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Russia’s Gazprom, ITERA Out Of Armenian Energy Bidding


By Emil Danielyan

Russia’s natural gas monopoly Gazprom and its ITERA subsidiary will not take part in the ongoing international tender for Armenia’s state-run energy distribution networks, contrary to recent statements by senior Russian government officials. The Armenian ministry of energy said on Monday that the Russian power utility RAO UES is the only company to have submitted proposals for the first “pre-qualification” stage of the bidding.

The deadline for their submission was September 21. Four Western companies that were last year short-listed in the government’s first unsuccessful attempt to privatize the utilities are considered to have automatically passed the pre-qualification. However, their participation in the current tender is in doubt, according to sources close to the bidding.

One of them, Spain’s Union Fenosa, has already dropped out of the contest. A senior executive told RFE/RL on September 20 that the Spanish firm has invested heavily in South America this year and has no plans to expand further for the time being. He denied Russian Deputy Prime Minister Ilya Klebanov’s claim that Union Fenosa will submit a joint bid with ITERA.

Speaking to reporters in Yerevan last month, Klebanov said that both Gazprom and ITERA will compete for a 51 stake in the four Armenian electricity companies. But a spokeswoman for the Armenian energy ministry told RFE/RL that none of them has applied for pre-qualification, effectively excluding themselves from the process.

Also, there have been no indications yet that the three other Western firms – Electricite de France, ABB and the US operator AES Silk Road – will participate in the bidding this time. The previous tender ended in failure last April when none of them submitted a bid.

This may leave RAO UES the only foreign company seeking control of the loss-making Armenian utilities. The World Bank, which is effectively supervising the energy sector privatization, has previously objected to the participation of both RAO UES and Gazprom, arguing that they lack resources and expertise to make the networks profitable.
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