By Emil Danielyan
The Russian power utility RAO UES moved closer to winning control of Armenia’s electricity distribution companies over the weekend when the Armenian government found it eligible to take part in the ongoing international bidding for the state-run networks. A government commission handling the sell-off ruled that the Russians can qualify for the final phase of the tender, saying they meet all preconditions spelled out in bidding specifications.
The commission headed by Prime Minister Andranik Markarian had twice delayed the decision on the grounds that the package of documents submitted by RAO UES was incomplete and needed “further clarification.” Armenian officials and Western donors overseeing the process were notably dissatisfied with results of the company’s audit.
The Russian company’s participation was cleared after it submitted additional data about its financial situation. According to the commission, the Austrian consultancy Raiffeisen Investment AG, which advises the Armenian government on the energy sector privatization, gave a positive assessment of the RAO UES audit.
However, a source familiar with the process told RFE/RL on Monday that RAO UES’s initial financial statement contained “sad results” showing that the state-controlled Russian energy giant stands “on the brink of bankruptcy.” The audit figures submitted by the Russians later on painted a much brighter picture, the source said, adding that, “All this is somewhat suspicious.”
The World Bank, Armenia’s main creditor which has in the past argued against Russian ownership of the Armenian utilities, would not comment on the latest development. A spokesman said the bank has yet to “clarify some issues” with the government.
RAO UES is the only foreign bidder whose participation in the tender has been confirmed so far. Officials say the US company AES Silk Road is also expected to submit a bid. But other sources claim that AES may well follow the example of three other potential Western bidders and pull out of the contest.
The Western donor states and agencies fear that the Russian company’s victory is a forgone conclusion in light of the recent Russian-Armenian economic agreements. The two countries plan to sign a deal giving the Russians substantial stakes in state-run Armenian industries in payment for Yerevan’s $90 million debt to Moscow. The deal is expected to encompass the energy sector as well.