Dec 22, 2009

YEREVAN, December 22, /ARKA/. An Armenian parliament committee on
economic issues will convene a series of parliamentary hearings next
year to discuss the concessional management of Armenian railroads.

Committee chairman, Vartan Ayvazian, said it will organize three
hearings next year to look into whether the South Caucasus Railways
company that was granted the concessional management of the railroads,
is meeting its investment commitments, what it has done to improve
the state and management of the railroads.

Speaking at a Monday news conference Vartan Ayvazian said the Couth
Caucasus Railway has already failed to meet some of its commitments.

He said the company had committed to reform the system and
particularly, to increase the speed of trains.

Vartan Ayvazian said the committee had already discussed the operation
of the company together with its representatives. According to him,
the Armenian side has also failed to meet some of its obligations,
relating, particularly, to handing the rolling stock.

He said the hearings will be centered on how the company implements
procurements and on its investments.

In 2007 the Armenian government called tenders for a 30-year concession
to modernize and operate Armenian Railways. An Indian RITES and Russian
Railways qualified to bid, but the Indian company withdrew. The Russian
Railways was the only bidder and has set up South Caucasian Railway as
a sub diary to run the Armenian Railway. On the 1st of June 2008 South
Caucasus Railways (SCR) has officially started business operations
under a concession agreement to manage Armenian Railways. In this
connection, by 1 June 2008, SCR, a wholly-owned subsidiary of Russian
Railways, received property owned by Armenian Railways consisting
of 2,000 freight cars, 58 passenger coaches, 85 locomotives and 30
electric trains. The concession agreement was concluded for 30 years,
with a right of extension for another 20 years after the first 20
years of operation.