OREANDA-NEWS. On February 13, 2008 the concession agreement was signed by Vladimir Yakunin, President of Russian Railways, and Andranik Manukyan, Minister of Transport and Communication of Armenia, reported the press-centre of Russian Railways.

According to the agreement, the concessionary period is 30 years, with the right to prolong for another 20 years after the first 20 years of operation. South Caucasus Railways, a wholly-owned subsidiary of Russian Railways specially created for this contract in Armenia, will assume the management of Armenian Railways.

Under the contract, Russian Railways will pay the Armenian Government an initial contribution of USD5 million and 2% per annum of the revenues (excluding revenues from passenger transport). In addition, the concessionaire will acquire Armenia’s entire rolling stock.

The preliminary investment plan provides for Russian Railways to commit about USD400 million over the 30 years to the development of Armenia’s rail infrastructure. It is also planned to invest some USD170 million to upgrade rolling stock. Russian Railways is guaranteeing the investment.

The concessionaire is expected to begin operations in the second half of 2008.