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Russian Management Of Armenian Rail Network Under Review


Armenia - A railway bridge in Lori region.

The chief executive of the Russia Railways (RZD) company managing Armenia’s railway network met with Prime Minister Nikol Pashinian on Tuesday to discuss the uncertain future of its operations in the country.

RZD runs the network called South Caucasus Railway (SRC) in line with a 30-year management contract signed with the former Armenian government in 2007. The deal committed it to investing $230 million in Armenia during the first five years of operations and another $240 million in the following years. The state-run company, which operates Russia’s vast network of railways, claims to have honored those commitments.

Law-enforcement officials raided the SRC offices in Yerevan and confiscated many documents kept there in August 2018 three months after a dramatic change of Armenia’s government. They subsequently launched criminal proceedings against the company, saying that it is suspected of large-scale fraud.

RZD and SCR denied any wrongdoing. None of their executives in Armenia are understood to have been charged to date.

Armenia -- Prime Minister Nikol Pashinian (R) meets with Oleg Belozerov, chief executive of Russian Railways, Yerevan, October 8, 2019.
Armenia -- Prime Minister Nikol Pashinian (R) meets with Oleg Belozerov, chief executive of Russian Railways, Yerevan, October 8, 2019.


Russia’s Deputy Transport Minister Vladimir Tokarev warned last month that RZD is considering unilaterally scrapping the 2007 contract because the continuing investigation prevents it from “operating normally” in Armenia. “Our arguments about compliance with the terms of the contract are ignored,” Russian media quoted him as saying.

Earlier in September, Prime Minister Nikol Pashinian defended the probe and said the Armenian government is “actively” discussing the matter with the Russian side.

Pashinian’s office reported few details of his meeting with RZD’s visiting chief executive, Oleg Belozerov. It said vaguely that they discussed “prospects for making investments and implementing concrete projects in the future.”

RZD did not immediately issue statements on Belozerov’s talks with Pashinian.

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