Pashinyan Linked Oligarch Wins Government Contract Without Competition

Pashinyan Linked Oligarch Wins Government Contract Without Competition

Amid growing questions about integrity in public procurement in Armenia, the government has awarded, without a competitive tender, another contract to a company belonging to the family of Khachatur Sukiasian, a pro-government businessman and parliamentarian.

The Armenian Interior Ministry will pay the company, SIL Insurance, about $500,000 to buy yearly insurance coverage for some 2,000 vehicles used by the national police. SIL reportedly signed earlier similar deals with other government agencies.

The Interior Ministry said on Wednesday that it had checked with other insurance firms and found out that they would charge higher fees for the mandatory insurance. It did not disclose those fees or explain why it did not formalize the procedure through a formal tender.

Armenian anti-corruption experts criticized the ministry’s decision. Varuzhan Hoktanian, who runs the local branch of the Berlin-based watchdog Transparency International, said the no-bid contract awarded to Sukiasian’s firm carries a “corruption risk.”

“I cannot be sure that they really sent inquiries [to other insurers,]” Hoktanian told RFE/RL’s Armenian Service.

“It’s hard to presume that they did that without a tender because of a lack of time,” said Hayk Martirosian, a lawyer advising a German company.

Armenian law allows the government not to put contracts for the delivery of goods or services out to competitive tender in some cases. The number of such government decisions has reportedly increased in recent years, prompting concerns from opposition figures and civil society activists.

Pashinyan inspects new Patrol Police vehicles in Gyumri, April 16, 2022.

Hoktanian pointed out that the government’s handling of procurements is one of the reasons why Transparency International downgraded Armenia’s position in its annual survey of corruption perceptions around the world released late last month.

Prime Minister Nikol Pashinyan last week expressed concern at the downgrade and admitted shortcomings in his government’s stated fight against corruption. At the same time, he blamed Armenian media outlets accusing members of his political team of illicit enrichment.

Pashinyan pledged to separate business from politics when he swept to power during the 2018 “velvet revolution.” He declared shortly afterwards that Armenian entrepreneurs no longer need parliament seats in order to protect and increase their assets.

Sukiasian and another wealthy businessman were elected to the current Armenian parliament on the ruling Civil Contract party’s ticket in June 2021.

Sukiasian and his extended family have reportedly expanded their business interests since 2018. In particular, the investigative publication reported in 2021 that a fuel importing company set up by them in 2020 has signed with the Armenian Defense Ministry supply contracts worth $14 million.

The tycoon could not be reached for comment on Wednesday.