Veolia Djur applied to PSRC to increase water tariff: the grounds are kept secret

ArmInfo. Veolia Djur, a single operator in the sphere of water supply and sanitation in Armenia, asks the Commission for Regulation of Public Services (PSRC) to raise the water tariff.

To remind, a year ago, when the Armenian Government announced the results of an international tender to determine a single water supply operator in the republic, it was officially announced that the priority was given to the company that offered the lowest water tariff- French Veolia Enviroment SA. "The unified water tariff in Armenia in the next 15 years, if it increases, is insignificant," the regional vice president of the French corporation Veolia Generale des Eaux Malika Genduri told journalists on November 21, 2016 at a press conference on the completion of the tender. Then she did not name the value of the future tariff, adding that it will be determined by the regulatory body. "As you know, we have been supplying Yerevan with water for 10 years. I can say that of all the more than 40 countries where "Veolia" operates, the tariff in Yerevan is the lowest. It can rise, but slightly -    taking into account the obligations that we will assume, now and outside of Yerevan, "said Genduri. At the same time, the company undertook to significantly reduce losses in the water supply sector, and the responsible persons assured that at least two years after the establishment of a single tariff in the territory of Armenia, a new revision of it will not be made.

In the meantime, starting from January 1, 2017, the republican single water tariff for residents of Yerevan was raised from 170,256 drams for 1 cubic meter of water to 180 drams, including VAT. Participants of the process hastened to assure the citizens of RA that the increase comes from their own interests, since the funds will be used to improve the system and expand the service network. As Musheg Karapetyan, adviser to the Water Supply and Sanitation Department of the State Committee for Water Resources of the Ministry of Energy Infrastructures and Natural Resources, said at the meeting with the ArmInfo correspondent, the state policy is to include the unified water supply operator in the service area left behind until today.  Meanwhile, in May this year. The chairman of the State Water Committee of Armenia Arsen Harutyunyan told ArmInfo correspondent that today Veolia has no contractual obligations and the community water infrastructure can be transferred under the management of a single operator only after the necessary water system is formed.

Veolia Djur voiced its intention to apply to PSRC previous week. At the same time, Murad Sargsyan, spokesman for the company, told ArmInfo that all the company's actions are based on a 15-year lease agreement, according to which it is obliged to submit an application to the state regulator in August 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 rate, 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. On August 2, refraining from commenting on the information that the company had previously committed at least 2 years to not request the PSRC to raise the tariff, Sargsyan promised ArmInfo to submit information on the grounds for applying to the Regulator on August 7.

Meanwhile, on August 7, the company applied to the PSRC in order to raise the tariff to 194.3 drams. For large subscribers, the tariff is proposed to be raised to about 58.3 drams from the current 54. However, according to the letter of the law, the intention to raise the tariff is voiced, the company should justify it.  Under the same lease agreement, 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.

As of August 9, Murad Sargsyan was not ready to provide the media with legal grounds for increasing the tariff and refused to continue the conversation.  At the same time, according to PSRC, the application will be considered within 80 days, of which 10 days will be allocated for desk inspections, that is, checking the correctness of the application, as well as all necessary documentation to justify the increase in the current tariff. Further, according to the order, monitoring and public hearings will follow. The situation around the water supply today is a story with a lot of questions and as practice shows, and this time the Regulator will not make an exception and will deny the natural monopolist of increasing the current tariff.