Gharabegian: Water Issues in Armenia

Armenia has abundant water resources that are generally adequate for drinking, irrigation, and industrial use throughout the country, with some limitations in a few areas. Water usage has been reduced after independence due to a reduction of industrial and agricultural activities. Approximately 98 percent of drinking water supplies are from groundwater and/or springs, with the remaining percentage from surface water, mainly streams. The quality of ground and spring waters is generally satisfactory for potable use, and as a result only chlorination/disinfection treatment is required. However, conventional water treatment systems are used for water from streams. The water sources are quite well protected and only rare cases of contamination or bacterial pollution have been reported in recent years. Base on the forecast of water demands for urban and rural areas, it is anticipated that the sources will remain adequate to satisfy future water needs.

The adequacy of resources is not behind the current issues with water services in Armenia. During the Soviet era, large investments were made on water-related projects to provide water to urban and rural areas. However, the quality of workmanship was low and there was a lack of proper water resource management and control of consumption. In addition, water delivery and treatment infrastructure were neither routinely maintained nor upgraded. Major repairs, investments, and upgrades were almost entirely stopped for many years after the collapse of the Soviet Union due to a lack of funding. There were also widespread misuse of assets and resources, such as stolen pipes and pumps.

Over the last 10 years, significant legislative bills have been enacted and institutional reforms have been introduced related to water resource management and protection. One of the main achievements was the introduction and the application of the principles of integrated water resources management.

Improvements in the continuity of the water supply can only happen with increased investments in infrastructure. Initial estimates indicate that short- to mid-term investment requirements could total about $179 million ($79 million for Yerevan and $100 million for other urban areas). Recent proposed investment programs are particularly linked to improving efficiency.

Five state-owned enterprises were established to manage and administer the water systems in different areas of Armenia, as part of the system reform. Currently the majority of the population in Armenia is served by the following water utilities:

–Yerevan Jour, which serves a population of 1 million in Yerevan and 33 nearby villages;

–the Armenia Water and Sewerage Company (AWSC), serving a population of 620,000 in over 300 villages; and

–Three Regional Utilities (Nor Akunq, Lori, and Shirak), serving a population of 320,000.

Additionally, 560 villages outside of these service areas are served by arrangements that vary with each community. All five major utilities are engaged in some form of private-public partnership with various international operators. The AWSC is currently managed and operated by Saur, a French utility company. The fee-based contract had an original term of five years but was extended by one year—until Dec. 31, 2013.

Armenia’s water supply networks and systems are in need of major repairs and upgrades. The absence of investments over the years, coupled with the lack of routine maintenance, has resulted in deteriorated infrastructure that is unable to deliver the appropriate level of service to its users. Water losses or nonrevenue water is estimated at 85 percent, which according to the World Bank is one of the highest percentage of water losses in the world. More than 50 percent of water losses are due to leaks from old pipes, and the remainder is due to nonpayment, underpayment, or theft. Nearly 65 percent of the nonrevenue water losses occur at multifamily residential buildings and private houses. In addition to leaky pipes, these losses are due to meter tampering by using magnets, leaving the water running, and using second and third unmetered inlet pipes at residential units.

An increase in the level of services that use old leaky pipelines has a negative effect on water losses. This is due to running high-pressure water through old pipes with leaks for a longer time, which cause more water to be lost through leaks. Recently about 70 percent of the distribution system in Armavir was replaced, and the water supply duration was increased to 22 hours a day; yet, nonrevenue water decreased from only 87 to 70 percent.

Most of the current water meters in Yerevan are old and are often low quality. They are inaccurate and cannot provide reliable results. In addition, most of the meters can be easily tampered by using magnets. However, over 95 percent of residential and commercial water connections are metered.

The water rates in Armenia are around 200 drams per cubic meter, which is considered low compared to regional and international norms of approximately 400 drams per cubic meter. Such a low level does not provide adequate funding for water providers to renovate the infrastructure. The rates are not even sufficient to cover operation and maintenance costs. The typical cost of water for one month for a family is equivalent to three packs of cigarettes. It would be difficult to impose water rate increases on the public, especially if the service is intermittent.

Revenue collections are extremely high when compared to international and regional numbers. However, generally billing is based on flow volumes and, as noted earlier, it is almost impossible to obtain accurate measures of consumption because of the poor state of the metering. As a result, there is no clear indication of whether customers are paying for the actual water volumes received.

Despite Armenia’s abundance of water, the population’s supply needs cannot be met, as a significant proportion have access to drinking water for just a few hours a day. To address these issues, the government has sought to improve the water supply and sanitation sector through various policy and legislative reforms as well as capital investments, with support from international institutions, such as the Asian Development Bank (ADB), and with private participation through public-private partnerships.

In 2007, the ADB approved a loan of $36 million to Armenia to help improve public health and the environment for 576,000 people in 16 towns, by revitalizing and rehabilitating the existing infrastructure and increasing the capacity of the water supply and sanitation service providers. While this project has had positive implementation results, the need to address pressing issues, including the capital investments needed to upgrade the network and the long-term financial sustainability of the water supplying companies, remain. Thus, in 2012, the ADB approved the Armenian government’s request for $40 million in additional financing needed to continue and expand the improvements brought by the initial project.

Operationally, the project has increased the potable water supply by at least 12 hours to more than 600,000 residents. Payment collection has also increased from 61 percent in 2008 to 74 percent in 2010, driven by the installation of water meters and an ongoing community program to raise awareness of water use and management.

Water supplying companies acknowledge that the amount of nonrevenue water is staggeringly high. To address the issue, they are suggesting to (1) utilize large capital investments to replace and upgrade aging infrastructure and decrease leaks in the network; (2) install better water meters for residential properties and electronic water meters for high-rise buildings to better account for water use; (3) install better flow meters to account for more accurate flow values; and (4) place more attention and efforts on decreasing the incidence of illegal connections through better community consultation and active monitoring.

Sources

Water Sector Note, Report No. 61317-AM, Sustainable Development Department, Europe, and Central Asia Region, the World Bank, May 2011.

Armenia: Fostering the Long-Term Financial Viability and Sustainability of the Armenian Water and Sewerage Company, Asian Development Bank (ADB), Central and West Asia Department, Working Paper Series, Adrian Torres, March 2013.

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Areg Gharabegian

Areg Gharabegian has a B.S. in Mechanical Engineering and an M.S. in Energy, Resources, and Environment with more than 30 years of experience in the field of project management, environmental studies, and transportation engineering. Since 1990 he has visited Armenia numerous times to provide assistance in the development of Western-style management procedures and practices, and to provide training in various environmental issues and technical computer models.

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