A company belonging to Russian-Armenian billionaire Samvel Karapetian said on Thursday it itself has pulled out of an agreement with the Armenian government to manage the country’s electricity transmission network.
The Russian-based company, Tashir Kapital, denied the recently appointed Energy Minister Artur Grigorian's claim that the new government has decided to terminate the management contract because some of its provisions are “not beneficial for the state.”
“During the process of termination of the agreement between the Armenian government and Tashir Kapital no provisions were discussed and there were no negotiations on any [specific] issue, especially with the participation of the newly appointed [energy] minister,” read a company statement.
The previous government moved last year to authorize Tashir Kapital to manage the High-Voltage Electric Networks (HVEN) for the next 25 years. Government officials said at the time that the new operator will cut costs by “synchronizing” Armenia’s power transmission and distribution networks. They said Tashir Kapital will also obtain large-scale loans that will be used for refurbishing electricity transmission lines and substations and building new facilities.
Grigorian did not specify the reasons for the government’s decision to scrap the deal when he spoke to journalists on Wednesday. For its part, Tashir Kapital gave no reasons for its purported decision not to run HVEN.
Instead, Tashir Kapital listed a raft of data meant to show that HVEN has been badly mismanaged and is a heavy burden on state finances. In particular, ts statement pointed to $520 million in outstanding debts incurred by the state-owned network in the last 15 years.
The statement said that Tashir Kapital would slash HVEN’s “inflated” operational costs by 40 percent if the deal did not fall through. The company also claimed that the cost of a planned new power transmission line connecting Armenia to Georgia, estimated by the government at $200 million, is disproportionately high. It said it could have built the line with only $70 million in investments.
“HVEN cannot be of interest to Tashir Kapital as a source of profit,” added the statement. “The main motive for the negotiations was to ease [HVEN’s] impact on the [electricity] tariffs.”
Tashir purchased the Electric Networks of Armenia (ENA), the debt-ridden national power utility, and a large power plant in the Armenian town of Hrazdan from a state-run Russian energy company in 2015. The new owner appears to have significantly cut ENA’s massive losses since then.
Samvel Karapetian strongly supported former Prime Minister Karen Karapetian (no relation) throughout the latter’s tenure which came to an end when former President Serzh Sarkisian became prime minister on April 17. Karen Karapetian took over as acting prime minister after Sarkisian stepped down on April 23 amid mass protests against his continued rule.