Government to Discuss Energy Privatization Issue

YEREVAN (Noyan Tapan)–The Government of Armenia made a decision to recommend the President to call a special session of parliament on July 24. The agenda of the session is supposed to include amendmen’s to the draft law "On the program of privatization of state property in 1998-2000" and the draft law on the privatization of the close joint-stock companies Yerevan Electricity Network–North Electricity Network–South Electricity Network and the Central Electricity Network.

The National Assembly standing commission for finance-crediting–budgetary and economic affairs held a meeting on July 21 for the purpose of considering the bill on the privatization of electricity distributing companies submitted by the government. However–for lack of quorum–only Energy Minister Karen Galustian made a speech–after which the meeting was postponed until July 24.

Karen Galustian presented the bill. He said that the major goals of the companies’ privatization were the following: Reliable and uninterrupted supplies of electric power to consumers–higher reliability of electricity distribution networks–minimization of losses of electricity–and replenishment of the budget.

The minister said that at least 51 percent of shares of each distribution network is sold through an international tender to persons that undergo a preliminary attestation in a manner subscribed by the government. Up to 20 percent of the shares of each electricity distribution company may be sold immediately to an international financial organization. As for the organization of a tender on electricity distribution companies and major principles of evaluation of bids–Galustian made it clear that the tender commission at any time may make a decision at its own discretion and without any commentary to suspend the tender as well as refuse to conclude an purchase-sale agreement with the side that wins the tender. He said that under the bill–the Energy Commission concludes a tariff margin agreement with well-known strategic investors that win the international tender fixing a concrete margin. The minister said that the tariff margin should be agreed with the calculations of strategic buyers.

Galustian reported that in cases regulated by laws the government is entitled to take action to regulate the activities of the energy sphere in the event of emergency situations. He said that the bill consists of 17 items. The authors of the bill recommend the National Assembly to take general control of the privatization process and the government to assume responsibility for the drafting of the purchase-sale agreement.

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