Epress.am News from Armenia
The Armenian government is preparing for a new scandal concerning Nairit rubber plant, the fate of which is increasingly murky, reports local daily Haykakan Zhamanak. In September 2013, it was announced that Russian company Rosneft expressed interest in the plant. It was said that the company would build a “New Nairit” in place of the old.
Rosneft spoke about operating Nairit on September 3, the day Armenian President Serzh Sargsyan declared Armenia's accession to the Customs Union. “That is, Rosneft was waiting for Serzh Sargsyan to decide on Armenia joining the Customs Union so that it could announce it would be operating Nairit. It follows from this that this won't be an economic, but a political transaction. Rosneft will operate Nairit in exchange for Armenia's joining the Customs Union,” reports the paper.
The newspaper notes, however, that negotiations with Rosneft have stalled and no agreement has yet been reached.
Sources at the RA Ministry of Energy and Natural Resources informed the newspaper that negotiations are not moving forward because the parties cannot agree on arrangements for repaying the debts accumulated by the plant.
At the end of May, Nairit's gross debt was $400 million, which accummulates interest daily and is payable to specific organizations. None of the creditors are preparing to forgive the debt.
It should be noted that every month Armenian banks provide loans to Nairit in exchange for budgetary guarantees provided by the Armenian government. That is, if the plant doesn't pay the debt, it will fall on Armenia's state budget, and consequently, it will become a national debt.
According to Haykakan Zhamanak, about half a billion dollars is necessary to operate Nairit. If Rosneft takes this on, then the program cost may exceed $700 million. That is, more than $1 billion is necessary to pay Nairit's debts and operate it.
“It will be very logical if Rosneft steps back from the one-billion-dollar headache that is Nairit,” reports the paper, adding that if this happens, it can be assumed that Nairit's “song has been sung,” as no other company is showing interest in the plant.