Assessment of the Quality of the PPP Legislation and of the Effectiveness of its Implementation in Armenia

An indirect general policy framework for improving the legal environment and promoting PSP has been identified in Armenia (Poverty Reduction Strategic Paper). Armenia does not have a general concession Law. General laws do not refer to and regulate concessions (apart from the general reference in the Law on Foreign Investments providing that concessions are one of the forms of foreign investments). Two sector-specific laws regulate concessions, in the mining and water sectors. However, such laws do not contain clear definitions and need to be improved regarding the selection procedures (even though the general rule is that concessions are granted based on a tender/auction). In the water sector, the use of a model concession agreement is optional. Recently adopted Republic of Armenia Law “On Railway Transport” contains just specific reference to concession by stating that the concessions shall be regulated under the relevant contract as approved by the government of the Republic of Armenia. Government support and financial securities are defined in the general legislation (Civil Code, Law on Budgetary System) and allow, to a certain extent, such elements. No clear reference is made to international arbitration. In this respect, it should be noted that that international arbitration has been provided in privatisation contracts in Armenia. Thus, despite certain positive features, the general legal framework for PPP needs to be elaborated in Armenia.