When the presses were talking about how we (“we” is open to interpretation) were going to sell the Hrazdan Electricity 5th block and one part of the Iranian-Armenian gas pipeline to the Russians in exchange for the low gas price, Armenian authorities advised them not to get ahead of themselves.
This was just rumor, but unfortunately, these kinds of rumors become reality.
“The people don’t have to panic; the gas price will only go up by 15-20%,” said the president of Armenia during an interview with “HyeLur” yesterday.
So, what should we do now-jump for joy? Apparently, this was “good news”. In other words, citizens will have to pay 65-70 AMD per cubic meter instead of the current 59 and fixed 90.
Let’s look at it more logically. It’s already clear that the Armenian side is going to pay 110 dollars to “GazProm” for 1 cubic meter of gas starting from April 1. “ArmRusGazard” was the one who officially declared this. Basically, the 110 dollars is fixed and isn’t going to change anytime soon. So, what we are dealing with are other issues.
In the end of 2005, when the Prime Minister of Russia Fradkov was in Armenia and announced that the Russian side is interested in purchasing the Hrazdan Electricity station’s 5th block, the Minister of Energy Armen Movsisyan gave him the answer, which is the following: there can no longer be any issues concerning the 5th block of the electricity station because it has been sold to the “Samir” company. But just two weeks ago the minister of energy declared that the owner of the block would be decided through a contest between “Samir” and “GazProm”. “168 Hours” had touched upon this and wrote that the final result would benefit the Russian side.
Robert Kocharyan also commented on that during his visit to the “ArmRusGazard”.
“It only took a matter of time for us to realize that it was right to keep “ArmRusGazard” in the gas sector,” said the president and hopes that future joint projects will reach success. Just what are those “joint projects”? One of them, of course, is the 5th energy block.
“With the help of the Russian side, the block will be updated,” said Mr. Kocharyan.
Armenian authorities also assured that the word “contest” is a fake. Everything was decided by the Armenian and Russian sides.
It’s like all Robert Kocharyan wanted to do in his 10 minute speech was to tell the people the news: Armenia gave the 5th energy block to the Russians…
He didn’t make that announcement officially, but the president did say that the “problem had been solved” and the government had been assigned to take care of the assortment of some documents.
The important thing is that that “solution” was considered to be based on national interests and one of the greatest achievements. However, the Russians had talked about such a “solution” a while back. A couple of months ago, “GazProm” representative Dennis Ignateyev had announced that Armenia can pay much less for gas if it agrees on some conditions. The conditions were the following: the 5th energy block and the Iranian-Armenian gas pipeline.
It’s clear that the decision had been made a long time ago and was being postponed in order to convince the political parties. Recently, the authorities have started to go along with the compromise variant. For example, chairman of the National Assembly Artur Baghdasaryan, who is currently criticizing the reforms made in the “law on energy” (which does away with the state’s monopoly on the energy sector), said the following a couple of days ago:
“We will accept any decision.” Of course, he added that it would be based on whether or not it hurts Armenia’s interests and security. The National Assembly chairman had proposed waiting a couple of days and giving new evaluations. What’s interesting is just what evaluation he will give. Is he going to go against the authorities, or is he going to announce that this decision doesn’t hurt Armenia’s interests?
Basically, the predictions were right. As economist Edward Aghajanov said (last night at 9 p.m. on “HyeLur”): “These authorities are capable of anything. It has turned into some kind of habit for them.”
What does it mean to give something to Russia in exchange for the low gas price?
“This means that Armenia is slowly yet surely losing its independence and is turning into a country under the control of Russia,” says the economist.
He is certain that the Russians could fix the gas price at 80 dollars without any compromises and that would give Armenia a 25% yearly income (34 million dollars). “GazProm” would even benefit from a fixed 70 dollars, but why refuse extra money when you can get something for it? Mr. Aghajanov has the answer to that question. According to him, Armenia and Russia are strategic allies. After all, it is thanks to that strategic alliance that Armenia is paying for Russia’s military troops. It is that same strategic “alliance” that is making the Iranian-Armenian gas pipeline, which is 1.5 meters in diameter, shrink down two-fold, depriving Armenia of the opportunity to get transit gas. Based on Aghajanov’s calculations, Armenia could have received 150 million dollars yearly from the Iranian gas transit and the country is letting go of that opportunity due to the pressure of the ally country. So, what do we get in the end? The Russians first ordered us to construct a gas pipeline 700 mm in diameter instead of the 1.5 meters, and now they want full control of it without even considering the risk factor of competition.
Apparently, this is the question: What’s more profitable for Armenia-(from the long-term strategy perspective)- pay 110 dollars for gas and keep Armenia’s property, or pay less for 2-3 years until the Russians get all they want from us? If the authorities really trusted the head of the Central Bank of Armenia, when he said that the gas price increase would only affect the consumer basket by 1%, then they could have adapted to the changes just like Georgia did. Besides, giving something in exchange doesn’t solve the issue completely. As one of the top representatives of “GazProm” D. Medvedeyev said recently, the fixed 110 dollars is not the final price for Armenia and Georgia and it can go higher in the near future. What are we going to do then? These are some of the questions which should have been discussed on a wider spectrum and with specialists, rather than have a couple of people make the decision.
If you recall, just two months ago, on January 13, 2006 to be more exact, Prime Minister of Armenia Andranik Markaryan was saying exactly what the political figures against the compromise variant are saying now. During an interview given to “Azatutyun” agency, in response to the question as to whether or not it was possible for Armenia to give something to Russia in exchange for the low gas price, the prime minister had said:
“To be honest with you, we don’t have any extra resources to give. If we go ahead and give everything; that will only take one year and won’t solve anything.”
So what changed his mind? “168 Hours” asked press speaker of the government Mary Harutyunyan who replied:
“It’s not right to jump to conclusions when nothing is decided yet. When we get the final decision, then we can come up with answers.”
Robert Kocharyan forgot to discuss the gas pipeline yesterday during his interview. Perhaps the ministers will remember that. All we can remember now is Robert Kocharyan’s speech. What do the people of a country call someone who doesn’t keep his word? I’m sure it’s a bad word…