North-South Highway/Iran-Armenia Railway

[Federate]

Re: North-South Highway/Iran-Armenia Railway

Russian Official Against Iran-Armenia Rail Link


Հրապարակված է՝ 09.06.2015

The influential head of Russia’s state-run rail network has spoken out against the construction of a railway connecting Armenia with neighboring Iran, saying that it would not be commercially viable.

According to the Arminfo news agency, Vladimir Yakunin compared at the weekend the ambitious project worth an estimated $3 billion with “cutting through a window in the wall leading nowhere … to the wall of the adjacent house.” Yakunin, whose RZhD network manages Armenia’s national railway company, said chances for its implementation are therefore nil.

Yakunin, who is widely regarded as a member of Russian President Vladimir Putin’s entourage, described the project as “realistic” as recently as three years ago, during a visit to Armenia.

The Armenian and Iranian governments officially approved it in 2009. But they have still not found concrete sources of funding for the 470-kilometer rail link that would mainly pass through Armenian territory.

The Armenian side has repeatedly expressed hope that Russian firms will participate in the railway construction and partly finance it. The Russian government and RZhD have not ruled out such a possibility before Yakunin’s remarks cited by Arminfo.

President Serzh Sarkisian called for China’s “active” involvement in the project when he visited Beijing in March. He said that the Armenia-Iran railway could be part of a transnational “Silk Road economic zone” which China would like to create along a vast geographic area.

The China Communications Construction Company (CCCC) has already conducted a feasibility study and recommended a cost-effective route for the rail link.

The study was commissioned in 2013 by the Dubai-based company Rasia that had in turn a received 30-year Armenian government concession to build and manage the 305-kilometer Armenian section of the railway. Earlier this year, Armenia’s Deputy Transport Minister Artur Arakelian said that Rasia has been holding “very active negotiations” with unnamed Chinese investors.

Visiting Yerevan in January, Iran’s Foreign Minister Mohammad Javad Zarif spoke of further progress made towards the construction of the railway. “There have been very good trilateral discussions and we hope that [the project] will quickly move forward,” Zarif said without elaborating.

http://www.azatutyun.am/content/article/27062793.html

This isn't all that surprising to me. Considering the narrow hellish path it has follow in Syunik, the railway itself can never return the investment it requires. However on national scale, how it'll improve security and relations with Iran and Russia, how it'll improve business, investment, and growth, specially in the outer regions, it will have a 10X return on the investment. That's why it would be so valuable if we had the funding to fund it ourselves instead of waiting for a handout from foreign banks and nations

All these Armenian millionaires and billionaires building ugly and/or useless churches which bring no returns on their investment except boosting their egos should be funding this.

[Mher]

Re: North-South Highway/Iran-Armenia Railway

Russian Official Against Iran-Armenia Rail Link


Հրապարակված է՝ 09.06.2015

The influential head of Russia’s state-run rail network has spoken out against the construction of a railway connecting Armenia with neighboring Iran, saying that it would not be commercially viable.

According to the Arminfo news agency, Vladimir Yakunin compared at the weekend the ambitious project worth an estimated $3 billion with “cutting through a window in the wall leading nowhere … to the wall of the adjacent house.” Yakunin, whose RZhD network manages Armenia’s national railway company, said chances for its implementation are therefore nil.

Yakunin, who is widely regarded as a member of Russian President Vladimir Putin’s entourage, described the project as “realistic” as recently as three years ago, during a visit to Armenia.

The Armenian and Iranian governments officially approved it in 2009. But they have still not found concrete sources of funding for the 470-kilometer rail link that would mainly pass through Armenian territory.

The Armenian side has repeatedly expressed hope that Russian firms will participate in the railway construction and partly finance it. The Russian government and RZhD have not ruled out such a possibility before Yakunin’s remarks cited by Arminfo.

President Serzh Sarkisian called for China’s “active” involvement in the project when he visited Beijing in March. He said that the Armenia-Iran railway could be part of a transnational “Silk Road economic zone” which China would like to create along a vast geographic area.

The China Communications Construction Company (CCCC) has already conducted a feasibility study and recommended a cost-effective route for the rail link.

The study was commissioned in 2013 by the Dubai-based company Rasia that had in turn a received 30-year Armenian government concession to build and manage the 305-kilometer Armenian section of the railway. Earlier this year, Armenia’s Deputy Transport Minister Artur Arakelian said that Rasia has been holding “very active negotiations” with unnamed Chinese investors.

Visiting Yerevan in January, Iran’s Foreign Minister Mohammad Javad Zarif spoke of further progress made towards the construction of the railway. “There have been very good trilateral discussions and we hope that [the project] will quickly move forward,” Zarif said without elaborating.

http://www.azatutyun.am/content/article/27062793.html

This isn't all that surprising to me. Considering the narrow hellish path it has follow in Syunik, the railway itself can never return the investment it requires. However on national scale, how it'll improve security and relations with Iran and Russia, how it'll improve business, investment, and growth, specially in the outer regions, it will have a 10X return on the investment. That's why it would be so valuable if we had the funding to fund it ourselves instead of waiting for a handout from foreign banks and nations

[Mher]

Re: North-South Highway/Iran-Armenia Railway

Part of Armenian North-South Highway to Be Commissioned This Year

YEREVAN (Arka)—The Artashat-Ashtarak section of the North-South transport corridor will be commissioned before the end of this year, Armenian Deputy Transport and Communications Minister Arthur Arakelian said Friday in the National Assembly.

“Concrete lining of the 31-kilometer Artashat-Ashtarak section of North-South motorway is already completed, and now testing procedures as well as construction of road facilities and infrastructure have started,” he said at a parliamentary hearing.

According to Arakelian, four more such sections remain to be completed.

Arakelian also added that negotiations are underway with Iran to build a similar road, which will be connected to the North-South highway.

Arakelyan said that the first tranche of the contractual cost of the first section of the highway amounts to $70.4 million, of which $60 million will be provided by the Asian Development Bank.

The Armenian government approved January 14, 2010 the investment program to build the North-South transport corridor, as well as a $500 million framework loan agreement with the Asian Development Bank.

According to Armenian officials, the cost of building the North-South transport corridor is estimated at $ 1.5 billion.

Currently two sections of the road are being built; one stretches from Artashat to Ashtarak and the second from Ashtarak to Talin.

About 3,000 new jobs will be created for completing the construction of the North-South transport corridor in Armenia, Deputy Minister of Economy Garegin Melkonyan told a parliamentary discussion on the project.

The transport corridor will stretch from the southern Armenian town of Meghri, on the border with Iran, to Bavra in the north on the border with Georgia. The North-South transport corridor will enable Armenia to mitigate the effects of the blockade imposed by Azerbaijan and Turkey.

According to Armenian officials, the cost of building the North-South transport corridor is estimated at $1.5 billion.

http://asbarez.com/blog/archives/136129

[Mher]

Re: North-South Highway/Iran-Armenia Railway

Russian Owner Keen To Sell Armenian Power Utility

Sargis Harutyunyan
Հրապարակված է՝ 13.05.2015

A Russian energy conglomerate plans to sell Armenia’s loss-making national electricity distribution company owned by it, Energy and Natural Resources Minister Yervand Zakharian confirmed on Wednesday.

A subsidiary of the state-run RAO Unified Energy Systems (UES) purchased the Electricity Networks of Armenia (ENA) utility from a British-registered firm in 2006. The $73 million takeover solidified Russia’s strong presence in the Armenian energy sector.

The ENA absorbed capital investments from its new owner and remained profitable until 2011. However, the network has since been making losses, resulting in an estimated $220 million in outstanding debts to Armenian commercial banks and power plants.

The Yerevan daily “Haykakan Zhamanak” reported last month that the UES is poised to sell its troubled Armenian subsidiary to the Tashir Group of Samvel Karapetian, an Armenian-born billionaire based in Russia. Karapetian’s brother Karen, who is a member of the Armenian parliament, did not explicitly deny the report in a special statement issued earlier this week.

Zakharian similarly did not rule out the possibility of such a takeover. “I won’t refute or confirm that,” he told a news conference.

Zakharian said the UES is indeed keen to sell at least a part of the ENA to another investor. But he did not go into details.

The minister accused the Russians of mismanaging the ENA. He said “the inefficient work of the company management” is one of the reasons why the Armenian power utility posted 37.6 billion drams ($78 million) in losses over the past three years in addition to its massive debts. “The losses result from theft, outdated equipment, [poor] quality of exploitation, and insufficient diligence of personnel,” he said.

Citing the need to end the losses, the ENA last week asked Armenia’s Public Services Regulatory Commission (PRSC) to allow it to raise its daytime electricity price for households by as much as 40 percent.

While criticizing the ENA management, Zakharian said a higher energy tariff would be justified. He dismissed suggestions that ordinary Armenians are effectively forced to pay for the company’s mismanagement.

The minister also said it is only natural that electricity is more expensive in Armenia than in Russia. “Armenia is not a transit country for gas or oil and it has no energy resources of its own,” he argued. “Why do you compare our [energy] tariffs with those of Russia?”

http://www.azatutyun.am/content/article/27014518.html

The ideal situation will be for the infrastructure to be sold to an Armenian. If that's not possible, the second best option will be for a Chinese or US private buyer, which can further reduce the total monopoly that Russia has in ownership in Armenian infrastructure. While foreign ownership is never desirable, at the very least the Armenian government should make sure the foreign ownership should be private non state entities and as diversified as possible between competing powers, as to ensure no single foreign government has significant control of key infrastructure.

[Mher]

Re: North-South Highway/Iran-Armenia Railway

Some other infrastructure updates:

New Date Set For Iran-Armenia Energy Project
րապարակված է՝ 13.05.2015

Armenia and Iran will start building next month a third transmission line that will connect their power grids and increase Armenian electricity exports to the Islamic Republic, Energy Mnister Yervand Zakharian said on Wednesday.

Work on the project has repeatedly been postponed by the governments of the two neighboring states due to financial issues and obstacles resulting from international sanctions imposed on Iran.

An intergovernmental commission on economic cooperation co-headed by Zakharian and his Iranian counterpart Hamid Chitchian claimed to have cleared all hurdles to its implementation after a meeting held in Tehran in December.

Zakharian announced at the time that the high-voltage line’s construction will start in March and take 18 months. The new facility will allow Armenia to increase electricity supplies to Iran from the current 1.2 billion kilowatt/hours to up to 7 billion kilowatt/hours, he said.

That electricity is generated by Iranian natural gas delivered to Armenian thermal-power plants.

Zakharian on Wednesday spoke of June as the new date for the launch of the construction. He told reporters that the Armenian government will finance its share of the $120 million project with a loan be provided by the Iranian side.

The minister also said that the new Armenia-Iran line will be as powerful as the two existing ones combined.

The sharp increase in electricity exports anticipated by Yerevan will presumably require much higher volumes of Iranian gas supplies. According to government figures, Armenia buys around 500 million cubic meters of gas from Iran annually, compared with approximately 2 billion cubic meters imported from Russia.

http://www.azatutyun.am/content/article/27014505.html

[Mher]

Re: North-South Highway/Iran-Armenia Railway

More Funding Secured For Armenian Highway Upgrades

Emil Danielyan
Հրապարակված է՝ 14.04.2015

A development bank founded by Russia and Kazakhstan provided the Armenian government on Tuesday with a $150 million loan that will finance the ongoing reconstruction of Armenia’s main highways stretching more than 550 kilometers to neighboring Georgia and Iran.

The chairman of the Almaty-based Eurasian Development Bank (EDB), Dmitry Pankin, signed a corresponding agreement in Yerevan with Armenian Transport and Communication Minister Gagik Beglarian after talks held with Prime Minister Hovik Abrahamian.

In a statement issued after the signing ceremony, the EDB said the loan repayable in 20 years will finance work on a 20-kilometer highway section encompassing Armenia’s highest mountain pass close to the Iranian border.

The Kajaran pass situated over 3,000 meters above the sea level is frequently closed to traffic in winter months because of snowstorms and ice. The Armenian government did not explain just how the tortuous road, where serious accidents have not been uncommon, will be upgraded.

The EBD-funded work will be part of the government’s ambitious North-South project meant to facilitate the landlocked country’s access to the Georgian and Iranian ports. Another aim of the project worth an estimated $1.5 billion is to enable Iran to use Armenian and Georgian territory for large-scale freight shipments to and from Europe.

In 2009, the Manila-based Asian Development Bank (ADB) lent the government $500 million for the first phase of the planned road upgrades. But it was not until 2012 that a Spanish construction firm contracted by the government began expanding and repaving two highways running south and northwest of Yerevan.

The total length of the two roads exceeds 90 kilometers. Their $280 million reconstruction is due to be completed by next year.

Pankin stressed the importance of the biggest road project in Armenia’s history in an interview with the Armenian news agency Arka. He said the reconstructed roads will reduce the cost and increase the speed of cargo transport through the country.

Armenia joined the EDB in 2009, three years after the bank’s establishment by Russia and Kazakhstan. Its government and business enterprises have obtained about $130 million in loans from the bank since then.

Pankin told Arka that the EDB will soon disburse a $40 million loan for the rehabilitation of Armenia’s irrigation networks. He revealed that the authorities in Yerevan are also seeking a separate budgetary credit and that the EDB is considering the request. “It is still too early to speak of our response,” he said.

http://www.azatutyun.am/content/article/26955835.html

[Eddo211]

Re: North-South Highway/Iran-Armenia Railway

You can also move military vehicles on the roads which gives strategic advantage to Armenian Generals.

[Shant03]

Re: North-South Highway/Iran-Armenia Railway

Great points!

[Mher]

Re: North-South Highway/Iran-Armenia Railway

Mher is right this will boost things in the short run but it is the long run that is way more important here. Infrastructure development is always a great idea and its effect on the economy can be huge and long lasting. I hope this gets done.

exactly, construction jobs are temporary anyway, and one of the issues of the Aremnian economy, and the reason for the disproportional fallout in 2009, is the heavy reliance on construction jobs.

the main issue is getting this done to create many permanent jobs.

[Haykakan]

Re: North-South Highway/Iran-Armenia Railway

Mher is right this will boost things in the short run but it is the long run that is way more important here. Infrastructure development is always a great idea and its effect on the economy can be huge and long lasting. I hope this gets done.