Subvention Schemes in Armenia: Relatives of Community Leaders are Competition Winners
In 2020, the Armenian government approved 580 subvention schemes, for which tenders were issued to carry out work. As was the case previously, the companies who won the competition this time around were also not random.
The government allocated 14,310,000,000 drams from the state budget for the implementation of subvention schemes. The amount of community co-financing was 11,069,000,000 drams, while the amount from other organizations and private investments was 742,000,000 drams.
The Hetq Media Factory team studied the implementation of subvention schemes in three regions: Syunik, Gegharkunik, and Vayots Dzor. The selection of these regions was predicated on the fact that a significant number of communities in these regions became border communities as a result of the 2020 war, and some of the subvention schemes were not implemented.
Syunik Region: From those related to the mayor to Tashir Group
Many of the 2020 subvention schemes aimed at economic and social infrastructure development of communities in the Syunik region will continue this year. According to data provided by the Syunik regional administration, a subvention scheme worth 6,500,000,000 drams was supposed to be implemented in 2020; however, work has not been completed due to the war.
The 26 subventions included purchasing garbage trucks for the communities; renovating early learning facilities; asphalting link roads; improving the energy efficiency of apartment buildings; constructing drinking water and sewerage lines; and renovating cultural centers, kindergartens, and educational facilities.
Most of these programs are being implemented in Kapan, Gorayk, Sisian, Meghri, Kajaran, Tatev, and Goris, with the ten largest implemented in Kapan, Sisian, and Kajaran.
In the Kapan community, in particular, subvention schemes were implemented in 7 settlements, including Davit Bek, near the border.
The mayor’s father’s company has a subvention scheme
The companies Kapan Chshsh, Kaolin and Kapani Norogshin are implementing the “Kapan, Geghanush-Artsvanik Road Links, Streets, Sidewalks, and Courtyards Reconstruction" program that is worth 961 million drams. Director of Kapani Norogshin LLC Razmik Parsyan, who has been running the company since 2008, is the father of mayor Gevorg Parsyan.
This company has also carried out renovation of Kapan #8 and Davit Bek early learning facilities and renovation of the building planned as an alternative early learning facility in Vardavanq. In 2021, a ban order was imposed on moveable property of the company Shin Ashkharh LLC that is implementing the project “Repair of Yeghvard village drinking water line and daily pool maintenance” worth 211 million drams.
The company affiliated with the former mayor of Goris has a subvention scheme
There is another company with a subvention scheme: Ava-Building LLC, which is affiliated with the former mayor of Goris Vachagan Adunts. The latter led the community from July to September 2017. Vachagan Adunts’ wife, Varduhi Parsadanyan, headed the company from 2015-2018. Vachagan Adunts assumed the position of head of the company in January 2018.
Together with 6 other companies, Ava-Building LLC developed the 240 million dram subvention scheme “Repair of flat and sloping roofs of Kapan apartment buildings”.
Businessman Samvel Karapetyan’s affiliated company implements Syunik’s largest subvention scheme
The largest subvention scheme in the Syunik region is the "Improvement of energy efficiency of apartment buildings" program in Kajaran worth 1,706,000,000 drams.
In an interview with Hetq, Head of the Kajaran Municipality Department of Environment, Agriculture, and Economic Development Programs Garegin Gabrielyan said that this program is vital to the community.
"The issue of saving energy is a priority for us," said Gabrielyan.
The company implementing this project is T-Construction CJSC, which has carried out construction in Meghri. T-Construction CJSC was founded in April 2016. According to the charter obtained from the state register, the company had one shareholder at the time of state registration: Tashir Capital CJSC. Tashir Capital belongs to the Russia-based business owner of Tashir and his family.
The program "Renovation and improvement of community streets" in Kajaran worth 766 million drams was implemented by Kapani Norogshin LLC and Aparaj LLC. The program "Construction and reconstruction of parks, sports grounds, and playgrounds in the community" worth 246 million drams was implemented by Tunel CJSC.
The former RPA MP implemented the Sisian subvention scheme
Subvention schemes in Sisian are nearly completed.
Hidro LLC, which implements the 565 million dram project “Renovation of the section of the road leading from Sayat-Nova, Shahumyan, and A. Manukyan streets to Syunik street in Uyts and the central street in Shaki”, is connected with Avet Sargsyan, RPA MP from 2017-2018, who left the position of company director after being granted a parliamentary mandate. In addition to Sisian, Hidro LLC also implements a subvention scheme in Gorayk to repair sewerage and drinking water lines.
Gegharkunik: The mayor’s wife’s company won the competition
In 2020, more than 100 programs were implemented in 50 communities and settlements in the Gegharkunik region. During his visit to the Gegharkunik region on March 9th, Prime Minister Nikol Pashinyan stated that Gegharkunik is one of the most active regions with regards to subvention schemes.
In 2020, one of the projects with the highest contract value in the region was planned for the enlarged Geghamasar community with Sotk at the center. The plan was to allocate around 240,186,000 drams to the program “Construction or reconstruction of the internal and external networks of drinking water lines in 12 communities of Geghamasar”; however, it was partially implemented due to martial law.
In an interview with Hetq, Davit Shahnazaryan, an adviser to the mayor of Geghamasar, said that all the work in the community that was left incomplete was due to the war. The program was partially implemented in Sotk, Areguni, and Norabak, while no construction was carried out in Pokr Masrik.
Three programs were implemented in Martuni in 2020: For 29,510,000 drams, Armen-Mar LLC had water heaters and roof photovoltaic panels installed for 4 kindergartens and sports schools and a photovoltaic station installed at the municipality building. Marina Hoveyan, the wife of Martuni Mayor Armen Avetisyan, owns 100% of the company's shares.
In a conversation with Hetq, Armen Avetisyan emphasized that his son has been installing photovoltaic stations for more than three years and that he has also implemented a similar program in Jermuk.
"Three to four companies participated in the competition. I do not know the details, but my son brought [the price] down by 9 million and set up the station using his own expenses. There is no such price in any community. What I’m saying is that he did it out of compassion. If I am the mayor, why is it that my son doesn’t have the right to do business? Whatever Armen-Mar gained, they put toward benefiting the community,” said the community head.
The company affiliated with the former deputy governor implemented the subvention scheme
The 130,115,000 dram project "Asphalting of construction of sidewalks on the traffic heavy area of Yerevan Street in Martuni” was implemented by Shant-Seyran LLC. Artush Ghukasyan, the brother of company director Armen Ghukasyan, was the former deputy governor of Gegharkunik from 2003-2012. Artush Ghukasyan's other brother, Rubik Ghukasyan, held the post of mayor of Verin Getashen, their birthplace, for many years. In addition to this program, Shant-Seyran also implemented a program in 2020 in 5 communities of Gegharkunik.
The program with the largest contract value (247,781,000 drams) envisages asphalting the streets of Nerkin Getashen.
In a conversation with Hetq, Mayor Karo Gevorgyan noted that the work had been delayed due to bad weather conditions, with about 200 meters left to complete.
One of the main problems of Nerkin Getashen is the lack of a sewer system, but due to the lack of necessary financial means, preference was given to another program. “We are working to solve this problem, but the cost of the sewer system is very high. The station alone costs several million dollars, not counting the lines. It's a lot of money. That's why we applied [to the government] several times. They are saying to wait and see. The amount the state would need to give is a lot. Our village is also served by Veolia. We need Veolia to agree to an investment,” said the mayor.
Three subvention schemes were implemented in Tsakkar in 2020.
VMV Company LLC carried out 2 projects in Tsakkar in 2020: "Construction and lighting of the road leading from the natural bridge to the monument" and "Asphalting of 6th Street in the community". Mayor Gvidon Avetisyan announced that the asphalting works of 6th street have not been carried out, as the water lines in that area must be changed first.
Companies affiliated with members of the Council of Elders implemented subvention schemes
The program “Construction of lighting network for 3rd and 10th streets” in Tsakkar was implemented by the locally-registered company Al-Maska LLC. Until April 2020, the shareholder of this company was Mesrop Aleksanyan, who is also a member of the community council. In an effort to explain the situation, the mayor noted that a tender had been announced and that whoever applied had won and carried out the work.
Two projects were implemented in Tsovagyugh in 2020. Both have been completed. The reconstruction of the asphalt concrete cover in Tsovagyugh was carried out by locally-registered Tsovagyugh RCM LLC. The project contract is worth 97,327,000 drams. It is worth mentioning that the company director Norik Simonyan’s son, Aram Simonyan, is a member of the community council.
Mayor Vahram Gevorgyan told Hetq that the tender was organized by the regional administration, so there is no risk of corruption. Armen Zohrabyan, Head of the Regional Administration Urban Development Department, confirmed that tenders for road construction projects that don’t exceed 150 million drams are organized by the regional administration.
The former MP Mher Sedrakyan's son’s company implemented the subvention scheme
Bidek LLC, owned by the son of former MP Mher Sedrakyan, Davit Sedrakyan, implemented 2 programs in Sarukhan and Zolakar in the Gegharkunik region.
The company built an internal drinking water network in Zolakar for 114,900,000 drams and carried out the first phase of renovation of Kindergarten #1 in Sarukhan for 47,133,000 drams.
Vayots Dzor: The company of the former governor implemented subvention schemes
In 2020, 1,000,186,000 drams was allocated for subvention schemes implemented in the Vayots Dzor region, of which 436,250,000 drams was given by the community while the rest was provided by the government.
In 2019, some of the subvention schemes implemented in Areni, Gladzor, Yeghegis, Yeghegnadzor, Zaritap, Malishka, Vayk, and Jermuk were not implemented or postponed due to technical problems or work not being completed. In general, 592,820,000 drams in subvention schemes were given to companies. Partial financing (249,250,000 drams) was shared by the community, while the rest (343,570,000 drams) was co-financed from the state budget.
Mher Sedrakyan’s son’s company Bidek LLC has implemented large projects in Areni. They carried out construction of a tractor park in Areni, 2 retaining walls in Aghavnadzor, and irrigation water lines in Agarakadzor, Elpin, Khachik, and Rind in Areni. The total amount came to 116,540,000 drams.
Armen-Mar LLC carried out construction of a solar photovoltaic station with a capacity of up to 200 kilowatt/hour in Jermuk, costing 82,062,000 drams. Construction began in 2020 but was completed in 2021 due to unfavorable weather conditions. The share of the state budget will be paid after results are shown.
As a reminder, the director of Armen-Mar LLC is Marina Hoveyan, wife of the Martuni community head Armen Avetisyan.
Mavshin LLC and Shinashkharh LLC carried out capital repairs of fountains and capital renovations of water lines and aqueducts in Zaritap and Saravan. The amount in the contractor’s agreement signed by both companies was for 83,340,000 drams, of which Mashvin LLC was given 65,700,000 drams and Shinaskharh was given 17,630,000 drams.
It should be noted that Mkhitar Matevosyan, the director of Mavshin LLC, was accused of intentionally stealing a large amount of money from the state, which resulted in his real estate and moveable property being confiscated to compensate for the damage caused to the state.
Large programs have been implemented in Gladzor. Line Shin LLC and Zhilyo PC carried out construction of a drainage system in Gladzor and construction of water metering in Vernashen. They were provided with 46,022,000 drams for the project. Zhilyo PC carried out renovation of a cultural center hall in Gladzor for cultural events that will take place in the newly-built annex. Municipality Secretary Marine Hovhannisyan said that all the programs have been implemented; however, building the banquet hall annex is complicated and still in progress, and they need to make a call for new tenders. The latter was provided with 25,590,000 drams.
Line Shin LLC has installed gas networks for certain streets and the cultural center in Gladzor and the kindergarten in Vernashen. 29,810,000 drams was allocated for this program.
Lusine Bekchyan, the wife of Director of Line Shin LLC Masis Shamilyan, is a My Step faction expert.
Arpa Shin LLC has implemented subvention schemes with several companies in Areni. The company was known as Saghatelyan Brothers until August 2018, after which it became Arpa Shin. Aragats Saghatelyan, the sole shareholder of the company, was the former mayor of Vayk and former governor of Vayor Dzor. He was appointed to the post of governor on June 1, 2018 and resigned on October 3, 2018.
Authors: Lusine Voskanyan, Susina Khachatryan, Gohar Petrosyan
Coordinator: Grisha Balasanyan