The Armenian government plans to increase the subsidy provided to South Caucasus Railway CJSC by 65.2 million drams to compensate for losses from passenger transportation. The relevant non-reportable draft has been included on the agenda of the government’s July 16 meeting.

Under the proposal, revenues and expenditures in the 2026 state budget will each rise by 65 million 222.3 thousand drams. The entire amount will be directed to the Railway Network Development program, Armenpress reports.

Based on 2025 results, the subsidy payable to South Caucasus Railway totaled 312 million 211 thousand drams. However, the 2026 state budget allocated 246 million 989 thousand drams for this purpose.

The difference created an outstanding payable of 65 million 222.3 thousand drams, which the government intends to settle through the proposed amendment.

A concession agreement signed in 2008 between Armenia, South Caucasus Railway and Russian Railways stipulates that the state partially compensates the company for annual losses incurred from passenger services on agreed routes.

For the period from 2016 to 2038, compensation has been set at 30% of the approved losses.

According to the draft’s explanatory note, the measure will not create an additional financial burden on the state budget because the subsidy is paid in an amount equivalent to the concession fee transferred by the company to the state budget.

The concession fee for 2025 amounted to 312 million 211 thousand drams and was paid into the state budget by the company on June 4, 2026. By adopting the proposal, the government will fulfill its financial obligations under the concession agreement.