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 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.
Garegin Baghramian, the chairman of the Public Services Regulatory Commission (PSRC), said the commission has looked into the application and believes that the water tariff must remain unchanged for low-income households and be set at 200 drams for other consumers.
Baghramian told reporters that the PSRC will “propose” this solution at an upcoming meeting with Veolia Djur executives. It will make a final decision on the new tariff after that meeting, he said.
In his words, the regulators are also seeking a 10-year tariff agreement with the water operator. “That presupposes a certain increase in the price, which will remain, nonetheless, stable in the next 10 years,” added Baghramian.
Under Armenian law, the PSRC has to fully or partly approve the Veolia Djur application or reject it by December 1.
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.