Veolia Djur proposes to raise water tariff in Armenia

ArmInfo.The single operator of the Armenian water supply system, Veolia Djur, intends to apply to the Public Services Regulatory Commission (PSRC) to increase the  water tariff by about 9 drams per 1 cubic meter.  

From January 1, 2017, the new single operator  of the water supply  system in Armenia, Veolia Djur company - a subsidiary of the French  Veolia Enviroment SA, has been operating five water distribution  companies across the country- Yerevan Jur, Armvodokanal, Shirak  Vodokanal, Lori Vodokanal and Nor Akunk for a period of 15. At the  same time, from January 1, 2017, a single water tariff was  established throughout the republic, and for 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  comes from their own interests, since the funds will be used to  improve the system and expand the service network. After the  announcement of the results of the tender, the company presented  basic tariffs for 15 years, which are adjusted based on 3 factors -  depending on the tariff for electricity, inflation rates, as well as  the volume of retail supplies in the water supply sector.  

The last time the water tariff was increased from January 1, 2022,  the tariff - by about 20 drams - to 200.47 drams (including VAT) per  1 cubic meter (the current tariff for socially vulnerable segments of  the population was maintained at the level of 180 drams), despite the  fact that, with an application dated August 9, 2021, Veolia Djur  proposed to increase the tariff by 43.7 drams from January 1, 2022 -  up to 223.7 drams (including VAT) per 1 cubic meter, mainly referring  to the annual inflation of 5.7%. As PSRC head Garegin Baghramyan  stated at the end of October 2021, the RA authorities plan to achieve  a stable price of 200 drams for the next 10 years instead of the  current 180 drams and maintain the current tariff for socially  vulnerable segments of the population. According to him, within the  framework of the relevant agreement between the Water Committee and  the Veolia Djur company, the rent for the company will remain  unchanged for the next 10 years. In addition, Armenia will abandon  the clause of the lease agreement, which implies a reduction in the  tariff after 2026.

Today Veolia proposes to establish a single tariff of 209 drams  (about 50 cents). As noted in the company's statement, in its  calculations, the company proceeds from the fact that the base tariff  for 2023 is 183.6 drams per 1 cubic meter. The impact of inflation on  the tariff was estimated at 23.51 drams (in the consumer market of  Armenia, inflation accelerated in the first half of 2022 to 8.1% -  ed. note). The effect of the increase in the electricity tariff is  estimated at 3.89 drams (from February 1, 2022, electricity tariffs  have increased by an average of 4.7 drams. An exception was made for  socially vulnerable segments of the population - ed. note). And,  since, in January-May 2022, compared to the same period in 2021, the  volume of retail supplies in the field of water supply increased by  about 5%, this factor reduced the burden on the tariff by 1.74 drams  per 1 cubic meter, another 0.26 drams per cubic meter is excluded  from other incomes.

After the application is accepted by the PSRC for consideration, it  will be studied within the next 80 days from the date of its receipt,  and a decision on it should be made no later than December 1. If  approved, the new regulations will come into force on January 1,  2023.