American Company Breaks Through Armenia

    • Comments - 26 October 2017, 22:04
The Ministry of Energy informed that an American company will join the project of construction of Shnogh water power plant. According to the message, The Robbins Company which has huge international experience in boring big tunnels has signed an agreement with Devbed Hydro specialized in building water power plants. Reportedly, the American company will provide a boring machine for boring a 22-km tunnel intended for the water power plant construction project, as well as provide technical assistance and training of staff.

The U.S. Ambassador Richard Mills announced about the big American investment, recalling an earlier investment in Vorotan Cascade. ContourGlobal which acquired the cascade makes the biggest American investment in Armenia at around 200 million dollars.

The official message does not specify the amount of the investment in the 22 km tunnel of Shnogh WPP. The ambassador announced that an American major company will make an investment in another “sector”. In fact, the entry is again through the “gate” of water power generation but in a so-called other sector, tunnel construction.

The issue of American investments in Armenia is certainly a political one, with some core components. Here the issue is first of all viewed in the context of the geopolitical bias of Armenia but not bias is primary but diversification.

So far Armenia has been dependent on Russian investments which were mainly in infrastructures and were implemented through Russian state-run companies. They are instruments for political influence on Armenia.

Big investments in Armenia from other countries are important to enhance diversification, hence the level of sovereignty of Armenia, as well as the international reputation and security of Armenia. Besides, these investments are important to change the structure of capital in Armenia and reduce the influence of tycoons in the economy.

At the same time, big Western investments in Armenia often encounter major hindrances and often have to implement simple investment projects through complicated breakthroughs.

In the case of Shnogh Water Power Plant the United States starts an Armenian breakthrough by building a 22-km tunnel for the WPP. The U.S. breakthrough started outside Armenia, in the form of the isolation policy on Russia, and Moscow simply has to think in a real politics mode, retaining its usual rhetoric, think about compromise and terms of cooperation in some regions and over some issues.

In this context, a change of behavior of the Armenian tycoons is possible because the behavior of Russia, the main sponsor of the oligarchy for 15 to 20 years, is changing too.

Hence, Shnogh WPP is a symbiosis. The WPP is the first big project of the club of investors of Armenia. This club is a “hybrid” of the Armenian tycoons and the Russia-based Armenian capital, and now the project is acquiring American involvement or participation.

I wonder if the American breakthrough in Armenia will be 22 km long or will last longer.

The point is that there is a long way to go in Armenia. For example, the North-South road which connects the Persian Gulf to the Black Sea. Despite the regional importance of this project, Armenia deals with it at a “neighborhood” level in terms of financial effectiveness, quality, speed.

Meanwhile, North-South needs a lot of tunnels, especially in the parts of the road running through Vayots Dzor and Syunik region. Will the American company continue to break through the North-South highway?