By Ruzanna KhachatrianPresident Robert Kocharian on Wednesday effectively confirmed reports that he has agreed to hand over yet another major Armenian power plant to Russia in exchange for a more modest increase in the cost of Russian gas delivered to Armenia.
“I think we have found solutions and the government has been instructed to present the final decision on this issue in the next few days,” Kocharian said in televised remarks on the end of Yerevan’s lengthy negotiations with Russia’s government and state-run Gazprom monopoly.
The Yerevan daily “Haykakan Zhamanak” reported on Friday that the parties have already agreed on the key terms of the deal whereby the Russians will get hold of the incomplete Fifth Unit of Armenia’s largest thermal power plant and supply $250 million worth of gas free of charge in return.
That would mean Armenia can continue to pay $56 per thousand cubic meters of Russian gas until the end of 2008. Gazprom was due to charge the country $100 per thousand cubic meters starting from April 1.
“We intend to implement a large-scale investment program with the Russian side in Armenia regarding the Fifth Unit of the Hrazdan plant,” said Kocharian. “As a result of that, the government will have funds to compensate the people for that price rise for the next three years … and at the same time complete the unit’s construction and modernization.”
A senior government source, who asked not to be identified, clarified that the energy facility will be given to Russia, which already owns the Hrazdan plant’s four other units. He told RFE/RL that Kocharian made this clear to leaders of the three parties represented in his government at a meeting late on Tuesday. Some of those leaders, notably Prime Minister Andranik Markarian, had spoken out against any fresh asset handovers to Moscow earlier.
The source denied “Haykakan Zhamanak” claims that Gazprom has also been granted control over a under-construction pipeline which will start pumping Iranian gas to Armenia next year.
Russian energy giants already control, both directly and indirectly, virtually all of Armenia’s power generating capacities, and the latest deal with Gazprom will further tighten their grip on the Armenian energy sector. It also means that the Kocharian administration is walking away from last October’s agreement with Iran regarding the incomplete Hrazdan plant.
Under that agreement, a state-run Iranian company was due to invest $150 million in the facility. The Armenian side, for its part, pledged to repay the investment with supplies of electricity to the Islamic Republic. That electricity was in turn supposed to be generated by Iranian gas.
Kocharian emphasized the short-term benefits of the deal with Gazprom for ordinary Armenians. “The people can rest assured that the price of gas for them will not rise by more than 10-15 percent,” he said.
Armenia’s Public Service Regulatory Commission last month allowed the national gas company, ArmRosGazprom, to raise the price of gas for local households by 50 percent to 90 drams (20 U.S. cents) per cubic meter. The measure was supposed to take effect on April. However, Kocharian’s announcement suggests that the new price will be cut to 66-70 drams per cubic meter.
(Presidential press service photo)