Audit of Nairirt Plant is completed: results are unpromising

 World Bank has a very rich experience in audit of big enterprises, Deputy Minister of Energy and Natural Resources Ara Simonyan said in the parliament in response to the question by Levon Zurabyan, member of the Armenian National Congress Party Faction in the Parliament, about the reason why the WB was entrusted with the audit.  

In addition, the deputy minister said, the audit required financing. Therefore, negotiations were held with the WB over the issue, given the high importance of the Nairit Plant and the social and economic situation around it. The audit that was conducted by the British subsidiary of JACOBS Company, U.S., is over.  This company had earlier conducted two audits at the request of Russian Itera and Rosneft companies.  JACOBS is an authoritative audit company, Simonyan said.  He said if a European company was selected for the audit at the Plant, there could be a conflict of interests.  Simonyan said the Russian and Iranian companies were interested in reactivation of the Plant, but their projects were not implemented due to transport problems.  

Earlier today, a group of former employees of the Nairit Plant gathered outside the Parliament building demanding their salaries.  

On May 13, Minister of Energy and Natural Resources of Armenia Yervand Zakharyan said reactivation of the Nairit Plant is not expedient by preliminary estimates of the World Bank. He said to reactivate the Plant at least $250 million are needed. In addition, he said, it is not clear if the Plant's production will be competitive on the world market. The minister recalled the heavy financial situation of the Plant that has been idling for already 4 years. The arrears of wages have reached 5.7 billion drams, exclusive of social payments and income tax.  1,700 employees of Nairit Plant were fired on Feb 6. A total of 478 employees remain at the Plant now.  
The wages for another month have been paid recently, with the total arrears to be liquidated till the end of the year.  Following intensive talks with Interstatebank - the bank provided a loan for development of the Plant - an agreement was reach to unpledge the property of the Plant within the coming 2-3 days.  Afterwards, the property of the plant will be transferred to the Government. 

Nairit Plant has been idle since April 2010. The Plant's shares were given as security against the CIS InterStateBank's 70 mln USD loan provided in 2006 for 5 years - till late Dec 2011 - at 12.5% p.a. In 2006, 90% of Nairit Plant's shares were sold to Rhinoville Property Limited (UK). The latter owns an 89,999% stake in the plant, Armenian Ministry of Energy and Natural Resources - 4,496%, Gazprom Armenia CJSC (previously ArmRusgasprom) - 3,596%, and Yerevan Thermal Power Plant - 1,907%.