ArmInfo. Government of Armenia negotiates with a single operator of the water supply system -company "Veolia Djur" for the revision of the lease agreement in order to form a more stable pricing policy for the next 10 years. This was stated by the head of the Public Services Regulatory Commission (PSRC) of Armenia Garegin Baghramyan on September 29 in an interview with reporters referring to the company's application to increase the water tariff.
Earlier, ArmInfo reported that on August 9, 2021, "Veolia Djur" company applied to the Commission, proposing to increase the water tariff by 43.7 drams from January 1, 2022 - to 223.7 drams (including VAT) per 1 cubic meter , mainly referring to annual inflation (in January-June compared to January-June last year it was 5.7). The application will be studied within the next 80 days from the date of receipt of the application, and a decision on it must be made no later than December 1. If approved, the new regulations will come into force on January 1, 2022.
""The water supply system in Armenia was leased for a period of 15 years. After the announcement of the results of the tender, the company presented basic tariffs for 15 years, which are adjusted based on three factors (depending on the tarrif on electiricty, inflation rates, as well as wholesale supply in the field of water supply-ed. note). Considering the base price, I can say that the tariff for 2022 will be 214 drams, that is, only on this line there will be an increase of 34 drams, plus inflation and an increase in the electricity tariff, "the PSRC head explained today.
According to him, at this stage, the responsible structures with the operator of the water supply system are discussing the possibility of revising a number of conditions in the lease agreement. "There is a scenario according to which the tariff will increase until 2025-2026, then it starts to decrease. Currently, we are negotiating with Veolia Djur to form a more stable pricing policy for the next 10 years, but in such a way that this does not affect budget revenues generated from the company's rent. This is not yet certain, "Baghramyan said, noting that discussions will also take place in order to maintain the current tariff for socially disadvantaged segments of the population - about 100 thousand subscribers, by analogy with benefits on the line of payment for electricity and gas.
In response to the remark that in 2019 Prime Minister Nikol Pashinyan assured that an agreement was reached with the Veolia Jur company that the price for water supply and sanitation would not increase until 2024, Garegin Baghramyan said that maintaining the tariff could be achieved by reimbursing these expenses from the state budget. "We can avoid increasing the tariff until 2035, instead nonpaying the corresponding rent for the network to the state budget," he said. By giving up these receipts to the state treasury, approximately in the amount of 6.8 billion drams, according to the head of the Commission, it will even be possible to reduce the tariff. At the same time, as Garegin Baghramyan emphasized, he considers it wrong and inexpedient to refuse from rent and corresponding budget receipts in exchange for maintaining the tariff, since there are many solvent citizens who are able to "cope" with this increase.
In September 2019, ArmInfo, referring to the head of PSRC Garegin Baghramyan, reported that Veolia Djur (a subsidiary of the French Veolia Enviroment SA - ed. note) applied to the Commission to revise the current tariff for drinking water from the current 180 AMD for 1 cubic meter up to 181.8 drams (including VAT). As the head of PSRC Garegin Baghramyan assured the ArmInfo correspondent, despite the existence of an application, the tariff will remain unchanged both in 2020 and 2021. According to him, over the past months, the Armenian government has been negotiating with Veolia Djur on the water tariff, resulting in an agreement to lower the base water tariff due to additional tax levies and in return for lower network rent. Meanwhile, when in 2016 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 priority was given to the company that offered the lowest water tariff - French Veolia Enviroment SA. "The single tariff for water in Armenia in the next 15 years, even if it rises, will be insignificant," Regional Vice President of the French corporation Malika Genduri told reporters on November 21, 2016 at a press conference on the occasion of 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 water to Yerevan for 10 years. I can say that out of all 40-odd countries where the company operates, the tariff in Yerevan is the lowest... It may increase, but insignificantly - given the obligations that we will undertake, now also outside Yerevan, "Genduri said. At the same time, the company pledged to significantly reduce losses in the water supply sector, and the responsible persons assured that, at least for two years after the establishment of a single tariff on the territory of Armenia, there will be no new revision upward.
Since January 1, 2017, a new single water operator, the French company Veolia Enviroment SA, has taken over the management of the property of five operating operators: "Yerevan-Jur", "Armvodokanal", "Shirak Vodokanal", "Lori Vodokanal" and "Nor Akunk". At the same time, from January 1, 2017, a single tariff for water was established in the republic, and for the residents of Yerevan it was increased from 170.256 drams per 1 cubic meter of water to 180 drams, including VAT. The participants in the process hastened to assure the citizens of the Republic of Armenia that this increase is based on their own interests, since the funds will be directed to improve the system and expand the service network. At that time, Mushegh Karapetyan, Advisor to the Water Supply and Wastewater Systems Department of the Ministry of Energy Infrastructures and Natural Resources, said in an interview with ArmInfo correspondent that the state policy is to include the territories remaining "overboard" in the service zone of a single water supply operator. Meanwhile, the former chairman of the State Committee for Water Resources of Armenia Arsen Harutyunyan told ArmInfo correspondent that Veolia has no contractual obligations and the community water infrastructure can be transferred under the management of a single operator only after the formation of the necessary water system.
