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Armenia's Water Operator Seeking Price Hike


Armenia - A sign outside the Yerevan headquarters of the Veolia Djur company, September 2, 2018.

A French company managing Armenia’s water distribution network has asked public utility regulators to allow it to raise the price of drinking water in the country by over 24 percent.

The price has stood at 180 drams (37 U.S. cents) per cubic meter ever since the Veolia utility giant took over the nationwide network in 2017 after signing a 15-year management contract with the former Armenian government.

Garegin Baghramian, the chairman of the Public Services Regulatory Commission (PSRC), said on Wednesday that the company’s Armenian subsidiary, Veolia Djur, requested last month permission to raise it to almost 224 drams per cubic meter. The operator cited, among other things, higher-than-expected inflation and the increased cost of electricity, he told reporters.

Under Armenian law, the PSRC has to fully or partly approve the tariff rise or reject it by December 1.

Baghramian signaled the regulatory body’s intention to agree to a higher water price. He argued that the management contract with Veolia envisages price hikes for the coming years.

But he stressed that the tariff will likely remain unchanged for about 100,000 low-income households that already enjoy electricity and natural gas price discounts.

The official also revealed that the PSRC and the government are negotiating with Veolia on a deal that would set a fixed water price for the next 10 years.

Veolia managed the water and sewerage network of Yerevan from 2007-2016, phasing out Soviet-era water rationing in the vast majority of city neighborhoods. The 2016 contract commits it to investing 37.5 billion drams ($77 million) in Armenia’s aging and inefficient water distribution network.

It is not clear how much the company has invested so far. Veolia Djur has still not responded to relevant questions sent by RFE/RL’s Armenian Service last week.

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