Politics and Power: Armenia decision to pick Russian nuke technology no surprise for experts

Economists and political analysts see as a predicted move the decision by the Armenian Government to set up a joint venture with Russians tasked with building a new reactor that will replace the current technology at Armenia’s ageing nuclear station in Metsamor.

Unveiling the decision at a Cabinet meeting last week, Prime Minister Tigran Sargsyan called it “political”.

Meanwhile, still several weeks ago Energy Ministry officials would deny that state-run Russian energy giant Gazprom’s decision to allow Armenia to enjoy a lower-than-expected increase in the price for natural gas was made in exchange for favors to the Russian side in the tender for the construction of a new nuclear power plant in Armenia.

On December 3, the government approved the decision to build a new facility that will have a Russian-built reactor with a “European safety certificate”.

With a projected capacity of about 1,060 megawatts, the new facility will have a designed operational lifetime of 60 years and will more than double the capacity of the current nuclear power plant – which has been a source of concern and debate in Armenia for the past 20 years.

Energy and Natural Resources Minister Armen Movsisyan said the decision is based on the recommendations of WorleyParsons, an Australian engineering company chosen by the government in May to manage its nuclear project.

Political analysts are far from considering the Armenian government’s decision as a “surprise”, with some even viewing it as the most convenient option for Armenia.

In this sense, political analyst Yervand Bozoyan finds “not serious” talks about Armenia’s economic or energy independence, as he stresses that this is “a sad Armenian reality”.

“There is, in fact, no alternative for us. A typical example in this sense was the sellout of the power grid when tenders were being held for a long time only for the Russians to win in the end, since on the one hand their levers were stronger, and on the other hand there were no others who actually wanted it,” says the political analyst.

Economic analyst Harutyun Khachatryan also thinks that because of the low interest of European and American companies in the Armenian market in the past several years, the field was left to Russian companies.

In these conditions, Khachatryans considers the decision to give preference to Russian technology in building a new nuclear reactor facility as no surprise.

“Russian technologies in the nuclear energy field do not yield to their foreign types. Both economically and technically, a decision that is not so bad has been made,” the analyst adds.

Deputy Director of the Noravank analytical center, political analyst Sevak Sarukhanyan is even convinced that no other than a Russian company would have been ready to invest billions of dollars in the construction of an Armenian nuclear station, as these investments would not be returnable for a long time.

“With Russia this is a realistic decision, since in this case they enhance their standing in Armenia’s energy sphere. For a French or an American company that would have been a dubious deal to make, since Armenia’s economy continues to remain closed,” says Sarukhanyan.

The tender for the construction of a new energy unit at the Armenian nuclear power plant was announced in February 2009. The new facility is expected to be built in the area of the already existing station in Metsamor, with the use of the already existing infrastructure.

The construction project with an estimated cost of $5 billion is expected to be launched in 2011 and last up to seven years.