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Italian-Run Utility Reports Improved Collection Of Water Fees


By Karine Kalantarian
The Armenian government and an Italian company that runs Yerevan’s water distribution network announced on Friday a marked improvement in the collection of utility fees.

Officials said the A-Utility operator now collects over 350 million drams ($610,000) in fees every month, or as much as it did in the course of 2000 when the Italians took over Yerevan’s rundown water network.

“During each month of this year the city’s population pays as much for water as it did in the past,” said Gagik Martirosian, head of the State Committee for Water Resources.

The consumers’ widespread failure to pay for their bills has been one of the reasons for the continuing difficult situation with supplies of drinking water. Most Yerevan households still have it for several hours a day. The authorities have pledged to ensure around-the-clock supplies by the end of 2004.

The situation has somewhat improved since the government signed a four-year management contract with A-Utility in 2000 as part of a $20 million loan program funded by the World Bank. The A-Utility chairman, Andrea Mangano, said $15 million of that has already been invested in the network and 17 percent of the homes now have running water 24 hours a day.

The improving bill collection results, to a large extent, from the ongoing mandatory introduction of water meters by all Armenian households. According to Martirosian, half of the Yerevan residents have already purchased and installed them. But he cautioned that the network will not end its losses before 2006.

Part of the problem, officials say, is that the existing water tariff of 56 drams (about 10 U.S. cents) per cubic meter is too low and does not allow the operator to recoup its costs. The government indicated earlier that it will have to nearly double the price next year.

Martirosian also complained that the aging Soviet-era infrastructure also greatly contributes to the inefficiency. He said that 40 percent of the city’s 1,500 kilometer-long network of water pipes needs to be replaced altogether, while the rest of it requires urgent repair. He said the government and A-Utility plan to carry out the work with an additional $55 million loan to be provided by the World Bank next year.
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