ArmInfo. The Armenian authorities have proposed to amend two laws that are aimed at starting the nationalization procedure of Electric Networks of Armenia CJSC - the law "On the Public Services Regulatory Authority" and the law "On Energy".
Both bills will be discussed at an extraordinary session of the National Assembly of the Republic of Armenia, which starts on July 1. Both documents do not specifically refer to "ESA", but it is obvious that this is the company in question.
In particular, as noted in the justification for the draft amendments to the Law "On the Public Utilities Regulatory Authority", in the event of a message from an authorized government body, which clearly substantiates that the safety or reliability of the functioning of the system that constitutes the energy sector has been or may be threatened, or that a potential violation has led or may lead to a violation of the rights or legitimate interests of a group of consumers or a gross violation of the terms of the license, at the initiative of the Chairman of the Commission, administrative proceedings are immediately initiated, which can be considered no later than five days from the date of receipt of the message. The PSRC will have the right to consider the issue of terminating the license of the licensee. At the same time, both documents establish guarantees for the continuity of the normal and uninterrupted operation of these critically important infrastructures, which are aimed at protecting the rights and legitimate interests of consumers.
As for the amendments to the Law on Energy, they grant the RA Government a preferential right to acquire the property that is the subject of the transaction. To exercise the preferential right, the licensee notifies the Government of the intention to carry out the relevant transaction. The Government may exercise its preferential right within three months from the date of receipt of the said notification, notifying the licensee thereof. The procedure for exercising the preferential right is established by a government resolution.
In case of exercising the preferential right, the cost of acquiring the property that is the subject of the transaction or the right thereto may not exceed their market value in accordance with the report determined by the Law on Appraised Value. In case of more than one report, the average value is taken as a basis, which must not exceed 10% of the market value.
In case of voluntary renunciation of the license, in order to ensure uninterrupted supply of consumers, the Public Services Regulatory Commission has the right to oblige the person who voluntarily renounced the license to temporarily continue its activities in accordance with the conditions established by the Commission, or delegate the implementation of the licensed activity to a temporary administrator. In the event of termination of a license, in order to ensure uninterrupted supply to consumers, the Commission, until a new license is issued, has the right to delegate the implementation of the licensed activity of the person deprived of the license to a temporary administrator who must have at least five years of experience in the field.
The Commission is obliged to take all necessary measures to expedite the process of issuing a new license. In case of refusal of a person to continue the activity or termination of its license, the government proposes the shareholders of this person to alienate the shares of this company in the manner agreed with it. In case of failure to alienate within three months, as an exception, the shares, property or property complex ensuring the licensed activity may be alienated in the manner prescribed by Article 60 of the Constitution of the Republic of Armenia.
The Chairman of the PSRC may decide to initiate a case and apply preventive measures. When applying preventive measures, the number, frequency or nature of violations previously committed by the licensee are taken into account. The Chairman of the Commission has the right to apply one or more preventive measures. In particular, to develop a program for the elimination of the identified violations or their consequences and oblige the licensee to implement the measures specified therein, convene a meeting of the supreme governing body of the licensee with an agenda determined by the Chairman of the Commission. The head of the KROU will also have the right to demand changes to the charter of the licensee within the time period established by the chairman of the Commission and registration of changes to the charter, demand replacement of a member or members of the licensee's management bodies within the time period established by the chairman of the commission, and appoint a temporary manager of the company.
It is interesting that the amendments to the current legislation were proposed not by government structures, but by the ruling Civil Contract faction in Armenia. The justification emphasizes that the main speaker on the presented documents will be Vladimir Vardanyan, Chairman of the Parliamentary Committee on State and Legal Issues.
The issue of the need for the nationalization of power grids was raised by RA Prime Minister Nikol Pashinyan. Moreover, this happened immediately after the campaign against the president of Tashir Group of Companies Karen Karapetyan and his arrest. On June 18, the RA Prime Minister told journalists that the company's activities had led to an energy crisis in the country caused by frequent power outages. According to him, a month ago he instructed those responsible to sort out the situation around the grids. The company must either compensate the damage caused to the population, government agencies and the private sector within a month, or be subject to urgent nationalization. It should be noted that the Tashir Group of Companies, headed by Samvel Karapetyan, acquired Electric Networks of Armenia CJSC from Inter RAO in September 2015. Earlier, Samvel Karapetyan noted that since 2016, when the Tashir Group of Companies acquired ownership rights to Electric Networks of Armenia, a total of about $900 million has been invested, $680 million of which was for modernization and $200 million for the creation of new capacities. Investments were made, including, at the expense of credit resources of international financial institutions, which led to the pledging of 100% of the shares of the CJSC.
