Armenia is trying to bring its railways out from under Russian control

Oct 16, 2026

Armenia and Russia have agreed to set up a working group to resolve issues in the railway sector, following a meeting in Yerevan between Prime Minister Nikol Pashinyan and the director of Russian Railways. Despite tensions between the two countries, the future of the concession under which Moscow controls the Armenian railway network was not discussed.

Russian control over Armenia’s railways remains unchanged following talks held on Wednesday, 14 October, in Yerevan, between Prime Minister Nikol Pashinyan and Oleg Beloziorov, Director General of Russian Railways (RZD).

The meeting took place against a backdrop of disagreements between the two countries regarding the management of Armenia’s railway infrastructure, which is operated by an RZD subsidiary under a concession agreement signed in 2008.

Although Pashinyan has repeatedly called for the management of the network to be transferred to a company not affiliated with Russia, terminating the current concession was not on the agenda.

“The question of whether to maintain or terminate the concession did not arise. We discussed the implementation of the concession agreement, which is currently being carried out, and agreed to work together,” Beloziorov said after his meeting with the Armenian Prime Minister.

The two sides agreed to set up a joint working group to analyse existing problems in the management of the railway infrastructure, identify possible solutions and determine the next steps in the short term.

Armenia is seeking to reduce its dependence on Russia

The dispute over the management of the Armenian railways has intensified in recent months, after Prime Minister Nikol Pashinyan argued that the current concession system limits the country’s ability to participate in new international transport projects.

Armenia’s railway network has been managed since 2008 by South Caucasus Railway, a company controlled by RZD, under a 30-year concession agreement.

The contract grants the Russian side the right to manage the infrastructure until 2038, with the possibility of extension under the terms set out in the agreement.

Pashinyan had previously proposed that the concession rights be transferred to another company, not affiliated with Russia, arguing that the presence of the Russian operator deters potential international partners.

According to the Armenian Prime Minister, this situation also affects the prospects for developing new transit links through Armenia, against the backdrop of attempts to reopen transport links with Turkiye and Azerbaijan.

Moscow, however, has rejected the proposals to transfer the concession and has insisted on compliance with the existing agreement.

Tensions escalated this summer when Pashinyan warned that Armenia might resort to international arbitration to resolve the dispute. The Prime Minister also raised the possibility of demanding payments of up to USD 2 billion annually from the Russian side for the rights to manage the network.

Moscow’s response came via the management of RZD, which warned that any amendment or termination of the contract could oblige Armenia to compensate the Russian side for its investments.

According to RZD, the investments made from the group’s funds and the revenues of the company managing the Armenian network amount to approximately USD 400 million.

Subsequently, the Armenian Prime Minister toned down his remarks, stating that he preferred a negotiated solution rather than the unilateral cancellation of the concession.

Rail links with Turkiye and Azerbaijan on the agenda

Beyond the dispute over the concession, the meeting in Yerevan also focused on the prospects for modernising the rail infrastructure and connecting Armenia to international transport routes.

According to the Armenian government’s press release, Pashinyan emphasised that the authorities’ objective is to increase the competitiveness of rail transport and integrate the national network into the rail systems of neighbouring countries.

A key topic was the projects to rehabilitate disused railway sections, which could re-establish connections with Turkiye and Azerbaijan.

The two sides discussed the reconstruction of the Gyumri–Akhurik line, towards the border with Turkiye, as well as the Yeraskh–Nakhchivan section, which is important for restoring regional rail links.

These projects could enable Armenia to capitalise on its geographical position in transit transport, in a region where numerous rail links have been severed by political and territorial conflicts.

For the government in Yerevan, the reopening of international routes is also linked to the issue of infrastructure management, with the authorities believing that the network must be usable without hindrance in the development of trade relations with neighbouring states.

RZD insists on compliance with the agreement

At the end of the meeting, the management of Russian Railways stated that it intends to continue to fulfil the obligations assumed under the concession agreement.

“We are open to dialogue with the Armenian government and to a joint assessment of the effectiveness of the concession agreement.

For our part, we intend to strictly honour all the commitments we have made,” said Oleg Beloziorov.

RZD maintains that its management of the network has enabled the maintenance and development of Armenia’s railway infrastructure without passing on the costs of maintenance and modernisation to the state budget.

On the other hand, the Armenian government’s statement focused on the efficiency of management, existing problems and development projects, without mentioning the Prime Minister’s previous requests regarding the Russian company’s withdrawal from managing the network.

The joint working group agreed upon in Yerevan is set to analyse these issues and the possibilities for developing rail transport, but no changes to the current concession agreement have been announced.