Table of Contents:
1. State Oil Fund to Set Aside Azm 105 bln for BTC Pipeline Construction

2. 4 Million Tones of Oil Needed TO Fill BTC Pipeline
3. Credit Agreement in Force
4. Environmental Ministers of Eastern European, Asian and Caucasian
Countries Meet in Baku
5. Bendukidze Lashes out at Forestry Department Head
6. US Company to Ship Oil from Azerbaijan Via Georgia Ports
7. Illegal Villas in Tsaghkadzor
8. Minister Sees 'Natural' Economic Slowdown


Source: Source: State Telegraphic Agency of the Republic of Azerbaijan,
Azertag, November 25, 2004

The Azerbaijan Republic State Oil Fund is going to set aside 105 billion
manats to finance Azerbaijan's share in the Baku-Tbilisi-Ceyhan oil
export pipeline construction, Fund executive director Samir Sharifov
told AzeTAJ correspondent.


Source: Source: State Telegraphic Agency of the Republic of Azerbaijan,
Azertag, November 25, 2004

According the press service of BP Azerbaijan, as soon as
Baku-Tbilisi-Ceyhan oil pipeline construction ends 4 million barrels of
oil will be needed to fill the pipe out, BP said. The pipe will be
filled with 11 million tons of oil extracted from the
Azeri-Chirag-Gunashli field.


Source: Source: State Telegraphic Agency of the Republic of Azerbaijan,
Azertag, November 25, 2004

Azerbaijani side is going to start repaying its credits taken to finance
its share in the Baku-Tbilisi-Ceyhan oil pipeline construction as soon
as the batch of oil is dispatched from Ceyhan seaport in 2006, State Oil
Company of Azerbaijan reported. In this respect, credit agreements
remain in force.


Source: Source: State Telegraphic Agency of the Republic of Azerbaijan,
Azertag, November 25, 2004

In the office of Regional Ecological Center (REC) of Caucasus in
Azerbaijan was held a meeting dedicated to results of the recent
conference of the ministers of environment of the countries of Eastern
Europe, Asia and Central Caucasus (EEACC) in Tbilisi.

Noting that in the period after the ministerial conference on the topic
`Environment For Europe', passed in Kiev in May 2003, real conclusions
on improvement of the environment and regional cooperation a notable
result was not achieved in this direction, presiding at the meeting,
head of the Society `For Sustainable Development' Fikrat Jafarov and
participants of Tbilisi conference from Azerbaijan spoke of positive
reaction of all attendees in the event of speech of the minister of
ecology and natural resources of Azerbaijan Huseyngulu Bagirov.

Discussed was also the importance of elaboration of the national plans
on eco-strategy of EEACC, focused suggestions on realization of tasks,
put forward by the ministerial forum in Kiev and Tbilisi.

It has to be noted that in the EEACC countries, there are functioning
five Regional Ecological Centers (REC) - in Hungary, Russia, Kazakhstan,
Moldova and in the Caucasus, which are to implement sustainable
partnership on realization of EEACC strategy.


Source: The Messenger, November 26, 2004

Minister describes plans for rehabilitating tourist infrastructure and
removing IDPs from hotels

Minister of Economic Development Kakha Bendukidze hit out at the Head of
the Forestry Department Bidzina Giorgobiani over disagreements between
the two regarding the privatization of Georgia's forests.

Although Mr. Giorgobiani said in an interview with the media that
government members had been able to come to an agreed view regarding
forestry reform at lat week's government session and that there were no
longer any questions on the issue, Bendukidze told the media on Monday
November 22, 2004 that `it seems Mr. Bidzina has forgotten that he is
working at the government.'

`The government has not yet made any decision with regard to forestry
reform. When Mr. Giorgobiani talks about the `government view', he means
the view of him and his deputy,' the minister said.

`The forestry department is a part of government and it is the
government which is responsible for making decisions on this issue,' the
minister added.

Mr. Bendukidze says that the position of his ministry is to be maximally
careful in creating new state owned enterprise with new functions, such
as looking after the forests.

`As a rule, state owned enterprises are badly managed and a source of
corruption. If we want to create a joint stock or limited company
someone should write a special plan concerning its functions. Creating
some kind corporation does not mean that the problem is solved,'
Bendukidze said.

Also on Monday the minister addressed the issue of the possible transfer
of Trade Union property to the state, property that includes numerous
hotels throughout the country that are currently inhabited by IDPs.

Mr. Bendukidze said, 'There is no talk of Trade Union property being
transferred to the state. We are saying that there are very many hotels
and sanitariums in the ownership of the Trade Union, where over 11, 000
refuges are living. That is why we agreed to create a special fund that
will be called the Fund for Developing Resorts.'

According to the minister, 'the National Fund for Developing Resorts
will be charge of management the hotels and sanatoriums, developing the
tourist infrastructure and removing the refugees from these building,'
adding that some of assets under the ownership of the Trade Union will
also be included in the fund.

`The Trade Union expressed the desire to finish rehabilitating some of
these assets and the National Fund will provide funding for the
realizations of their aims,' he said.

He said that Tkhaltubo and Borjomi regions would be the main
beneficiaries from this process.

`Tskhaltubo as a resort town is `dead', as over 6000 refugees are living
in the sanatoriums located there. We should do something with regard to
these people. So we are moving to a new mechanism of managing the
property and we have also offered this to the Trade Union,' said Mr.


Source: RIA Novosti, November 29, 2004

ExxonMobil subsidiary, Exxon Azerbaijan Ltd., has made a deal with the
Azerbaijanian Azpetrol Holding on shipping part of its oil from Azeri
and Guneshli (Azerbaijan) deposits via Georgian seaports.

Novosti-Georgia reports with reference to a press release of the US
Company that according to the agreement, oil is to be shipped along the
Baku-Batumi (Georgia) railway in the amount of ten million tons during
five years.

Despite being a participant in the project to develop sea oil deposits
Azeri-Chyrag-Guneshli, ExxonMobil at a time did not find it necessary to
become a shareholder in BTC Co. that builds the Baku-Tbilisi-Ceyhan
pipeline. For this reason, ExxonMobil is considering all possible
options for exporting oil from Azerbaijan, including the northern
(Russian) route of the Baku-Novorossiisk oil pipeline.

Oil pumping through the BTC pipeline will cost $3-odd per barrel on the
average. But these tariffs will only be applicable to the companies that
participated in constructing and financing the oil pipeline as
shareholders of the BTC company. Other companies wishing to transport
their oil through BTC will have to pay more.

Azpetrol Holding shipped over 15 million metric tons of oil and oil
products via the South-Caucasus transport corridor when it began
operating (2001). In 2003 alone, this company transported 4,045,656
metric tons of oil and oil products along the Baku-Batumi route.


Source: http://www.hetq.am/eng/photostory/, November 24, 2004

Members of Parliament Gagik Tsarukyan and Levon Sargisyan, Head of the
State Customs Department Armen Avetisyan, and Deputy Head of the State
Police Department Armen Yeritsyan have all built houses in the
recreation areas and forest reserves of Tsaghkadzor.

How did these men build their villas? Gagik Tsarukyan, one of the
richest men in Armenia, began illegal construction work in the resort
town of Tsaghkadzor during the 2003 parliamentary elections. Both the
municipal administration and the law enforcement agencies knew about
this, but neither did anything to stop it. At the same time Tsarukyan
was unlawfully building his two houses, he was also campaigning for a
seat in Armenia 's legislature.

But now, said the mayor of Tsaghkadzor, Garun Mirzoyan, the buildings
"have been legalized in accordance with Armenia 's Law on the
Legalization of Unauthorized Constructions. Some time ago an
unauthorized building was constructed; we legalized the construction,
transferring quite a large amount of money to the state budget. The
territory amounts to 1.4 hectares. Both buildings were legalized in the
name of Gagik Tsarukyan, based on his written applications."

I asked the mayor if there had been any discussions with community
members, any public hearings conducted prior to the legalization. "There
is no such provisions in this law. What were we supposed to discuss
after the houses had been built?" he answered. "[Tsarukyan] had built
the houses, and appealed to the State Cadastre to legalize the
construction. Naturally, since the State Cadastre didn't have the
necessary documents it applied to the Mayor's Office asking us to pass a
decision on legalizing the construction. Thus there was no point in
discussing the matter with the community," Mayor Mirzoyan explained.

The mayor said Tsarukyan's buildings had been legalized in mid-2003, at
a price of 2,000 drams per square meter of construction, plus the
cadastre value of the land. "Mr. Tsarukyan paid about 15 million drams,"
he added.

The truth is the Mayor's Office was in a position to turn down
Tsarukyan's request, or to oblige him to pull down one or both of the
illegal buildings. But instead, "We found it appropriate and legalized
the construction," Mayor Mirzoyan told us. The Mayor's Office did not
risk opposing Gagik Tsarukyan. They say there's only one man in Armenia
who can - the president of the republic. They also say that Tsarukyan
built one of the houses for a certain senior official. Just who that
official is, time will tell.

"The forests of Tsaghkadzor are situated on steep slopes, 45 degrees
minimum, and are of great value from the perspective of preserving the
land and regulating the flow of water," Srbuhi Harutiunyan, the chairman
of the Social Ecological Association, explained. "According to the
forest cadastre, these forests have defensive significance. Because of
the construction work in the Tsaghkadzor forests, the integrity of the
forest has been violated, the specific composition has suffered, and the
functions of the land have been impaired."

"According to municipal zoning, two-thirds of the land in Tsaghkadzor is
for recreational use," Mirzoyan said. In reality, half of this land is
already occupied by constructions. According to Article 22 of the Land
Code of Armenia, any activity impeding the intended use of recreation
land is forbidden. Construction work in Tsaghkadzor deprives the people
of Armenia of an unspoiled vacation area and damages the forests on the
steep slopes.

The mayor justifies what's going on by saying that the building is only
taking place in areas that used to accommodate camps. But that's not
true. Furthermore, talking with the people who live here, I found out
that they had not been informed about the planned changes that would
affect their lives. "In fact, the Kotayk Governor's office and
Tsaghkadzor Mayor's office failed to inform the public in advance, as
they are required to do by Articles 13 and 14 of the Law on Town
Planning and by the October 28, 1998 Government Decision # 660," Srbuhi
Harutiunyan said.

If every parliament member, government member, judges and or prosecutor
decides to build a villa in the forests of Tsaghkadzor, who will stop
them? Unfortunately, no one. The construction work keeps going on.


Source: Radio Free Europe, Czech republic, November 25, 2004

Economic growth in Armenia, which hit a double-digit rate last year,
will slow down in the coming years but will remain strong in relative
terms, Finance and Economy Minister Vartan Khachatrian predicted on

Khachatrian said the country's Gross Domestic Product is on course to
expand by up to 11 percent this year and 8 percent in 2005, down from 13
percent reported by the government in 2003. Official figures put GDP
growth in the first nine months of 2004 at 10.3 percent.

"There is a tendency of [growth rate] decrease and that is natural. The
greater the economic base, the slower its further growth," Khachatrian
told RFE/RL.

"Many countries and organizations hold up Armenia as an example," he
added. That is especially true for the World Bank and the International
Monetary Fund that have praised the country's macroeconomic performance,
rewarding its government with more multimillion-dollar loans. The World
Bank described that performance as "exemplary" in a statement last week.

The key question arising from the rosy macroeconomic data is their
impact on still low living standards. Many local and foreign economists
believe that the growth has mostly benefited a small number of wealthy
Armenians that continue to routinely evade taxes.

But Khachatrian repeated the government view that the benefits are
beginning to trickle down. "The poorest section of the population may
still not be happy but it does feel change," he claimed.

According to official statistics made available to RFE/RL in September,
the proportion of Armenians living below the official poverty line fell
from 49.7 percent to 42.9 percent in the course of last year. They also
showed the rate of "extreme poverty" tumbling from 13 percent to 7
percent during the same period.

The credibility of the latter figure, based on household income surveys
by the National Statistical Service, was seriously questioned on
Wednesday by Hranush Kharatian, a prominent sociologists and the head of
a government department on minority affairs. "I think most experts find
this figure extremely suspicious," she said. "If I'm not mistaken, even
the Finance Ministry has asked for a repeat of that survey."

Other experts say that the official poverty line is set too low.

Caucasus Environmental NGO Network (CENN)

Tel: ++995 32 92 39 46
Fax: ++995 32 92 39 47
E-mail: [email protected]
URL: www.cenn.org