By Albert Khachatryan

At his meeting with journalists on October 5, Patrick Lorin, General Director, Armenian Water & Sewerage Closed Joint-Stock Company, reported his company plans to revise – upwards - the water supply price. After being raised by 28.4% on April 1, 2010, the water supply price reached 179.8 AMD per cubic meter. The SAUR S.A. Company (France) has been managing the Armenian Water & Sewerage CJSC since 2004.

The current water-supply, drainage and purification price is 181 AMD per cubic meter. The Generale des Eaux Company (France) is also working in this sector as founder of the Yerevan-Jur CJSC. However, irrespective of their legal status in Armenia, the companies are employing similar tactics.

Before launching their activities in a country, foreign companies carry out an overall risk assessment. We can hardly believe that such world-famous companies as SAUR S.A. and Generale des Eaux were not well informed of the situation in the Armenian water management sector, particularly of the water losses reaching as much as 80% - and even more. The long-standing problem has not so far been resolved. Complaints are regularly voiced despite the water-suppliers’ “efforts.” 

However, it seems a rather strange thing for the companies to shed crocodile tears for the huge water losses. It is not the suppliers, but water consumers that sustain losses. About 4/5 of the amount indicated in the water bills is a mere fraud.

After the Generale des Eaux Company launched its activities in Armenia, the RA Public Services Regulatory Commission promised a reduction in drinking water prices in Yerevan. The basic price, 172.8 AMD per cubic meter, was to be reduced. However, that proved a piecrust promise.

This March Mr. Patrick Lorin stated round-the-clock water-supply would cost Armenia a total of U.S. $1bn! So we can arrive at the sad conclusion that the problem will not be resolved in the foreseeable future. The paradox is that millions of cubic meters of water are lost no one knows where, whereas consumers are supplied on schedule, just a few hours a day in some districts. So let us try to find out the “whereabouts” of the lost water.

Both companies’ managers bring regular accusations against the thousands of their clients. However, it is the companies’ work that is the core of the problem. Independent experts say leaks the can easily be located by comparing the figures on house service meters with those on individual meters. For many years, however, the question about the huge water losses has remained unanswered.

The General Director of the Armenian Water & Sewerage CJSC tried to color the truth by making a sensational statement: in the past water losses were over 90% rather than 65%. So it turns out that the situation has improved during the years. The present losses are “only” 80-81 per cent. A thing enough to make a cat laugh!

In 2006, Chairman of the Public Services Regulatory Commission Robert Nazaryan stated the Armenian Water & Sewerage CJSC and the Yerevan-Jur CJSC were to reduce water losses down to 65% within two years. However, reducing water losses by 15-20 per cent within such a short period would hardly be possible. Even token positive changes have not been observed during the past four years!

The foreign companies’ managers often play a trump card: water prices are much lower in Armenia than in their own homeland. So the companies’ profits are insufficient as well. But they “conveniently” forget about the much higher wages in their homeland than in Armenia. Water has no price here, and the wage-fund constitutes a major part of the water-supply costs. The lower are the wages the lower are water-supply costs. So let the companies stop complaining about low water-supply prices and justify their increase.