The Yerevan-based company, Factory Production, has won a dozen such contracts worth a combined $2.4 million in the last three and a half years. In virtually all of those cases, it faced no competition from other firms.
Factory Production will be paid 750 million drams ($1.5 million) to organize the 2022 European Boxing Championship in Yerevan next month.
The government picked it without offering other firms the chance to bid for the logistical work. In a statement issued after a weekly cabinet meeting chaired by Prime Minister Nikol Pashinian, it said that it did not have enough time to organize a tender.
That the championship will take place in Yerevan in May was first announced by an Armenian deputy minister of education, culture and sports last October. The government formally agreed to host it in November.
“The period from November to May is very short,” Education, Culture and Sports Minister Vahram Dumanian told reporters after the cabinet meeting.
“There was a serious danger that we could not manage to organize the event,” claimed Dumanian.
Factory Production, which specializes in the organization of entertainment events, was founded by two former state TV producers in June 2017. One of them, Vazgen Poghosian, sold his 50 percent stake in the company to the other, Rudik Ter-Galstian, for just $50 in November 2021. Ter-Galstian is now its sole nominal owner.
Factory Production was given its first government contract in September 2018 four months after the “velvet revolution” that brought Pashinian to power.
RFE/RL’s Armenian Service asked the company on Friday to explain how it has managed to secure so many lucrative deals with the prime minister’s office, the ministries of foreign affairs and economy as well as local governments. It promised to comment later on.
“Look for the [company’s] real owner and you’ll find the answer,” said Varuzhan Hoktanian of the Armenian branch of the anti-graft watchdog Transparency International.
“If the figures cited by you are really accurate I will seriously suspect that high-ranking officials from the current government are behind that company,” added Hoktanian.
Armenian law allows the government not to put contracts for the delivery of goods or services out to competitive tender on a case-by-case basis. The number of such government decisions has reportedly increased in recent years, prompting concerns from opposition figures and civil society activists. The latter have also questioned the integrity of procurements administered by the authorities.
Companies owned by or linked otherwise to at least three senior Armenian officials, including Pashinian’s deputy chief of staff, won dozens of government contracts in 2021, raising suspicions of a conflict of interest and even corruption. Pashinian insisted in November that they did not exploit their government connections to win tenders for road construction and various supplies.
Pashinian has repeatedly claimed to have eliminated “systemic corruption” in Armenia since coming to power in May 2018. Law-enforcement authorities have launched dozens of high-profile corruption investigations during his rule. They have mostly targeted former top government officials and individuals linked to them.
Critics say that Pashinian uses corruption inquiries to crack down on his political opponents. They also claim that some members of his entourage are busy enriching themselves or their cronies.