Sheikh Muhammed Musallami Wants to Bottle Water and Build Hotels in Armenia

Villagers of Artavaz in the Kotayk Marz have been promised $4,200 for each hectare of the 96 hectares delineated by the Armenian government as public domain lands. This works out to 160 AMD per square meter. Former Artavaz mayor Yervand Naltakyan said that the lands would be taken from the residents a few days later, even though most don't find the terms acceptable.

Artavazr esidents have launched a petition drive and 99% of the land owners affected have signed. They are now preparing to take their claims to the courts to appeal the government's decision. However, current Artavaz Mayor Rem Hovhannisyan has rejected the villagers' claims about the appraisal. "The villagers are lying", he told us. He said that due to the recent heavy rains, the appraisers weren't able to complete their survey and that no final evaluation was made. This would have to wait for better weather. Mayor Hovhannisyan said that one appraiser named Hrach had visited the village  but that nothing final was done. When he asked if the villagers wanted to turn over their lands, the mayor replied, "Some do and some don't. Some want $10 per square meter, others want $30 and some just $3." 1.5 hectares of this land in the "prevailing public interest" is owned by  former MP Sasun Mikayelyan, Commander of the Sasun Unit who was sentenced to eight years  in the March 1st "Trial of Seven". It was back when Andranik Margaryan was prime minister that the government decided to re-zone 1.5 hectares of Artavaz communal agricultural land for energy and communications usage in order to construct a hydro-electric unit and supplemental facilities. (Government Decision 1610-N, November 9, 2006) Mr. Mikayelyan's land is registered as a production facility and he was planning to construct a hydro-electric station there but it didn't work out. At the cabinet meeting on February 25 of this year ( and we have the transcripts), Economics Minister Nerses Yeritsyan said  that the issue had been discussed at the Ministry for Territorial Administration and that talks had been conducted with local community representatives. "There is an overall consensus by the regional and local leaders," said Minister Yeritsyan, who added that the project had been presented to the government as agreed upon.

An Arab Sheikh and a Swiss company

On February 25, the government decided to allocate 85.1 hectares of land of the Artavaz community in Kotayk Marz containing fresh water and mineral water springs of the Ulashik River basin to the company "A&M Rare, Ltd." for the purpose of building a water bottling plant. "A&M Rare" was founded by "A&M Investment", a company registered in Luxembourg. The executive director of A&M Rare, Ltd. is Aram Abrahamyan; the son of Republican Party MP Gagik Abrahamyan, who, in turn, is the brother of Ara Abrahamyan, president of the Union of Armenians in Russia and a wealthy entrepreneur to boot. Hetq sent a letter to the government, requesting the investment proposal made by the company to build  a water bottling plant. We received a reply from Minister Nerses Yeritsyan. It turns out that the investment plan was presented to the government by "Swiss Rare S.A.", a Swiss firm whose president is Saudi Arabian Sheikh Muhammed Musallami. He is also a stockholder of the company. Till now, we have been able to identify only one other Armenian official who owns shares in the company; MP Gagik Abrahamyan. The "Swiss Rare" investment company is registered in Geneva and engages in industrial, agricultural and hotel construction. According to the minister's reply, during a visit to Armenia by the company's representatives, an interest was expressed in constructing a bottling plant for fresh and mineral water. Several sweet and mineral water springs were selected during the visit and samples were tested by the Swiss laboratory "GEOTEST".

Is Sheikh Musallami building a water bottling plant or a hotel?

In the Sheikh's notes made during his visit to Armenia, he mentions an interest in entering the hotel business in the country. Sheikh Musallami visited Armenia during July of last year. During his meeting with Economic Monister Yeritsyan, the Sheikh said that there were several Saudi businessmen who wanted to invest in Armenia, especially in the hotel and agricultural sectors. The minister gave an overview of the hotel business in Armenia and noted that the idea of building world-class hotels in Yerevan and hotel complexes in the regions was most welcome. On the same day, Sheikh Musallami weas received by RA Prime Minister Tigran Sargsyan. MP Gagik Abrahamyan was also present at the meeting.

PM Sargsyan commented that Armenia was keen to improve its commercial ties with Saudi Arabia and to implement investment projects of mutual interest. Sheikh Musallami, in turn, told PM Sargsyan that he was interested in building a hotel complex in Armenia. We can infer another reason for the Sheikh's visit from the minutes of the October 29, 2009 meeting that took place between him and Minister Yeritsyan, which resulted in a "Letter of Intent" signed by both. There was no mention of a hotel but rather a plant to be built in Artavaz. Prior to this, in September 2009, the firm "Swiss Rare S.A." presented an proposal to build the plant to the Ministry of Economics in the hope of receiving government assistance and backing. The proposal was debated by the appropriate government agencies and was given the green light to proceed. "Swiss Rare" had preliminary delineated about 1,400 hectares of land in the vicinity of the Ulashik River basin in the north-western section of the Artavaz community district. Only forty of the hectares had been envisaged for necessary infrastructure and the plant itself. The large expanse of te remaining area is explained by the need to form a buffer zone according to international standards to ensure the quality of the waters. This are includes state, municipal as well as private lands zoned for agricultural use, according to the ministry reply.

What investment project is Sheikh Musallami proposing?

According to the "Letter of Intent", the Ministry of Economics assumed the responsibility on the part of the RA government to assist in the implementation of the investment project. "Swiss Rare", for its part, assumed the obligation of realizing the project in Armenia to buil;d a modern technology plant that would bottle high quality water to the highest international standards, that would employ local labor and retrain workers, that would build adequate facilities for the workers, and that the plant would bottle 40 million liters of water per year. The target market for the water would be Russia, the European Union countries and later on, Iran and the Gulf states. The product would carry the "Rare Water" Armenia brand. During the government session, Minister Yeritsyan noted that according to laboratory testing, the water could be bottled without filtration, using modern technological processes. The proposal calls for up to $50 million in investment and 50-100 jobs at the plant itself. Minister Yeritsyan hinted that the number of new jobs created could be much higher. Minister Yeritsyan also mentioned the possibility of producing bottled water infused with the fragrance of various botanicals and that this would create more jobs.

The government attempts to clarify

We will remind readers that "A&M Rare" received state registration on the very same day that the government passed the "public domain" decision to allocate the land to the company. When we asked how it was possible for "A&M Rare" to receive registration on the same day, Minister Yerisyan replied that by taking into account the fact that work on the plant had begun back in 2009 and that the company name "A&M Rare" had been registered on February 19, 2010, the government considered it appropriate to recognize "A&M Rare" as the beneficiary in the decision, since it had, in effect, already received state registration. As to the question how the 85.1 hectares specified at the government session turned into 96 hectares, Minister Yeritsyan replied that modifications to the original decision had been presented and that as a result of a review carried out with the participation of the Kotayk Regional Governor, the RA Real Estate Cadastre and Artavaz municipal officials, amendments were made resulting in an increase of certain private holdings  to be declared "public domain".

The re-edited decision was then presented to the government for final approval. It would appear from this reply that the interested parties sat down at the table and  resolved all outstanding issues in a matter of minutes. From the transcripts of the meeting, it becomes clear that the specific amount of land was 85.1 hectares, but that an issue arose regarding certain lands belonging to private individuals. Deputy Prime Minister Armen Gevorgyan, who is also the Minister for Territorial Administration, proposed that these issues be resolved and that the proposal be resubmitted to the government so that the process not be halted. In this case, the decision of Prime Minister Sargsyan should have been dated not as February 25, the day of the session, but days later, when the changes had been made. The entire issued will only be clarified when we know the identities of the Sheikh's other Armenian partners.