Government Under Opposition Fire Over Gas Deal With Russia

Lawmakers from leading Armenian opposition forces lashed out at the government on Friday as it sought parliamentary ratification of a controversial agreement with Gazprom that guarantees an irreversible privileged status for the Russian gas giant in Armenia for the next 30 years.

The opposition minority in the National Assembly described as a serious blow to Armenia’s sovereignty key terms of the agreement signed during Russian President Vladimir Putin’s December 2 visit to the country. They also condemned President Serzh Sarkisian’s government for secretly subsidizing the increased price of Russian natural until after Armenia’s last national elections.

Energy and Natural Minister Armen Movsisian admitted the secret subsidy immediately after signing the deal with Gazprom chief Alexei Miller. He said the Armenian government has run up some $300 million in debts to Gazprom to ensure that the gas price, raised by the Russians in April 2011, remains unchanged for Armenian households until last July. Movsisian had earlier repeatedly denied any price hikes.

Opposition deputies seized upon the revelation to accuse the government and the energy minister in particular of lying to the public to boost Sarkisian’s chances in the February 2013 presidential election. Levon Zurabian, the parliamentary leader of the Armenian National Congress (HAK), said the secret subsidy constitutes a serious violation of Armenian laws.

“You want to make us a party to a deal which you concealed from us,” Vartan Oskanian, a former foreign minister representing the Prosperous Armenia Party (BHK), told Movsisian.

The minister claimed that the government did not declare the subsidy because it was the result of “oral agreements” reached with Gazprom. He also defended the transfer of the government’s 20 percent share in the ARG national gas distribution network to Gazprom in payment for the $300 million debt. He said the real market value of the minority stake was lower.

The government also made other concessions to the Russian giant as part of the debt settlement. The deal in question stipulates that the current and future Armenian governments cannot change the regulatory environment for ARG until January 2044. It also commits the Armenian side to ensuring that domestic gas tariffs in the country are high enough for Gazprom to recoup 9 percent of its capital investments in the network annually.

Zurabian said the Sarkisian administration committed high treason by agreeing to these terms. “Gazprom is being placed above the law and is becoming a state within a state,” he declared.

“During one of his numerous Moscow visits Serzh Sarkisian achieved his supreme goal: he added Armenia to the list of Gazprom’s debtors,” charged Nikol Pashinian, another opposition lawmaker.

“Even Russian tsars were not so capricious,” said Alexander Arzumanian, a nominal member of the pro-Western Zharangutyun (Heritage) party’s parliamentary faction.

The gas deal was also strongly criticized by deputies from the more pro-Russian BHK and the Armenian Revolutionary Federation (Dashnaktsutyun). The BHK’s Naira Zohrabian said Movsisian is personally responsible for the “vassal agreement.” “Do you know what Ukraine’s former Prime Minister Yulia Tymoshenko was jailed for? For cutting a gas deal that caused damage to the interests of her country,” she told the minister.

Parliamentary leaders of the ruling Republican Party of Armenia (HHK) rejected the opposition attacks. They said the privileges granted to Gazprom are necessary for ensuring further capital investments in the domestic gas network.

The HHK majority postponed a planned parliament vote on the agreement until Monday because of a poor attendance of the extraordinary session by its members. Its leader, Galust Sahakian, expressed confidence that the controversial deal will be ratified.

Meanwhile, as the deputies debated the matter, around 100 civic activists demonstrated outside the parliament building to add their voice to the opposition concerns. Riot police used force after the small crowd chanting “Sovereign Armenia!” blocked the adjacent Marshal Bagramian Avenue, one of Yerevan’s main thoroughfares. Ten people were briefly detained in the scuffle.

Some of the protesters said the opposition minority should surrender its mandates if the National Assembly backs the deal.