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Armenia’s Water Sector Reform Experience : Access to water and sanitation Yerevan , Armenia 2011 PowerPoint PPT Presentation


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Armenia’s Water Sector Reform Experience : Access to water and sanitation Yerevan , Armenia 2011. Armenia’s Water Sector Reform Experience. Area: 29,800 sq. km Capital city - Yerevan Population: 3,235,000 (July 2009 est.) Official language: Armenian

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Armenia’s Water Sector Reform Experience : Access to water and sanitation Yerevan , Armenia 2011

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Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’sWater Sector

ReformExperience:

Access to water and sanitation

Yerevan, Armenia

2011


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Area: 29,800 sq. km Capital city -Yerevan

Population: 3,235,000 (July 2009 est.)

Official language: Armenian

Terrain: High plateau with mountains, little forest land.

Climate: Highland continental, hot summers, cold winters.

Provinces: ten provinces, 915 communities, of which 49 are considered urban and 866 are considered rural


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

  • Water Supply in Soviet Union Times

  • Water systems were managed by centralized-planning system

  • The construction of these systems was carried out with violations of engineering norms, low quality materials and technologies

  • The water supply of almost all the settlements fed from centralized systems was limited to schedule hours

  • There was no such concept as “tariff”

  • Payment was done according to calculation by 1inhabiant per sq/m


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

  • Water Supply in Post-Soviet Union times

  • As of independence of Republic of Armenia, intensive rehabilitation reforms started in water systems management

  • Linked with development programs, the “Water Code” was created in early 2000

  • Water-metering concept has started, tariffs were established

  • Investment projects started everywhere in Armenia through international donor funds

  • International operators were invited for management of water systems, first in Yerevan than for Armenian Water Company (2005)

  • Parallel to water systems management reforms, development programs started in sewerage treatment systems


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Situation before Management Contract

Number of water supply hours

6 hours(average)

Electricity/Income ratio

72 %

Installed water meters

30%

NEED FOR INVESTMENT 1 billion USD


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Why Management Contract ?

SOLUTION:

-The step of management before lease contract

-Creating a sufficient company level attractive to a private operator


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Criteria for Selecting an Operator

Fixed Fee

- 10 million USD for 6 years

PIC

- 1,3 million USD from year 2 to year 6


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Why SAUR ?

  • International Tender where SAUR was interested

  • 70% technical score

  • 30% financial score

  • After technical score two participants were chosen: SAUR and German company

SAUR had the best technical score and a cheaper offer

MC was signed with SAUR for 4 years with 2 years possible extension


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Financial Resources available to SAUR

* 1 USD= 363,44 AMD

(as of Dec. 31, 2010 rate)


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Financial Resources available to SAUR

* 1 USD= 363,44 AMD

(as of Dec. 31, 2010 rate)


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Financial Resources available to SAUR

WB First Phase

* 1 USD= 363,44 AMD

(as of Dec. 31, 2010 rate)


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Financial Resources available to SAUR

WB Second Phase

* 1 USD= 363,44 AMD

(as of Dec. 31, 2010 rate)


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Financial Resources available to SAUR

Other Donors: ADB (USD)

* 1 USD= 363,44 AMD

(as of Dec. 31, 2010 rate)


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Financial Resources available to SAUR

Other Donors: EBRD (EUR)


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Priorities of Investments

More spread out settlements in the service area instead of 3-4 settlements

WHY?

- Situation was catastrophic in many settlements

- Objective to raise the level of service in the service area at the same time

- Show population that the investments are on the way

CRITERIA USED:

-Electricity expenses

-Lower time of supply

-Lack of equipment

- Expectation of financial income


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

REVIEW OF ACHIEVMENTS


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Daily Hours for service

2004 2010

14.00 h

6.00 h

(Annual average)


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

DREAMS COME TRUE

WATER IN PRIVATE TAPS-Finally

People caring water in buckets for decades


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Electricity consumption

2004 2010

40,5mln kwt

68 mln kwt


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

MASIS PUMPING STATION

NEW

OLD


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

% of water disinfected

2004 2010

61%

80%


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

DILIJAN DRINKING WATER TREATMENT PLANT

Liquid Chlorine Injection

Alum and Lime Injection


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Number of Payments

(170 000 customers receiving service)

2004

2010

Billing Payments

4.4 mln USD

10,5 mln USD

140 000

35 000

Subscribers with water meters

88%

40%


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Magnet used to slow meter down


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

PUBLIC RELATIONS

Drawing of Lots


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

  • WB INDICATORS

  • 22 Indicators are used

  • All are making progress

  • (Visit our Web-site)


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Future Plan

2010

2012

2013

2019

2011

2014

2015

2016

2017

2018

Armenia Water and Sewerage

  • Management Contract

  • Lease ?


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Future Plan

Technical

  • 18 hours of water supply

  • Reduction of electricity expenses from 40 mln kwt o 20mln kwt

  • Reduction of losses from 80% to 60%

NEED FOR INVESTMENT 100 million USD


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Future Plan

Financial

  • Future level of tariff should cover AWSC obligations, including debt service

  • If no tariff increasing the Government subsidy should be increased to compensate the lack of income to cover all expenses


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Future Plan

“To be sustainable: Tariffs+ Subsidies = Total Cost of Service”

Grants

Subsidies

Tariff

COST OF SERVICE

INCOME


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Future plan

  • LEASE CONTRACT (How to choose the leaser?)

  • -tender

  • -direct negotiation


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Risk for the Future

  • For Future Operator (Leaser):

  • -No respect of terms of contract

  • - Financial crisis (decreased income)

  • -Political changes

  • -Geopolitical situation

  • For Country (Client):

  • - NOT adequate operator(case of tender)

  • -No investment means (international funds)


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

Armenia’s Water Sector

Reform Experience

Conclusion

THE SUCCESS OF THIS PROJECT is linked with:

OPERATOR

Government & Local Authorities

DONORS

  • Professionalism and competency

  • Respect of local values

  • Supportive approach

  • Respectful to the spirit of operator

  • Assistance to country

  • Support to operator


Armenia s water sector reform experience access to water and sanitation yerevan armenia 2011

www.armwater.am


Best regards from company staff

BEST REGARDS FROM COMPANY STAFF

THANK YOU!


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