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Russia & CIS Business and Financial Newswire
January 16, 2008 Wednesday 1:30 PM MSK
Russian Railroads wins tender to manage Armenian Railway
MOSCOW Jan 16
Russian Railroads (RZD) (RTS: RZHD) has won the concession to manage
Armenian Railway, the national rail operator, RZD reported.
RZD was named the winner of the tender on Wednesday in Yerevan, the
company said.
"The transfer of Armenian Railway to the concession management of RZD
was one of the company's strategic goals. It will enable us to
increase the scale of the transportation business and strengthen its
competitive position on the international transportation market," RZD
President Vladimir Yakunin said.
The concession is for 30 years with the right to extend for 20 years.
The management function will be assigned to South Caucasus Railroad,
an RZD subsidiary in Armenia set up for the purpose.
Under the terms of the concession, RZD will pay the Armenian budget
an initial fee of $5 million, and annually pay 2% of Armenian Railway
revenue, excluding revenue from passenger services. RZD will acquire
all of Armenian Railway's rolling stock.
RZD plans to invest about $400 million in Armenia's railway
infrastructure over 30 years, according to the preliminary investment
plan. It also plans to invest roughly $170 to upgrade rolling stock.
RZD will serve as the guarantor for the investment.
RZD and South Caucasus Railroad are expected to sign an agreement
with the Armenian government in February 2008. They will then draft a
detailed investment program and form the management system. The
concessionaire expects to begin operations from the second half of
2008.
The Armenian Transportation and Communications Ministry announced the
tender on concession management of Armenian Railway on October 15,
2007. India's railways also qualified to participate in the tender,
but withdrew during the process of drawing up the tender
documentation.
January 16, 2008 Wednesday 1:30 PM MSK
Russian Railroads wins tender to manage Armenian Railway
MOSCOW Jan 16
Russian Railroads (RZD) (RTS: RZHD) has won the concession to manage
Armenian Railway, the national rail operator, RZD reported.
RZD was named the winner of the tender on Wednesday in Yerevan, the
company said.
"The transfer of Armenian Railway to the concession management of RZD
was one of the company's strategic goals. It will enable us to
increase the scale of the transportation business and strengthen its
competitive position on the international transportation market," RZD
President Vladimir Yakunin said.
The concession is for 30 years with the right to extend for 20 years.
The management function will be assigned to South Caucasus Railroad,
an RZD subsidiary in Armenia set up for the purpose.
Under the terms of the concession, RZD will pay the Armenian budget
an initial fee of $5 million, and annually pay 2% of Armenian Railway
revenue, excluding revenue from passenger services. RZD will acquire
all of Armenian Railway's rolling stock.
RZD plans to invest about $400 million in Armenia's railway
infrastructure over 30 years, according to the preliminary investment
plan. It also plans to invest roughly $170 to upgrade rolling stock.
RZD will serve as the guarantor for the investment.
RZD and South Caucasus Railroad are expected to sign an agreement
with the Armenian government in February 2008. They will then draft a
detailed investment program and form the management system. The
concessionaire expects to begin operations from the second half of
2008.
The Armenian Transportation and Communications Ministry announced the
tender on concession management of Armenian Railway on October 15,
2007. India's railways also qualified to participate in the tender,
but withdrew during the process of drawing up the tender
documentation.