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Commercial Water Losses Guarantee Constant Revenues for Yerevan Djur Sara
Petrosyan
http://hetq.am/eng/investigation/16845/commercial-water-losses-guarantee-constant-revenues-for-yerevan-djur.html
14:51, July 23, 2012
Part 1
Company management also did not agree with the observation of the
prosecutor that `periodic inspections and monitoring' could have prevented
the Nubarashen poisoning incident.
With an agreement concluded by the Armenian government, operation of water
supply and waste water removal for the city of Yerevan and 32 adjacent
villages was leased to the French Veolia Water company. It covers all the
water services activities, such as production, distribution, customer
services, and maintenance. The contract came into force on the 1st of June
2006. Under the conditions of the ten year contract, Veolia assumed the
responsibility of providing water on a 24 hour basis during the allotted
timeframe.
The company also received $18.75 million in World Bank financing to
implement these obligations. A body called the `Community Development
Programs Office' (CDPO) attached to the Yerevan Municipality was set up
to
monitor implementation of the obligations set forth by the credit program
during the first five years. From the CDPO bulletins regarding Yerevan Djur
's annual business projects it becomes clear that the initial encouraging
successes registered by Yerevan Djur in the first year (a certain
improvement in water distribution in Yerevan, clarification of supply
timetables) did not continue. In the sixth year of the contract, 2012,
according to informed individuals, the company only succeeded in supply in
water to Yerevan for 16 hours daily at most.
Illegal connection
Yerevan Djur General Manager Gor Grigoryan doesn't accept these indices
and claims that in 2012 the company has already been able to guarantee 23
hours of water; the mark set for 2016. He says that in the capital Yerevan
the minimum water supply is twelve hours daily and that this is the case in
a very small section.
Yerevan Djur presented such a high figure to the municipality two years
ago, confirming an almost 23 hour water supply. In reality, residents were
complaining about the supply and complains particularly increased during
the summer. This issue became a prime issue of municipal consultations.
Those in the know claim that tensions between the municipality and Yerevan
Djur kept rising.
Only 15% of the water reaching Yerevan is being paid for
The company explained away this shortcoming by pointing to 81-86% of
leakage loss and proposed the closing of fountain and water cascades in the
capital to decrease losses and improve supply, as well as the installation
of water meters. We should note that according to Yerevan
Djurcalculations, water fountains only comprise 2-3% of overall water
loss. In
addition, these fountains are shut down from November to April. Thus,
closing them completely wouldn't have made much of a difference.
Fish seller
The municipality did not accept the company's demand and instead proposed
that the company create a monitoring unit within the company; something
which the company was obligated to have anyway according to the contract
with the Armenian government. The new unit was tasked with exposing
employee inadequacies in the company's sub-divisions, locate illegal
connections to the system and write them up, control water losses, monitor
repair work, implement work to locate and monitor flow losses, monitor
complaints/advisories about water supply quality, and to assist in
decreasing water leakage in Yerevan and adjacent villages and increase
company revenues.
This proposal was not favorably viewed by Yerevan Djur management but
they were forced to make concessions since complaints against the company
were rising. `In general, the company failed to decrease water losses and
to economically use drinking water. The 84.6% system-wide loss figure is
unacceptable in the fourth year of the contract. In the first four years,
the company has failed to bring that figure down by even 1%, even though
all the necessary factors to do so are in place=85' This is the opinion
expressed by the CDPO in March 2010 regarding Yerevan Djur's annual
report for the fourth contract year.
Starting on April 19, 2010, a Water Balance Coordination and Supervision
Directorate (WBCSD), a separate subdivision under the direct control of the
company's general manager, began to operate. This Directorate only lasted
for one year. During that time it studied ¼ of the company's service area -
the 7 districts of the capital and certain adjacent villages. 15,305
violations were registered and fines were levied as a result. This brought
in 166 million AMD in revenues to the company.
Gagik Margaryan
The violations were diverse and included illegal connections, defective
water meters, seal breaking, etc. In one house, residents using water were
not subscribers. In one community, the Zovuni gardening organization, all
the residents weren't paying their water bills, this when Yerevan
DjurCustomer Relations Director Gagik Margaryan had a summer house
there. Many
cases came to light when residents wanted to become subscribers but the
company never signed contracts with them. In another case, water meters
were not registered in the company's computer database.
As a result of all this, the amounts collected from citizens disappeared
and company revenues didn't grow. `This was shown as a business loss,' said
WBSCD Director Mikayel Davtyan. According to his calculations, only 15% of
the water entering Yerevan was being paid for. The non-payers not only
included physical and legal entities but government agencies.
Violations registered by the WBSCD between May 3, 2010 and April 20, 2011
Type of act/writ
Total
Of which non-subscribers
Physical
Legal.
Total
Physical
Legal.
Illegal water usage
4774
436
5210
Non-working water meter
956
94
1050
Damaged water meter
1359
57
1416
1392
152
Standard state stamp
1828
84
1912
Holographic stamp
5544
173
5717
Total
14461
844
15305
1544
Legal acts of exposed infractions were sent to the Yerevan
Djurdirectorate and the general manager. However, they say that they
received
answers to only 100 of the 500. `We sent another communiqué to see how
many
had been made subscribers, but the letter remained unanswered. They
nullified some of the legal acts we wrote up without having the right to do
so,' says M. Davtyan.
Pascal Royer
On March 10, 2011, Davtyan wrote the following to then Yerevan
DjurGeneral Manager
Pascal Royer: `Practice shows that legal acts leaving our directorate
aren't discussed but are nullified without basis. As a result, no monies
are collected in favor of the company. We wish to note that such documents
with legal force started to be nullified not by the demand of the general
manager, but rather by the decision of Customer Relations Director Gagik
Margaryan.
130 cases regarding revealed violations were sent to the courts. The amount
to be collected was about 60 million AMD. `Every month they collect 50-60
million AMD and this was only a portion of their revenues presented as
water loss. By working well, that loss could have been decreased to 70%,'
says WBSCD Director M. Davtyan. On March 18, 2011, he presented Yerevan
Djur General Manager Royer with the company shortcomings in a letter and
stated that if all the violations exposed just in 2010 were removed and
fixed, then water loss by the end of the year would have dropped by 5%.
`This means that company revenues would have grown by 1/3rd, the amount of
water supplied would have increased by 33%, and the water rate could have
dropped by 60 Drams,' the letter reads.
Mikayel Davtyan notes that when they conducted inspections of certain
sites, the water loss decreased immediately and revenues rose. When they
left, the opposite happened. Due to infractions, it's calculated that water
loss amounts to 260 million AMD; more than 30% of the amount monthly in
Yerevan.
Illegal water connections
This even surprised the Community Development Programs Office.' They
demanded additional clarifications regarding the fifth year of the `lease
Contract'. In a letter dated January 25, 2011 to all Yerevan
Djurdirectorates and the general manager, they wrote: `The fact that
water loss
hasn't decreased remains a mystery even though:
a) 10,589 were discovered, of which 3,920 were illegal connections
b) 102 breakdowns were discovered, which comprise
It was proposed to the company to present differentiated between commercial
and technical water loss figures.
In its one month of operation, the control directorate gave special
attention to breakdowns of an operational nature, to which immediate
responses would lead to water loss reduction and a rise in water quality.
However, according to directorate employees, the company did not eliminate
a majority of the infractions found and that many were never followed up.
In a letter dated February 1, 2011, the Operations Directorate sent a
letter to then General Manager Gor Grigoryan regarding non-response to
emergencies, stating: ` To date, most of the breakdowns discovered by the
Water Balance Coordination and Supervision Directorate have either not been
fixed or, if they have, there is no relevant information about
them=85attached is the corresponding list.'
Ashtarak trunk road; ilegal connection
General Manager Pascal Royer also didn't respond to the communiqués of
the
control directorate. M. Davtyan says that as a result, shortcomings in the
system increased. `Due to Mr. Royer's unexplained indifference, the
abovementioned infractions are overlooked, favoritism is practiced, and
directorates and employees regarded as inconveniences are being eliminated.
As a result, the true picture is not reaching the European management of
Veolia Water. During his years as manager, he and his cohorts did
everything to make the company unproductive, leading to irrational usage of
credit and financial resources, improper and incorrect use of leased
property, and water loss. All this not only damages the national strategic
resources of the Republic of Armenia but immediately negatively impact the
company's financial status=85'
This time, Pascal Royer's response was quick in coming. All the employees
of the WBCSD received notices from the general manager on April 4, 2011,
informing them that their work contract was being terminated. `According
to
Decision 2 taken by the Yerevan Djur Council on April 14, 2011, an
administrative restructuring will occur resulting in a new job position
list. By this decision your job position has been terminated. The company
has no other work to offer you.'
Mikayel Davtyan stated that as of April 20, 2011, when he and the others
were still regarded as Yerevan Djur employees, writs against 50 legal and
830 physical individuals for illegal water connections were never given due
process.
(Scoop, a Danish-based network for investigative journalists, assisted in
the preparation of this investigative article)
From: Baghdasarian
Petrosyan
http://hetq.am/eng/investigation/16845/commercial-water-losses-guarantee-constant-revenues-for-yerevan-djur.html
14:51, July 23, 2012
Part 1
Company management also did not agree with the observation of the
prosecutor that `periodic inspections and monitoring' could have prevented
the Nubarashen poisoning incident.
With an agreement concluded by the Armenian government, operation of water
supply and waste water removal for the city of Yerevan and 32 adjacent
villages was leased to the French Veolia Water company. It covers all the
water services activities, such as production, distribution, customer
services, and maintenance. The contract came into force on the 1st of June
2006. Under the conditions of the ten year contract, Veolia assumed the
responsibility of providing water on a 24 hour basis during the allotted
timeframe.
The company also received $18.75 million in World Bank financing to
implement these obligations. A body called the `Community Development
Programs Office' (CDPO) attached to the Yerevan Municipality was set up
to
monitor implementation of the obligations set forth by the credit program
during the first five years. From the CDPO bulletins regarding Yerevan Djur
's annual business projects it becomes clear that the initial encouraging
successes registered by Yerevan Djur in the first year (a certain
improvement in water distribution in Yerevan, clarification of supply
timetables) did not continue. In the sixth year of the contract, 2012,
according to informed individuals, the company only succeeded in supply in
water to Yerevan for 16 hours daily at most.
Illegal connection
Yerevan Djur General Manager Gor Grigoryan doesn't accept these indices
and claims that in 2012 the company has already been able to guarantee 23
hours of water; the mark set for 2016. He says that in the capital Yerevan
the minimum water supply is twelve hours daily and that this is the case in
a very small section.
Yerevan Djur presented such a high figure to the municipality two years
ago, confirming an almost 23 hour water supply. In reality, residents were
complaining about the supply and complains particularly increased during
the summer. This issue became a prime issue of municipal consultations.
Those in the know claim that tensions between the municipality and Yerevan
Djur kept rising.
Only 15% of the water reaching Yerevan is being paid for
The company explained away this shortcoming by pointing to 81-86% of
leakage loss and proposed the closing of fountain and water cascades in the
capital to decrease losses and improve supply, as well as the installation
of water meters. We should note that according to Yerevan
Djurcalculations, water fountains only comprise 2-3% of overall water
loss. In
addition, these fountains are shut down from November to April. Thus,
closing them completely wouldn't have made much of a difference.
Fish seller
The municipality did not accept the company's demand and instead proposed
that the company create a monitoring unit within the company; something
which the company was obligated to have anyway according to the contract
with the Armenian government. The new unit was tasked with exposing
employee inadequacies in the company's sub-divisions, locate illegal
connections to the system and write them up, control water losses, monitor
repair work, implement work to locate and monitor flow losses, monitor
complaints/advisories about water supply quality, and to assist in
decreasing water leakage in Yerevan and adjacent villages and increase
company revenues.
This proposal was not favorably viewed by Yerevan Djur management but
they were forced to make concessions since complaints against the company
were rising. `In general, the company failed to decrease water losses and
to economically use drinking water. The 84.6% system-wide loss figure is
unacceptable in the fourth year of the contract. In the first four years,
the company has failed to bring that figure down by even 1%, even though
all the necessary factors to do so are in place=85' This is the opinion
expressed by the CDPO in March 2010 regarding Yerevan Djur's annual
report for the fourth contract year.
Starting on April 19, 2010, a Water Balance Coordination and Supervision
Directorate (WBCSD), a separate subdivision under the direct control of the
company's general manager, began to operate. This Directorate only lasted
for one year. During that time it studied ¼ of the company's service area -
the 7 districts of the capital and certain adjacent villages. 15,305
violations were registered and fines were levied as a result. This brought
in 166 million AMD in revenues to the company.
Gagik Margaryan
The violations were diverse and included illegal connections, defective
water meters, seal breaking, etc. In one house, residents using water were
not subscribers. In one community, the Zovuni gardening organization, all
the residents weren't paying their water bills, this when Yerevan
DjurCustomer Relations Director Gagik Margaryan had a summer house
there. Many
cases came to light when residents wanted to become subscribers but the
company never signed contracts with them. In another case, water meters
were not registered in the company's computer database.
As a result of all this, the amounts collected from citizens disappeared
and company revenues didn't grow. `This was shown as a business loss,' said
WBSCD Director Mikayel Davtyan. According to his calculations, only 15% of
the water entering Yerevan was being paid for. The non-payers not only
included physical and legal entities but government agencies.
Violations registered by the WBSCD between May 3, 2010 and April 20, 2011
Type of act/writ
Total
Of which non-subscribers
Physical
Legal.
Total
Physical
Legal.
Illegal water usage
4774
436
5210
Non-working water meter
956
94
1050
Damaged water meter
1359
57
1416
1392
152
Standard state stamp
1828
84
1912
Holographic stamp
5544
173
5717
Total
14461
844
15305
1544
Legal acts of exposed infractions were sent to the Yerevan
Djurdirectorate and the general manager. However, they say that they
received
answers to only 100 of the 500. `We sent another communiqué to see how
many
had been made subscribers, but the letter remained unanswered. They
nullified some of the legal acts we wrote up without having the right to do
so,' says M. Davtyan.
Pascal Royer
On March 10, 2011, Davtyan wrote the following to then Yerevan
DjurGeneral Manager
Pascal Royer: `Practice shows that legal acts leaving our directorate
aren't discussed but are nullified without basis. As a result, no monies
are collected in favor of the company. We wish to note that such documents
with legal force started to be nullified not by the demand of the general
manager, but rather by the decision of Customer Relations Director Gagik
Margaryan.
130 cases regarding revealed violations were sent to the courts. The amount
to be collected was about 60 million AMD. `Every month they collect 50-60
million AMD and this was only a portion of their revenues presented as
water loss. By working well, that loss could have been decreased to 70%,'
says WBSCD Director M. Davtyan. On March 18, 2011, he presented Yerevan
Djur General Manager Royer with the company shortcomings in a letter and
stated that if all the violations exposed just in 2010 were removed and
fixed, then water loss by the end of the year would have dropped by 5%.
`This means that company revenues would have grown by 1/3rd, the amount of
water supplied would have increased by 33%, and the water rate could have
dropped by 60 Drams,' the letter reads.
Mikayel Davtyan notes that when they conducted inspections of certain
sites, the water loss decreased immediately and revenues rose. When they
left, the opposite happened. Due to infractions, it's calculated that water
loss amounts to 260 million AMD; more than 30% of the amount monthly in
Yerevan.
Illegal water connections
This even surprised the Community Development Programs Office.' They
demanded additional clarifications regarding the fifth year of the `lease
Contract'. In a letter dated January 25, 2011 to all Yerevan
Djurdirectorates and the general manager, they wrote: `The fact that
water loss
hasn't decreased remains a mystery even though:
a) 10,589 were discovered, of which 3,920 were illegal connections
b) 102 breakdowns were discovered, which comprise
It was proposed to the company to present differentiated between commercial
and technical water loss figures.
In its one month of operation, the control directorate gave special
attention to breakdowns of an operational nature, to which immediate
responses would lead to water loss reduction and a rise in water quality.
However, according to directorate employees, the company did not eliminate
a majority of the infractions found and that many were never followed up.
In a letter dated February 1, 2011, the Operations Directorate sent a
letter to then General Manager Gor Grigoryan regarding non-response to
emergencies, stating: ` To date, most of the breakdowns discovered by the
Water Balance Coordination and Supervision Directorate have either not been
fixed or, if they have, there is no relevant information about
them=85attached is the corresponding list.'
Ashtarak trunk road; ilegal connection
General Manager Pascal Royer also didn't respond to the communiqués of
the
control directorate. M. Davtyan says that as a result, shortcomings in the
system increased. `Due to Mr. Royer's unexplained indifference, the
abovementioned infractions are overlooked, favoritism is practiced, and
directorates and employees regarded as inconveniences are being eliminated.
As a result, the true picture is not reaching the European management of
Veolia Water. During his years as manager, he and his cohorts did
everything to make the company unproductive, leading to irrational usage of
credit and financial resources, improper and incorrect use of leased
property, and water loss. All this not only damages the national strategic
resources of the Republic of Armenia but immediately negatively impact the
company's financial status=85'
This time, Pascal Royer's response was quick in coming. All the employees
of the WBCSD received notices from the general manager on April 4, 2011,
informing them that their work contract was being terminated. `According
to
Decision 2 taken by the Yerevan Djur Council on April 14, 2011, an
administrative restructuring will occur resulting in a new job position
list. By this decision your job position has been terminated. The company
has no other work to offer you.'
Mikayel Davtyan stated that as of April 20, 2011, when he and the others
were still regarded as Yerevan Djur employees, writs against 50 legal and
830 physical individuals for illegal water connections were never given due
process.
(Scoop, a Danish-based network for investigative journalists, assisted in
the preparation of this investigative article)
From: Baghdasarian