After Hovik Abrahamyan’s becoming prime minister, failing of the deal on selling of “Vorotan” HPP complex is much talked about, and the undermining motive is not only “pulling the wrong” to the former Prime Minister with regard to the selling of this HPP, but taking “Vorotan” from the Americans and giving it to Russians.
Recall that on January 29, this year, the U.S. “Contour Global” company signed an agreement with the Government of Armenia, by which it purchased the “Shamb”, “Spandasyan,” and “Toatev” HES of “Vorotan” complex.
Our energy system is mainly owned by Russian companies, and recently Russia is trying to further strengthen its positions in Armenia, and on the way to joining the Eurasian Economic Area, it is not surprising that the Russians do not tolerate the so many strategic and profitable “Vorotan” be given to Americans.
On the background of rumors of Russians’ eye on “Vorotan”, the “message” send by the U.S. Ambassador to Armenia, John Heffern, to our government was not accidental. In the interview to the “Voice of America” radio station, the ambassador told that the sale of the “Vorotan” HPP to an American company was important. “It concerns one of Armenia’s key spheres where initially Russian companies prevail. I hope that the deal will serve a signal to investors of the U.S. and Western countries and will help us prove that Armenia is open to business.”
Note that pursuant to the agreements signed with the American side, the agreement can be cancelled within 75 days following the date of signing the agreement. From the day of signing the agreement, January 29, seventy-five and even more days have passed, but so far, there is no official announcement of its being cancelled, but there is also no word that the agreement will completely come into effect soon. To our written inquiry whether the Government of Armenia has intention to cancel the agreement, the Ministry of Energy and Natural Resources responded that the Armenian side has no intention to break the agreement, and the deal in the course. Note that under this agreement, the American side is committed paying 180 million dollars for “Vorotan”, of which 110 million will be paid immediately, and later, the remaining amount. To the question of Aravot of whether “Contour Global” has made the payments, the Ministry stated that currently negotiations on technical issues are underway, which will be followed by signing of a closing act of the deal, the payments will be made along with other processes.
On June 11, at the National Assembly, the government’s chief of staff David Harutyunyan approved that not all the legal issues of the technical aspect are resolved with regard to privatization of the Vorotan Hydro Cascade. And since the period for possibility of breaking the agreement has expired, Mr. Harutyunyan also assured that a decision was made not to declare about the cancellation of the agreement.
After the agreement on Vorotan, noise has been raised that it was made with violations, especially with regard to Spandaryan, Tolors, Shamb, and Angeghakot reservoirs. First, these reservoirs were returned to the capital of the cascade by the government, moreover, by extending the borderlines of reservoirs. Davit Harutyunyan has mentioned at the National Assembly that a number of reservoirs of the Vorotan Cascade will not be privatized, and they will not be transferred to the buyer under the privatization agreement. One of the aforementioned unresolved technical issues is the issue of defining the borders of the reservoirs. “The complexity of the issue lies in the fact that the boundaries in different legal acts are perceived differently. In one case the matter is about the basin, in the other case, including the adjacent buildings,” said Mr. Harutyunyan.
There is another technical issue for not achieving a final agreement with the American side. In 2010, the former Minister of Finance, Tigran Davtyan, signed a 51 million euro loan program with KfW, the loan was intended to aim at refurbishment and reconstruction of the Vorotan hydro cascade, these funds were allocated for 15-year repayment term, of which four-year grace, with 2% interest rate per year. These loan commitments, basically, are actually transferred to the buyer along with Vorotan. Recently, the Minister of Energy and Natural Resources, Areg Galstyan, had hinted that one of these technical issues is this loan. “Will they assume the loan, or will they accept the terms that we offer? Is it beneficial for them to work under these terms? There are formalities and obligations-related issues.”
If, as said by David Harutyunyan, the reservoirs are not transferred to the buyer, but only the loan obligations, then the Vorotan deal would hardly be beneficial to “Contour Global” company.
In the conversation with Aravot, the ANC member, economist Vahagn Khachatryan said that Vorotan cascade’s significance without the reservoirs amount to zero. As observed by Mr. Khachatryan, “The Cascade privatization process is done incorrectly. On the one hand, the reservoir should not be bought, on the other hand, the entire management of the reservoir should be given to the owner, because the significance of this Hydro Cascade without the reservoirs amount to zero.”
If the new government has a great desire, and, of course, if it is imposed, then apparently, the deal may be cancelled, substantiating the violations made by the former government. This is also confirmed by Mr. Khachatryan. Vorotan Hydro Cascade was sole in violation of the law on privatization of state property, it was to be involved in the list of privatization as a state property, and then announce a tender, which the government has not conducted. In my opinion, there was a lot of rush here, resulting in too many gaps in the legislation. Any new government, if wanted, may retract this agreement, or at least suggest other terms.”
As for the “message” made by the U.S. Ambassador to Armenia that with this deal, Armenia wins the confidence in business among the investors from the U.S. and Western countries, and there is a diversification in the energy sector, Mr. Khachatryan said that the ambassador unequivocally says that there is no need to break the deal. “Because if we go back, the same problem is available with Iran, why did not Armenia build an alternative gas pipeline with Armenia, why didn’t Iran become Hrazdan’s 5th block investor? There was an application for investment and operation. This also had a political context, which was coerced by Russia. In that case, the Americans at some point did not do anything against Russia’s coercion, because at that time they had a problem with Iran. But if they are really thinking about us, which, however, I do not think so, and if they are really thinking about the economic independence of Armenia, then they should have given us the opportunity, and Iran would seize the opportunity. The USA, of course, is exerting pressure not so that we do not think of cancelling this deal. There are other things with regard to the deal. Let the USA tell about where 110 million from 180 million is, which was planned to be transferred immediately. There is no money.”
NELLY BABAYAN
