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Vestnik Kavkaza, Russia
July 23 2014
Vorotan dam cascade
23 July 2014 - 12:51pm By Susanna Petrosyan, Yerevan. Exclusively for
Vestnik Kavkaza
Disputes over the legitimacy of the sale of Armenia's Vorotan dam
cascade to U.S. company Contour Global Hydro Cascade (CGHC) continue
in Armenia. The three-level dam cascade on the River Vorotan (Syunik
Province) will have an output of 404.2MW, an average of 1.16 billion
kilowatt hours annually. The Armenian government and CGHC signed a
contract: the U.S. company will pay $180 million for the cascade in
six years and $70 million of investments for its modernization. Any of
the sides has the right to cancel the deal if they fail to implement
it in 75 days.
The deal was supposed to be signed in mid-April. Justice Minister
Ovannes Manukyan said that the process was slow because the list of
facilities for privatization needed clarifying. Absence of
explanations provoked speculations about foreign influence. U.S.
Ambassador to Armenia John A. Heffern warned Armenia about the
consequences of refusing to sign the document. In his words, it would
become a signal for Western investors. Realization of the document
would, on the other hand, demonstrate the opportunities and potential
of Armenia in making deals, proving the readiness of Armenia for major
contracts.
Grayr Manukyan, an economic columnist of 1in.am, is adamant that the
real reason for the problems with the contract is pressure from the
Kremlin. The latter, in his words, does not want the U.S. to
strengthen its economic influence in Armenia.
The key dispute is the legality of the deal, the cascade was sold
without parliament's approval. The Vorotan cascade was not on the list
of enterprises for privatization and the government skipped the
parliamentary procedure when signing it. The vagueness of the deal is
so obvious that two Armenian ex-presidents have spoken out against it.
"By selling the Vorotan cascade, Armenia lost its sovereignty. It is
nothing but a crime of the century," said Levon Ter-Petrosyan.
According to Robert Kocharyan, the best energy asset of Armenia was
being sold in a very dubious manner: "The people responsible for the
sale will hardly have a chance to avoid responsibility. It is a very
ambiguous acquisition for the purchaser too."
Experts explain that the economic activation of the U.S. and interest
of American business in strategic energy facilities of Armenia is a
response to Armenia's plans to join the Eurasian Economic Union. The
logic of foreign players is fair, it is aimed at preserving and
expanding influence in Armenia. The only thing unclear is the logic of
Yerevan. What interests do the Armenian authorities have?
Alexander Karapetyan, an ex-member of the Energy Ministry, said that
the government had decided to refrain from privatization of the
Vorotan cascade, a regulator of the energy system, according to
studies of experts in the 2000s. "If the facility operates to make
profit, it will not regulate peaks and falls in the energy system
properly. Its output depends on the needs of the system. It is the key
facility of our system, it has great strategic value."
In this case, the foreign political element does not serve Armenian
interests, which require the Vorotan dam cascade to remain under state
control.
http://vestnikkavkaza.net/analysis/economy/58037.html
July 23 2014
Vorotan dam cascade
23 July 2014 - 12:51pm By Susanna Petrosyan, Yerevan. Exclusively for
Vestnik Kavkaza
Disputes over the legitimacy of the sale of Armenia's Vorotan dam
cascade to U.S. company Contour Global Hydro Cascade (CGHC) continue
in Armenia. The three-level dam cascade on the River Vorotan (Syunik
Province) will have an output of 404.2MW, an average of 1.16 billion
kilowatt hours annually. The Armenian government and CGHC signed a
contract: the U.S. company will pay $180 million for the cascade in
six years and $70 million of investments for its modernization. Any of
the sides has the right to cancel the deal if they fail to implement
it in 75 days.
The deal was supposed to be signed in mid-April. Justice Minister
Ovannes Manukyan said that the process was slow because the list of
facilities for privatization needed clarifying. Absence of
explanations provoked speculations about foreign influence. U.S.
Ambassador to Armenia John A. Heffern warned Armenia about the
consequences of refusing to sign the document. In his words, it would
become a signal for Western investors. Realization of the document
would, on the other hand, demonstrate the opportunities and potential
of Armenia in making deals, proving the readiness of Armenia for major
contracts.
Grayr Manukyan, an economic columnist of 1in.am, is adamant that the
real reason for the problems with the contract is pressure from the
Kremlin. The latter, in his words, does not want the U.S. to
strengthen its economic influence in Armenia.
The key dispute is the legality of the deal, the cascade was sold
without parliament's approval. The Vorotan cascade was not on the list
of enterprises for privatization and the government skipped the
parliamentary procedure when signing it. The vagueness of the deal is
so obvious that two Armenian ex-presidents have spoken out against it.
"By selling the Vorotan cascade, Armenia lost its sovereignty. It is
nothing but a crime of the century," said Levon Ter-Petrosyan.
According to Robert Kocharyan, the best energy asset of Armenia was
being sold in a very dubious manner: "The people responsible for the
sale will hardly have a chance to avoid responsibility. It is a very
ambiguous acquisition for the purchaser too."
Experts explain that the economic activation of the U.S. and interest
of American business in strategic energy facilities of Armenia is a
response to Armenia's plans to join the Eurasian Economic Union. The
logic of foreign players is fair, it is aimed at preserving and
expanding influence in Armenia. The only thing unclear is the logic of
Yerevan. What interests do the Armenian authorities have?
Alexander Karapetyan, an ex-member of the Energy Ministry, said that
the government had decided to refrain from privatization of the
Vorotan cascade, a regulator of the energy system, according to
studies of experts in the 2000s. "If the facility operates to make
profit, it will not regulate peaks and falls in the energy system
properly. Its output depends on the needs of the system. It is the key
facility of our system, it has great strategic value."
In this case, the foreign political element does not serve Armenian
interests, which require the Vorotan dam cascade to remain under state
control.
http://vestnikkavkaza.net/analysis/economy/58037.html