Japan to finance North-South transport corridor

The Japanese International Cooperation Agency (JICA) is ready to
provide $50-70 million towards financing the North-South transport
corridor in Armenia, ARKA cites Armenian Minister of Transport and
Communication Manuk Vardanyan.

The government of Armenia approved the investment program of the
North-South highway construction on January 14, 2010, and a framework
financial agreement between Armenia and the Asian Development Bank
worth $500 million and an agreement on the first loan tranche equal to
$60 million, signed on September 15, 2009, and October 12, 2009,
respectively.

The tender for construction of the North-South transport corridor will
be held in March-April.

The first section, Yerevan-Ashtarak, covering 11.7 km, has received
financing, but construction work hasn't yet started. The section will
join the Ashtarak-Talin section of road. The tender will be announced
in spring 2011.

The Yerevan-Ashtarak road is part of the North-South transport
corridor, initiated by Russia and Iran to activate the transport
streams. The goal will be achieved by building new transport
communication on the Russia-Iran-India route.

Armenia is searching for financing for the technical-economic basis of
the North-South railway.

Vardanyan said that they will determine the road structure after
developing the TEB. Russia, China, Iran have expressed their
willingness to take part in the program.

The deal on constructing the Iran-Armenia railway was signed in Tehran
on April 15, 2009, by the Iranian Minister of Roads and
Transportation, Hamid Behbahani, and the Armenian Minister of
Transport and Communications, Gurgen Sargsyan. The construction may
take 4-5 years. The railway will be 470 km long, 60 km of which will
run through Iran and 410 through Armenia.

A working group consisting of Armenian, Iranian and Russian deputy
transport ministers is working on the issue.

Armenian Prime Minister Tigran Sargsyan had said earlier that
construction of the railway is a priority project for Armenia.

The railway will allow Armenia to use an alternate route to transport
energy resources and other goods. Armenian railway communications with
foreign countries only run through Georgia.

The Iran-Armenia railway needs approximately $2 billion of investments.
Iran expressed readiness to provide $400 million for the project and
to cover the expenses on its own territory.

The World Bank and the Asian Development Bank have expressed interest
in the project.