Armenian Water-Sewerage Company Faces Financial Problems

The Armenian Water-Sewerage Company has encountered difficult problems since the beginning of the year due to the global economic and financial crisis. This was stated by Patrick Lorin, General Director and Management Contractor of the company (AWSC). Since the beginning of the year both the revenues of the company and state subsidies have reduced, told the director general.

The company has increased tariffs for drinking water since April 1, though the enterprise intended to change tariffs from the beginning of January. Tariffs for drinking water grew from 140 AMD to 179.78 AMD (including VAT) per cubic meter.

According to Mr. Lorin, the value added tax, which is charged from the revenues, has been imposed on the company since January. Since some 100 thousand subscribers do not make regular payments, in fact the company itself pays 20 per cent of VAT from the collected amount, told P.Lorin. AWSC currently has 270,000 subscribers in Armenia (which is about 1 million residents).

According to Mr. Lorin in the current difficult situation the company is forced to close one of its four branches this month. AWSC’ s branches are located in Sevan, Abovyan, Sisian and Artashat. This will entail a notable reduction of the staff (by more than 40 work places).

Moreover, the company had to reduce salaries by 20 per cent, and also to cut the workweek to four days.

According to the General Director of AWSC, the company has elaborated a number of measures to get out of the critical situation. Particularly, they intend to publish in the press the names of regular defaulters, who did not pay for water in 2008. They already have publicized 400 names of defaulters from Ejmiatsin, Gavar, Kapan, Harzdan. Instead, the company organizes a lottery for its regular payers: 8 people have already received 300 000 AMD each.

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