Armenia’s French-managed water distribution network said on Friday that it will ask state utility regulators next week to allow a 7 percent increase in the price of drinking water in the country.
The Veolia Djur network wants to raise the price from just over 191 drams (40 U.S. cents) to 205 drams per cubic meter starting next January. It needs the Public Services Regulatory Commission’s permission to do that.
The commission has already twice sanctioned water tariff increases in the last two years.
In a written statement to RFE/RL’s Armenian service, Veolia Djur said it needs additional revenue to upgrade the aging water network which is in need of substantial capital investments.It argued that annual price hikes are envisaged by its 15-year management contract with the Armenian government signed in November 2016. Under that agreement, the tariff can be cut after 2023.
The operator, which is part of France’s Veolia utility group, managed only the water and sewerage network of Yerevan from 2007-2016. It has been in charge of water supply in the entire country since November 2016.
Inessa Gabayan, the recently appointed head of the State Committee on Water Resources, on Friday criticized Veolia’s track record and strongly objected to its plans to raise the water price. Citing a recent series of water main breaks and other accidents in and outside Yerevan, she said that many Armenians are dissatisfied with the company.
“Our evaluation of the work of Veolia is unsatisfactory,” Gabayan told RFE/RL’s Armenian service (Azatutyun.am). “It is backed up by many complaints which we get by post every day.”
The Public Services Regulatory Commission is technically independent from the Armenian government and Gabayan’s agency in particular.
Veolia managed to phase out Soviet-era water rationing in the vast majority of Yerevan’s neighborhoods after taking over the municipal network over a decade ago. “By 2030 the entire population of Armenia will be supplied with drinking water [around the clock] thanks to Veolia,” the company pledged in November 2016.
It said that it will attract $200 million in funding from the European Bank for Reconstruction and Development and the German development bank KfW over the next four years for further infrastructure upgrades.