The Russian Foreign Ministry has accused the Western countries of pressuring the Armenian leadership over the concession of the South Caucasus Railway (SCR), demanding the removal of the “Russian factor” in exchange for what Moscow describes as “promised multimillion-dollar investments.”
The Russian Foreign Ministry told TASS the issue had recently been discussed on the sidelines of a meeting of the Eurasian Intergovernmental Council in Cholpon-Ata on August 6–7, where Russian Deputy Prime Minister Alexey Overchuk provided detailed comments on the matter. The ministry also referred to remarks by Russian Economic Development Minister Maxim Reshetnikov concerning the management of Armenia’s railway network by the Russian side.
“Given that the issue of transferring the concession to anyone had not previously been raised, there is a high degree of probability that the Armenian leadership is simply being blackmailed,” the Russian Foreign Ministry said.
According to the ministry, Armenia is being asked to eliminate the “Russian factor” from the transport sector in exchange for multimillion-dollar investments and participation in projects whose economic viability, Moscow argued, is questionable.
The Russian Foreign Ministry characterized this as part of what it called “unfair games” by Western capitals aimed at pushing Russia out of the South Caucasus.
Moscow defends South Caucasus Railway’s record
The Russian Foreign Ministry also rejected what it described as claims that the Russian concession prevents Armenia from participating in regional logistics initiatives.
The ministry said South Caucasus Railway has “responsibly fulfilled its obligations” and invested more than 30 billion rubles, including in the modernization of rolling stock. It added that the investment schedule had been adjusted at Armenia’s request.
According to Moscow, the expertise of Russian railway specialists has helped Armenia maintain competitive advantages that now make it possible to discuss the unblocking of regional transport links.
The ministry said there was a “complete discrepancy with reality” in arguments that the Russian concession is preventing Armenia from joining new logistics initiatives.
It also called on the Armenian side to discuss existing concerns through dialogue before making public statements, particularly if Yerevan seeks to resolve the issue “in a friendly manner.”
Armenia raises possibility of arbitration
The dispute over the railway concession has intensified in recent months.
On July 30, Armenian Prime Minister Nikol Pashinyan said the Armenian government was prepared to take the issue of the operation of the country’s railways to arbitration if it could not be resolved in a friendly atmosphere. He also said Armenia could potentially seek compensation of $2 billion per year.
On the same day, Russian Railways CEO Oleg Belozerov told TASS that the company intended to adhere to the terms of the railway concession agreement with Armenia. However, he said that if the terms were changed or the concession were terminated at Armenia’s initiative, the Russian side could expect its investments to be returned.
South Caucasus Railway concession
The concession agreement between Russian Railways and Armenia was signed in Yerevan in February 2008, transferring the management of Armenia’s railway system to South Caucasus Railway.
The agreement provides for a 30-year concession, with the possibility of extending it for another 10 years after the first 20 years, subject to mutual consent.