Azernews.Az

By Abdul Kerimkhanov

Relations between Armenia and Russia are becoming more complex and difficult every day after the velvet revolution.

Russia wants to terminate the concession agreement with the South Caucasus Railways (SCR). Currently, investigation into cases involving the SCR are ongoing in the investigative bodies of Armenia, the volumes of the company's investments are being studied, and interviews with employees are being held.

In particular, there was revealed a fact of VAT non-payment worth 9.7 million drams ($20.000).

The agreement on the transfer of Armenian railways to the concession of the SCR company, daughter of Russian Railways, noted that if the company does not fulfill its obligations properly, the Russian side is obliged to pay the full amount "not exceeding $57 million drams ($117,000)".

Armenia's insistence to prove the guilt of a Russian company has a clear objective -- to receive large payments from Russian Railways.

But, as in all its steps, the new government of Armenia does not think about the consequences, which can be very deplorable for the Armenian economy, and in particular the sphere of railway transportation.

Economist Karlen Khachatryan said if SCR terminates the concession agreement, it will have certain negative consequences for the Armenian economy, adding that the results will be obvious in just a few months.

Khachatryan stressed that if SCR abandons the contract, the government should strive to transfer the company to concession management under better conditions.

‘’But it is difficult for the government to imagine that any foreign company would agree to enter the Armenian market. The reason for the deterioration of railway infrastructures, including rails, which is an obstacle in terms of market attractiveness,’ said the economist.

Blame against Russian companies, including SCR, began to sound almost immediately after the April coup. Another reason was that the company did not pay taxes in the total amount of $20,000. Such a small amount caused bewilderment and made many people talk about targeted pressure on the SCR.

The question again became relevant in an even more rigid form in December 2018.

The Investigation Committee stated that in the framework of the criminal case, inspections are being carried out to clarify all the circumstances of the abuses recorded in SCR, identifying the circle of persons involved and identifying their actions.

In turn, the company announced its intention to go to court if the accusations against it become official.

Commenting on the issue, Andrei Babko, Trade Representative of Russia in Armenia said that there is noise around RSC but no confirmation.

‘‘Only after a court decision, we can talk about guilt. When done the other way around, it scares everyone’’, Babko concluded.

Current Armenian authorities, violating the presumption of innocence, provoke legal processes against RSC. Therefore, it is not surprising that due to this situation, Russia will reduce investments in this country.

In the end, the situation around RSC hurts the already worsened Armenian-Russian relations.

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Abdul Kerimkhanov is AzerNews’ staff journalist, follow him on Twitter: @AbdulKerim94

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