A Cabinet meeting was held today, chaired by Acting Prime Minister Nikol Pashinyan.

Before discussing the agenda, the Acting Premier referred to the summarized results of the early parliamentary elections, the tense military-political situation in the region fueled by Azerbaijan’s provocative actions and maximalist aspirations, the growing jobs dynamics in Armenia, the difference between income tax collection indicators for the first 6 months and the epidemiological situation.

The government approved a bill to allocate 8.9 billion drams from the 2021 state budget to the Ministry of Territorial Administration and Infrastructure for implementing Activity 21001 “Rehabilitation of Roads of National Importance” under the 1049 Program of Improvement of Road Networks. A total of 50.7 km-long road sections will be repaired under the program, of which interstate roads - 44.9 km, national - 1.7 km, and local - 4.15 km. The expected result is the reconstruction of public roads and transport facilities.

With reference to the project, the Acting Prime Minister said, “Road construction is a key direction. I would like to stress that here too we have reached an intermediate goal. I mean the quality of roads. Today we can state that we have tangible progress in terms of the quality of road construction, but, Mr. Papikyan, we should admit that we have not yet reached the goal we talked about in 2018. I mean achieving a completely new standard for the quality of roads. Also, I wish to raise the topics we talked about several times during working discussions. According to the Civil Contract party’s electoral platform, we are supposed to build 2600 km of roads, 500 kindergartens, 300 schools, and start or complete the construction of 15 reservoirs.”

Noting that analyses evidence that Armenia’s construction potential prevents us from implementing the aforementioned programs in full, Nikol Pashinyan emphasized that not all construction companies have such potential. He called the attention of international partners to this factor and invited them to discuss the ways of implementing these huge investment programs over the next five years. The Acting Prime Minister expressed hope that the newcomers may bring in new construction standards and a new quality of construction activities.

Acting Minister of Finance Atom Djangzhugazyan noted that while Nikol Pashinyan talked about international partners, but seeing the opportunities available in this field, the local companies should make extra efforts in order to improve the quality of their performance.

The effectiveness of support provided under Activity 1 to mitigate the economic impact of COVID-19 will be improved

The government amended a number of government decisions in an effort to address the liquidity issues caused by the protracted impact of COVID-19 for individual business entities, promote development in the new economic situation and increase the effectiveness of support provided under Activity 1, which seeks to mitigate the economic impact of COVID-19.

The project implies reviewing the terms and conditions of assistance provided under the aforementioned activity, in particular: 1. Expansion of the circle of economic entities at the expense of construction companies in Syunik Marz of Armenia; 2. Revision of the objectives of the use of loans provided under the activity, establishing opportunities to address the recurrent financial problems and improve the effectiveness of activities; 3. Revision of lending terms provided as part of the activity: increase in the size and interest rate and extension of the grace period, as well as reduction in state subsidy periods; 4. Determination of requirements for business entities by introducing corporate governance mechanisms.

The expected result is to increase the effectiveness of the assistance provided under the given activity through targeted selection of beneficiaries and the development of mechanisms for making a targeted use of loans.

In response to Nikol Pashinyan’s question about what the companies benefiting from this program can receive, Acting Minister of Economy Vahan Kerobyan said previously half or 4-12% of interest on various components used to be subsidized, while now interest is fully subsidized for the first year, after which the facility becomes a commercial loan and should be serviced without state interference.

Acting Deputy Prime Minister Mher Grigoryan pointed out that there is another component, namely the capital replenishment tool, which he considered to be extremely important.