The government cherishes great hope with the North-South road corridor. After its completion, the government authorities predict of course not the degree of road speed, but significant activation in Armenia’s economy. In 2012, when the North-South expressway road construction began, Minister of Transport and Communication Gagik Beglaryan said that this road will provide a great economic opportunities to Armenia and as an express transit road, it solves the most important public issue for our country. This road corridor worth of 962 million dollars and 556 kilometers, as the officials of the industry assure, will give a chance to improve the road connection between the 2 neighbors of Armenia – Iran and Georgia. It is going to ensure an access to international trade destinations and markets. Agarak-Kapan-Yerevan-Gyumri-Bavra road will connect the north of Armenia to the south by providing an entry to Georgia’s “South road Corridor”, which will enable to reach the ports of Poti and Batumi or to Tbilisi. The program is administered by the Asian Development Bank (ADB), loan of 500 million and 462 million dollars in co-financing by the Government of Armenia.
In the conversation with “Aravot”, economic commentator for “Haykakan Zhamanak” Daily Hayk Gevorgyan, assessing the impact of the road construction on the economy, noted, “The road is being built one and a half year. If its effect is so great, then in the meantime, the growth of the construction should be significant, while there is no such thing. Of course, if it were not for this program, the indicators would be sadder, but it is obvious that under this project, our construction sector, in fact, does not grow. As for solving the most important public issue, then, years later, our generations should pay off the debt of at least 1.2 billion dollars for the “North-South”. This is much more “the most important” than the economic effect of this road.” Note that the road construction was planned to start in 2009, but it was delayed for 3 years, moreover, for unused credit, as a penalty, Armenia paid 300 thousand dollars to the bank. The road speed limit on this highway road is 100 kilometers per hour, and as assured by the government, this is unprecedented for Armenia, and it will cut off the traffic time quite a lot. In this sense, Hayk Gevorgyan said that practically, the economic effect would be too small. “Because this road, now, is in more or less normal condition, and its “gold plating” cannot have significant impact on the economy as a passenger and freight route. If currently, the maximum speed limit on the road is 90 kilometers per hour, then after reconstruction it will become 100 kilometers per hour. I do not think that it is a solid argument laying additional debt of over 1 billion dollars for the future generations. This amount would be much better to spent on, let’s say, building a tunnel instead of Kapan-Meghri winding road sector, it would really contribute to improvement of transport connection.”
Economist Artak Manukyan, in the conversation with “Aravot”, said that most of the roads in Armenia were built during the Soviet times made of soil and asphalt, the North-South as a concrete way of its kind is the first and in this respect, we do not have respective equipment for the maintenance of concrete roads in Armenia in the winter season. “Additional problems may possibly happen in the winter. In addition, illogical choice of certain sections of the road, for example, there are narrow serpentines in the Goris sector, which increase the likelihood of car accidents. In fact, I do not see, at least now, that the time for choosing to invest so much amount to the infrastructures is right. In other words, there are roads that are more or less in good shape and provide normal traffic. It would be better to put an emphases on poor condition of intercommunity roads, which would solve much more problems than this project. Now, it was not the time for this project, we have more pressing problems. North -South road will reduce the road impasse for only 1 hour, spending approximately 1 billion, moreover, on credit for 1 hour is illogical. They say that a section of the road is attached to Georgia, I’m sure that the same could be done later.”
Mr. Manukyan noted that, of course, the road construction is a long-term investment, during the crises, some economists are in favor of such investments, allegedly for the activation of the economy, but now this project is a luxury for Armenia. “Because there are problems of much more vital importance – 40% of poverty, and it would be better to direct this amount to this sector. Eventually, this project will not have too much impact on our gross domestic product.” Recently, on Yerevan-Ashtarak highway, we witnessed the “North-South” high-speed road works, which definitely are not high-speed. Three workers were employed in the place. The office of Project Implementation Unit informed “Aravot” that the Tranche 1 of the project includes Artashat-Yerevan and Yerevan-Ashtarak sections with a total length of 31 km. The concrete cover work of these two segments is completed and is in the process of experimenting and laboratory testing. On our arrival, no test work was carried out, the workers were just doing some finishing works.
We learned from the office that the stitching works, infrastructure and respective furnishing works of these sectors are underway. The above-mentioned section of Tranche 1 will be put into full operation by the end of this year. The total amount of construction work amounts to 70.4 million dollars by the Asian Development Bank loan. Note that it is a miult-Tranch project and the total highway is expected to be completed in 2019. Tranche 2, Ashtarak-Talin section of 41 km will be built by ADB loan of 179.6 million dollars and will be completed by 2017. The loan agreements of 100 million dollars by ABD and 72 million euro by the European Investment Bank for Tranche 3 are already ratified. Herewith, the international tender should be launched for the construction of sections Talin-Lanjik – 18.7 km and Lanjik-Gyumri – 27.5 km. The office assures that the drafts for Artashat-Kajaran (about 300 km) and Gyumri-Bavra (70 km) are in the process of ordering, after which the implementation of construction will be processed, as well as negotiations are held with existing donors, and new funding sources are studied to cooperate also in the framework of private investors and Public-Private Partnership. In short, the project is wide-scale and as said by the responsible of the sector, negotiations are held with Iran pertaining to possibility of building a similar road in this country. “Given the current pace of construction, the probability is less that they will manage to finish the work in the specified period. The probability of attracting new money is low. In addition, the estimated cost of construction is far from reality. I will not be surprised that this program estimated at 960 million dollars will cost about 1.5 billion to us in the end. This is one of the “charms” of the construction,” such an observation was made about the project by Hayk Gevorgyan.
Nelly BABAYAN
