Yerevan Heightens Pressure On ArmenTel

YEREVAN (RFE/RL)–The Armenian government’s relations with ArmenTel went from bad to worse on Thursday after a special inter-ministerial commission accused the telecom operator’s parent company–OTE–of failing to respect its investment commitmen’s.

The commission led by Transport and Communications Minister Andranik Manukian concluded that the Greek telecom giant inflated the amount of its investmen’s in Armenia–which fell short of the $100 million target set under the terms of its 1998 purchase of ArmenTel.

After eleven months of investigation–the inter-ministerial commission presented its findings to a similar commission formed by the Armenian parliament last year. Manukian said they will also be submitted to the office of the prosecutor-general.

"ArmenTel has not made $100 million worth of investmen’s," a senior commission official–Serzh Sarkisian (no relation to the Armenian defense minister)–told lawmakers.

He claimed that the ArmenTel managers exaggerated the cost of equipment imported from Greece and portrayed some of their operational expenditures in Armenia as investmen’s. He also alleged that the telecom monopoly committed "big financial abuses" in granting local companies construction contracts.

Further details of the commission’s report were not available as most of the meeting proceeded behind the closed doors.

OTE insists that it invested a total of $127 million in Armenia between 1998 and 2001 and is bound to reject the latest government accusations. An ArmenTel spokeswoman’said the company received no written notice from the inter-ministerial commission as of Thursday evening.

The commission report increases pressure on state prosecutors to launch a criminal inquiry into the dispute. Justice Minister David Harutiunian wrote to the prosecutors last week–accusing the company of violating some provisions of a recent agreement with the government on telephone charges.

The government accusations left the agreement on the brink of collapse. It came after the telecom operator announced that some of the agreed tariffs do not include the 20 percent value-added tax (VAT). The decision specifically applied to businesses and other legal entities that may choose to pay a flat monthly fee of 5,100 drams ($9) up front for unlimited local phone calls.

ArmenTel’s chief executive–Nikos Georgulas–has said the row is the result of an "orthographical error" in the text of the deal. He said the two sides should be guided by the company’s operating license which stipulates that all phone charges for businesses are not VAT-inclusive.


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