ArmInfo.The single water supply operator in Armenia - "Veolia Jur" company applied to the Public Services Regulatory Commission (PSRC) to review the current water tariff. If the application is approved and the authorities refuse to subsidize the difference further, the tariff for the consumer will be increased.
According to the Regulator's press service, the Commission accepted for examination the application of a single operator dated August 7, 2019 to clarify tariffs for water supply and sanitation. As head of the tariff policy department of the PSRC Ashot Ulikhanyan told ArmInfo, the application will be examined within the next 80 days from the receipt of the application. If approved, the new regulations will enter into force on January 1, 2020.
So, according to the application, "Veolia jur" proposes to establish a retail tariff of 128.780 drams (excluding VAT) and 154.536 drams (including VAT) for drinking water supply per 1 cubic meter. It is proposed to specify services for drainage water up to 22.72 drams (excluding VAT) and 27.271 drams (including VAT), in total - up to 181.8 drams (including VAT) against the current 191.4 drams.
The tariff for water supply and drainage water to persons licensed to provide this type of service, communities and community budget departments, non-profit organizations is proposed to set the following: wholesale tariff of 30.301 drams (excluding VAT) and 36.361 drams (including VAT) for water supply for 1 cubic meter drinking water, and services for drainage water it is proposed to clarify up to 15.151 drams (excluding VAT) and 18.181 drams (including VAT).
Drainage water of "Karen Demirchyan Yerevan Subway" CJSC, according to the application, is planned in the amount of 9.276 drams (excluding VAT) and 11.131 drams (including VAT).
At first glance, and as a result of simple mathematical addition, we can conclude that the water tariff is reduced. But there is more to it than that. As the saying goes, the devil is in the details.
On November 22, 2017, PSRC approved the application of the single water supply operator in Armenia - "Veolia Jur" company (daughter of the French Veolia Enviroment SA) to increase the water tariff and from January 1, 2018 increased the water tariff in Armenia from 180 drams to 191,414 drams per 1 cbm. Of these, the tariff for water supply amounted to 162,702 drams, and for the drainage water - 28,712 drams. The tariff for the supply of wholesale drinking water services and drainage amounted to 57.423 drams per cubic meter against the previous 47.853 drams. The tariff for groundwater drainage of "Karen Demirchyan Yerevan Subway" CJSC amounted to 11.114 drams per cubic meter. At the same time, it was reported that water tariffs under the lease agreement with Veolia, for the second year of its activity, should be adjusted depending on the electricity tariff, inflation, as well as retail supply volumes in the water supply sector.
On November 28, 2018, PSRC approved the application of Veolia Jur CJSC on the application of the previous tariff for drinking water and wastewater disposal. Initially, it was envisaged that the tariff should have been increased by 10.4858 drams and amounted to 202.272 drams, however, on the basis of the signed memorandum of understanding between the Ministry of Energy Infrastructures and Natural Resources of the Republic of Armenia and Veolia Jur CJSC, it was stated that this tariff rate will start to apply from 2025 year. Thus, the rate remained at the level of 191.414 drams, however, taking into account the subsidization of the tariff by the state in the amount of 11.414 drams per 1 cubic meter of water, the water tariff for the final consumer has remained unchanged - 180 drams per 1 cubic meter. And then it becomes obvious that the next "refinement" of the de facto water operator will lead to an increase in the price of water supply and sanitation services for the final consumer - from the current 180 drams per 1 cubic meter up to 181.8 drams. Unless, of course, the authorities remain committed to a tariff subsidy policy.