The price has stood at 180 drams (37 U.S. cents) per cubic meter ever since the Veolia utility giant took over the network in 2017 after signing a 15-year management contract with the former Armenian government.
The company’s Armenian subsidiary, Veolia Djur, requested in August this year permission to raise it to almost 224 drams per cubic meter. It cited, among other things, higher-than-expected inflation and the increased cost of electricity in the country.
The Public Services Regulatory Commission (PSRC) decided to scale back the price hike effective from January 1. It said the water tariff will remain unchanged for low-income households and be set at just over 200 drams for other consumers.
The PSRC linked the decision to the Armenian government’s November 10 agreement with Veolia Djur which amended some terms of the French company’s operating license.
The government has shed little light on the agreement so far. It is not clear whether it made financial concessions to Veolia in exchange for limiting the price rise.
Veolia had managed the water and sewerage network of Yerevan from 2007-2016, phasing out Soviet-era water rationing in the vast majority of city neighborhoods.