Minister: Armenian Government has no reasons to doubt results of audit conducted in Nairit by World Bank

ArmInfo. Armenian Government has no reasons to doubt the results of the audit conducted in Nairit plant by the World Bank, Yervand Zakharyan, Minister of Energy and Natural Resources, announced from the National Assembly rostrum on October 28. According to him, currently the Yerevan Nairit Plant is idle. The Armenia's Government is interested in reactivation of Nairit Chemical Plant if the potential investor is found. According to the World Bank's experts, re-launch of the plant is inexpedient.  But if an investor is found, the executive power is ready to start negotiations.  The Minister emphasized that CIS Interstate Bank continues to settle procedure issues to lift the attachment of the plant property. According to the received information, during upcoming two weeks the Bank will make final decision, after which the shares of the plant will pass to the state.  Only after this happens, the Government will announce its further steps on Nairit issue.

Earlier, the employees of the Nairit Plant announced their intention to fight for reactivation of the plant and for cancellation of the "illegal" agreement of assignment of claims in respect of penalties and fines from their wages to Nairit-2 enterprise.  They said that in August 2015 the Armenian Government completely repaid the arrears in wages owed to all former employees of the Plant. At the same time, the employees were forced to sign an agreement of assignment of claims in respect of penalties and fines from their wages to the Nairit-2 enterprise. As regards the re-launch of the plant, Hrach Tadevosyan, the chairman of the trade union of Nairit Plant, said that the specialists of the enterprise have presented three programs for the plant operation with different capacities. "The most expensive program implies investments worth $97 mln instead of $350-400 million specified in the audits of the World Bank," said Tadevosyan. "Donor countries such as the United States, Germany, France and Japan have rubber manufacturers and it is not beneficial for them to have such a competitor as Nairit Plant," he said.

To note, Nairit Plant has been idle since April 2010. The Plant's shares were given as security against the CIS InterStateBank's 70 mln USD loan provided in 2006 for 5 years - till late Dec 2011 - at 12.5% p.a. In 2006, 90% of Nairit Plant's shares were sold to Rhinoville Property Limited (UK). The latter owns an 89,999% stake in the plant, Armenian Ministry of Energy and Natural Resources - 4,496%, Gazprom Armenia CJSC (previously ArmRusgasprom) - 3,596%, and Yerevan Thermal Power Plant - 1,907%. At the moment the debts of Nairit Plant amount to 50 billion AMD (about 130 million USD).

In 2015 the World Bank conducted a financial and technical audit at Nairit Plant at the request of the Armenian Government. The WB considers the re-launch of the plant to be inexpedient because it will need at least $250 mln. But even if investors are found, the WB experts do not think the product will be competitive, because it will have a high prime cost. Most experts say that the results of the WB audit can be considered as recommendations to the Plant's bankruptcy process.