What can be changed by another report?

By Karine Mangasarian

Yerkir/arm
November 12, 2004

NA Vice-Speaker Vahan Hovhannisian yesterday presented third report of
the` Committee on researches of effective use of foreign trenches,
grants, humanitarian aid,’ which concerned the use of credits provided
to the Yerevan Water Sewage cjsc in years 1999-2003. Hovhannisian said
that the water systems reforms cause anxiety and may result in rise of
water taxes.

Before arriving to that conclusion the temporary committee researched
the summary rendered by the Aukon auditing company as of
01.07.2002. According to the summary the repair of the whole system
takes some 83.6 billion AMD, re-evaluated amortization – 55 b AMD, as
a result of which the re-evaluated value is 28.5 b AMD. These results
were nearly fully accepted by the government decision N1952.

The Vice-Speaker prioritizes the circumstance that according to the
Aukon the rise of the re-evaluated value was indicated in the lines of
`Structures’ and `Houses, buildings,’ constituting about 85 per
cent. However, the KPMG independent auditing company researches bring
different data according to which about 55 per cent of re-evaluated
value is in the `Machineryâ=80=9D and ` Transportation’ lines.

Hovhannisian said: `As we know, the machinery and transportation
amortization periods are 5 years, i.e. each year we can count 20%
amortization of its cost in contrast to buildings which have an
amortization period of 20 years. And accounting excessive amortization
causes rise of self cost.’ He also prioritized the need to address
this issue on the parliamentary level.

The Vice-Speaker also quoted a peace of the report of the KPMG
auditing company regarding the Italian `El Utility’ company. The
conclusion said that ` without parliamentary assistance the Yerevan
Water Sewage company will be hardly able to carry out its activities.’

The speech maker summed up saying that the WB donation of 30 million
dollars is not sufficient for the improvement of the system. He also
reminded that in addition to this trench the Armenian government also
provided 4 million dollars.

`It appears that without government assistance this project cannot be
implemented,’ says Hovhannisian suggesting to `exile the Italian `El
Utility’ which somehow happened to win the WB grant’ from the country.

The discussions will be continued in the next session. But since the
parliament does not have the relevant authorities in rendering
punishment, the case may e interesting for judges.