Water tariff in Armenia will not increase in the next 2 years
The single operator of water supply in Armenia - "Veolia Djur" company applied to the Public Services Regulatory Commission (PSRC) to revise the current tariff for drinking water from the current 180 drams per 1 cubic meter up to 181.8 drams (including VAT). As the head of PSRC Garegin Baghramyan assured an ArmInfo correspondent, despite the availability of the application, the tariff will remain unchanged both in 2020 and 2021.
According to him, over the past months, the Armenian government has been negotiating with "Veolia Djur" around the water tariff. As a result, due to additional tax fees and in return for reducing the rent for the network, an agreement was reached on lowering the base water tariff. As a result, a single water supply operator turned to the Regulator with a request to increase the water tariff to 181.8 drams, and not to 211 drams stipulated by the 15-year agreement for 2020.
In addition, as Bagramyan explained, according to the established practice, annually, until August 10, the "Veolia Djur" company applies to the PSRC, use as a basis the basic tariff and adjustments depending on the electricity tariff, inflation, as well as the volume of retail supplies in the field water supply. In the latter case, actual volumes of water sales are taken into account in comparison with the basic indicators fixed in the lease. But, since "Veolia" traditionally uses data from the beginning of the year to June, and the PSRC has data for July, the regulator is based on its own more recent data when revising the tariff. "In July of this year, compared with July 2018, water consumption increased by about 1 million cubic meters, which automatically leads to a certain reduction in the tariff. That is, only on the basis of this factor, the proposed tariff of 181.8 drams is reduced by 1 dram", Baghramyan said.
The fixed increase in consumption, as explained by the head of the PSRC, is the result of a decrease in theft of water and illegal consumption, as well as economic growth. For the third year in a row, the Regulator monitors the actual volumes of water supply by "retailers" to identify cases of illegal connection to the water supply system and violations.
From September 17 to November 1, regular monitoring of retail supply volumes in the water supply sector will be carried out and, when such facts are revealed, the registered volumes will also be taken into account in calculating the new water tariff. As of today, 14 groups have been formed together with the water committee, and the media will participate in the monitoring if desired, as well as public organizations. The Head of the Regulator also urges citizens to join the "campaign" and, if there is information about illegal consumption, report to the PSRC by phone (010) 584 529.
The last important factor that gives rise to an optimistic forecast by PSRC is the position recorded in the license agreement with "Veolia Djur". "When a tariff is specified in the range of plus or minus 0.5% of the current tariff, the tariff is revised. Based on the above factors, I am more than sure that the current tariff will not be revised. Moreover, the tariff will not be kept at the expense of the planned investment, "- said the head of the department. However, from January 2020, the government will not subsidize the difference in tariff in the amount of 11.414 drams per 1 cubic meter of water, approved from January 1, 2018 at the level of 191.414 drams per 1 cubic meter.
As of today, as Garegin Baghramyan stated, an agreement was reached with "Veolia Djur" (Veolia Djur, the daughter of the French Veolia Enviroment SA - Ed. note) on maintaining the basic tariff for water at the level of 176.4 drams for 2020-2021.
Earlier, ArmInfo reported that the PSRC accepted for examination the application of a single operator dated August 7, 2019 to clarify tariffs for water supply and sanitation. The application will be studied within the next 80 days from the receipt of the application. If approved, the new regulations will enter into force on January 1, 2020. The next "clarification" of the water operator, upon its approval, will de facto lead to a rise in price of water supply and sanitation services for the final consumer - from the current 180 drams per 1 cubic meter up to 181.8 drams.
Meanwhile, in November 2018, the acting Prime Minister Nikol Pashinyan, who heads the campaign list of the My Step bloc, said during an election campaign in Alaverdi that there would be no increase in drinking water tariffs until 2024. Meanwhile, according to the agreement signed with the company, a tariff reduction is not provided, and moreover, a tariff increase is envisaged until 2023, and only after 2023 will it decrease to the level of 2016, that is, after the 15-year lease term of the water supply system.