By Karine KalantarianDefense Minister Serzh Sarkisian insisted on Tuesday that the controversial sale of additional Armenian energy facilities to Russia is extremely beneficial for Armenia, dismissing its critics as incompetent and uninformed individuals.
He also stopped short of explicitly denying reports that among the assets given to Russia’s Gazprom monopoly in return for a temporary reduction in the price of Russian natural gas is a planned Armenian pipeline leading to neighboring Iran.
Official Yerevan has so far only confirmed the transfer to Gazprom of what was until recently known as the Fifth Unit of Armenia’s largest thermal power plant located in the central town of Hrazdan. Its four other units are already owned by another Russian energy giant, Unified Energy Systems.
Sarkisian argued that the deal was worth it because the Russians will pay as much as $250 million for the modern but incomplete facility and spend a comparable sum on finishing its protracted construction. “Of course it is favorable, very favorable [for Armenia],” he told reporters. “It’s just that, strangely enough, some people discuss that topic without even knowing what the Fifth Unit is. I will simply ask you to go there and take a look at the Fifth Unit.”
“To put it figuratively, the Fifth Unit resembles a three-story house of which only the basement has been built,” he said, promising that the Armenian government will soon come up with “more convincing arguments” in favor of the deal.
Critics argue, however, that Armenia will now become even more dependent on Russia for energy despite its leaders’ recent pledges to the contrary. They point to the fact that the Armenian government has effectively walked away from its earlier agreement with Iran concerning the incomplete Hrazdan plant. Under that agreement finalized last fall, an Iranian company will make $150 million worth of capital investments in the facility. The Armenian side would repay them with electricity supplies to the Islamic Republic.
According to Sarkisian, the Russians have offered much better terms. “The facility would have recouped those [Iranian] expenditures in ten years at best,” he explained. “So under the best-case scenario we would have a profitable enterprise only in 2017. As a state, what do we stand to gain from? Selling our non-existent thing for $250 million or waiting until we can earn a few pennies in 2017?”
“Unfortunately, there are people and groups in our society on whom the word Russia has the same impact as the red color on a bull. We must renounce such thinking,” he added.
The Hrazdan plant was due to generate electricity with natural gas to be supplied by Iran through the pipeline currently construction. It is not clear if that will be the case after the Russian-Armenian gas deal. The Armenian government has denied reports, initially confirmed by Gazprom, that the state-run Russian giant will gain control of the pipeline as part of the settlement.
Sarkisian, who also co-chairs the Russian-Armenian inter-governmental commission on economic cooperation, was far more ambiguous on that score, though. “Let’s leave that for the next time as there are interesting things here as well,” he said, refusing to elaborate.