By Atom Markarian
State regulators approved on Tuesday an anticipated 40 percent increase in the price of drinking water in Yerevan which is sought by the new French operator of the city’s water and sewerage network.The Veolia Eau utility had asked the Public Service Regulatory Commission to allow it to raise the tariff from 125 drams to almost 173 drams (40 U.S. cents) per cubic meter of water -- a key term of its 10-year management contract signed with the Armenian government last December. It argued that the price hike is essential for reducing the rundown network’s huge losses.
Predictably, the government-controlled commission agreed to the request, ruling that the new price will take effect on July 1. Aram Andreasian, head of a government department managing Armenia’s water resources, praised the decision and said the difficult situation with water supplies in the capital will improve soon.
“I hope the people of Yerevan will be happy,” Andreasian told reporters. “We have saved no effort to have a good agreement with an experienced partner that now manages the Yerevanjur network.”
Veolia, which is the world’s largest water company, was chosen as the new network operator in an international tender overseen by the World Bank. The company will receive $20 million in World Bank loans and has pledged to invest 9 million euros ($11 million) of its own capital in Yerevanjur over the next decade. It has also committed itself to ensuring 24-hour water supplies to 95 percent of Yerevan households by 2009.
According to Andreasian’s department and Yerevanjur, about 78 percent of city residents already enjoy around-the-clock supplies. However, consumer rights groups and even the regulatory body dispute these claims, saying that the proportion is grossly inflated.