Water prices in Armenia are expected to rise for most consumers beginning next year as the country plans to have a single utility operator applying the same tariff for all regions.
Currently, there are five companies managing drinking water supply in Armenia and their tariffs vary from area to area.
According to the State Committee of Water Resources, the single tariff will be applied countrywide soon after Veolia, a French company currently managing water supply only in Yerevan, will become a single operator.
An agreement with the company for the next 15 years is expected to be signed in mid-November.
State Committee of Water Resources head Arsen Harutiunian said that the new operator will pay a rent of a total of about 89 billion drams (approx. $186 million) and invest 36.5 billion drams (over $76 million) in the system during the next 15 years.
According to the official, as a result of negotiations they agreed on the tariff that will be applied for the first year of operation, which is the average rate of the five operating companies - 180 drams ($0.38).
Depending on the location the water tariff today in Armenia is between 170 to 204 drams. The final decision on this account is to be made by the Public Services Regulatory Commission. If the suggested tariff is approved, all residents of Armenia except those who live in the western Armavir province will see a rise in water prices.
According to Harutiunian, the calculation of the tariff includes three main components: water consumption, the electricity price and inflation. He said that depending on circumstances, the tariff can be changed again.
Environmentalist Inga Zarafian, meanwhile, argued that it is a “big mistake” to transfer such a strategic area to a single operator, because this way, in her opinion, it becomes a monopoly.
The head of the State Committee of Water Resources head dismissed such concerns, saying that the single operator will not have any advantages. “There is a concept of a natural monopoly, and this is the case of a natural monopoly. Over years we have had one gas distribution network, one electricity distribution network. Do you think the situation would be better if we had several operators,” he said.
Veolia, represented as Yerevan Jur in Armenia, over the past 10 years provided maintenance of water supply and sewerage in the Armenian capital. Company spokesman Murad Sargsian said they are now going to continue their work countrywide, putting the emphasis on upgrading the network in the regions.
While the tariff can be reviewed every year, Sargsian said the company will not seek to put the burden on consumers. “We are going to focus not on increasing tariffs, but on reducing losses through effective management, maintenance and reduction of energy costs,” he said.
The head of the State Committee of Water Resources said that the new agreement will have tougher requirements and will imply stricter penalties if the single operator fails to comply with them.