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Russia, Armenia Discuss Energy Fees As Yerevan Protests Go On


Armenia - A protester lies on the ground near riot police deployed on Marshal Bagramian Avenue, Yerevan, 26Jun2015.

Armenia - A protester lies on the ground near riot police deployed on Marshal Bagramian Avenue, Yerevan, 26Jun2015.

President Serzh Sarkisian and Prime Minister Abrahamian discussed on Friday with a visiting Russian government member the increased cost of power supplies by Armenia’s Russian-owned electric utility, which has sparked angry street protests in Yerevan.

It was announced after their talks with Russian Transport Minister Maxim Sokolov that a Russian-Armenian intergovernmental commission economic cooperation will organize an independent audit of the under-fire power distribution network.

Sokolov arrived in the Armenian capital on Thursday to co-chair, together with Abrahamian, a regular session of the commission. His visit followed concerns expressed by Moscow in connection with the ongoing nonstop protests against a more than 17 percent rise in electricity prices in Armenia. A senior Russian diplomat on Wednesday urged the Armenian government to work out a “compromise solution” with the protesters camped out on a major Yerevan thoroughfare.

“We discussed the entire agenda of our intergovernmental commission,” Sokolov told reporters on Friday after the meeting of the Russian-Armenian body.

Asked whether the energy tariff issue was also on the agenda, he said: “Of course it was. We discussed all issues.” He declined to comment further.

Armenia - Prime Minister Hovik Abrahamian (R) and Russian Transport Minister Maxim Sokolov address the press in Yerevan, 26Jun2015.

Armenia - Prime Minister Hovik Abrahamian (R) and Russian Transport Minister Maxim Sokolov address the press in Yerevan, 26Jun2015.

Official Armenian press releases on the commission meeting as well as Abrahamian’s separate talks with Sokolov made no mention of the issue.

Later on Friday, the Armenian government’s press office reported that Deputy Prime Minister Vache Gabrielian and Energy Minister Yervand Zakharian held a “discussion” with Sokolov that focused on “Russian-Armenian cooperation in the area of energy.”

A statement by the office said they specifically discussed “the situation that has arisen around the Electric Networks of Armenia (ENA),” the national power distribution network belonging to Inter RAO, a Russian energy corporation. It gave no other details.

Sokolov met with President Sarkisian afterwards, reportedly telling him that the Russian-Armenian commission decided to initiate an audit of the ENA that will involve representatives of “all interested parties.” The company’s books will be inspected in a transparent manner, he said, according to a statement by Sarkisian’s office.

The statement quoted Sarkisian as also stressing the importance of a “meticulous audit” involving representatives of Armenian civil society.

Inter RAO is a successor to Russia’s now defunct Unified Energy Systems conglomerate that bought the ENA in 2006. In the last few years the ENA has posted growing losses, which many in Armenia believe blame on poor management.

The company’s outstanding debts totaling over $225 million are a key reason why Armenian regulators last week raised the ENA tariffs for a third time in two years. The price hike infuriated many Armenians feeling that they are forced to pay for corruption and inefficiency within the ENA.

The Armenian press reported in the months leading up to the price hike that Inter RAO plans to sell its loss-making Armenian subsidiary. Energy Minister Zakharian confirmed those reports last month. He also did not deny reports that the Tashir Group of Samvel Karapetian, an Armenian-born Russian billionaire, is interested in acquiring the ENA.

Karapetian has so far made ambiguous statements to that effect through his Yerevan-based brother Karen, a parliament deputy and former chief of President Serzh Sarkisian’s staff.

Some Armenian observers have suggested that a new ENA owner might be willing to abandon the price rise and thus meet the key demand of the Yerevan protesters. Abrahamian on Thursday defended the unpopular measure.

There have also been calls in Armenia for Inter RAO to inject more cash into the ENA and restructure the company, instead of trying to sort out its financial troubles at the expense of Armenian consumers. The Russian group, which also owns Armenia’s largest thermal power plant, posted $13.4 billion in operating revenue last year.

The Russian calls for Armenian government concessions to the protesters seems to reflect fears in Moscow that the unrest could grow into the kind of popular revolt that toppled Ukraine’s pro-Russian President Viktor Yanukovych last year. Some pro-government Russian politicians and media have alleged that Western powers orchestrated the ongoing protests to install a pro-Western regime in Yerevan. Russian Deputy Foreign Minister Grigory Karasin disputed these allegations on Wednesday.

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