On 2 September, the Russian Ministry of Transport stated that it had resolved disagreements with the Armenian Ministry of territorial Administration and Infrastructure regarding the operation of the South Caucasus Railway company (SCR), reported arka.am. The protocol, which would end the disagreements between Armenia and Russia on the issue, was signed by Russia’s Deputy Minister of Transport Vladimir Tokarev and Armenia’s Deputy Minister of Territorial Administration and Infrastructures Armen Simonyan.  

According to the protocol, both sides agreed with the findings of independent audits of the SCR carried out over the entire period of  the concession agreement concluded in 2008. The SCR also confirmed the complete fulfilment of its investment obligations and, as a result, the absence of claims from the parties.

“Despite the current restrictive measures imposed to stop the spread of the coronavirus infection, the financial and a number of other performance indicators of the SCR continue to grow. This allows us to positively assess the prospects for our further joint work. The signing of the protocol plays an important role in solving a number of tasks facing the SCR, including both an increase in the volume of transportation of goods and passengers and the renewal of railway rolling stock,” the statement of Russia’s transport ministry emphasized.

For reminder, on 23 September 2019, the Russian RTVI reported through a source familiar with the process of negotiations between Armenia and the Russian Railways state corporation, that Russia is planning to breach the contract signed in 2008 on concession management of Armenian railways due to Armenia’s investigation of the SCR. SCR allegedly received concessions over 10 years in the country with the value of investments worth around $226.8 million (Caucasus Watch reported).  

The Government of Armenia signed an agreement in 2008 to transfer 100% of the state-owned Armenian Railways to Russian Railways. According to the agreement, the concession period is 30 years, with a possible extension for another 10 years by mutual agreement of both parties. South Caucasus Railway is among the five largest companies of Armenia, and its performance has a direct impact on the country's economic growth.