Armenia Names Source of Rate Hike Subsidy, Nairit Plant Workers Get Back Pay

After months of protests, Nairit plant workers were finally paid back wages owed to them on Monday (Source: ArmeniaNow)
After months of protests, Nairit plant workers were finally paid back wages owed to them on Monday (Source: ArmeniaNow)

After months of protests, Nairit plant workers were finally paid back wages owed to them on Monday (Source: ArmeniaNow)

YEREVAN (Combined Sources)—The Armenian government will use the money received through the sale of one of the country’s largest electric power generating facilities to subsidize the rise in electricity prices, Prime Minister Hovik Abrahamyan revealed over the weekend, while on Monday, Nairit plant workers were given their owed back pay after months of protests and unkept promises from the government.

During a working visit to Armenia’s northwestern city of Gyumri on Saturday, Abrahamyan said that the 16-percent rise in electricity prices effective from August 1 would be offset by the recent sale of the Vorotan Hydro Cascade to ContourGlobal, a private U.S. energy company, for $180 million. Under the deal reached in May, the New York-based firm will also invest another $70 million to modernize the facility.

After days of large-scale protests in Yerevan, President Serzh Sarkissian said in late June that the government would take upon itself the whole burden of the rate hike until an international audit was conducted of the Russian-owned Electric Networks of Armenia (ENA), which runs Armenia’s power grid. He said the public would start paying the difference only if the audit confirmed that the rise was justifiable. Otherwise, the government would find a way to recover the sums paid as subsidy.

A large number of activists as well as opposition politicians in Armenia have not accepted the government’s “compromise solution.” They say that the subsidy will still be paid using taxpayer money.

Prime Minister Abrahamyan later promised that the subsidy would be from “extra-budgetary” means, but did not elaborate further.

Rise Armenia, a civil group campaigning against the electricity price hikes, held smaller-scale street protests last week. One of the demands of its members was that the government reveal the source of funding for the subsidy.

Speaking to reporters on Saturday, Abrahamyan described the funds received through the sale of the Vorotan Cascade as “extra-budgetary”. He also spoke about the planned audit, stressing that it will be done “in a transparent manner.”

“We will try to give answers to all questions that exist in society today. Our goal is that the society will know the reality,” he said.

Armenia’s leading civil groups have rejected the government’s approaches to the electricity price subsidy as they believe that the money received from the sale of the Vorotan Cascade are “budgetary funds”.

Sofia Hovsepian, a member of the No To Plunder movement, described the Vorotan Cascade as a “national wealth.” “It turns out that again they pay from the people’s pocket,” she said.

In its Saturday statement on the general situation around the rate hikes issue, Rise Armenia demanded the nationalization of Armenia’s power distribution network so that it could become a public company later. It also called for the resignation of the tariff-setting commission that controversially approved the electricity tariff rise in June.

Meanwhile, after months of protests, hundreds of former and current workers of the idling Nairit chemical plant received their back wages on Monday.

Dozens of workers gathered in front of the government building in Yerevan—the main venue of recent protests—to “congratulate each other” on their success.

“We have also gathered here to say good-bye to each other,” said one of Nairit protest leaders, Anush Harutiunian, referring to the large scale layoffs that took effect in February.

“In any case, we consider this to be our victory, because in the last 15 years there has not been any popular demand that has had a positive outcome,” she added.

Harutiunian said that as many as 1,800 former and current Nairit workers have had their back wages cleared and another 600 employees are expected to receive their back pays later today.

Due to financial difficulties Nairit, which is known for its synthetic rubber production, has been idling since 2010. Since then it has accumulated wage arrears estimated at over $10 million.

Nairit workers began to hold regular protests near government offices and the presidential administration building in Yerevan late last year. Government officials, including Prime Minister Hovik Abrahamyan, promised several times that a solution to the problem would be determined, but each time the promised solution was delayed.

Before Monday’s final wage arrears clearance, workers were forced to sign documents which waived any fines and penalties stemming from salary payment delay.

While some complained about it, most appeared to be satisfied with the outcome.

“It proves that not everything is hopeless in this country,” one former Nairit worker said. “One can achieve a result by struggling,” he added.

Nairit workers said they intended to hold more protests in the future for the chemical giant to be re-opened.

The World Bank last month recommended that the debt-ridden Yerevan chemical plant be put into bankruptcy. But Armenian Minister of Energy and Natural Resources Yervand Zakharian told the National Assembly on July 28 that the bankruptcy procedure for Nairit would be much more costly for the government than continuing to operate the plant. Zakharian did not elaborate on specific ways to ensure Nairit’s continued operation. He only said that special hearings on the plant’s future are due to be held in the National Assembly next fall.


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