Engineers were demanding higher salaries, and after three days managed to receive certain concessions" />

Railroad workers stop strike in Armenia: train movement restored

Engineers were demanding higher salaries, and after three days managed to receive certain concessions

Armenia, strike, SCR, Russian Railways

In Armenia, after a three-day collapse of the railroad, the work of the railways has been restored. The leadership of the South Caucasian Railways made certain concessions on the issue of raising salaries.

South Caucasus Railways is a 100 percent subsidiary of Russian Railways.  Since the beginning of 2008, Armenia signed a concession agreement on the transfer of the state-owned closed joint-stock company Armenian Railway to the management of Russian Railways.

The concession agreement entailed the reconstruction of the state-owned enterprise at the expense of the investor, and the investor company was to operate the enterprise and earn income, of course, paying taxes to the state.

Engineers of the locomotive depot in Gyumri, the second city in Armenia, demanded a 30 percent increase in salaries.

Due to the strike of railway workers, the movement of trains was completely stopped from October 22, including the transportation of oil products and grain.

Armenia exports these products, and supply disruptions could lead to severe fines.

The leadership of the Russian Railways met with striking railway workers on the third day of the strike.

After the meeting, the company’s management distributed a message saying: the volume of freight and passenger traffic for nine months of 2019 increased significantly, and this allows the South Caucasus Railways to raise the salaries of drivers by an average of 19 percent.

At the same time, due to downtime, the company lost a profit of 140 million drams (approximately 290 thousand dollars).  This means that it will be difficult for the company to fulfill annual plans, which, in turn, casts doubt on the increase in salaries of all employees.

However, at the end of the meeting, a decision was made:

• to develop a normative act on indexation of 10 percent of the salaries of all employees from November 1, 2019,

• to submit to the board of directors the issue of increasing the hourly pay of locomotive brigades by five percent starting January 2020,

• Considering the positive results of the company’s work, provide for the payment of bonuses to all employees.

The same message states that the salaries of train drivers in 2019 have already increased and amounted to 354,000 drams (about $740).  And the ratio of wages of locomotive drivers to the average wage in Armenia is 198.6%, that is, railway workers are paid almost twice as high.

Russian Railways may leave Armenia

The strike of the railway workers is not the only intrigue surrounding Russian Railways in Armenia.

One month ago, Russian media reported that the company was preparing to break off its contract with the Armenian authorities. Although the term for transferring the Armenian railways to the concession management of Russian Railways is 30 years, that is, there are another 19 years to go.

It was reported that the reason for this decision is the fact that Armenia allegedly is ‘hindering the work of the South Caucasus Railway company.’

Presumably, this means a criminal case against SCR.  Searches on suspicion of tax evasion were held at the company’s office in August this year.

The Investigative Committee of Armenia has also opened a criminal case against the former deputy minister of transport for allegedly hiding violations revealed in the SCR.

The Investigative Committee continues to check the activities of the company of the past 10 years, checking the effectiveness of the investments promised under the contract.

By the way, the total amount of investments promised by the company was 572 million dollars, 220 of which were planned to be spent in the first five years.


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