2005 - 2006 - Pinsent Masons Water Yearbook 2012

ARMENIA PART 2: COUNTRY ANALYSIS
Armenia
Municipalities are responsible for the water supply and wastewater treatment of communities. The
municipal wastewater and water supply investment costs are financed mainly by municipalities
themselves, and operation and maintenance costs, including capital costs, are covered by the users
in compliance with the 1997 Water Code. Approximately, 1.7 million people (60% of the 2002
population) live in 19 towns and cities, including 1.1 million in Yerevan.
Public waterworks served 98% of the urban population in 2002. With a 66% unaccounted for water
rate in that year, utilities sold just 177 million m 3 of the 540 million m 3 of water they abstracted. Water
supply systems are operated mainly by pumps. Due to the current energy crisis the operation of
pumps is essentially inadequate and water supply is often restricted to 2-4 hours in the mornings and
evenings. The percentage of tap water samples with bacterial contamination rose from 9.4% in 1990
to 11.6% in 2000. Sewerage services cover 88% of the population in the four cities with more than
50,000 people, but 52% of the 15 smaller towns. There are 20 wastewater treatment works, all built
before 1990 at a time when they did not need to pay for energy. By 2002, five WWTW's were still in
operation, all at the primary level only.
Average spending on water services by the government and industry between 1996 and 2001 has
been estimated by the OECD at €5 million per annum. The 46 district branches of the Armenia Water
and Sewerage Company (AWSC) will be transformed into legally independent entities that can jointly
or alone contract out with the private sector under different forms of private sector participation.
The Yerevan management contract
The World Bank has made two loans worth US$80 million to Yerevan for improving water and
sewerage services, especially in poorer areas. In 2000, ACEA (Italy) and Lotti and Associatie WRc
(UK) started an operations and management contract for Yerevan. In 2000, just 21% of billed
accounts were paid. Billing collection was revived through the introduction of metering from 2002,
with an increase in the number of registered customers from 275,500 in 2002 to 311,056 by April
2004; with 245,000 of these being metered and 28,000 are non-active accounts (empty apartments,
etc). Instead of charging domestic customers for a nominal per capita consumption of 250 litres/day,
customers are now being billed for actual usage, working out at 100-120 l/c/day.
Yerevan, service indicators 1999 2003 2004
Water provision (hours/day) 6 13 16
Apartment Metering 56% N/A 95%
Revenue collection 21% 87% 100%
30% of Yerevan’s population lives below the poverty line. The introduction of metering has improved
service affordability for these people. In 2002, the bottom quintile spent 8.1% of their income on
water services. This fell to 5.0% in 2003 and is expected to be about 4% in 2005, despite a 50%
overall tariff increase in April 2004.
Private sector contracts awarded (Please see the relevant company entry for
details)
Location Contract Company
Yerevan 4 year Management ACEA
Private sector company operations (Please see the relevant company entry for details)
Company Parent company (country)
Water
Population served
Sewerage Total
ACEA ACEA (Italy) 900,000 0 900,000
Sources:
OECD (2004) Financing Strategy for Urban Wastewater Collection and Treatment Infrastructure in Armenia, OECD EAP, Paris,
France
ACEA (2003) Facing a crisis of confidence in PSP in the water sector: The Yerevan experience, presentation to the World Bank
conference, 2-3 July 2003, Vienna, Austria
World Bank (2005) Project appraisal document 30251, Yerevan water and wastewater project, 25th January 2005. Europe &
Central Asia Region
54 Pinsent Masons Water Yearbook 2005 – 2006