By Atom Markarian
The Armenian government officially confirmed on Thursday its anticipated plans for a dramatic increase in the price of drinking water next year, saying that the drastic measure is needed for making water supplies more efficient. The head of the government Committee on Water Resources, Gagik Martirosian, said the existing tariffs will be more than doubled to 120 drams (20 U.S. cents) per cubic meter to generate additional revenues that will be used for scaling down the network’s chronic losses. He said that will in turn help his agency ensure 24-hour water supplies by the end of 2004.
“It’s impossible to carry on like this,” Martirosian told journalists after a weekly cabinet meeting. “We need to raise funds for the badly needed capital investments.”
“The tariffs must be raised step by step if we are to have a reliable and efficient distribution network,” he said.
The tariff increase requires the approval of the State Commission on Natural Monopolies, a regulatory body which has final say in determining the utility fees in Armenia. Martirosian said an appropriate request will be filed to the commission “very soon.” Its positive decision seems a forgone conclusion.
The government plans come amid the mandatory introduction of water meters in houses and apartment buildings across Armenia. Some 280,000 households, who previously paid a fixed monthly fee for drinking water, have already installed the devices in the course of this year. Officials say they now use three times less water and pay for it on time.
Poor collection of water bills has been central to the sector’s woes. Water metering is seen by the government as the principal mechanism for addressing them. In recent months, the bill collection has improved considerably in Yerevan whose water distribution network is run by an Italian company.
Still, the aging Soviet-era infrastructure requires substantial investments and continues incur major losses. Some of its sections have been modernized with a $20 million loan provided by the World Bank in 2000. Another $56 million will be made available by the bank next year.
According to Martirosian, even that will not be enough for getting the network into shape. He said it will not become self-sufficient until the tariffs are brought to 250 and possibly 300 drams per cubic meter.