Monday, June 15 2015 11:47

 Head of the Union of Local Commodity Producers of Armenia Vazgen Safaryan does not trust the results of the World's Bank's audit of the Nairit Plant.  

Talking to reports on June 15, Safaryan said reactivation of the Armenian plant is not in favor of the World Bank, as it donor countries - USA, Germany, France, and Japan - have rubber producing plants and do not need another competitor - Nairit Plant. 

"If reactivated, the Plant's production may account for 5% of the total market, and most of the production will be exported to the United States," Safaryan said. "The Union has submitted some proposals concerning the Nairit Plant to the Government, but no response has been received yet."

Earlier on June 9, Levon Zurabyan, Head of the Armenian National Congress (ANC) parliamentary group, also cast doubt on the impartiality of the WB. He demanded holding hearings at the Parliamentary Commission for Economic Affairs following the audit conducted by the World Bank at the Nairit Plant. The politician pointed out that both in 2011 and in 2013 Jacobs Consultancy Ltd conducted a technical and environmental audit at the Plant, and the audit results were different. "So, there is some fraud and they are trying to deprive Armenia of the opportunity to become a country with serious chemical industry. The issue should be discussed with the relevant commission," he said, adding that he has some documents to present at the hearings. 

On May 13, Minister of Energy and Natural Resources of Armenia Yervand Zakharyan said reactivation of the Nairit Plant is not expedient by preliminary estimates of the World Bank. He said to reactivate the Plant at least $250 million are needed. In addition, he said, it is not clear if the Plant's production will be competitive on the world market.  The minister recalled the heavy financial situation of the Plant that has been idling for already 4 years. The arrears of wages have reached 5.7 billion drams, exclusive of social payments and income tax. 1,700 employees of Nairit Plant were fired on Feb 6. A total of 478 employees remain at the Plant now. 
Nairit Plant has been idle since April 2010. The Plant's shares were given as security against the CIS InterStateBank's 70 mln USD loan provided in 2006 for 5 years - till late Dec 2011 - at 12.5% p.a. In 2006, 90% of Nairit Plant's shares were sold to Rhinoville Property Limited (UK). The latter owns an 89,999% stake in the plant, Armenian Ministry of Energy and Natural Resources - 4,496%, Gazprom Armenia CJSC (previously ArmRusgasprom) - 3,596%, and Yerevan Thermal Power Plant - 1,907%.