ArmInfo. The Armenian Government has rejected a bill on setting a special regime of work and management of Nairit Plant. On September 29, the Government gave a negative conclusion on the bill.
Armenian Minister of Energy and Natural Resources Ashot Martirosyan said that he understands the intention of the authors - lawmakers from the Prosperous Armenia Party - to support Nairit Plant. At the same time, according to the conclusion of the Justice Ministry, the bill can seriously contradict the Constitution. Therefore, the ministersuggested removing it from the agenda and discussing it with the relevant state structures.
David Harutyunyan, Head of the Government Staff, explained that the bill suggests exempting the Plant from taxes for 5 years if 70mln USD and more is invested. The authors of the bill also suggest setting up a parliamentary commission. The Government must study any investment offer with that commission, which runs counter to the Constitution, Harutyunyan said.
On September 2, Prosperous Armenia Party (PAP) introduced a bill on setting special regime of work and management of Nairit Plant. The press-service of the party informed ArmInfo that the PAP proposes mechanisms of ensuring restart and viability of the enterprise, particularly maintenance of the property of the plant, exclusion of alienating of the main assets, as well as implying tax benefits via announcing Nairit an industrial zone.
It was previously reported tat EU-ASIA Business Finance Centre (Slovakia) is ready to invest up to 150 mln EUR in Nairit Plant. The holding is registered in Bratislava, the capital of Slovakia. The company was registered in April 2016 as a company providing advisory services in the field of business and management.
Nairit Plant has been idle since April 2010. Throughout six years the Armenian government responded to numerous appeals of the former employees that the plant will be re-launched as soon as investor is found. "EU Asia Business Finance Center" holding has an Iranian partner who is ready to provide gas for operation of the plant free of charge as an investment. Holding is ready to pay 1EUR for operation of the plant for 5 years in case it is exempted from taxes for that period and its debts to state are canceled.
To note, at the moment the debts of Nairit Plant amount to 50 billion AMD (about 130 million USD). 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%. 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 were saying that the results of the WB audit can be considered as recommendations to the Plant's bankruptcy process, which has in fact started.