Commission Concludes Private Sector Manager Fails Duties

YEREVAN–Armenia’s Interim Commission examining the efficient use of foreign loans–credits–gran’s–and humanitarian assistance–in its latest report detailed the effective implementation of a $30 million Community Development Project (CDP) financed by the World bank.

The interim report–submitted to Armenia’s National Assembly (NA) on Thursday–probed financial issues in implementing the credit for emergency improvemen’s in the drinking water supply to Yerevan–particularly to the poorer–most affected populations.

The project aims to improve the management and delivery of water and wastewater services for the Yerevan area–while laying the groundwork for the involvement of the private sector in these services.

Its March 30 report detailed technical issues and concluded concludes that electricity expenses greatly impact total expenses tied to the water system.

But–under the requiremen’s of the CDP Program and the Management Agreement–one of the main aims is to reduce the use of electricity and debt in maintaining the system–by hiring a private sector manager.

The report finds that though electricity expenses decreased from 1999-2003–total expenses have remained the same. It also finds that the government sustained the system by providing 34 billion drams through credits–subsidies–as well as remission of part of the remaining debt related to the operator’s credit.

The parliamentary commission concludes that the involvement of the particular private sector operator A Utility–has not helped the Armenian government in managing its water system more efficiently–and advises securing a new operator. "A Utility must be driven away from here," Chairman of the Interim Commission and Vice Chairman of the NA Vahan Hovhannisian stresses–cautioning the government not to make the same mistakes in choosing a new operator.

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