Thursday, 05 December

Beneficiaries Are To Blame, Says Ministry

The February 12 issue of Hetq included the article Apartments for Graduates from Children's Homes Are Unfit to Live In, after which a meeting was organized at the initiative of the Ministry of Labor and Social Affairs, where they attempted to explain to Hetq why some apartments end up in dilapidated condition within just a few months and who is to blame for this situation.

No Wrecked Apartments Provided, Ministry Insists

Those responsible for the State Aid to Children's Home Graduates program assured us that none of the beneficiaries ever received wrecked apartments. “It's a different matter that after the beneficiary settles in, the state of the apartment worsens for technical reasons (a breakdown of the water-sewage system, the beneficiary placing an antenna on the rooftop and so on). Such a situation could arise anywhere and in any apartment. The state budget does not provide finances for renovation. The beneficiaries must take care of the apartment themselves,” a letter in reply from Deputy Minister Filaret Berikyan claimed.

Grisha Martirosyan, Vice-President of the Sokol Group, also insisted that none of the beneficiaries had complained to him personally so far. “They all have my phone number. Let one of them come now and say that we've treated them badly, haven't taken their wishes into consideration or haven't been accommodating. Let them come and say so. After all, the Ministry approved of those apartments and accepted them; we didn't force them to do so,” said Grisha Martirosyan. Nevertheless, the Sokol Group representative noted that the majority of Yerevan apartments were at least 40-50 years old and it was natural that there would be problems. “We cannot renovate all the pipes in the building or the roof. We have now come to the conclusion that it is better for us to construct buildings than to buy them,” said Martirosyan.

Problems arose in the past in those areas which did not have residential building status from the start. This issue is often resolved easily – the rooms in such hostels and other areas with four walls are privatized with the permission of the corresponding state agencies; they get the statues of residential area, are renovated and nobody can say that anything illegal was done.

“Perhaps it suits them better to buy the area and turn it into an apartment, instead of buying a single-room apartment. That's for them to decide. After all they're a for-profit organization,” said Lala Ghazaryan of the Department for Family, Women and Children at the Ministry of Labor and Social Affairs.

Why was the Sokol Group Chosen?

The Ministry has been working with the Sokol Group since 2004. One of the main questions asked in the previous article was why the Ministry had continued to sign contracts with only the Sokol Group in order to acquire apartments. Let us note that before the Sokol Group, an organization called Karen Z bought 35 apartments for the Ministry in 2003. But the Ministry then refused to continue working with them, citing poor quality of services rendered. Thus, the Ministry admitted that that organization had provided the beneficiaries with poor quality apartments, otherwise they would not ended their cooperation. (The apartments in Charentsavan and Yerevan's 16 th District mentioned in the previous article had been provided by Karen Z).

The reply from Filaret Berikyan said, “Although in 2004 the Sokol Group had not won the tender announced for this task, we nevertheless decided to sign a contract with them because they were the only ones who had shown interest in being a part of this process then and also because the Ministry faced a choice either to sign a contract and spend the money allocated in the state budget for this program, or to fail. In 2005-2006, being in a similar situation and knowing that the Sokol Group owned a building which could contain 36 renovated single-room apartments, the Ministry once again signed a contract with the Sokol Group.”

Let us note that Mr. Berikyan's explanation is not accurate. According to a statement provided by the State Acquisition Agency, another organization – L. K. and D. International Investment Group – had also submitted an application in the tender in 2004.

In 2006, two other organizations took part in the tender besides the Sokol Group – Aramazd ltd. and Transport Association ltd. The application packages of all the participants were rejected because they did not meet the tender requirements. But the contract was once again signed with the Sokol Group.

This suggests that someone in the government had sent down the order that the Sokol Group must be contracted. It should be noted that after the contract is signed, the whole sum is transferred to the company's account against which the apartments are provided almost a year later. Last time, the Sokol Group received 379 million drams (around US$ 1.1 million).

In 2003, ten apartments were acquired through the State Acquisition Agency and 25 through the Karen Z organization. In 2004, five apartments were acquired through the State Acquisition Agency, ten through Karen Z and 37 through the Sokol Group. In 2005-2006, the Sokol Group once again worked in this program, but no apartments have been provided yet. A total of 87 graduates from children's homes have received apartments to date.

The Money is Not Enough for Good Apartments

When complaints are made to the Ministry of Labor and Social Affairs, the explanation given is that the budget for apartments is drawn up at the start of the year, while prices go up at the year-end, such that the money does not suffice. The chances of receiving an apartment in Yerevan are now a lot less than a year ago. However, apartments in Echmiadzin, Zvartnots and Abovyan also cost almost the same as the ones in Yerevan now.

A commission, consisting of staff from the Ministry of Labor and Social Affairs as well as the State Property Management Department within the government, has been set up to assess and accept the apartments provided by the Sokol Group. After this, the apartments are considered to be state property and are submitted to the State Property Management Department. The graduates can privatize the apartments only 10 years later. The commission is charged with assessing the state of the apartments. However, a number of graduates we spoke to said that any complaints they made had been received with replies such as “If you don't want it, you can forget about it”, “This is too good for you anyway”, “Take it while it's still up for grabs” and so on.

Those responsible for the program noted that very often the graduates would be capricious in their demands for apartments, that they would not adapt and would forget that for many years no such program had existed. A building with 36 single-room apartments is currently being reconstructed in Charbakh, which would allow the demand for apartments in Yerevan to be met completely. Deputy Minister Berikyan did not wish to name a date for the end of renovation, but said that the apartments would be ready in the near future. This program is one of the government's major achievements indeed, wherein graduates from children's homes no longer find themselves on the street. However, it should be properly monitored so that it does not become a business boom for any one company.

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