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Armenia Seeks Chinese Funding For Rail Link To Iran

Transport and Communications Minister Manuk Vartanian says the Asian Development Bank is interested in assisting the project.
YEREVAN -- An Armenian government minister says Yerevan is seeking as much as $1 billion in loans from China to finance a railway link to neighboring Iran, RFE/RL's Armenian Service reports.

Armenian Transport and Communications Minister Manuk Vartanian said on June 28 that the government has spoken with officials and financial institutions in Iran, China, and Russia about funding the project. He added that he hopes an agreement with China will provide more than $1 billion of the required funding.

After years of discussion, the Armenian and Iranian governments formally agreed in April 2009 to start work on the project.

While both governments say the project is progressing, they have yet to secure concrete sources of funding for the 470-kilometer rail link, most of which would pass through Armenia. Unofficial estimates of the project's total cost have varied from $1.2 billion to $4 billion.

"I have also talked to the Asian Development Bank (ADB)," Vartanian said, "which has expressed its readiness to assist in the project after we meet some demands."

In 2008, the ADB agreed to provide $1.5 million to study the feasibility of such a project. However, the sum has not yet been disbursed. Vartanian gave no reason for the delay.

Critics of the Armenian government have questioned the project's feasibility and cost-effectiveness since its inception.

Former Yerevan Mayor Vahagn Khachatrian said that the project -- declared a top economic priority by President Serzh Sarkisian shortly after he took office -- is a political publicity stunt designed to "distract" people from the main problems facing the country.

"That project will not be implemented," Khachatrian told RFE/RL. "You couldn't implement it even if you had the utmost desire."

Khachatrian, who is a senior member of the opposition Armenian National Congress, argued that the country's debt burden is nearing a "dangerous threshold."

Sarkisian promoted the rail link on a visit to Germany last week. He said the Armenia-Iran rail link as well as the unfolding expansion of Armenian highways into Iran could have "a truly revolutionary significance" for the region.