Armenian paper questions terms of gas pipeline loan agreement with I

Armenian paper questions terms of gas pipeline loan agreement with Iran

Aykakan Zhamanak, Yerevan
11 Sep 04

Two out of three contracts signed during Iranian President Mohammad
Khatami’s two-day official visit to Armenia are related to the
Iran-Armenia gas pipeline. A contract signed by Armenian Energy
Minister Armen Movsisyan and the director of the Export Development
Bank of Iran, Noruz Kohzadi, deals with the financing of construction
of the Megri-Kadzharan section of the Iran-Armenia gas pipeline. The
second contract was signed by the director of the Yerevan high-voltage
network, Saak Abraamyan, and director of the Iranian company Sanir
Alireza Kadhoda’i to appoint a contractor for the above construction
project under the agreed financing. That is, the bank will give a
credit and Sanir will lay the Megri-Kadzharan section of the gas
pipeline. The credit will be paid off by Armenia.

At first sight, everything seems all right. But one look at the terms
of the loan results in quite a different impression. The bank gives a
30m-dollar loan for a period of seven and half years at an interest
rate of 5 per cent. That is, the sum which should be paid off by
Armenia, is 41m dollars. Is this an expensive loan or not?

During the Armenian prime minister’s visit to Moscow [in mid-July],
where an option of Russian financing for the gas pipeline construction
was also discussed, the proposed terms were much more favourable: an
interest rate of 1 per cent and a payback period of 15 years. These
terms would have been the best. But we did not manage to enter into
a contract with the Russian side.

Quite possibly, the signed contract is a “reward” to the Iranian
side for finally reaching an agreement which had been delayed for 10
years. But in this case, if new financing organizations come forward,
they will undoubtedly take into account the terms which are at the
basis of the contract made with the Iranian bank. However, this is
not the most interesting part.

The point is that after building the Megri-Kadzharan section of
the pipeline, Iranian gas can flow through Armenia’s existing and
functioning network. But in this case only 300m cu.m. of gas will
be able to enter Armenia annually. In order to reach the gas volume
envisaged in the contract – 2.2bn cu.m. annually – it is necessary
to get an additional 90m dollars and to build one more pipeline in
Armenia. A new pipeline is necessary for the efficient use of the
existing one.

In this case our task is becoming more difficult in the sense of
finding cheaper credits. A potential investor would have an extra
trump card on their hands: knowing that for paying off 30m dollars
that are already spent Armenia needs 90m US dollars, naturally the
investor will come up with tougher terms.

Certainly, it is not ruled out that the loan received from the
Iranian bank may be paid off with electricity. This would make the
loan noticeably cheaper. But not as cheaper as an international
tender would have done. Incidentally, some of our officials were
earlier speaking about the need for such a tender. But as we know,
this most fruitful method was not applied in Armenia.

National Citizens’ Initiative Examines Armenia’s Place in RegionalSe

PRESS RELEASE
The National Citizens’ Initiative
75 Yerznkian Street
Yerevan 375033, Armenia
Tel.: (+374 – 1) 27.16.00, 27.00.03
Fax: (+374 – 1) 52.48.46
E-mail: [email protected]
Website:

September 9, 2004

National Citizens’ Initiative Examines Armenia’s Place in Regional Security

Yerevan — The National Citizens’ Initiative (NCI) today convened a
specialized policy discussion on “Armenia in the Current Security
Systems of the Region” to discuss optimal options for Armenian
security amid a rapidly changing region undergoing global geopolitical
developments. In view of Russia’s apparently scaled-back, and the US’s
and European Union’s evidently growing, impact upon the region the
roundtable brought together policy makers, public figures, academic
circles, and representatives of the mass media and NGO communities
to consider Armenia’s challenge of making a strategic choice among
the available security systems in the region in order best to meet
its needs and avoid becoming the “odd man out.”

Given the fact that Armenia is the sole regional member of the
Collective Security Treaty Organization (CSTO), while its South
Caucasus neighbors aspire for NATO accession, key questions arise. In
which security system should Armenia take part in the future,
is it possible to combine close cooperation with both systems on a
complementary basis, how real are the prospects for the establishment
of a common Caucasian security system? These and other issues critical
to the future of Armenia formed the day’s agenda.

Hovsep Khurshudian, analyst of the Armenian Center for National and
International Studies (ACNIS), greeted the participants and capacity
audience with opening remarks. “We should seek ways both to provide
for the security of Armenia and Mountainous Karabagh and to foster
their sustainable economic and human development. Otherwise their
safety would be endangered in the near future,” Khurshudian maintained,
attaching importance to making correct choices in view of contradictory
events and in particular NATO’s enhanced role in the region.

In a paper on “The Prospects for Forming an All-Caucasus Security
System,” Giro Manoyan of the Armenian Revolutionary Federation
reflected on the perspective of shaping a common Caucasian approach
based on the region’s place at the crossroads of European, Eurasian,
and Middle Eastern security spaces. “The perfect form for the
provision of regional security is the inclusion of all the states of
the region within the same system. However, at present that is not yet
possible to achieve,” Manoyan asserted. In his opinion the peoples of
the region hold different perceptions on security matters; for some
it is a guarantee to protect what they currently have, whereas for
others it is a way to bring back their losses. Manoyan is convinced
that high living standards, economic growth, and democracy will play
a large role in accomplishing security.

ACNIS analyst Stepan Safarian focused on regional security guarantees
in reference to the results of both a specialized questionnaire and
a public survey on “Armenia’s National and International Security in
the Next
Decade,” conducted by the Armenian Center for National and
International
Studies in August. “The problem is that Armenian society perceives
both NATO and CSTO with reservations.” The speaker sees a future
Armenia within the same security system as its neighbors. Otherwise,
the alternative will lead to “closed gates and regional crises.” The
main impediment to formation of a shared system in the South Caucasus
is the existence of non-resolved or “frozen” conflicts in the region.

Against the backdrop of pipeline policies and the region’s inclusion
at the forefront of the Euro-Atlantic agenda, Yerevan State University
lecturer Aram Haroutiunian focused on “NATO or Collective Security
Treaty Organization, European Union or CIS?” In his assessment Armenia
faces the following four challenges: the Ankara-Tbilisi-Baku triple
arc, the possibility of sudden political volte-faces in the neighboring
republics, the Karabagh challenge, and the efforts to resolve other
regional conflicts by force, that is insatiable revanchism. On
the NATO-CSTO dilemma he opined: “It is expedient to preserve the
traditional strategic relations within the CIS, which is a condition
for maintaining the equilibrium among regional forces. Otherwise,
we might increase the level of our vulnerability.” As for NATO, its
penetration into the region is happening step by step. The Pankisi
operations were a vivid example of this, Haroutiunian said.

The remainder of the session was devoted to exchanges of views
and policy recommendations among the public figures and policy
specialists in attendance. Noteworthy were interventions by MP Grigor
Haroutiunian of the People’s Party of Armenia; former minister
of state Hrach Hakobian; Aramazd Zakarian of the Republic Party;
former presidential adviser Levon Zourabian; Artak Poghosian of the
Republican Party; Edward Antinian of the Liberal Progressive Party;
Haroutiun Khachatrian of the Noyan Tapan news agency; Narine Mkrtchian
of the National Press Club; Petros Makeyan of the Democratic Fatherland
Party; Samvel Shahinian of the National State Party; and many others.

The National Citizens’ Initiative is a public non-profit
association founded in 2001 by former minister of foreign affairs
Raffi K. Hovannisian, his colleagues, and fellow citizens with the
purpose of realizing the rule of law and overall improvements in the
state of the state, society, and public institutions. The National
Citizens’ Initiative is guided by a Coordinating Council, which
includes individual citizens and representatives of various public,
scientific, and educational establishments. Five commissions on Law
and State Administration, Socioeconomic Issues, Foreign Policy,
Spiritual and Cultural Challenges, and the Youth constitute the
vehicles for the Initiative’s work and outreach.

For further information, please call (3741) 27-16-00 or 27-00-03;
fax (3741) 52-48-46; e-mail [email protected]; or visit

www.nci.am
www.nci.am

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1) Poland, Armenia Strengthen Ties
2) Armenian Caucus Co-Chairs Commend Karabagh on 13th Anniversary of
Independence
3) Khatami, Iranian Delegation to Arrive in Armenia

1) Poland, Armenia Strengthen Ties

WARSAW (Deutsche Presse-Agentur)–The presidents of Poland and Armenia vowed
Monday to continue bilateral cooperation aimed at fostering western-oriented
economic and political development in the former Soviet Caucusus republic.
Following talks with President Robert Kocharian, Polish President Aleksander
Kwasniewski termed bilateral political relations with Armenia “excellent.”
Asked whether Armenia’s membership of the European Union could one day become
a reality, Kwasniewski said though he is unable to “prophesize” about the
prospect, he offered that EU member Poland share with Armenia its almost 15
years experience in transitioning from communism to a market economy, and
dictatorship to democracy.
Kocharian noted that the most important task the South Caucasus faces is
achieving “predictable progress” to carry out political and economic reforms
necessary to attract business and investment from EU countries.
Both leaders also expressed hope that a solution would be found to the
long-standing dispute between Armenia and neighboring Azerbaijan over the
territory of Mountainous Karabagh Republic.
The Armenian leader vowed to send 50 soldiers including medical personnel to
join the Polish-led multi-national contingent stationed in south-central Iraq.
The contingent is unlikely to be deployed before the end of this year.
Kwasniewski confirmed that bilateral Polish-Armenian agreements on fighting
international organized crime, as well as military, economic, and industrial
cooperation were finalized Monday in Warsaw.
The Armenian president met with Polish Prime Minister Marek Belka and the
leaders of the upper and lower houses of the Polish Parliament later on
Monday.

2) Armenian Caucus Co-Chairs Commend Karabagh on 13th Anniversary of
Independence

WASHINGTON, DC–On the occasion of the 13th anniversary of Mountainous
Karabagh
Republic’s independence, US Reps. Joe Knollenberg (R-MI) and Frank Pallone,
Jr.
(D-NJ), co-chairmen of the Congressional Caucus on Armenian Issues, commended
the people of Karabagh.
In a letter to President Arkady Ghoukasian, Knollenberg and Pallone wrote,
“Despite all the difficulties, today Nagorno Karabagh is a proud state
committed to the values of democracy, respect for human rights, and an open
civil society.”
“Today, as we extend our congratulations to the people and the authorities of
Nagorno Karabagh on the 13th anniversary of the Proclamation of the NKR, we
welcome your determination and efforts in strengthening Karabagh’s democratic
institutions and market economy.
“Karabagh has proven to be a capable, reliable, and serious partner of the
international community,” the lawmakers continued. “Peace and stability in the
South Caucasus are not possible without a contribution from Nagorno Karabagh.
We assure you of our strong commitment to Karabagh’s security and
development,”
the letter concluded.

3) Khatami, Iranian Delegation to Arrive in Armenia

YEREVAN (Armenpress)–Iran’s president Mohammad Khatami is due to arrive in
Armenia on September 8 for a two-day official visit, at the invitation of his
Armenian counterpart Robert Kocharian.
His delegation will include Iran’s foreign minister, Economic Affairs and
Finance, as well as Commerce ministers, government officials, and journalists.
Kocharian and Khatami will first meet face-to-face, then hold expanded talks
with other officials. The meetings are expected to produce bilateral
agreeemnts.
Khatami will address members of the Armenia’s National Assembly and will meet
with the prime minister of Armenia, and Catholicos Karekin II. Students and
professors of Yerevan State University will also host Khatami.
The Iranian delegation will visit the Armenian Genocide Monument and
Yerevan’s
Blue Mosque. Before departing for Iran, Khatami will also meet with Iranian
citizens working in Armenia.
Hojjatoleslam Seyyed Mohammad Khatami, the fifth president of the Islamic
Republic of Iran, was elected to office in May 1977.

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BAKU: Azeri president leaves for France,expected to meet Chirac late

Azeri president leaves for France, expected to meet Chirac later today

Turan news agency
7 Sep 04

Baku, 7 September: Azerbaijani President Ilham Aliyev has left on
an working visit to France. The press service of the French embassy
to Azerbaijan has told Turan that Aliyev is going to meet French
President Jacques Chirac later today.

The two presidents are expected to discuss bilateral political and
economic relations, prospects for solving the Karabakh conflict and the
situation in the South Caucasus. [Passage omitted: expected itinerary.]

This is the Azerbaijani president’s second visit to France this
year. Aliyev paid an official visit to France in January.

Russia targets world with new jet range

Russia targets world with new jet range
By M. COREY GOLDMAN, FORWARD

Toronto Star, Canada
Sept 6 2004

While the aviation industry has had its fair share of setbacks over
the past few years, people are still flying and airlines are still
buying aircraft..

Lots of countries are content with the status quo. While many have
their own national passenger airline, they typically don’t go to the
trouble and expense of developing their own planes that outside their
own borders would have to compete with the two giant makers, Airbus
and Boeing Co, not to mention No. 3, Bombardier with its Canadair
and de Havilland offerings.

Except in Russia, where things are a little different thanks to 70-plus
years of communist rule that made innovation in the aerospace industry
a priority — though mainly for the military, not for the kinds of
planes regular people ride on.

But over the past 10 years, Russia’s aerospace companies have been
working hard developing new kinds of jets that they hope will not
only be embraced by the country’s own airlines but find markets around
the globe.

They’ve also been trying to show the world that they make good planes
— jetliners that will be reliable and safe, despite having emerged
from the depths of Design Bureaus and state-owned manufacturing plants.

One initiative, called the Russian Regional Jet program, or RRJ,
has some big backers. The program, which will soon produce three
different-sized small jets, a 60-seater, a 75-seater and a 98-seater,
is being developed by Russia’s Sukhoi Civil Aircraft with support
from Boeing, which is working as a consultant on the deal.

Sukhoi hopes to deliver from 800 to 1,000 RRJs through 2022, and has
just announced an order for 50 RRJ-95 aircraft from Sibir, Russia’s
second-biggest carrier. Russia’s NPO Saturn and France’s Snecma Moteurs
are involved in designing the propulsion system of the new aircraft.

What it points to is a shift away from Russian aircraft designs with
roots in the Cold War era, hundreds of examples of which remain in
service but that in most ways lag behind world standards.

The history of Soviet aeronautics spins into quite a tale. In the
mid-1930s the Soviet government set up what was called a Central Design
Bureau — a state-run agency whose sole purpose was to design bombers,
fighters, and transport and cargo airplanes.

One part of that bureau had a section for designing long-range
bombers, headed by Sergej Vladimirovich Ilyushin, who later became a
successful designer of long-range jets, including the Ilyushin series
of commercial and military jets that exists today.

A different area called the Central Aerohydrodynamics Institute was
run by Andrei Nikolaevich Tupolev, who designed and built a large
number of various Soviet aircraft called Tupolevs, including the two
planes that simultaneously crashed last month, apparently brought
down by terrorism.

Those two families of commercial airplanes, named for their respective
creators, served the Soviet Union just fine for many years. They were
used to transport people, cargo, and military equipment all around
the vast country. In the 1990s the Soviet monopoly carrier Aeroflot
was dismantled into dozens of smaller carriers, many of whom had
doubtful finances, poor management and even poorer reputations.

But as the industry continued to grow, companies like Aeroflot and
Sibir wanted re-equip.

Western-built planes from the likes of Boeing and Airbus were there
for the taking, but at a hefty price, thanks to government-imposed
tariffs of 20 per cent meant to encourage airlines to keep buying
Russian-made planes rather than imported ones.

But the Russian designs were old, not up to speed with what Boeing,
Airbus and others were producing.

And with no system in place for leasing aircraft from the domestic
manufacturers that are still producing planes, new aircraft were,
and are, difficult to come by no matter where carriers look.

A senior official at Russia’s industry and energy ministry warned
earlier this summer of a possible crisis in 2006 or 2007 as aircraft
become antiquated and international noise and emission requirements
come into play.

Aeroflot has some Boeing 777s, 767s and Airbus A310s in its fleet,
though the majority of its planes are Tupolevs and Ilyushins — the
TU-134, TU-154, IL-96, IL-86 and IL-62. Almost all of Sibir’s aircraft
are Tupolevs and Ilyushins — the TU-154, TU-204 and IL-86.

One way Russian carriers have gotten around the tariffs and
restrictions is by buying or leasing planes for airlines they have
a stake in that are in other countries.

Sibir, which took over 70 per cent of Armenian carrier Armavia last
year, inherited one leased Airbus A320. Because Armenia charges only
a registration fee for imported aircraft, Sibir can buy or lease more
if it likes.

Other manufacturers that found themselves outside Russia after the
Soviet Union crumbled have enjoyed some success.

Antonov, based in Ukraine, has been building new cargo planes such
as the An-225 Mriya, which has three jet engines on each side and
can transport cargo literally on its back — on top of the fuselage
outside the plane.

The entire Russian aerospace industry appears to be at a crossroads.
The regional TU-334 has flown; first RRJ is expected to make its
maiden test flight in 2006, with commercial use to begin a year later.

With a land mass bigger than Canada’s, with 11 different time zones
and with only one road connection from one end of the country to the
other, analysts expect the domestic market for smaller regional planes
to be huge.

Aeroflot carried 5.8 million passengers in 2003, up 6.5 per cent from
2002. Sibir carried 3.5 million passengers last year, while passenger
volumes grew more than 25 per cent for the first half of this year.
The industry as a whole has notched up 15 per cent growth almost
consistently since 2000.

If the RRJ program is successful, it will be proof to the world that
Russia can build modern, sophisticated planes that serve a purpose,
not only for Russia but for other markets too. Some wonder whether
Russia should sink billions of dollars into an industry that is
struggling to break free from its military, government-dominated past,
in the face of massive competition from entrenched players.

Russia’s own carriers aren’t holding their breath for competent new
jets to roll out in their own backyard.

While Sibir has signed a letter of intent with Sukhoi to buy the
50 RRJ-95 aircraft starting in 2007, one of its senior officials
recently told Russian news agency Prime-Tass that it plans to take
out a lease on 100 Boeing 717 regional jets by the end of this year,
with plans to continue taking out leases on foreign-made aircraft
over the next 10 years.

Still, it’s worth remembering there once seemed little hope for the
European consortium known as Airbus when it set out to take on Boeing
back in 1970. Airbus struggled to produce new designs to compete with
Boeing and runner-up McDonnell Douglas Corp.; Airbus practically had
to give away its first jets to get airlines to fly them.

Perhaps one day we will, indeed, step into a brand-new Russian-built
jetliner, for our shuttle flight to Ottawa, Montreal or New York.

Azerbaijani newspapers protest Armenian officers’ arrival in Baku

Azerbaijani newspapers protest Armenian officers’ arrival in Baku

AP Worldstream
Sep 04, 2004

Leading Azerbaijani newspapers ran blank front pages Saturday to
protest the arrival of officers from rival Armenia for a NATO-sponsored
exercise, while some electronic media stopped broadcasting for
several hours.

The front pages carried only the words, “The media of Azerbaijan
protest the arrival in Baku of the Armenian military.”

A statement of protest published in Friday’s newspapers called the
visit “an insult to the Azerbaijani people,” which endangered the
nation’s stability.

The statement was signed by the chief editors of nine newspapers
representing a wide political spectrum and the heads of the ANS and
Azernet agencies.

Earlier in the week, members of the Organization for the Freedom of
Karabakh, including its leader, were sentenced to between 3 and 5
years in prison for organizing disturbances in protest of the arrival
of Armenian officers.

The NATO Cooperative Best Effort-04 seminar is scheduled to run
Sept. 13-26.

Veteran children’s doctor focus of Russian hostage mediation hopes

Veteran children’s doctor focus of Russian hostage mediation hopes

Agence France Presse — English
September 2, 2004 Thursday 11:52 AM GMT

MOSCOW Sept 2 — Children’s doctor Leonid Roshal who is attempting
to mediate a way out of the hostage crisis at a school in southern
Russia is a veteran of tense situations who enjoys the trust of both
Chechen rebels and Russian authorities.

Roshal, who arrived in the North Ossetian town of Beslan on Wednesday
and has already held several sessions of telephone talks with the
hostage-takers, succeeded in negotiating the release of eight children
during the siege of a Moscow theatre in October 2002 after a Chechen
commando took some 800 theatre-goers and performers hostage.

The white-haired pediatrician, aged 71 and known to Russian media
as the “peace doctor”, won the respect of Chechen rebels during the
first separatist war of 1994-96 when he provided medical care to
wounded Chechen children.

Russian media speculated the hostage-takers in Beslan had called
specifically for Roshal to mediate.

During the Dubrovka theatre crisis, in which he persuaded the
hostage-takers to allow water and medication into the building,
he operated on one of the rebels who had received a wound to the hand.

After working with the victims of the massive Armenian earthquake
of 1988, Roshal set up a team of doctors to work in war and natural
disaster zones.

He and his colleagues have provided care for children in war zones
in the former Yugoslavia (1991), Georgia (1991-92), Nagorno Karabakh
(1992) and Chechnya (1995). Last year, during the US-led invasion of
Iraq, he proposed a “green corridor” to evacuate children from the
cities of Baghdad and Basra.

Roshal, who was decorated by President Vladimir Putin for his mediation
efforts during the Dubrovka crisis during which at least 129 hostages
died, is also a member of the presidential commission on human rights.

Some 132 children have been identified among the hundreds of hostages
seized by the 17-strong commando at the Beslan school.

Ministers of Armenia, Azerbaijan discuss Karabakh in Prague

MINISTERS OF ARMENIA, AZERBAIJAN DISCUSS KARABAKH IN PRAGUE

Czech News Agency
August 30, 2004

PRAGUE, Aug 30 (CTK) – Various aspects of the process of a peaceful
solution to the Armenian-Azeri dispute over the province of
Nagorno-Karabakh were discussed by the foreign ministers of Armenia
and Azerbaijan, Vardan Oskanyan and Elmar Mamedyarov, in Prague today.

The talks, which had been mediated by the Organisation for Security
and Cooperation in Europe (OSCE), were also attended by members
of the OSCE Minsk group from Russia, France and the United States,
the Russian RIA Novosti agency said.

Only snippets of information about the results of the meeting have
been provided. According to available reports, the talks did not have
a precise programme.

The negotiating sides exchanged views on various aspects of the
solutions to the problems in Nagorno-Karabakh, where national disputes
persists.

In the Soviet times, Karabakh, a territory populated by Christian
ethnic Armenians, was assigned to mainly Muslim, Turkic-speaking
Azerbaijan.

The Prague meeting was the fourth meeting between Oskanyan and
Mamedyarov. The previous talks were held in June, also in Prague.

CTK failed to find out whether the Czech side joined the debate and
how. The Czech Foreign Ministry spokesman had no information about
the meeting.

Armenia Indifferent To U.S. Troop Presence In Azerbaijan

Agence France Presse
Aug 27 2004

Armenia Indifferent To U.S. Troop Presence In Azerbaijan

BAGRAMIAN MILITARY BASE, Armenia, Aug 27 (AFP) – Armenia does not
oppose the presence of US troops in Azerbaijan, Armenia’s Defense
Minister Serge Sarkissian said Friday.

“The deployment of American troops in Azerbaijan is an affair between
the United States and Azerbaijan,” the minister told journalists at
the close of joint Russo-Armenian military operations.

Sarkissian also dismissed protests from Azerbaijan concerning the
presence of a Russian military base on Armenian soil as “just words”.

Some 3,000 troops took part in the joint, four-day military
maneuvers, which included fighter jets and helicopters.

The defense minister also said that Armenia was preparing to host
NATO exercises in 2006.

Azerbaijan and Armenia fought a four-year war between 1990-1994 over
disputed Nagorno-Karabakh, an enclave in Azerbaijan with a majority
Armenian population.

A ceasefire was agreed in 1994, leaving Armenian forces in de facto
control of the enclave and surrounding Azeri regions. Azerbaijan has
said it is determined to force Armenian troops out of the territory.