Interfax
July 29 2004
Georgian, Armenian power systems to work in parallel
Tbilisi. (Interfax) – The energy system of Georgia is to start to
work in parallel with the system in Armenia in the near future, which
will allow it to join in an energy exchange between Armenia and Iran.
Georgian Energy Minister Nika Gilauri told journalists that this
agreement was reached at a meeting this week of an intergovernmental
Armenian-Georgian commission for energy cooperation.
He said that as part of this project Georgia will export excess
electricity to Iran in the summer period through the Armenian system,
and will import power from Iran through Armenia in winter.
The minister said that a group of Georgian energy workers would
travel to Yerevan soon to iron out the technical details of the
project.
Georgia imports 120-130 megawatts of electricity per day from Armenia
in the winter period.
Gilauri also said that during the commission meeting, the Georgian
side proposed to look into the possibility of reducing tariffs for
electricity supplied from Armenia. Tariffs currently amount to 2.54
cents per kWh, which is 0.9 cents higher than the tariff for
electricity imported from Russia. However, “at this stage the
Armenian side is refraining from considering this issue,” Gilauri
said.

Interfax
July 29 2004
New bank with foreign capital to be set up in Armenia
Yerevan. (Interfax) – A new commercial bank with foreign capital is
being set up Armenia, Armenian Central Bank Chairman Tigran Sarkisian
told journalists.
He said that the Central Bank has agreed to provide a license to
ArmSwiss Invest & Trust Bank, founded by Swiss citizens of Armenian
origin involved in international finance and industry.
Sarkisian said that the initial charter capital of the bank amounts
to $6 million.
“The founders of ArmSwiss Invest & Trust Bank plans to introduce new
banking instruments, that are not used by the other 19 commercial
banks in the republic,” Sarkisian said. He said that the new bank
will work on the international market and will have an active
investment policy. The bank should start to operate in three months.
Armenia currently has 19 commercial banks with total charter capital
of $65 million, of which non-residents accounts for 53%.

Baku Today
July 29 2004
Armenian FM Official Warns Azerbaijan against Resorting to Force
Armenia’s Foreign Ministry spokesman on Wednesday warned Azerbaijan
against attempting to regain its occupied territories by force,
threatening that any such attempt could turn out to be `catastrophic’
for the latter.
“We have repeatedly stated that the ramifications of any attempt to
resolve the Nagorno-Karabakh problem by force will be catastrophic
for the whole region and first of all, for Azerbaijan,” Gamlet
Gasparyan told reporters in Yerevan, Armenia’s Mediamax news agency
reported.
Gasparyan noted that the Azerbaijani President Ilham Aliyev’s recent
statement that his nation would fight back the occupied territories
should the peace negotiations prove fruitless `is a matter of serious
concern.’
President Aliyev on Tuesday told a meeting of Azerbaijani diplomats
in Baku that his country wouldn’t go for any compromise on its
territorial integrity.
`The international law is on our side… Justice is on our side.
Economic potential and other issues are also in favor of Azerbaijan,’
President Aliyev said, warning that if the peace talks mediated by
the Minsk group of the Organization for Security and Cooperation in
Europe (OSCE) give no results, Azerbaijan will resort to force.
Armenia has been occupying Nagorno-Karabakh – a western Azeri region
that is home to about 100,000 ethnic-Armenians – along with seven
other regions, Lachin Kelbajar, Aghdam, Fuzuli, Jebrail, Zengilan and
Qubadli, since 1991-94 war. The territories make up for one-fifth of
the country’s total area.
Peace talks launched by the Minsk group in 1992 have yielded no
result while over 700,000 Azerbaijani citizens forced out of their
homes in the occupied regions are suffering in tent camps built in
inner regions of the country.
From: Emil Lazarian | Ararat NewsPress

Messenger.ge, Georgia
July 29 2004
Armenia interested in Abkhaz railway
As reported in Mtavari Gazeti, the Armenian delegation visiting
Georgia once again voiced its interest in restoring the Abkhaz
railway. Several months ago, representatives of the Armenian
government said that Armenia is losing millions of dollars because of
the closure of the railway.
Armenians continue to sow the results of Karabakh war even today.
Azerbaijan creates a lot of obstacles in the economic relations with
Russia, the paper reports.
Even though the issue of restoring the Abkhaz railway cannot be
settled without Russia, the Armenian delegation visited Georgia with
this end in view. During this visit, a bilateral commission was set
up which will look into issue of restoring Abkhaz railway. Chair of
the parliamentary committee on the economy Niko Lekishvili told
journalists that Armenia is interested in restoring the Abkhaz
railway and it will help Georgia resolve the Abkhaz conflict.

Messenger.ge, Georgia
July 29 2004
Tbilsresi maintenance missing ingredient
By M. Alkhazashvili
To maintain both a stable economy and state, Georgia strives to
overcome its energy problems. To do so, it is essential to have the
important energy producing system Tbilsresi working properly.
During the 1970’s and 80’s Tbilsresi, located in Gardabani in Eastern
Georgia, produced half of the Georgian energy system’s output, and in
autumn and winter 70-75 percent of the country’s entire energy
system. Unfortunately, the 1990’s saw the dramatic decline of the
station, as poor maintenance and over use led to serious damage
It took more than a decade to build Tbilsresi, which was begun in the
early 1960’s and completed in 1972. In 1990, the output of Tbilsresi
station was 1,100 megawatts, and this was increased that year by the
construction of a new unit, number 9, with an output of 300
megawatts. In 1994, unit number 10 was begun, adding a further 400
megawatts.
But due to the lack of repairs on the infrastructure, between 1994-96
units numbers 5, 6 and 7 stopped functioning. Then in 2002, units 1
and 2 were stopped and it was decided to build new ones in their
place, but a lack of finances meant this was never carried out.
Although number 3, 4 and 8 still work and can produce energy, the
lack of repairs on these units means they are now urgently in need of
rehabilitation.
The more recently built units 9 and 10, which were purchased by the
American AES company and now belong to the Russian RAO UES, have a
mixed record of performance. Unit 10 has not worked since 2001, while
unit 9 has suffered numerous break downs and is currently being
overhauled by RAO UES.
During past year, the limited production of Tbilsresi as led Georgia
to satisfy its requirements through the import of Russian
electricity, although this was hampered last winter by the frequent
break-down of the Kavkasioni 5,000 kilowatt high voltage transmission
line, again because of lack of maintenance.
Although the Georgian State Electrosystem (GSE) halted Russian
imports on June 15th owing to their high cost, it looks like Georgia
will again have to rely on imported energy from Russia. Considering
Russia is also the country’s sole supplier of gas, the new government
has eagerly pushed for energy projects with Iran, Azerbaijan and
Armenia. More importantly, it gives the country ample cause to
rehabilitate its internal electric infrastructure.
From: Emil Lazarian | Ararat NewsPress

Messenger.ge, Georgia
July 29 2004
Georgia strikes electricity deal
New plan uses Armenia as energy corridor with Iran
By Christina Tashkevich
Georgia is to begin exporting its summer-time electricity surplus to
Iran through Armenia, in return for imported Iranian electricity in
winter time, the Minister of Energy Nika Gilauri announced earlier
this week.
According to the Armenian Minister of Energy Armen Movsesian, who was
part of the Armenian delegation visiting Georgia this week, his
country is ready to help Georgia to do this, although he added that
the Armenian government is not currently prepared to consider
reducing its tariff on electricity imports, as Georgia has asked it
to.
Nevertheless, Gilauri is hopeful that a discount may be offered. As
he explained to journalists, the electricity tariffs are set by the
Armenian Energy Regulatory Commission and therefore the delegation
was not permitted to decide on this issue.
Any change to the tariff may depend on the controversial issue of
Georgia’s energy debt to Armenia. Georgia denies owing Armenia USD 6
million for supplying electricity in 2000, claiming it has already
paid off the debt, while Armenia says it has not received the money.
The sides chose not to discuss the issue during the Armenian
delegation’s visit, and instead agreed to create special working
groups which will work on resolving this issue in the coming weeks.
Meanwhile, Armenia is ready to supply Georgia will electricity
through the Alaverdi electricity transmission line, and could also
supply Georgia with Iranian gas. The news agency Iran.ru cites
Minister of the Foreign Affairs Salome Zurabishvili as saying that
Georgia is interested in importing Iranian gas through the
Iran-Armenia gas pipeline, and also as suggesting that a transit gas
pipeline be constructed in the Caucasus.
However, it has also been suggested that Georgia plans to import gas
from Iran not through Armenia but through its other South Caucasian
neighbor, Azerbaijan. After his visit to Iran in early July, Minister
Gilauri said he had had talks concerning importing Iranian gas
through Azerbaijan and that this would be a reserve gas route for
Georgia after Russia.
“Rehabilitation works are needed to import gas and create additional
gas reserves for Georgia so that we are not dependent on a single
country,” said Gilauri. He says the route needs repairs, which will
cost USD 1.8 million and will take four months.
The government now expects to finalize agreements during a reciprocal
visit to Armenia this week. From the talks during the recent visit in
Tbilisi, it is apparent that Georgia considers cooperation with
Armenia integral to the economy. “It is impossible to imagine the
development of Georgia without Armenia,” Prime Minister Zhvania said
on Monday.
From: Emil Lazarian | Ararat NewsPress

Azer Tag, Azerbaijan State Info Agency
July 29 2004
GEORGIA SEEKS ALTERNATIVE GAS SUPPLY FROM IRAN
[July 29, 2004, 16:27:30]
Georgian officials say Tbilisi considers Iran as an alternative gas
supplier for Georgia, which currently depends only the Russian giants
GazProm and Itera for its gas supply, reported AzerTAj Tbilisi based
correspondent.
Officials say that the project is a long-term one and may be launched
as early as next year. Georgian President Mikheil Saakashvili
discussed this issue during his visit to Iran in early July. `Iranian
gas can serve as an alternative source of gas supply for Georgia only
in cases of emergency situations and in the case that Russia reduces
or stops the gas supply
[to Georgia]. It can not be a permanent supplier for us, as Iranian
gas is more expensive,’ Teona Doliashvili, a spokesperson for the
Georgian Energy Ministry, told journalists.
There are two potential delivery routes of gas from Iran into Georgia
– one via Azerbaijan and another through Armenia.
In Soviet times Georgia received gas from Iran via Azerbaijan;
however the Azerbaijani pipeline needs rehabilitation, which,
according to the Georgian Energy Ministry, would cost around USD 2
million.
Representatives from SakGazi, the gas distribution company in
Georgia, say that the joining of the Georgian gas system to the
Iranian-Armenian gas pipeline may prove cheaper.
`These considerations over a gas supply from Iran were launched some
three years ago, but discussions yielded no results, mainly because
of the lack of finances to rehabilitate the pipe. I think the
Armenian option will be cheaper,’ Maka Arakhamia, a spokesperson for
the SakGazi Company, told correspopndents.
This issue was discussed during the Georgian Foreign Minister Salome
Zourabichvili’s vist to Armenia last week. Zourabichvili said that
Georgia is interested in gas being delivered from Iran.
According to the Georgian Energy Ministry, Iran is also interested in
Georgia as a transit country to export its gas to Europe.

Internews Monthly Bulletin
June 2004
The Mineral Water Tragedy
And other mysteries revealed by Aniv Investigation
Last summer, when twelve-year-old Margarita bought a bottle of
mineral water she couldn’t even imagine she would lose her eyesight
as a result. The glass bottle exploded and damaged her eye when she
put the bag of groceries down to catch her breath on her way to the
apartment where she lived. Her family tried to file a lawsuit against
the mineral water company and get reimbursement in order to regain
Margarita’s eyesight but failed…
This is just one of the stories investigated by Internews Armenia
radio production group and broadcast in the framework of the new
project Aniv Radio Investigation at Yerevan-based Ardzagank and
Public Radio stations, as well as at Shant in Gyumri and Interkap in
Vanadzor. The program on the mineral water tragedy was on the air
this week, evoking lots of feedback from listeners in three cities.
As told by Robert Balayan, a radio producer from Interkap, Vanadzor:
`We had lots of phone calls from our audience. They insisted that the
problems of our city should be covered as well.’
Aniv Investigation is a two-part program with an average running time
of 30 minutes. As stated by the Internews Armenia production manager
Harutyun Mansuryan, `While we produced Aniv Talk Show and Aniv Radio
Hour, we constantly came across striking and impressive facts that we
couldn’t explore to the end because the program format didn’t allow
us. We realized we had enough materials to investigate, to launch a
new program and to grab listeners’ attention. Plus, we already had
the television investigative program and we thought: why not make a
radio show?’
Prepared by the Internews team and freelancers, Aniv Investigation
supposes comprehensive and thorough research of the topic. The
producers and reporters search and reveal hidden facts and previously
unknown details in their attempts to get the truth. Other topics
covered by Aniv Investigation include: the safety of dairy products
in Armenia, the issue of adoption, the suicide of a prisoner accused
of the assassinations in the parliament in October, 1999.
The audio files of the radio investigation are available at the
Internews Armenia web site:

UEFA.com
July 29 2004
Longford share hopes of progress
Forty-eight teams will meet today when the second leg of the UEFA Cup
first qualifying round is completed.
Estonian winners
The victors will join Estonia’s FC Levadia Tallinn, who beat Bohemian
FC of the Republic of Ireland 3-1 on aggregate on Tuesday, in the
second and final qualifying round.
Helpful fans
Another Irish side will be hoping for a more successful outcome this
evening. Longford Town FC trail Liechtenstein’s FC Vaduz 1-0 from the
away leg, but their supporters will expect their players to match the
efforts they have put in over the past few days. New seats,
turnstiles and a control room have been installed to bring Flancare
Park up to the UEFA A Licence standard required to host the match.
Injury doubt
Vaduz’s chances will not be helped should Liechtenstein Player of the
Year, Benjamin Fischer, fail to recover from a minor leg injury. “We
have to apply pressure from the start,” said coach Martin Andermatt.
“The Irish will try to score an early goal but we will try to impose
our rhythm.” However, Vaduz midfielder Franz Burgmuller is confident
of progress. “If we play with full speed and concentration we will
make it.”
Pre-season fitness
Meanwhile, Northern Ireland’s Glentoran FC face a tough task at
Finnish club AC Allianssi. With the Irish League only starting on 14
August, Glentoran manager Roy Coyle said a lack of match fitness had
played a big part in the 2-2 first-leg draw in Belfast.
Competitive debut
However, Coyle, who could include former Manchester United FC
defender Pat McGibbon for the first time in a competitive game, said:
“I think we have seen the best of them and we are pretty confident.”
His Allianssi counterpart, Ari Tiittanen, is also in relaxed mood
ahead of the action at Vantaa’s Pohjola stadium. “We are in no rush
to score an early goal. We can be patient. I believe we can win,” he
said.
Visa difficulties
Elsehere, Armenia’s FC MIKA will be without midfielder Tigran
Hovhannisyan, who has been denied a visa for the trip to Hungary
where they will play Budapest Honvéd FC. MIKA coach Suren Barsegyan
is unworried, though, and said of his side’s 1-0 deficit: “We are all
aware that nothing is lost after the first leg. We will get even for
the defeat and have enough to build on.”
First ever win
Despite trailing 2-0 to Ukrainians FC Illychivets Mariupil, another
Armenian club, FC Banants, are determined to restore national pride.
Armenia’s representatives are yet to win a match in this competition,
and Banants coach Hovhannes Zanazanyen said: “We will treat this game
seriously because we need a victory in the UEFA Cup. The time has
come to break the duck.”
Staying behind
Illichivets coach Mykola Pavlov has called up an 18-man squad for the
away leg, leaving several players at home to prepare for a league
fixture against FC Dynamo Kyiv next Monday. He acknowledged that his
team failed to take all their chances last week. “We failed to do
so,” he said, “and the winner will be decided in the second match.”
Farewell game
Finally, Lithuania’s FK Ekranas, 1-0 ahead against F91 Dudelange from
Luxembourg, and hoping for a first-ever aggregate victory in a UEFA
club competition qualifying round, could be saying farewell to
centre-back Egidijus Majus, who is a target for Russian Premier
League leaders FC Zenit St. Peterburg.

INTERNATIONAL FINANCIAL CORPORATION EXTENDS $2MLN LOAN TO
ARMSAVINGSBANK
YEREVAN, July 28 (Noyan Tapan). The International Finanical
Corporation (IFC) of the World Bank will allocate a loan of $2mln. to
Armsavingsbank for Small and Medium-Sized Enterprizes (SME) and
mortgage crediting. The agreement was signed by Ashot Osipian,
Executive Director of Armsavingsbank and Edward Nassim, Director of
the IFC Central and Eastern European Department in Yerevan July
28. A. Osipian told reporters the loan will be allocated in two
tranches to be repaid within five years. $1.5mln. will be used to
extend credits to the SMEs operating in the spheres of industry,
construction, services and trade. The largest size of those loans will
be $150,000 with a due date of payment five years and with annual
interest rates of 14%-20%. The bank will extend mortgage loans both
for the purchase and repair of dwellings. The largest size of the
loans in the first case will be $30,000, in the second case
$15,000. The loans will be extended with a repayment date of up to
five years, and with an annual interest rate of 14%. A. Osipian also
said the Armsavingsbank is currently extending mortgage loans with a
repayment date of four years and with an interest rate of 16%. He gave
assurances that the bank now has a package of 100% healthy mortgage
loans of $900,000. he said the main obstacle to the sphere’s
development is the procedure of working credit technologies which is
being gradually processes. According to Nassim, this deal is the first
investment of IFC in the Armenian banking system. Before that the
corporation invested $5mln. in the Marriott Armenia hotel and another
$2mln. in the ACBA Leasing company. He also said the corporation is
planning to establish a foundation in Armenia with its own funds
though no relevant final decision has yet been made. Edward Nassim
stated IFC studied the Armenian banking system four years ago and
decided it was too early to make investments in it. This deal
testifies that the Armenian banking system has developed and is
trustworthy now. He said mortgage loaning is of great interest for IFC
since it develops both the middle layer of the population and the
construction sphere of the country. Chairman of the RA Central Bank
Tigran Sargssian said the Central Bank welcomes this cooperation.
It will enable the Armsavingsbank to provide new services in large
volumes which will intensify competition in the banking sphere as a
result of which the system will get sronger. Armsavingsbank is the
fourth among the Armenian banks with the volume of its assets
($33.4mln.). The capital of the bank totaled $5.3mln. as of January
1. It has 24 branches and 450 workers. IFC, founded in 1956, is a
member of the World Bank. It aims to fund investments in the private
sector, attract free means in circulation on the international market,
as well as to assist the developing and transition countries. So far,
the corporation has extended loans of over $37bln. from its iwn funds
and over $22bln. from the attracted funds.