By Areg Gharabegian

Armenia has abundant water resources which 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 reduction of industrial and agricultural activities. Approximately 98% of drinking water supplies are from groundwater and/or springs with 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 water sources would adequate to satisfy future water needs.

The adequacy of water resources is not the reason for issues related 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, quality of workmanship was low and there were lack of proper water resource management and control of consumption. In addition, water delivery and treatment infrastructure were neither routinely maintained nor upgraded. Furthermore, major repairs, investments, and upgrades were almost stopped for many years after collapse of the Soviet Union due to the lack of funding. There were also a wide spread misuse of assets and resources such as stealing pipes and pumps.

water fountain, Republic Square at downtown Yerevan, Jerewan, Armenia, AsiaDuring the last 10 years significant legislatives have been enacted and institutional reforms have been introduced in Armenia related to water resources management and protection. One of the main achievements was introduction and application of the principles of integrated water resources management.

Improvements in continuity of water supply can only happen with increased investments in infrastructure. Initial estimates indicate that short to midterm investment requirements could be about $179 million ($79 million for Yerevan and $100 million for other urban areas). Recent proposed investment programs are linked particularly 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 water supply system reform. Currently the majority of the population of Armenia is served by the following water utilities:
• Yerevan Jour – serving population of 1 million in Yerevan and 33 nearby villages;
• Armenia Water and Sewerage Company (AWSC) – serving population of 620,000 in over 300 villages; and
• Three Regional Utilities (Nor Akunq, Lori, and Shirak) – serving population of 320,000.

Additionally there are 560 villages outside these utility service areas, served by arrangements that vary by each individual community. All five major utilities are engaged in some form of private-public partnership arrangement with various international operators. AWSC is currently managed and operated by Saur, a French utility company. The fee-based contract had an original term of 5 years but was extended for an additional year until 31 December 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 to be up to 85% which according to World Bank is one of the highest percentage water losses in the world. More than 50% of water losses are due to leaks from old pipes and the remainder is due to nonpayment, underpayment, or theft. Nearly 65% of the nonrevenue water losses are at the multifamily residential buildings and private houses. Besides leaks from pipes, these losses are due to meter tampering by using of magnets, leave water running, and use of 2nd and 3rd unmetered inlet pipes at residential units.

Increase in level of services using old leaky pipelines has a negative effect on water losses. This is due to running high pressure water through old pipes with leaks for longer time which cause more water to be lost through the leaks. Recently about 70% of the distribution system in Armavir was replaced and water supply duration was increased to 22 hours a day but non revenue water has only decreased from 87 to 70%.
Most of the current water meters in Yerevan are old and are often of low quality. These meters are inaccurate and they cannot provide reliable results. In addition, most of the meters can be easily tampered by using magnets. However, over 95% of residential and commercial water connections are metered.

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 to be up to 85% which according to World Bank is one of the highest percentage water losses in the world. More than 50% of water losses are due to leaks from old pipes and the remainder is due to nonpayment, underpayment, or theft. Nearly 65% of the nonrevenue water losses are at the multifamily residential buildings and private houses. Besides leaks from pipes, these losses are due to meter tampering by using of magnets, leave water running, and use of 2nd and 3rd unmetered inlet pipes at residential units.

Increase in level of services using old leaky pipelines has a negative effect on water losses. This is due to running high pressure water through old pipes with leaks for longer time which cause more water to be lost through the leaks. Recently about 70% of the distribution system in Armavir was replaced and water supply duration was increased to 22 hours a day but non revenue water has only decreased from 87 to 70%.

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

The water rates in Armenia are around AMD200 per cubic meter, which is considered low compared to regional and international norms of approximately AMD400 per cubic meter. Such a low level does not provide adequate funding for water providers to renovate water system 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 imposing water rate increases on the public, especially if the service is intermittent.

Revenue collections are extremely high when compared against international and regional experience. However, generally billing is based on flow volumes, and as noted earlier, currently 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 actual water volumes received.

Despite Armenia’s abundance of water, the population’s supply needs could not be met, as a significant proportion had access to drinking water for just a few hours per day. To address these issues, the Government of Armenia 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 water infrastructure and increasing the capacity of the water supply and sanitation service providers. While this project had positive implementation results, the need to address pressing issues, including capital investments for upgrading of the network and the long-term financial sustainability of the Armenian water supplying companies remained. Thus, in 2012, ADB approved the Government of Armenia’s request for $40 million in additional financing to continue and expand the improvements delivered by the initial project.

Operationally, the project has increased potable water supply by at least 12 hours to more than 600,000 residents. Payment collection also increased from 61% in 2008 to 74% 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 nonrevenue water is staggeringly high. To address the issue, they are suggesting that to (i) utilize large capital investments to replace and upgrade aging infrastructure and decrease leaks in the network; (ii) install better water meters for residential properties and electronic water meters for high-rise buildings to better account for water use; (iii) install better flow meters to account for more accurate flow values; and (iv) 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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