ArmInfo.If the negotiations of the Armenian authorities with the "Veolia Djur" company are concluded successfully, from January 1, 2022, the water tariff can be increased by only 20 drams - up to 200 drams per 1 cubic meter, instead of the 223.7 drams offered by the single operator of water supply. Head of the Public Services Regulatory Commission (PSRC) of Armenia Garegin Baghramyan stated this on October 20 in an interview with journalists referring to the company's application to increase the water tariff.
Earlier, ArmInfo reported that on August 9, 2021, the single operator of the water supply system in Armenia, "Veolia Djur"company, appealed 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 was accepted by PSRC for consideration on August 12 and 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 the document is approved, the new regulations will come into force on January 1, 2022.
Baghramyan recalled that 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 base tariffs for 15 years, which are adjusted based on 3 factors (depending on the electricity tariff, inflation rates, as well as the volume of retail supplies in the water supply sector, Ed. note). Based on the base price, as indicated by the head of the Regulator, 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.
Nonetheless, the Armenian government hopes to achieve a more painless increase by revising a number of conditions in the lease with the company. So, at this stage, the Armenian government is negotiating with "Veolia Djur" in order to form a more stable pricing policy for the next 10 years. "There is a scenario according to which the tariff will increase until 2025-2026, then it starts to decline. At present, we are negotiating with "Veolia Djur" to form a more stable pricing policy for the next 10 years, already without any subsidies from the state treasury or refusal from the company's rent," Bagharmian said. At the same time, as the head of the PSRC explained, a stable price does not mean keeping the tariff at the same level, but adjusting it, that is, a possible increase by only 1-2 drams.
If the negotiations are concluded successfully, then the current tariff will be 180 AMD per 1 cubic meter will be saved for socially disadvantaged strata of the population - about 100 thousand subscribers, by analogy with the benefits in the line of payment for electricity and gas. "A stable price policy will be developed for the rest of the population, that is, the tariff will be increased by about 200 drams, but not within one year, but within 10 years," he explained, adding that with such a development, Armenia will already refuse clause of the lease agreement, suggesting a reduction in tariff after 2026. 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.
In September 2019, "Veolia Djur" applied to the Commission to revise the current tariff for drinking water from the current 180 AMD per 1 cubic meter up to 181.8 drams (including VAT). However, at the expense of additional tax levies and instead of reducing the rent for the network, an agreement was reached to reduce the base tariff for water.
