The tariff of drinking water supplied to consumers in the Armenian capital will remain unchanged for at least another year despite the fact that the state regulators have approved a new rise in the utility price.
The Public Services Regulatory Commission (PSRC) said on Tuesday the Yerevan municipality will subsidize the difference of 14 drams (about 4 cents) arising from the change of tariff for drinking water from current 181 to 195 drams per cubic meter, effective July 8.
“A request for raising the tariff to 207 drams had been made. As a result of a monitoring our staff offered to set it at 195 drams. There is also a notice from the Yerevan municipality signed by [mayor] Gagik Beglarian that the city authorities are ready to pay the difference as a subsidy, so that the tariff [for end-consumers] remains unchanged,” PSRC Head Robert Nazarian said on Tuesday.
The municipal assembly made a decision earlier this month to allocate 340 million drams (more than $880,000) to the utility company to cover the difference between the tariff set by the PSRC and the price paid by the consumer.
In substantiating its request for the tariff rise, the French-run Yerevan Jur company had referred to a 20 percent drop in water consumption in Yerevan. It also said falling revenues stemming from the devaluation of the Armenian currency had required additional investment from the company to live up to its commitments, in particular to continue to upgrade the city’s water supply and drainage systems.
The last time the drinking water price was raised in Armenia was about a year ago when the PSRC approved an increase of the price of water from 172.8 to 181 drams per cubic meter from July 8, 2009.
Yerevan Jur submitted its latest request for a revised water tariff in late February. The company's Director General Pascal Royer said he was unhappy with the decision of the state regulatory body. He said the company would be receiving an estimated 1 billion drams' (about 2.6 million dollars') worth of additional income annually had the PSRC approved their requested tariff. The current decision, in Royer's words, gives the company only half of that expected income.
"I am unhappy with the final tariff, because we will have to make big cuts in our budget and that will be at the expense of the services we provide. But let's hope that the activities that we have already carried out will yield their results so that we can partly offset [the shortfall]," said Royer.
PSRC Head Nazarian, meanwhile, criticized the water utility company for trying to recover their losses incurred through mismanagement by seeking higher water tariffs.