Armenian anti-trust watchdog to assess efficiency of investments by South Caucasus Railway
24.03.2015,
20:59
Armenia’s State Commission for Protection of Economic Competition is conducting a study to see how efficient investments by the South Caucasus Railway were, the head of the commission Artak Shaboyan said in the parliament on Monday.
YEREVAN, March 24. /ARKA/. Armenia’s State Commission for Protection of Economic Competition is conducting a study to see how efficient investments by the South Caucasus Railway were, the head of the commission Artak Shaboyan said in the parliament on Monday.
The study carried out by the commission in 2014 indicate 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 growth of investments, Shaboyan said.
Shaboyan reminded that On March 13, 2015, the regulator reprimanded the company for violations found.
The Commission has found cases of unjustified price increases in the last three years and has considered the pricing calculations, Shaboyan said. In particular, according to the regulator, the South Caucasus Railway has periodically raised freight transportation tariffs since 2011. During 2011-2014, prices rose from 5 to 17% for national transportation and up to 17% for international freight shipping.
Earlier reports said the company’ expenditures were not always considered in the tariff increase In particular, in 2012 the company’s expenses per ton-kilometer rose by 5.4% against 2011, as compared to 4.8% increase in tariff. In 2013, expenditures rose by 2.5%, whereas tariff increased by 4.3%.
The commission has also revealed a number of violations of the laws. In particular, since 2010 the company has not been reporting and releasing information on infrastructures. The studies also showed that 95% of the company’s revenues come from transportation of cereals, oil products and ore.
Shaboyan said the commission is still to look into procurements as the company decides itself when, where and at what cost to make the procurement.
Bearing in mind the company’s current loss level, the commission decided to reprimand the company and request it to follow the antitrust laws and avoid abuses.
The commission will send the violations package to the ministry of transport and communications. The commission’s recommendations for rectifying the problems will be provided to all involved parties.
South Caucasus Railway, a subsidiary of Russian Railways, runs Armenian Railway, which was handed over to the South Caucasus Railway on February 13, 2008 for 30-year concession management with a right to prolong the management term for other 10 years. ($1 – 475.18 drams). -0-
