New Armenian government annuls 'unfavourable' agreements concluded by previous government

Armenia’s new government, formed by Prime Minister Nikol Pashinyan, is studying and verifying the activities of the previous government and is annulling agreements it deems to be ‘unfavourable’. Of particular interest is the energy sector. It was announced today that the High Voltage Electric Networks of Armenia company will no longer be managed by the Tashir Group of Companies, which is owned by Samvel Karapetyan, a Russian businessman of Armenian origin.

The previous authorities had appointed the Tashir Group of Companies to manage Armenia’s high-voltage electricity grids for a period of five-years.

The High Voltage Electric Networks company is one of the main links in Armenia’s energy system and is crucial to the country. It receives electricity from producers and transmits it Electric Networks of Armenia, which distributes it to consumers.

The former Minister of Energy, with whom the deal was concluded, had said that transferring the management of the power grids to that of the Tashir Group of Companies will bring a number of advantages. In particular, it was about optimizing expenditures as well as investments in this area.

Meanwhile, Artur Grigoryan, the newly appointed Minister of Energy Infrastructures and Natural Resources, has stated that some points of the agreement do not meet the interests of Armenia.

Vage Davtyan, an expert, believes that this deal had risks and led to the monopolization of the energy sector:

“There were certain risks for Armenia’s energy security there. Prime Minister Nikol Pashinyan has made several statements, from which it can be concluded that the new government will try to pursue an energy policy which would be based on national interests.”

Davtyan believes that this company, having taken the position of a monopolist, would become the one dictating prices. Now, after the termination of the deal and liberalization of the market, it will be possible to revise the electricity prices in Armenia as well.

Along with this expert position, an official statement has been voiced that the possibility of reducing tariffs for gas and electricity is being considered in Armenia. However, it is noted that this is not connected to the termination of the contract with the Tashir Group of Companies.

Grigoryan said that the issue is only being discussed, and this does not yet mean that tariffs for gas and electricity will decrease.

The fact that the issue was being studied has also been confirmed by the Public Services Regulatory Commission, where the tariffs will be revised. Mikael Soghomonyan, the Deputy Chairman of the Commission, said that although the issue is being actively discussed, it is still difficult to say whether or not tariffs could be reduced and by what amount.

Mikael Melkumyan, the Vice-Speaker of the National Assembly of Armenia, suggested discussing the issue at a parliamentary meeting:

“The society, lacking information, often accuses the authorities for not reducing or at least not letting the tarriffs increase, having enough resources to do it. So the current discussions should have a clear message. As a result of this discussion, we should reduce tarrifs for electricity or gas, if possible. And if it is not possible, we will clearly say why they can not be reduced.“