The Armenian-Russian negotiations on the railway concession are coming to a conclusion

The issue of managing the railway network of Armenia continues to be one of the most sensitive issues on the agenda of relations between Yerevan and Moscow.

The visit of Oleg Belozyorov, CEO of “Russian Railways” to Yerevan and the results of the meeting with Nikol Pashinyan show that the parties are still far from a final agreement on the future of concession management.

At the same time, the decision to create a joint working group proves that the issue is not limited to the general discussion of bilateral relations. negotiations are ongoing.

There was no question of maintaining the concession of “South Caucasus Railway” CJSC. Oleg Belozyorov, CEO of “Russian Railways” JSC, chairman of the management board, said this in a conversation with Sputnik Armenia.

And according to the press release of “Russian Railways” OJSC, “Russian Railways” is open to a dialogue with the Armenian government and a joint assessment of the effectiveness of the concession contract. “Russia and Armenia have agreed to create a working group to assess the potential of transit communications using Armenia’s railway network.

“Russian Railways” intends to strictly observe the terms of the concession agreement of the Armenian Railways,” the message says.

According to the announcement of the RA Government, at the Nikol Pashinyan-Oleg Belozyorov meeting, Pashinyan emphasized that taking into account the possibilities of unblocking the regional transport infrastructures, the goal of the RA Government is to make the railways of Armenia competitive, to integrate them into the neighboring states and the international railway network.

“In this regard, the interlocutors discussed the opportunities created in the context of regional processes and the steps aimed at making the railways of Armenia competitive, as well as integrated into international transport routes. Thoughts were exchanged on the reconstruction projects of the Gyumri-Akhurik-Turkey border and Yeraskh-Nakhijevan railways and the opportunities created as a result of them.

Reference was made to the works carried out during the concession management of the “South Caucasian Railways” company in the direction of infrastructure development, management efficiency, existing problems and the possibilities of their solution.

An agreement was reached to create a joint working group in order to discuss the formulated problems in a short period of time, to find possible solutions and to specify further steps,” the message says.

According to the RA government, the core of the disagreement between Yerevan and Moscow is not so much the ownership of the railway as the issue of its management and competitiveness in regional conditions. The railway infrastructure of Armenia belongs to Armenia, but under the concession agreement signed in 2008, it was handed over to the management of the “South Caucasian Railway” company, which is a subsidiary of “Russian Railways”. The term of the contract is 30 years with the possibility of extension.

However, the RA authorities currently consider the Russian concession problematic and non-competitive, so they put forward the idea of ​​transferring the right to manage the concession to a third country as a possible compromise. Pashinyan also suggests discussing the possibility of transferring the concession rights to a country that would be acceptable to both sides.

A possible alternative manager should not only be an economic operator, but also a tool for balancing Armenia’s relations with the West, Russia and regional partners. At the same time, the transfer of the concession to a third country is not an agreed decision, and political arrangements are necessary for its implementation.

Belozyorov’s statements show that the Russian side is trying to keep the existing agreement in the center of the negotiations, without promising concessions in the transfer of the concession.

The fact that the head of “Russian Railways” emphasizes the readiness to strictly fulfill contractual obligations is an important political message. Moscow considers the issue within the framework of the current legal agreement, while Yerevan wants to evaluate its effectiveness, taking into account regional and international realities.

In August, the Russian Foreign Ministry criticized the idea of ​​transferring the concession, presenting it as a possible consequence of external pressure on Armenia. However, the difference in the positions of the two sides is not only about the efficiency of railway management, they are currently trying to change the entire logic of Armenian-Russian relations.

The results of the meeting so far do not prove that Yerevan has achieved its main goal of changing the Russian governance model. The creation of a joint working group allows the parties to continue the dialogue, explore the potential of transit communications and discuss possible solutions to the problems already formulated. However, in the official reports, there is no agreement on the transfer of the concession rights to a third country, on revising the current contract or on setting the terms of its termination.

Moreover, Belozyorov’s statement about not making the issue of maintaining the concession a subject of discussion and the Russian side’s emphasis on the fulfillment of contractual obligations allow us to conclude that Moscow is not yet ready to publicly accept the main solution proposed by Yerevan. Here is the main contradiction of the visit. the parties have agreed to discuss the railway problems, but have not yet agreed on the principle of solving them.

Against this background, the upcoming meeting between Pashinyan and Putin in Moscow takes on special significance. In September, Pashinyan announced that they had agreed to meet with the Russian president in the near future and discuss various issues of bilateral relations, including the issue of railway management. Belozyorov’s visit can be considered as a preparatory stage of that political dialogue, during which an attempt is made to clarify the scope of disagreements and the limits of a possible compromise.

Until a political decision is made in Moscow, or the parties do not announce a concrete agreement, the conclusion is that Armenia has not yet managed to change the Russian governance model, and Russia continues to maintain its position in Armenia’s railway network.

A key question in the upcoming negotiations will be whether the parties will be able to combine the maintenance of contractual obligations with the new transit agendas.