By Atom Markarian
A state-owned company supplying drinking water to Yerevan has asked government regulators to allow it to more than double its tariffs, citing continuing huge losses incurred by the obsolete network. Officials at the State Regulatory Commission on Public Services said on Wednesday that the Italian-run utility wants to raise the price of one cubic meter of water from 90 drams to 187 drams ($0.38). They said similar, but less radical, applications were filed by the water suppliers in the northern Shirak and Lori regions.
Under Armenian law, the commission, which has final say on all utility fees, must rule on those requests within 60 days. The drastic fee increase is understood to be backed by the government which heavily subsidizes the water networks in Yerevan and elsewhere in the country. The regulatory body is technically independent of the cabinet of ministers.
“Water supplies remains the only utility service which is kept afloat with state subsidies,” the spokesman for the Yerevan Water and Sewerage Company, Murad Sargsian, told RFE/RL. He said even the new tariff sought by the company would not enable it to become self-sufficient this year.
However, consumer rights groups rejected those arguments. In the words of Abgar Yeghoyan of the Union To Protect Consumer Interests, a non-governmental organization, the network is unjustly forcing consumers to pay for its losses.
The network’s aging and leaky Soviet-era pipes are thought to be their main cause. The head of Armenia’s State Committee on Water Resources, Andranik Andreasian, revealed late last year that as much as 80 percent of drinking water gets lost before reaching households across the country. Government officials were previously painting a rosier picture.
The huge losses were expected to decrease dramatically as a result of network restructuring and repair financed with a World Bank loan. The Yerevan network has been managed by Italy’s A-Utility firm ever since the launch of the $30 million scheme. The process has involved a nationwide introduction of household water meters.
An ad hoc commission of the Armenian parliament caused a stir last March when it concluded that the reform has failed to achieve its objectives, alleging a serious misuse of the World Bank money. Both the government and the bank’s office in Yerevan denied the claims.
The authorities also appear to have failed to deliver on their pledge to ensure round-the-clock water supplies to 80 percent of Yerevan households by the end of 2004. Many residential areas in the city still have running water for only a few hours a day.