Armenia's Prime Minister Nikol Pashinyan has proposed transferring management of the country's railway network to a neutral third-party operator, naming Kazakhstan, the UAE, and Qatar as potential candidates — a move that reflects deepening Armenian unease with Russian institutional control at precisely the moment Russian Railways (RZD) teeters on the edge of insolvency.
The proposal, reported by OC Media, would see a country with "friendly relations" to both Yerevan and Moscow purchase the concession management rights currently held by South Caucasian Railway, an RZD subsidiary operating under a 30-year agreement signed in 2008. Pashinyan was explicit about his rationale: Russian management of the network was being exploited to route regional transit through the Kars–Dilucu corridor, bypassing Armenia and eroding its competitive position in South Caucasus transit geography.
"The fact that this section of the railway is under the management of Russia is being used to present the Kars–Dilucu route as more favourable," Pashinyan stated — a reference to the competing Turkish-Azerbaijani corridor that has gained significant momentum following the 2020 Nagorno-Karabakh war and the broader reorientation of regional infrastructure away from Armenian territory.
A Parent Company in Crisis
The timing of Pashinyan's proposal is inseparable from RZD's deteriorating financial position. According to RailFreight, the state-owned railway giant has accumulated a debt of approximately 4 trillion rubles — roughly €44 billion — after freight volumes fell 12.5 percent between 2022 and 2025. The company has lost an estimated 14 percent of its rail freight business since Russia's full-scale invasion of Ukraine.
The Russian government has announced a 1.3 trillion ruble bailout package, including debt restructuring, asset sales — among them a prominent Moscow skyscraper and a planned 49 percent stake divestment in Federal Freight Company worth approximately €500 million — and a 1 percent emergency freight tariff increase effective March 2026. Despite these measures, one industry analyst cited by RailFreight assessed that "Russian Railways is effectively bankrupt and has no chance of getting out of the hole on its own."
For Pashinyan, this financial fragility transforms what was previously a geopolitical preference into an operational urgency. With RZD preparing a sweeping asset sale to cover its liabilities, the future of its South Caucasian Railway subsidiary is materially uncertain. A disorderly RZD restructuring that forces a sale or management disruption of the concession could leave Armenia's rail network in limbo at a critical moment in regional connectivity negotiations.
The Diplomatic Architecture of the Candidate List
The choice of Kazakhstan, the UAE, and Qatar as proposed operators is not incidental. All three maintain substantive relationships with Moscow while pursuing independent foreign policies — providing the diplomatic cover Pashinyan requires to avoid positioning the transfer as a direct rupture with Russia. Kazakhstan, as a fellow member of the Eurasian Economic Union, carries particular weight as a candidate that Moscow could accept without interpreting the move as a pivot toward the West.
The Gulf candidates carry a different logic. Both the UAE and Qatar have invested heavily in infrastructure assets across the former Soviet space and offer capital depth, technical competence, and political neutrality. Their inclusion signals that Yerevan is keeping its options open across multiple geopolitical orbits simultaneously — a defining feature of Armenia's post-2020 foreign policy recalibration.
Strategic Decoupling Without a Break
In the Caucasus, as across mountainous borderlands, ancient identities and modern geopolitics create intricate patterns of conflict and cooperation. Pashinyan's railway proposal exemplifies the careful, incremental approach Yerevan has adopted toward reducing its structural dependencies on Russia without triggering the kind of open confrontation that Georgia's 2008 trajectory demonstrated can carry extreme costs.
The railway network is not merely an economic asset. It is a physical manifestation of the post-Soviet integration architecture that has linked Armenia to Russia since independence. Its transfer to a neutral operator would represent a significant, visible step in the broader realignment that has already seen Armenia suspend its participation in CSTO military exercises, open border management discussions with the EU, and quietly diversify its security partnerships.
Whether Moscow would accept such a transfer — particularly amid its own wartime pressures and institutional financial stress — remains the central uncertainty. The concession agreement gives Russia legal levers to complicate any transition. But RZD's own insolvency may ultimately give Pashinyan the leverage he needs: a financially collapsing parent company is poorly positioned to resist a managed handover framed as protecting the asset's operational continuity.
