Photo: PanArmenian
The construction of the North-South Corridor being financed through loans from the Asian Development Bank (ADB) may grind to a halt following the discovery of serious shortcomings in the quality of the construction of the Yerevan-Ashtarak (11.7 km) and Yerevan-Artashat (19.6 km) stretches of the highway. Construction began in September 2012, and within a few months the poor quality of the work was already apparent. The Spanish contractor Corsan Corviam Construccion S.A. failed to prepare the base of the road properly.
Control Chamber President Ishkhan Zakaryan told reporters about the problem on June 1. Deputy Minister of Transport and Communications Hrant Beglaryan informed parliament on June 5 that the ministry is aware of the violations. He said Corsan Corviam Construccion S.A. and the two companies responsible for the technical supervision of the construction, Safege (France) and Eptisa (Spain), have been given one month to eliminate the shortcomings.
Beglaryan said the project’s Governing Board will decide whether or not the organizations in question will be permitted to proceed with the construction.
A timeframe of one month to rectify the problem is not realistic, however, if we take into account the Control Chamber findings that instead of the mandatory 30 cm layer of stones to line the base of the road, only 3 cm was used, and the companies supervising the construction failed to rectify this.
Even if the Spanish contractor can rectify the shortcomings within a one month period, the delay in proceeding with construction will inevitably disrupt the predetermined schedule for completing the project.
According to the agreements signed by the government of Armenia and the Asian Development Bank (Tranche I and Tranche II), the reconstruction of the Yerevan-Ashtarak (11.7km) and Yerevan-Artashat (19.6km) stretches of the highway must be completed by 2013; and the Ashtarak-Talin (41.9km) passage by December, 2014. The Spanish contractor announced in April 2012 that the Yerevan-Ashtarak and Yerevan- Artashat stretches would be built within 18 months and the Ashtarak-Talin stretch in 36 months, meaning the project would be completed by the fall of 2015. Discounting adverse weather conditions, it is clear that construction will not be completed within the agreed timeframe.
There is a possibility that the agreement with Corsan Corviam Construccion S.A. will be terminated and a new international tender announced. The road works outlined in the Tranche I and Tranche II agreements began only after a two-year delay, as the ADB had transferred the US$60 million loan tranche in 2009 and an additional US$180 million in December 2010. The Armenian side announced the international tender only in August 2011, and the winning contractor’s name was announced in April 2012. Corsan Corviam Construccion S.A began construction in September 2012.
The current scandalous revelations could jeopardize the entire project. It is likely that this is why the ADB is in no hurry to confirm Tranche III ($180 million) which is earmarked for the reconstruction of the Talin-Gyumri (46km) stretch of the highway. The agreement for the loan transfer was to be signed at the end of 2012 and the winner of the tender for construction in the first quarter of this year. The process has been suspended by the ADB.
The ADB’s North-South Corridor project must be completed by 2017. The 556km long Agarak-Kapan-Yerevan-Gyumri-Bavra highway will connect to Georgia’s road network, thus giving Armenia easy passage to the ports of Poti and Batumi. The total budget for the project is $962 million, of which $500 million is ADB loans. These loans have been provided with an amortization of 32 years and an eight-year grace period with an annual interest rate of 1 percent, subsequently rising to 1.5 percent. The Armenian government is providing the remaining $462 million, of which $177 million will be raised through taxes and $285 million through direct funding.
By Armenak Chatinyan
