Monday, January 13 2014

All the issues connected with the latest gas agreement of Armenia and Russia can be divided into 3 parts: concealment of the real gas price that has led to a 300 million debt ($), the sale of Armenia's 20% share in ArmRusgasprom, and the exclusive conditions of monopoly activity till
2043 under the above agreement. Robert Kocharyan, the second president of Armenia, made such statement in an interview with 2rd.am news portal.

Robert Kocharyan sees no logic in the concealment of the real gas price from the people. "It was obvious that gas was supplied to the country for a tariff significantly exceeding the tariff for the consumers. One could see that in the customs invoices. Some media outlets have even publish relevant items about it. It was clear from the very beginning that the government would not avoid undesirable explanations, as the legislation will not allow them to neglect the parliament. They probably hoped to reach an agreement with Gazprom on some different schemes, but failed. In fact, the government found itself in a very unpleasant situation that has seriously damaged its reputation," Robert Kocharyan said.

The second president thinks that the government's efforts to explain the situation in the parliament were extremely unconvincing and uncertain.
"It would be easier to apologize.  Even part of the pro-governmental parliamentarians voted for the agreement with evident confusion.  This seriously affected the public perception of the agreement and its legality. The public used to see unprincipled politicians, but such evident low cunning of the government in public is, at least, shocking. Unfortunately, public in Armenia has never very much trusted in the government institutions (except army).

However, that incident has finally ruined the public trust. I am sure that the government should have informed the people of the increasing gas price and the government's efforts to settle the problem from the very beginning.  "

As for the sale of the last 20% share in ArmRusgasprom, Kocharyan believes that it has made the government just an observer at the meetings of the Board of Directors. It is not so pleasant to lose influence, but it happened within the business logic. Speaking of the exclusive rights provided to the natural monopoly for 2043, Kocharyan call the given provision of the agreement rather vulnerable.
"I have made useless efforts to find similar examples of agreements on natural monopolies in the world practice.  Maybe I have made insufficient efforts or searched in the wrong continent or in the wrong period.  Nevertheless, all this is happening amid dynamic changes in the global oil and gas industry and, generally, in the energy field. The country's energy may fall hostage to that agreement. Look at what happened to ArmenTel.  Now, everything is even more serious.

That agreement has made the government of Armenia an observer not only at the Board of Directors, but also in its own gas policy," the second president said. He recalled his own 10-year-long experience of fruitful cooperation with Gazprom that resulted in large-scale development of the gas infrastructures in Armenia, extension of gasholders, construction of the 5th power unit of the Hrazdan HPP, Iran-Armenia gas pipeline and finally, the 10-year sustainable gas supply to Armenia for a favorable price. He said that Gazprom has never set such conditions despite millions dollars of investments in economy of Armenia.

"So, why this has happened now? I do not know. No explanations have been made," Kocharyan said.