ArmInfo. The Direction on Railway Construction JSC under the Ministry of Transport, Communications and IT is to be cancelled. A corresponding resolution was approved at January 12 Government session. Meanwhile, according to Vahan Martirosyan, Armenian Minister of Transport, Communications and IT, this will not affect the implementation of Iran-Armenia Railway Project.
Following his wording, the cancellation of JSC mentioned is preconditioned with a purpose to optimize state authorities expenses. In the result of 13 positions and 1 vehicle reduction the entity plans to save an amount of AMD 35 mln. in annual view.
As Vahan Martirosyan clarified after the Government session, the liquidation of the Direction on Railroad Construction does not mean the rejection of the Iran-Armenia Project in all. "There is a Railway Department existing under the Ministry, which can implement appropriate functions," he mentioned. Meanwhile, stating that the negotiations to attract potential investors are in progress, the minister did not mention any names or countries as prospective participants of the project. " Appropriate works are in progress, but we all realize this project is not that easy one and there are separate efforts needed in respect to any given investor," he stated.
Vahan Martirosyan mentioned once again Armenian interest in the implementation of this project. Answering the question regarding terms and feasibility of the railroad construction, as well as regarding probability to stay off the project of regional importance, Minister noted: "I cannot state any definite terms of the implementation, but I can say that the project is straight in the focus of the Government attention. What is to the project - yes, it is highly desirable. And Iran-Armenia railroad is the shortest way to the Black Sea for Iran."
It is remarkable, that the project which start has been announced yet in 2012, is not completely shaped by now. According to the Minister, for this moment, due to approximate assessment, the construction cost makes USD 3,2 bln. "But this estimate is very broad brush, because we do not have finally approved project and we are waiting for future investors evaluations," he stated.
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The Direction under the MTCIT, which is under cancellation now and which annual expenses formed AMD 35-37 mln annually, did not idle time away. " The company kept holding negotiations with possible investors, conducted discussions with concessional project manager and estimations of tunnels and bridges needed. There is a lot of work done," the Minister said.
To remind, recently Armenia's Ministry of Transport, Communications and IT has a business plan related to implementation of Iran-Armenia railway construction program.
According to him the business plan points at the concrete investments and the program's payback period, research of certain sections of the future road has been conducted, on the results of which the Transport Ministry works with potential investors. However, the Minister did not provide any information about the investors, amounts of investments and terms of project implementation. '' More detailed information will be provided when there is dynamics in negotiation process'', he stated, adding that the implementation of the program is among priority tasks of the Armenian government.
Meanwhile, the assessment of the project cost was made 3 years ago. On June 6 in a talk to ArmInfo's correspondent Deputy Minister of Transport and Communication of Armenia Arthur Arakelyan stated that
Construction of Iran-Armenia railway has been considered economically justified based on the results the feasibility study.
To recall, Armenia and Iran signed a concession agreement in May 2012. In cooperation with Dubai-based investment company, Rasia FZE, a feasibility study of the Southern Railway project was developed. It is anticipated that the construction will take 6 years. The feasibility study of the project Southern Railway of Armenia (Iran-Armenia railway) is ready. The railway is supposed to connect Asia with Central Europe. It will be 305 km long and will consist of 86 bridges and 60 tunnels. The estimated cost of the project is $3.5bn. According to the program the construction is to be finished by 2022. It is anticipated that the annual freight activity on the railway route from Gagarin Station (Gegharkunik region) to Agarak (Syunik region) will total 25 million tons. This route is by 44 shorter than the earlier planned railway section Gavar- Agarak. It will be linked to the operating railway network. The launch of the Southern Railway of Armenia and Southern Highway of Armenia was announced in Jan 2013. Then a trilateral Memorandum of Understanding was signed by the South Caucasus Railway of Armenia, Ministry of Transport and Communications of Armenia and Rasia FZE. A year ago, on November 16 commenting on the prospects of Chinese investments in the railway project Chinese Ambassador to Armenia Tian Erlong stated that it will be possible to speak of real investments and dates of implementation of the Iran-Armenia railway project after the feasibility study of the project is prepared. He stressed that at the current stage two Chinese companies are conducting the feasibility study of the project on a non-repayable basis to see the expediency of the Iran-Armenia railway project.
To note, according to ArmInfo's economic analysts, there are three factors that make the project inefficient. First, the Armenian railway cannot have direct access to Russia. Second, even if there is a hypothetical possibility that the Abhkazian section of the railway will be reactivated in future, the Iran- Armenian motorway that will have been built by that time will make the Iran- Armenia railway absolutely unnecessary in view of its short mileage. The third, most important factor is the Astara-Resht- Kazvin railway project implemented by the Russian Railways to link the operating railways of Russia, Azerbaijan, and Iran. That project is part of the North-South international transport corridor that will integrate the transport routes and information highways of Russia, Azerbaijan, Iran, India and Oman. The analysts say the Iran- Armenia project is politically motivated. Therefore, the sides have not managed to set it in motion within the last 3 years. The statements by Armenian officials claiming that China may invest in the project as part of its ambitions plan to restore the great Silk Road (cost $40 billion) do not stand up to criticism either. Armenia is not mentioned in any of the new Silk Road scenarios, unlike the Iran-Azerbaijan and Turkey-Georgia railways. Relatively recently, the transport minister of Iran voiced quite promising projects of railway communication with the countries in the region, but Armenia was not mentioned in any of those projects.