South Caucasus Railway (SCR) CJSC (subsidiary of Russian Railways) is a public company and the high attention of the state administrative bodies to it is natural, Viktor Rebets, SCR CEO, told ArmInfo when commenting the Monday statement by the anti- monopoly watchdog of Armenia Artak Shaboyan who suggested a survey in the SCR's investments.
Viktor Rebets said SCR has invested over 100 billion drams (over $210 million) in the railway infrastructure development in Armenia over the last 6 years. For instance, the bridges built yet in the 19th century and the locomotive depot in Gyumri have been modernized and now meet the international standards. All these investments will develop the economy of Armenia and ensure safe railway traffic. The car turn-around halved, the service weight was increased 1.5-fold, with the train speed growing 1.5-fold. These technical features show the efficiency of investments. The investments were necessary and they did not affect cost of the services, as the funds were provided by the Russian Railways OJSC, the majority shareholder. "Such high investments could not be raised from he economy of Armenia," Rebets said.
Artak Shaboyan, the head of Armenia's State Commission for Protection of Economic Competition said in the Parliament, Monday, that the Commission's survey in 2014 revealed that along with investments of 91 billion drams as per the concession agreement, the company has an accumulated loss of 9.3 billion drams, which means losses increase along with investments.
The anti-monopoly watchdog recalled that On March 13, 2015, the regulator reprimanded the company for unjustified price increases in the last three years. In particular, according to the regulator, the South Caucasus Railway has regularly increased the freight transportation tariffs since 2011. During 2011-2014, prices rose from 5% to 17% for national transportation and up to 17% for international freight activity.
Shaboyan said the Commission is yet look into the procurements procedures of the company, as the latter decides on its own when, where and at what price to make the procurement. Considering that the Company has big accumulated losses, the Commission adopted a decision to reprimand the Company and demand it to follow the anti-monopoly laws and avoid abuses. The package of the Company's violations will be submitted to the Ministry of Transport and Communications. In addition, the Commission will provide its recommendations on how to correct the situation to all the parties concerned.
CJSC "South Caucasian Railway" is a 100% subsidiary of JSC "Russian Railways" and provides concession management of Armenian railroads. CJSC "Armenian Railways" was referred to the concession management to the company "SCR" according to the Concession Agreement signed on February 13, 2008. The term of the concession management is 30 years with possible extension for another 10 years