled to send the case back to the consideration
of the Court of Appeals with a new composition. Thus, the Investigative
Journalists” along with the public at large now have a chance to finally
get an answer to the question: what were the legal grounds behind the
boost in construction of entertaining institutions in one of most
beautiful and once the greenest spots of Yerevan?
2. IMF TO RELEASE ANOTHER $13 MILLION TO ARMENIA
Source: ArmenPress, November 4, 2004
The International Monetary Fund (IMF) office in Yerevan stated that the
Fund’s Executive Board is going to approve in early December the release
of $13 million to Armenian Central Bank as the last tranche of an $87
million credit, which is part of the Poverty Reduction and Growth
Facility (PRGF) Program.
The IMF Resident Representative James McHugh told a news conference the
money would arrive in Armenia in a couple of days after the Executive
Board approves the release. McHugh said the Armenian government and the
Fund are working now on prospects for implementation of new joint
projects, expressing also hopes that the relevant talks will start in
2005 January or February. He said it was so far difficult to define the
direction of new projects, but added that they would most likely apply
to tax reforms and administration improvement.
3. SCHOOL IS BUILT IN MARALIK ON ASSETS OF HAYASTAN ALL-ARMENIAN FUND
Source: ARKA, November 4, 2004
Hayastan All-Armenian Fund put into commission a school in Maralik
(Armenia). According to the Press Service of the Fund, the
schoolchildren previously studied in temporary buildings for 15 years,
as the school was completely ruined as a result of the earthquake.
The construction of the new school, which started in 2002, was carried
out with the assistance of Jan Pogosyan, Belgian sponsor of Armenian
origin. `Thus, the last school in Shirak Marz which was located in a
temporary building will be functioning in a modern, well-built and
comfortable building’, states the press release.
The school is designed for 964 schoolchildren. The construction of the
heat supply system will be completed by the end of the year.
4. ALTERNATIVE ENERGY IN ARMENIA
Source: Yerevan Times (Armenia), November 12, 2004
Since the 1990s, Armenia has been grappling with how to resolve its
energy shortages. Nuclear power delivers about 35 percent of Armenia’s
energy needs, but a government study several years ago determined that
it might be possible to develop alternative sources of energy to replace
nuclear as early as 2004.
If sufficient alternative sources were developed, then the nuclear power
plant could be shut down, according to an official who was the spokesman
for Armenia’s President Robert Kocharian at the time.
People sometimes hear what they want to hear, however, and so the
scuttlebutt for years was that Armenia had made a promise to
decommission its Metsamor Nuclear Power Plant by this year. They did,
sort of. The catch, of course, was that sufficient alternative sources
had to be available, first. The year 2004 is almost over, but those
alternative sources have not been developed – at least not to the extent
necessary to serve as an alternative to nuclear power. Some progress is
being made, however, especially with wind and solar-generated projects.
WIND
Renewable energy is cleaner than the traditional sources such as nuclear
and thermal power. Solar and wind power do have an impact upon our
environment, but they don’t pollute the atmosphere – unless one
considers the pollution that is emitted when the solar panels or wind
turbines are manufactured.
Armenia doesn’t have a wind stream that is comparable to the Gulf Stream
that exists in the US, but there is nevertheless some wind potential.
Armenia is a mountainous country, and strong winds frequently develop on
mountain ridges or on the saddles of mountain passes. Some of these
local wind currents are legendary.
At present, the economically viable capacity for wind energy is
approximately equal to that of nuclear, about 500 MW, but wind energy
development in Armenia is in its infancy. Still, wind energy is a strong
contingency plan for Armenia. Testing is ongoing, but if wind power
proves to be feasible, then Armenia could add wind-generated electricity
to its power sources.
Start-up costs for establishing wind, as an alternative energy source
would be insignificant compared to the cost of building a new nuclear
power plant. Building a wind farm with a 10-megawatt capacity could cost
$10 million to build, and another $1 million in legal fees. A new
nuclear power plant might easily cost $1 billion. Plus, storing the
radioactive waste – it cannot be `disposed’ of – is an expensive and
risky business.
Start-up costs are only part of the equation, however. In order to be
economically feasible, a site must have consistent annual wind speeds of
roughly 8 meters per second. After the infrastructure is built, the
price of wind power depends on the wind speed at the site. At 6 meters
per second, it cannot compete with nuclear, coal or gas. But an annual
wind speed of 8 meters per second beats coal, and starts to compete with
gas and nuclear energy. At 9 meters per second wind beats them all. At
this wind velocity, wind turbines can generate electricity for as little
as three cents per kilowatt-hour, which is quite inexpensive.
But whereas nuclear energy might continue to be a major contributor to
Armenia’s energy needs, wind might contribute no more than five percent
of the country’s electricity. Wind is therefore just one important
alternative among a portfolio of energy sources.
SOLAR
Energy from the sun is more affordable than wind power for individual
residences when the power does not get added to the country’s electric
grid. This is because the photo voltaic cells needed for solar power are
far too costly to be used for the national electrical grid but they are
more economical in areas that the electric grid doesn’t reach.
Artak Hambarian, the director of a solar energy project in Yerevan,
estimates that it could take a business 20 or 30 years to earn enough
savings in energy costs to pay for its investment in solar panels that
are used to create electricity.
Solar is especially economical for heating water, however. This is where
solar power beats wind power. Solar energy generation capacity in
Armenia is currently around 650 MW, but estimates for future capacity
are as high as 3,500 MW. Unfortunately, says Hambarian, `this could take
decades to achieve.’ Hambarian is the Director of the Engineering
Research Center (ERC) at the American University of Armenia (AUA).
Hambarian says it could take $10 billion to convert all of Armenia’s
energy generation capacity to solar – assuming that anyone wanted to do
that. `In the future it could all be solar,’ he says. `But it would be
too expensive.’
Limited practical applications of solar energy have proven
cost-effective for AUA, however. This University is supplied with hot
water and with heating and cooling by a project that its academic
engineers from ERC are working on.
A solar photovoltaic system, also installed on the roof, provides
electricity to a solar driven electric system that makes the University
building independent from the electric grid and which serves to back-up
the University internet servers.
WHO WILL BENEFIT FROM ALTERNATIVE ENERGY?
The thermal, nuclear and hydro facilities that Armenia inherited from
the Soviet Union generate so much electricity that Armenia has been able
to sell some of it to the Republic of Georgia. How might the cost of
wind or solar energy compare with the cost of the existing nuclear
energy program in Armenia? Could electricity generated by wind or solar
be sold commercially, at a profit?
It’s difficult to compare the profitability of wind and nuclear
generated energy in Armenia, because the nuclear energy that the country
generates and sells is from a plant that was already here when the
country gained independence. Wind-generated power would include start-up
expenses that nuclear didn’t have.
What this means is that wind might not be exploitable today, but that it
might become a better bargain when, or if, Armenia scraps nuclear power.
Over time, wind and solar productions may attract more and more donor
support from the government and from others.
Wind power generates about 13,000 megawatts of electricity worldwide,
with much of the increases of the past few years attributable to new
installations in Germany and Spain. At the current rate of new
construction, wind may surpass nuclear energy in total world capacity in
just a few years.
THE STONE GARDEN GUIDE TO ARMENIA, WRITTEN AND PHOTOGRAPHED BY TWO
INSIDERS
The photographers and authors of this story – Robert Kurkjian and
Matthew Karanian – have traveled extensively in Armenia and have just
released a new book about the region.
The travel guide highlights conservation efforts in Armenia, including
efforts at adopting renewable energy technologies, among its 304 pages.
The guidebook is unique among Armenian-subject guidebooks for its
beautiful color photography, its 25 color maps, and for the insider
perspective of its authors.
`The Stone Garden Guide: Armenia and Karabagh’ is available by mail
order from booksellers such as Amazon.com for $24.95. It is available in
Yerevan from Artbridge Cafe on Abovian Street. More information about
the book is available from
5. UNLIMITED ELECTRICITY FOR TBILISI
Source: The Messenger, Novemebr 15, 2004
Deputy Minister of Energy Aleksandar Khetaguri stated at a press
conference on Friday November 12, 2004 that Tbilisi will receive
electricity without limitations, and that the ministry will take all
measures to continue importing electricity from Russia and Armenia.
Meanwhile, Director General of TELASI Dangiras Mikolayunas applied to
the National Energy Regulation Commission (GNERC) to return the license
to import electricity from Armenia that was stripped from TELASI two
weeks ago. Mikolayunas told GNERC at a meeting on Friday November 12,
2004 that they should study a letter from Energy Ombudsman David
Ebrelidze to the General Prosecutor’s Office, which blames TELASI of
concluding an “unfavorable” agreement with Armenia.
Mikolyunas said the Commission must decide whether to give the license
to TELASI or not after studying this letter.
6. AWKWARDLY SUCCESSFUL
Source: Transitions Online, Czech Republic, November 15, 2004
The government beats its own poverty-reduction target eight years ahead
of schedule. From Eurasianet.
YEREVAN, Armenia–A recent economic survey in Armenia showing a
significant decline in the number of citizens living in poverty has
placed President Robert Kocharian’s administration in a somewhat awkward
position. While Kocharian has been eager to show Armenians that living
standards are improving, the report’s findings could complicate the
Armenian government’s efforts to secure international aid for
poverty-reduction programs.
The annual survey of household incomes by the National Statistical
Service contained a full range of startling statistics. Among the most
surprising: The percentage of Armenians living below the poverty line
fell from 50 percent in 2002 to 42.9 percent in 2003. Similarly, the
number of poorest Armenians–those who earn less than 7,742 drams (about
$15) per month–also took a surprising plunge, from 13.1 percent of the
population in 2002 to 7.4 percent in 2003. At the same time, the survey
indicated that the country’s income gap between rich and poor narrowed
slightly.
The statistics reveals that the poverty reduction rate in Armenia far
exceeds the projections that the government outlined in its Poverty
Reduction Strategic Paper (PRSP) released earlier this year. In one
example in the PRSP, officials estimated that that it would take until
2012 before the “very poor” could be reduced to less than 8 percent of
the population. The NSS figures show that this benchmark has been
surpassed a full eight years ahead of the government’s schedule.
Given the NSS findings, questions are already being raised about the
accuracy and potential effectiveness of the government’s anti-poverty
blueprint. While officials have been happy to tout the reduction in
poverty, one government minister has already disputed the NSS findings.
Vardan Khachatrian, the finance and economy minister, told reporters
that the results were difficult to trust and too optimistic.
Some economic experts share Khachatrian’s doubts. “I cannot see the
reasons that could bring about such a drastic change in the percentage
of the population made up by the very poor,” said Ruben Yeganian, a
researcher at Yerevan’s Institute of Economic Problems. The decrease was
particularly improbable for 2003, when Armenia’s inflation rate soared
in response to an increase in foreign grain prices, Yeganian asserted.
That year, bread prices increased by 31 percent between January and
December, causing an overall 8.6 percent increase in the consumer price
index, compared with a 2-percent rise the previous year.
A report published on 18 October by the International Crisis Group (ICG)
echoes Yeganian’s assessment. Its study, entitled “Armenia: Instability
Ahead,” states that while the market reforms of the 1990s may mean
Armenia is now enjoying a relative boom, relatively few Armenians have
seen a vast improvement in living standards. “The benefits of economic
recovery are not equally shared,” the report found. “There is little
sign of poverty decreasing.”
Contradicting the NSS, the ICG report cited statistics that show 55
percent of the population lives in poverty, with wealth concentrated in
Yerevan and in “circles close to the government.” Meanwhile, the exodus
of educated, well-trained workers–one of the main obstacles to an
Armenian economic comeback–continues. Favored labor markets include
Russia, Central Europe, Ukraine, and Turkey, where potential salaries
are higher than the $78 average monthly salary to be had in Armenia.
The poverty issue has figured prominently in the ongoing power struggle
between Kocharian and opposition political parties. In an attempt to
outflank his critics, Kocharian unveiled a 12-year plan for fighting
poverty in June. Yeganian speculated that the government might have cast
doubt on the NSS findings in order to prevent a decrease in foreign aid
programs. An additional factor feeding official concerns, Yeganian
suggested, is the decrease in value of the U.S. dollar against the
Armenian dram over the last year. As a result, the incomes of Armenians,
when denominated in dollars, appear to have increased.
The Armenian government counts heavily on international aid to promote
economic stabilization efforts, including anti-poverty programs. Armenia
hopes to receive $100 million for various economic development schemes
in 2004 from the U.S. Millennium Challenge Account program, aid monies
that are contingent on the country’s record for democratic reform and
human rights. Also in support of Kocharian’s agenda, the World Bank has
pledged to deliver $250 million by November 2004 for work on rural
schools, infrastructure and irrigation systems.
Some representatives of the NSS themselves have admitted to being caught
off guard by the survey’s results. Hovik Hohannisian, head of Food
Security Statistics, raised questions about the criteria used to
determine who is “very poor,” saying that the food basket used to
determine purchasing power was actually more like a “bread basket.”
Meanwhile, one of the country’s main creditors, the World Bank, said it
saw no reason to doubt the NSS data, the Bank’s Yerevan spokesperson,
Vigen Sargsian, told Eurasianet. Aside from the World Bank, the NSS’s
data is routinely cited by international organizations, including the
International Monetary Fund. The NSS also receives advice from
representatives of the European Union and the U.S. Agency for
International Development.
7. WATER SUPPLY IMPROVES IN GEGHARKUNIK
Source: ArmenPress, November 15, 2004
An 8.5 km long drinking water pipeline with a capacity of supplying 25
liters of water per second was inaugurated today in Armenia’s biggest
rural settlement, Vardenik in the province of Gegharkunik. The
construction cost was $88,000. The Armenian Social Investments Fund
released the bulk of money and the community raised ten percent.
According to community head Manuk Manukian, future plans include lying
of 53 km long inner pipeline and taking water to residents of newly
built boroughs of the village that has 10,000 population.
In a related development the inner drinking water network of another
village in the province, Norakert, was repaired as part of Poverty
Reduction Program. The repair budget, some $11,5000, was funded the
government of Great Britain.
8. SCADA SYSTEM TO BE INSTALLED BY THE END OF NOVEMBER
Source: ArmenPress, November 15, 2004
Armenian-Russian HayRusGazArd Company said today it would accomplish the
installation of SCADA system by the end of November. According to the
company’s deputy chief manager Ashot Hovsepian, the SCADA equipment cost
is $400,000, which does not include the cost of its installation and
putting into operation.
The SCADA system will allow collecting of updated information from all
main pipelines supplying natural gas to Armenia across Georgia. The work
for its installation began in 2003 October as part of TACIS assistance
to Armenia. The system will allow the company to maintain reliable
communication to ensure the safety operation of the pipeline and
decrease losses. The system will be the first one among former Soviet
republics.
9. FOREIGN INVESTMENTS TO AMOUNT TO $260-280 MILLION IN ARMENIA THIS
YEAR
Source: Azg/arm, November 16, 2004
Recently, the UNDP and RA Trade and Economic Development Ministry
represented World’s Investments Report 2004 at Armenian Development
Agency. Touching upon the report, Liz Grande, the UN representative,
informed that it is already the third year that the foreign investments
have decreased in the entire world, amounting to $560 billion. Moreover,
the biggest decrease is fixed in the EU countries and the North America,
amounting to $110 billion. While in Armenia, as well as in the region as
a whole, the investments have increased in the same period.
Tigran Davtian, RA Trade and Economic Deputy Minister, emphasized that
the growth of the foreign investments in Armenia is taking place on the
background of the decrease of the world’s investments. In the first half
of this year the foreign investments have increased by about 40 % and
they will amount to $260-280 million as it was envisaged for the end of
the year. Deputy Minister stated that a number of large investment
programs would be carried out in November-December of this year. He also
reminded that last year the investments made in Armenia amounted to $230
million.
Afterwards, they informed that the investments’ structure has been
changed. At present they have increased in the real sector of the
economy, in the light industry, mine industry, construction and in other
fields, too. The biggest investments in Armenia are made by Greece,
Argentina, the US and France. The local investments have increased as
well.
Tigran Davtian didn’t want to compare the investments made in Armenia
and Azerbaijan, saying that in Azerbaijan the investments are made in
one sphere only. As for Georgia, after the political changes the
interest of the foreign investors to this country has increased. The
deputy minister welcomed this phenomenon, saying for the most of the
foreign investors Armenia is considered a small market and that would be
beneficial to offer them the Georgian market as well. While the
activization of Armenian-Georgian economic relations inspire with hope
that in future it will be possible to establish an Armenian-Georgian
regional market, Tigran Davtian stated.
10. EXPERTS FEAR ARMENIAN CHERNOBYL
Source: The Times/UK, November 16, 2004
The Metsamor atomic plant looms menacingly behind Eduard Kenyasyan as he
offers a slice of homegrown watermelon on the end of his knife. `Nuclear
melon?’ He asks with a mischievous grin. After living next to this
Chernobyl-era power plant on a seismic fault in southern Armenia for 30
years, he is used to the threat of nuclear disaster. `If anything
happens, it will affect the whole country, not just me,’ he says,
shrugging.
The rest of Europe has not taken such a relaxed approach. The European
Union has lobbied hard for the plant, just ten miles from the border
with Turkey, to close this year. It says that the pressurized
water-reactor, based on first generation Soviet technology, may not
withstand another serious earthquake. Alexis Louber, the EU’s
representative in Armenia, caused an uproar recently when he said that
keeping the plant open was the same as `flying around a potential
nuclear bomb’.
Metsamor was built in the 1970s and shut down after a big earthquake in
1988, which killed at least 25,000 people in northern Armenia and hit
5.0 on the Richter scale around Metsamor. Yet the Armenian Government
reopened the plant’s second unit in 1995 because of severe power
shortages and now says that it can continue working until 2016 – and
possibly 2031.
The resulting dispute pits growing Western concerns over obsolete Soviet
nuclear facilities against Armenia’s determination to preserve its
independence and energy security. The EU has campaigned for the closure
of dozens of atomic plants in the former Soviet Union since Chernobyl,
and its concerns have intensified since expanding to Russia’s borders.
Although Metsamor uses different – and safer – technology from that at
Chernobyl, it lacks secondary containment facilities to prevent
radioactive leakage in the event of an accident, European experts say.
In addition, nuclear fuel has to be flown to Yerevan from Russia and
then driven along a bumpy road to Metsamor once a year, because
Armenia’s border with Turkey is closed.
Jacques Vantomme, the EU’s acting Ambassador to Georgia and Armenia,
said: `if there is an earthquake tomorrow, would it create a nuclear
disaster? I don’t know – it depends on the size of the earthquake.’
`The EU’s policy is that we want the closure of the plant at the
earliest possible date. This type of nuclear plant is not built to EU
standards and upgrading it cannot be done at a reasonable cost.’
The EU has offered ÷£70 million in financial aid to shut the plant and
develop alternative energy sources, but Vartan Oksanyan, the Armenian
Foreign Minister, described that as `peanuts’. Metsamor not only
provides 40 per cent of Armenia’s energy, it also sells excess power to
neighboring Georgia. Decommissioning the plant alone could cost more
than ÷£270 million, according to local experts. With no oil and gas, and
scant wind and water resources, Armenia has few alternative energy
sources.
The mostly Christian nation is also reluctant to rely on imported energy
because of its history of hostility with its Islamic neighbors.
`Armenia knows this plant has to go,’ Mr. Oksanyan said, but let’s make
sure we have the capacity to replace it before we close it down.’
Power shortages between 1989 and 1995 have left deep scars on the
country. Almost all Armenians can recall sleeping in multiple layers of
clothing or waking to use their one-hour of power each day.
Armenia’s forests were devastated by people cutting wood for fuel. Gagik
Markosyan, the head of the Metsamor plant, said: `I saw the energy
crisis myself. We can’t talk about closing the plant down overnight.’
He said that more than ÷£27 million had been spent on improving safety
since the plant reopened. British experts have been training staff there
for the past three years.
The second unit, opened in 1980, was originally designed to work until
2010, but as it was shut for six years, it could now work until 2016.
Tests by Russian experts on similar reactors show that Metsamor could,
in theory, operate until 2031.
`As an engineer, I would not exclude that,” Mr. Markosyan said. For
him, as for most Armenians, a new nuclear plant is the only viable
alternative. The EU is reluctant to foot the bill, however, arguing that
Armenia, without the Soviet Union, would never have borne the hidden
costs of development and decommissioning.
`We need the plant,” Mr Kenyasyan says. `Like it or not, we can’t live
without it.’
—
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