MFA: Russia has provided Armenia with all necessary clarifications  regarding South Caucasus Railway concession

ArmInfo.  Russia has clarified to Armenia all the concerns regarding the South Caucasus Railway (SCR) concession, Mikhail Kalugin, Director of the Fourth Department of the  CIS Countries at the Russian Foreign Ministry, stated in an interview  with TASS.

"This topic (the SCR concession - TASS note) was discussed in detail  during the talks between the leaders of Russia and Armenia on April  1. Clarifications were provided on all the issues of concern to the  Armenian side, and an understanding was reached on the modalities of  further work, including in the context of Russia's participation in  unblocking regional communications," the diplomat stated.

He emphasized that Moscow had recorded Armenian Prime Minister Nikol  Pashinyan's statement that the republic does not intend to discuss  concession-related issues "behind Russia's back." "We cannot agree  with the assertion that a Russian company's management of Armenian  Railways in any way limits Armenia's competitive advantages.  On the  contrary, we are convinced that it creates them," Kalugin noted. In  his view, "if it weren't for the meticulous work of the Russian side  under the concession to restore and maintain the functionality of the  railway network, it would be more difficult today to discuss the  prospects of Armenia's participation in the 'relaunch' of transport  arteries in the South Caucasus."

The director of the Russian Foreign Ministry's department recalled  that "since 2008, investments in Armenian Railways have amounted to  approximately 30 billion rubles.  Additionally, approximately 15  billion rubles have been paid into the Armenian budget, part of which  was used to upgrade the rolling stock." "Incidentally, one of the new  trains-for the Yerevan-Gyumri route-was tested directly by the prime  minister and other representatives of the Armenian leadership,"  Kalugin noted. He is confident that SCR remains one of the republic's  largest employers, providing approximately 2,500 jobs.

"For our part, we see great potential for mutually beneficial  cooperation, one of the keys to which is the competent management of  the Armenian railway network by Russian specialists," the diplomat  noted.

It should be noted that on February 13, Armenian Prime Minister Nikol  Pashinyan, speaking to journalists, stated that Russia's  concessionary management of Armenia's railways creates competitive  problems for Armenia, and many international partners want to bypass  Armenia when implementing infrastructure projects. In this vein, he  suggested that Russia consider selling the concession to a third,  friendly country. He suggested Kazakhstan, the UAE, or Qatar as  examples.

It should be noted that SCR CJSC is a wholly owned subsidiary of  Russian Railways OJSC. On February 13, 2008, a concession agreement  for the transfer of the railway system was signed between Russian  Railways OJSC and the Republic of Armenia in Yerevan. The Republic's  railways were transferred to the management of South Caucasus  Railways (SCR). According to the agreement, the concessionary  management term is 30 years, with the right to extend it for an  additional 10 years after the first twenty years of operation by  mutual agreement of the parties. SCR's responsibilities include  modernizing the Republic of Armenia's railway infrastructure,  developing cooperation with neighboring countries, and developing  domestic and international passenger and freight service. The  Company's investment totals $572 million. SCR commenced operations on  June 1, 2008.