ArmInfo. Armenia is extending the terms of the loan agreement with the Asian Development Bank, as it does not keep pace with the terms of its implementation and increases the financial burden of the state treasury.
On April 29, the RA government approved the draft law "On ratification of the loan agreement between the Republic of Armenia and the Asian Development Bank" On the program to improve the Armenia-Georgia border regional road (M6 Vanadzor-Bagratashen).
As stated in the explanatory notes to the document, the RA and ADB signed a loan agreement on November 9, 2016, for an amount equivalent to $ 50 million - 44,037,000 euros, for a period of 22 years with a 15-year grace period. The document entered into force on April 24, 2017. The main goal of the program is to restore and modernize a section of a two-lane highway in northern Armenia - from Vanadzor through Alaverdi to the border with Georgia - Bagratashen with a length of almost 51.7 km, as well as to prevent deterioration of the quality of the road network, and to ensure safe, fast and easy movement. It is planned that following the results of the implementation of the program on the Vanadzor-Bagratashen road section with a total length of 51.5 kilometers, the pavement will be repaired, the route will be equipped with protection means and adaptation capabilities to climate change. The project completion date is November 30, 2020, the loan repayment is May 31, 2021.
Meanwhile, the Ministry of Territorial Administration and Infrastructures believes that the agreement should be prolonged due to the fact that the construction contracts were signed on November 30, 2017, in fact, construction work began 13 months later - on May 29, 2018. The expected completion timeline for construction work includes the contractor's liability period for omissions identified after completion of the work (365 days per contract). "According to the concluded construction contract, 900 days are allotted for the completion of construction - from the date of the start of work, that is, on November 14, 2020," the document says. Thus, the deadlines stipulated in the agreement - November 30, 2020, are disrupted.
According to the document, taking into account the fact that August 31, 2021 is considered a more realistic date for the completion of construction work, the parties agreed to prolong the loan agreement until December 31, 2022 (completion of construction - August 31, 2021, completion of the liability period for omissions - August 31, 2022 and 4 months are allotted for the financial audit.
As a result, according to the conclusion of the Armenian Ministry of Finance, the budget allocations for 2021 planned under the agreement - 2,870,727.8 thousand drams, will be exceeded, since according to the calculations of the Ministry of Territorial Administration and Infrastructures, the required amount will increase to 7,726,300.0 thousand drams. Consequently, in 2021, the state budget expenditures on loan servicing will significantly increase, the RA Ministry of Finance noted.
