ArmInfo. A 15-year term agreement will be signed with a new single operator of water supply and sanitation Armenia in November. The new operator of water supply single throughout the country with common tariff will start operating from January 1, 2017.
Consultant of Water Supply and Sanitation Systems in State Committee of Water Resources under the Ministry of Energy Infrastructures and Natural Resources Mushegh Karapetyan informed ArmInfo's correspondent that preparatory work on holding international tender for choosing single operator of water supply in Armenia was being done since 2014. Three international companies: French operators Saur (manages "Armwaterchannel") and "Veolie Generale des Eaux (owner of 'Yerevan-Jur'), Italian Akea company (manager of Yerevan Jur in 2000-2005) and Armenian-German Consortium "AEG Service" (maintenance service of gas supply systems and water supply via Shirak water channel and Lori water channel") were competing for the position of single operator of water supply and water disposal. All the four companies passed the round of evaluation of technical proposals, on the results of the second round of tender French Veolia Environment SA was announced the winner. The company offered the lowest tariff on water. The relevant contract was approved by the Armenian government on October 27 and will be signed by the company in the middle of November. As a matter of fact, starting from January 1, 2017 new single water operator will take management of five acting operators: "Yerevan- Jur", "Armwaterchannel", "Shirak Water Channel", "Lori Water Channel" and "Nor Akunq".
The State Committee already mentions the positive sides of the reforms. It turns out that as of today the five operators were servicing 410-420 communities in Armenia, mainly large towns and villages. No water was supplied to around 570 communities due to small number of population. The current policy of the responsible agencies is to include these territories in the zone of water supply. Karapetyan noted that in some of these communities there is no infrastructure at all and only when relevant water systems are installed the single operator will be able to manage these communities. For this reason the situation in these communities has been already studied and in 30 of them in various regions of Armenia investments will be made in the nearest future via state funds and loans. In this context it is expected to attract funds from Asian Development Bank, German Development Bank (KfW) and European Bank for Reconstruction and Development (EBRD).
Mushegh Karapetyan thinks that the decision to have one single operator instead of the current 5 will be justified. A huge work was done to study the sector prior to making reforms. It became clear that it is important to have one operator for conducting common policy. Besides, Karapetyan clarified that the tenant according to the new contract is obliged to pay rent for state property entrusted to it and pays part from gained income. The second, the tenant will operate financial flows itself and if before the state was subsidizing the field, from now on there will be no subsidies. And most importantly, the expert noted that the managing company is obliged to make investments in modernization of water supply systems amounted to at least 37.5 bln drams within 15 years, although according to Head of State Committee of Water Management Arsen Harutyunyan the amount of investments may total up to 80 blnd rams ($170 mln).
However, society is seriously concerned not so much over the new reform as over reform of tariff policy. Meanwhile, Head of Tariff Policy Department of Public Services Regulatory Committee Garegin Baghramyan has told ArmInfo that one of the important results of the reform will be introduction of a common tariff. Earlier the tariff for Yerevan was 170.256 drams for 1cu.m and up to 200 drams in the regions. The official did not told the amount of the common tariff for all the consumers as negotiations with the tenant still continue, however he said that he does not think that the new tariff will be set at the highest threshold of the existing tariff. In the rental contract basic tariffs for 15 years will be set where the basic tariff for the 1st year will be set based on costs of retail supplies in water system and disposal of sewage. Starting from the 2nd year tariff will be corrected considering a number of factors: change of electricity tariff and amount of retail supplies, as well as inflation. The tariffs will be revised no sooner than once in a year.
