Veolia Jur intends to apply to PSRC for water tariff revision

ArmInfo. Veolia Jur, the unified  operator in the sphere of water supply and sanitation in Armenia,  intends to apply to the Public Services Regulatory Commission of the  Republic of Armenia (PSRC) in order to revise the tariffs for water.  This was stated to the correspondent of ArmInfo by the press  secretary of Veolia Jur Murad Sargsyan.

According to the representative of Veolia Jur, by the 15-year lease  agreement, the company is obliged to submit an application to the  state regulator in August of each year in order to clarify the tariff  for the next year. Already on the basis of studies and taking into  account the three main factors, namely, changes in the electricity  tariff, inflation rates, and the volume of retail supplies in the  water sector, the PSRC will decide whether to raise or lower the  water tariff. In this case, as Sargsyan noted, the revision of the  tariff does not necessarily mean raising them, because taking into  account the above arguments, tariffs may be reduced from January 1,  2018. "For today, we are not talking about raising the tariff, it is  about mandatory clarification of the tariff for water," he explained.

ArmInfo previously reported that in November 2016 a 15-year lease  agreement was signed with a new, unified operator of the water supply  and sanitation sector of Armenia. Already a new operator of water  supply, unified throughout the country and with a single tariff,  started operating on January 1, 2017 and took over the management of  five existing operators: Yerevan Dzhur, Armwatercanal, Shirak Wate  Canal, Lori Water Canal and Nor Akunk. After the single operator of  water came into possession of the "water economy" of Armenia,  starting from January 1, 2017 in the republic a single tariff for  water was set at 180 drams per one cubic meter, including VAT, thus  for residents of the capital, commemorating the rise in price  (previously low The tariff was in force in Yerevan, it makes 170,256  AMD per 1 cubic meter of water, and in the regions - up to 200 AMD,  in Armavir - 204). Today's information about a possible revision of  the tariff caused public outcry. As some media reported, the company  intends to raise the tariff to 194.3 AMD. For large subscribers, it  is proposed to raise the tariff to about 58.3 from the current 54.

However, according to the law, voicing the intention to raise the  tariff, the company must justify it. Under the same lease, it can be  revised if the following conditions exist: with a significant  increase in the price of electricity, in conditions of significant  fluctuations in the exchange rate, with an expansion in the scope of  the company's obligations requiring additional investment or  following a technical audit conducted by an international independent  organization, that Can not be earlier than 2018.

It is also important that when signing the contract with the French  company it was announced that the lease will also specify the basic  tariffs for 15 years, where the base tariff for the first year will  be set at the rate of retail supplies in the sphere of water supply  and sewage disposal. Tariffs for water can be reviewed no more than  once a year. It was also noted that, for at least 2 years, the  company would not request a tariff increase. This item was discussed  with ArmInfo Murad Sargsyan refrained from commenting.

To recall, in November 2016, a 15-year lease was signed with a new,  unified operator in the sphere of water supply and sanitation in  Armenia. The new operator of water supply undertook to provide its  subscribers with services (water supply, drainage and wastewater  treatment) for a total of about 800 million euro within 15 years. And  by 2030, throughout the territory where the company will provide its  services, water supply should become round-the-clock. To fulfill the  contract, including the point on the modernization of the water  supply system, serious investments will be required. Within 15 years,  Veolia will invest 37.5 billion AMD of its own funds in capital work.  In its turn, the Armenian side agreed within the first 4 years to  attract about $ 200 million to the company's important programs,  including at the expense of the European Bank for Reconstruction and  Development, the German Development Bank KfW and the European  Investment Bank.

To note, according to the National Statistical Service of Armenia in  2016, revenues from water supply, waste treatment and processing and  receipt of secondary raw materials increased by 7% per annum (against  10.1% growth a year earlier) to 22.1 billion drams. Moreover, the  growth in this segment, mainly, caused the collection, processing and  receipt of water (annual growth of 3.4%, with a decline for the month  by 1.2%). In January-February 2017, revenues from water supply, waste  treatment and processing and receipt of secondary raw materials  increased by 5.3% per annum (against 10% growth a year earlier) to  3.8 billion drams during the reporting period. Moreover, the upward  annual dynamics in this segment, mainly, resulted in the collection,  processing and receipt of water (an increase of 3.5%).