KfW proposes to raise tariffs for water in Gyanja and Sheki two times
The German Bank for Reconstruction (KfW) requested the government of Azerbaijan to accelerate the process of making contracts for the water system reconstruction project in Gyanja and Sheki, the government told Trend. The bank notified of it in its letter sent to the Azerbaijani side.
To this end, two remaining issues are to be resolved. First, for the project efficiency the prices for the water use in Gyanja and Sheki are proposed to be increased approximately twice, as the water payment in these towns differs from the price set in the capital city. The population in these regions pays only 100 AZM per 1 cubic mete of water, while in Baku this tariff grew to 320 AZM. Implementation of these measures will enable these water systems to reimburse their losses themselves, as the water charging factor for the use is very low. The German bank proposes to raise prices during 2-3 years. The government agrees that the price increase to be conducted gradually.
Relevant state bodies: Ministries of Finance, Economic Development and Justice and Azersu (Water company) are to clarify the matter till the beginning of the next week and give their proposals for resolving the issues.
On the whole, 54 million euro will be spent on the project implementation during the first five years, which are allocated by the KFW bank, the SECO Swiss organization (will grant 10 million euro) and the government of Azerbaijan. However, by the Feasibility Study the entire project will require between 80 -100 million euro. The remaining funds will be put by the water systems operators, which are supposed to be involved during the fifth year of the project implementation. Operators for the both water systems will be identified by tender to be announced jointly by KFW and the government of Azerbaijan. Water networks will be handed over to management under the condition of making essential investments for completion of reconstruction in the water supply systems of these towns.