QUARTERLY REPORT October-December 2008

Done by the Management Contractor The 15-th of January 2009

______Patrick LORIN

S A U R E X A M P L E

T A B L E OF CONTENTS

1. OPERATIONS ...... 4 1.1 COMMERCIAL ...... 5 QUARTERLY ACTIVITIES ...... 6 D I A G R A M S 1 -5 ...... 8 NUMBER OF WATER METERS INSTALLED BY AWS CJSC ON DATE 01.01. 2009 - T A B L E 1 ...... 12 1.2 W O R K S ...... 13 CHLORINATION PROGRAM ...... 14 WORKS ON THE NETWORK ...... 18 TRANSPORTATION ...... 21 1.3 OPERATION & MAINTENANCE ...... 23 OPERATION & MAINTENANCE WORKS ...... 24 NEW EQUIPMENT OPERATED IN IV QUARTER 2008 ...... 25 OPERATION END MAINTENANCE OF WATER TRANSMISSION AND DISTRIBUTION SYSTEMS TABLE -3, DIAGRAM-6 ...... 26 MAINTENANCE OF WESTWATER COLLECTION SYSTEMS TABLE -4 ...... 27 DIAGRAMS -7.8 ...... 28 NETWORK ANALYSING T A B L E - 5...... 29 DIAGRAMS – 9,10 ...... 30 DIAGRAMS – 11,12 ...... 31 WATER PRODUCTION & LOSSES TABLE-6 ...... 32 DIAGRAMS – 13,14 ...... 36 WATER DELIVERED THROUGH PUMPING AND CORRESPONDING ELECTICITY CONSUMPTION ...... 37 TABLE - 7 ...... 37 D I A G R A M S – 15,16 ...... 38 PROGRESS OF THE WATER METERS EQUIPMENT INSTALLATION BY THE AWS CJSC IN ITS MAINTENANCE AREA TAB LE - 8, DIAGRAM - 17 ...... 39 DISINFECTANT RECORDS IN IV QUARTER 2008 TABLE- 9 ...... 40 ELECTRICITY CONSUMPTION & EXPENSES TABLE-10,11 ...... 42 ELECTRICITY CONSUMPTION & EXPENSES IN PERIOD OF 13 LAST MONTHS DIAGRAM - 18 ...... 42 2. TECHNICAL ...... 43 2.1 TECHNICAL INVESTIGATIONS & DESIGN ...... 44 2.2 MAPPING OF TECHNICAL SYSTEMS ...... 48 2.3 MANAGEMENT OF COMPANY’S ASSETS ...... 52 2.4 WATER QUALITY CONTROL ...... 55 POTABLE WATER INVESTIGATION IN QUARTER IV, 2008 – T A B L E 1 2 ...... 57

QUARTERLY REPORT October-December 2008

DATA ON MAINLY OPERATED UNDERGROUND AND SURFACE POTABLE WATER SOURCES - TABLE -13 ...... 59 DATA ON WASTEWATER ANALYSES - T A B L E 1 4 ...... 60 NATURE PROTECTION ...... 61 ENVIRONMENTAL UTILIZATION & PROTECTION FEES BY THE REGIONS AND SECTORS TABLE-15 61 CONTAMINANTS VOLUME THREW TO WATER BASIN & PERMITTED MAXIMUM OUTLET (PMO) TABLE -16 ...... 62 2.5 QUALITY, SAFETY & ENVIRONMENT ...... 64 2.6 COMPANY’S PROCUREMENT...... 67 INFORMATION ABOUT PROCUREMENT WITHIN AWSC BUDGET, Q IV, YEAR 2008 TABLE – 17 ...... 68 3. ADMINISTRATION ...... 69 3.1 FINANCE & ACCOUNT ...... 70 SUBSIDY TABLE-18 ...... 71 INFORMATION CONCERNING INCOMES AND EXPENSES OF AWS CJSC IN IV QUARTER, 2008 TABLE -19 ...... 73 3.2 HUMAN RESOURCES ...... 74 1. PERSONNEL & CONTRACT DIVISION ...... 75 D I A G R A M 2 0 ...... 76 D I A G R A M 2 1 ...... 76 2. TRAINING & DEVELOPMENT DIVISION ...... 77 3.3 LEGAL & INSURANCE ...... 80 4. PROJECTS ...... 82 4.1 W B ...... 83 D I A G R A M – 22...... 91 TABLE -20 ...... 91 4.2 A D B ...... 92 Feasibility Studies and Development of Preliminary and Working designs ...... 93 T A B L E 2 1 ...... 96 4.3 E B R D ...... 97 4.4 U S A I D ...... 99 5. PUBLIC RELATIONS ...... 102 ON ACTIVITIES IMPLEMENTED BY THE PUBLIC RELATIONS DEPARTMENT ...... 103

QUARTERLY REPORT October-December 2008

1. OPERATIONS

QUARTERLY REPORT October-December 2008

1.1 COMMERCIAL

QUARTERLY REPORT October-December 2008

QUARTERLY ACTIVITIES

DATA ANALYSIS

General

In the 4th quarter high indicators have been recorded in all the branches. All the indicators have been improved except water meters installation indicator.

Starting January 1, 2009 the calculations for resident customers of private houses without water meters will be made by pipe capacity.

Installation of water meters

During the 4th quarter totally 1800 water meters have been installed (together with replaced water meters). Regardless the activities carried out by the Company (regular reminders, disconnections, etc) the water meters installation process goes on very slowly. Starting January 1, 2009 the calculations for resident customers of private houses without water meters and contracts with water supplying company will be made by pipe capacity. Here we have to emphasize the cooperation with Company’s Legal Department.

The thing is that the calculated amounts should be collected in juridical manner. Only in this way it will be possible to force the above mentioned customers (unfair customers) to install water meters.

Revenue Collection

In the 4th quarter unprecedented level of collection has been recorded. If we compare the previous quarter results with the same period of the last year the picture will be as follows:

The growth level of IV The growth level of IV 2007 IV 2008 III quarter, 2008 as quarter, 2008 Sectors 2008 IV quarter quarter quarter compared with III as compared with quarter, 2008 IV quarter, 2007

North West Region 175 869 193 355 189 534 -2% 8% North East Region 142 115 149 370 180 966 21% 27% Center West Region 188 190 191 163 193 155 1% 3% South 181 106 195 782 172 246 -12% -5%

A W S C 687 280 729 670 735 900 1% 7%

It is worth mentioning that on August 2008 the Company concluded a contract with the RA Ministry of Defense to carry out wastewater activities in several military units (cleaning of septic tanks).

QUARTERLY REPORT October-December 2008

On October-December according to the contract about AMD 6 694.0 thousand was collected. Together with the above mentioned amount the collection of the 4th quarter will constitute AMD 742 539.0 thousand (instead of above table mentioned AMD 735 900.0 thousand).

Notwithstanding the fact that the “North-East” and “North-West” branches of the Company did not fully implemented annual collection objective, the collection for the whole Company was fulfilled by 100%.

01/08 02/08 03/08 04/08 05/08 06/08 07/08 08/08 09/08 10/08 11/08 12/08 MD 2008 % SW Task 45 639 47 600 49 550 49 829 50 548 52 640 54 151 55 873 52 510 51 845 49 852 49 319 609 355 North East Collection 25 703 30 214 42 819 45 239 45 783 47 610 48 829 48 434 52 108 58 398 57 111 65 457 2 349 570 053 Difference -19 936 -17 386 -6 730 -4 590 -4 765 -5 030 -5 322 -7 440 -402 6 552 7 259 16 137 -39 302 -6,4% Task 57 038 58 100 58 290 59 713 60 859 61 329 59 648 60 880 60 360 59 131 59 141 60 019 714 507 North West Collection 46 254 47 010 52 360 55 638 60 542 60 539 63 050 65 240 65 066 63 519 62 514 63 500 0 705 232 Difference -10 784 -11 090 -5 929 -4 074 -317 -789 3 402 4 360 4 706 4 388 3 373 3 481 -9 274 -1,3% Task 52 944 53 127 56 844 57 667 58 709 59 769 61 040 62 244 63 055 62 292 63 086 62 559 713 337 Center Collection West 51 927 52 108 56 983 56 870 58 918 61 014 62 123 63 874 65 166 63 583 62 852 66 720 2 311 724 449 Difference -1 017 -1 019 140 -798 209 1 245 1 083 1 630 2 110 1 291 -234 4 161 11 112 1,6% Task 51 593 52 089 52 504 53 345 54 011 54 760 56 768 57 768 55 976 54 117 52 347 51 930 647 209 South Collection 38 619 39 908 56 661 57 157 59 395 65 802 65 088 67 623 63 071 60 830 47 277 64 139 2 034 687 603 Difference -12 974 -12 181 4 157 3 812 5 384 11 042 8 320 9 854 7 095 6 712 -5 070 12 209 40 395 6,2% Task 207 214 210 916 217 187 220 554 224 127 228 497 231 607 236 765 231 901 227 385 224 427 223 828 2 684 408 Total Collection 162 503 169 240 208 824 214 904 224 638 234 965 239 090 245 170 245 411 246 330 229 755 259 816 6 694 2 687 338 Difference -44 711 -41 676 -8 363 -5 650 511 6 468 7 482 8 404 13 510 18 944 5 328 35 988 2 930 0,1%

The number of customers making payments has also been increased but there are still customers enjoying services but not paying for provided services (about 32%). 7

QUARTERLY REPORT October-December 2008

Illegal connections

As one of the Commercial Department functions we continue making random visits (together with relevant departments). Numerous illegal connections have been revealed and eliminated. Supervision groups of the branches are actively involved in these activities. During such visits violation acts have been recorded, water meters have been installed and “hidden” customers have been brought to the legal environment etc. Due to these activities the sales indicators are improving month by month. But we have to state that there is still a room for improvements. Strict penalties should be imposed as far as it is possible. The involvement of other department employees should be enlarged. It is important to cooperate with the employees of Operations and Legal Departments. Ultimately considerable part of losses are caused by illegal actions.

Aparan city Sevan city

See below a diagrams and tables concerning the quarterly activity.

DIAGRAMS 1-5

QUARTERLY REPORT October-December 2008

DIAGRAM 1

N u m b e r o f P a y m e n t s

120 000 111 616 112 823 115 000 108 835 110 409 110 000 109 368 105 884 108 095 108 843 100 000 92 711 98 663 89 728 90 000 85 507 87 404 84 769 80 000

70 000 Number of Payments 60 000 Number of Customers receiving services : around 170.000

50 000 52 997

40 000 06 07 08 08 08 / / / / / 01/05 12/05 12 12 01/08 02 03 04/08 05/08 06/08 07/08 08/08 09/08 10 11/08 12/08

DIAGRAM 2

Billing & Revenue collection (Collection , Billing )

400 347 360 350 331 309 320 312 296 301 300 278 280 282 259 275 255 242 247 250 225 260 239 245 245 246 225 235 230 200 215 196 209 150 179 163 169 Millions AMD Millions

100 85 50

0 01/05 12/05 12/06 12/07 01/08 02/08 03/08 04/08 05/08 06/08 07/08 08/08 09/08 10/08 11/08 12/08

Billing Revenue Collection

QUARTERLY REPORT October-December 2008

DIAGRAM 3

Billing, collection and ratio % for customers with water meters

2 500 130%

2 104 120% 1 894 2 073 2 000 1 867 1 703 1 896 110% 1 731 1 850 1 704 1 503 101% 1 711 100% 100% 100% 100% 100% 100% 98% 100% 1 500 98% 101% 101% 98% 95% 1 313 1 242 1 507 1 122 1 306 90% 1 211 84% 1 000 939 1 118 75% 80% Millions AMD Millions 753 938 577 768 70% 500 414 591 66% 302 435 163 60% 72 253 48 0 123 50% 01/05 12/05 12/06 12/07 01/08 02/08 03/08 04/08 05/08 06/08 07/08 08/08 09/08 10/08 11/08 12/08

Billing Revenue Collection Ratio

DIAGRAM 4

Cummulative Billing & Collection

5 000 4 624

4 500

4 000 3 626 3 431 3 268 3 220 3 500 2 681 3 000 2 443 2 308 2 135 2 500 1 834 1 593 1 599

Millions AMD Millions 2 000

1 500

1 000

500

0 2003 2004 2005 2006 2007 2008

Billing Revenue Collection

QUARTERLY REPORT October-December 2008

DIAGRAM 5

BILLING PAYMENTS IN AWSC

2004 2005 2006 2007 2008

280 260 260 Pic due to the payment of budget organizations 240 for 3 months 243

220 196 200 179 180 mln.AMD 160 141 140

120 Management Contract 100 New tariff from: started date: 1st May 2005 19th October 2004 80

QUARTERLY REPORT October-December 2008

NUMBER OF WATER METERS INSTALLED BY AWS CJSC on date 01.01. 2009 - TABLE 1

Units Including TOTAL Total count of # SECTORS installed in Water meters Residential Juridical customers persons IV quarter

1 2 3 4 5 6 1 Abovyan 21 494 20 962 532 118 2 Charentsavan 10 308 9 976 332 78 3 Hrazdan 12 990 12 431 559 174 4 Ashtarak 8 822 8 531 291 111 5 Artik 6 674 6 332 342 70 TOTAL NORTH-WEST REGION 60 288 58 232 2 056 551 6 Sevan 6 904 6 572 332 106 7 Dilijan 3 173 3 035 138 54 8 Ijevan 7 414 7 069 345 183 9 Gavar 6 369 6 034 335 18 10 Alaverdi 9 882 9 637 245 10 11 Spitak 10 492 10 090 402 127 TOTAL NORTH-EAST REGION 44 234 42 437 1 797 498

12 Artashat 11 770 11 417 353 228 13 Masis 7 314 6 900 414 23 14 Vedi 9 633 9 371 262 157 15 Echmiadzin 17 925 17 239 686 97

TOTAL CENTER-REGION 46 642 44 927 1 715 505

16 Sisyan 5 401 5 121 280 38 17 Eghegnadzor 7 307 6 805 502 49 18 Goris 5 988 5 747 241 64 19 Kapan 17 074 16 267 807 88

TOTAL SOUTH REGION 35 770 33 940 1 830 239

TOTAL 186 934 179 536 7 398 1 793

* Some settlements of Gavar sector have been transferred to Sevan sector.

QUARTERLY REPORT October-December 2008

1.2 W O R K S

QUARTERLY REPORT October-December 2008

CHLORINATION PROGRAM AWSC self-financing

* The civil works for the rehabilitation of the chlorination points are already completed in the following locations:

North-East region 14 points North-West region 21points South region 1 point

Mounting of chlorination equipment is now in process in several chlorination plants

North-East region 6 points North-West region 11 points which will further be operated with new chlorination sets.

Hatsarat Dilijan Masis

Chlorination Equipment

The final phase of the installation of chlorination equipment is currently in process.

21 chlorination points in the North-East region have been equipped with chlorination sets. 9 of these points have electric power supply problems which will be solved in 2009.

8 new chlorination rooms have been constructed and 5 existing ones repaired in the North-West region. Currently the process of installation of equipment is completed in 9 plants.

One repair has been done and one assembled set installed in the South region.

13 of the 50 chlorination sets acquired through the MWWP funding have been stored in order to be used upon need.

It is worth to mention that the electric wiring of the chlorination points located in isolated areas is realized under the AWSC program. The program covers the South region – 2.14km and the North-West region - 2.2km.

QUARTERLY REPORT October-December 2008

NEW CHLORINATION PLANTS UNDER CONSTRUCTION IN 2008 Table-2

N sector - Dose Dose Sector Location Location

Sub Description Chlorinator Rate kg/day Rate Flow Rate g/h Rate Flow g/h Rate Flow Water Flow m3

Metering Type of of Type Metering Minimum Chlorine Minimum Chlorine Maximum Chlorine Maximum Chlorine Daily Chlorine Flow 1 2 3 4 5 6 7 8 9 10 11 12

North-West

- - Karbi Bore Co mplete - 1 160 0,7 0,8 112,0 128,0 2.7 - 3.1 500 rak rak Hole Operating Ashta Ashta Yeznak Complete - Pumping 300 0,6 0,8 180,0 240,0 2.4 - 3.2 500 Operating Station

Zh a mi Complete - 180 0,6 0,8 108,0 144,0 1.1 - 1.5 500 2 Aghbyur PS Operating

Aparan Aparan Complete - Geghadzor / Problem of Water 45+65 1,0 1,2 45+65 55+80 2,6 - 3,2 250-500 Tsaghahovit Inlet and Outlet Connection Under Installation Jraghatsi 60 0,7 0,9 42,0 54,0 1.0 - 1.3 250 - Chlorinator and Fittings Under Installation Daghdzut 40 0,7 0,9 28,0 36,0 0.7 - 0.9 250 - Chlorinator and

Fittings Under Installation Hartashen / 3 10 0,7 0,9 7,0 9,0 0.2 - 0.3 40 - Chlorinator and Lusaghbyur

Ashotsk Ashotsk Fittings Under Installation Karmravan 25 0,7 0,9 17,5 22,5 0.2 - 0.3 100 - Chlorinator and Fittings Under Installation Toros 5 0,7 0,9 3,5 4,5 0,1 40 - Chlorinator and Fittings - -

Complete - 4 Alapars 90 0,6 0,7 54,0 63,0 1.3 - 1,5 40-100 Operating tsavan tsavan Charen Charen

- Complete - Teghenis 25 0,6 1,0 15,0 25,0 0.3 - 0.6 100 Operating 5 Complete - Tsagh kadzor Ulashik WTP 30 1,2 1,4 36,0 42,0 0.8 - 1.0 250 Hrazdan Operating Complete - Kentaghbyur 45 0,7 0,9 31,5 40,5 0.7 - 1.0 250 Operating 6 Zovasar Talin Talin Complete - No 40 0,7 0,9 28,0 36,0 0.6 - 0.9 250 Jinjakner Chlorine

QUARTERLY REPORT October-December 2008

Flow m3 m3 Flow N sector - Sector Location Location Rate g/h Rate g/h Rate

Minimum Minimum Maximum Maximum Sub Description Chlorinator Chlorine Dose Chlorine Dose Chlorine Flow Chlorine Flow Daily Chlorine Water

Metering Type of of Type Metering Flow Rate kg/day Rate Flow 1 2 3 4 5 6 7 8 9 10 11 12

North-West

70 / 84 / 112 / Complete - Golovino WTP 500-500

220 264 352 Operating Complete - 7 Frolovo WTP 1,2 1,6 350/ 420 / 560 / 500-500- Operating Dilijan Dilijan 500 600 800 1000 Complete - Bldan WTP Operating Complete/El. Karkarot 125 0,8 1,0 100,0 125,0 2.3 - 3.0 500 P r o b l e m - Wiring and Meter Complete/El. Spitak Jur 100 0,8 1,0 80,0 100,0 1.9 - 2.4 500 P r o b l e m - Wiring and Meter Complete/El. Khozmarag 30 0,8 1,0 24,0 30,0 0.5 - 0.7 100 P r o b l e m - Wiring

and Meter 8 Complete/El. Ijevan Ijevan Getapnya 50 0,8 1,0 40,0 50,0 0.2 - 0.3 250 P r o b l e m - Wiring and Meter

Complete/El. Gmbet 8 0,8 1,0 6,4 8,0 0,2 40 P r o b l e m - Wiring and Meter Complete/El. A z a t a m u t 8 0,8 1,0 6,4 8,0 0,2 40 P r o b l e m - Wiring and Meter

- - Complete/El. 9 Chambarak 120 0,8 1,0 96,0 120,0 2,9 500 P r o b l e m - Wiring barak barak Cham Cham and Meter Complete/El.

Dz knget 28 0,7 1,2 19,6 33,6 0.4 - 0.8 100 P r o b l e m - Wiring 10 and Meter

Sevan Sevan Complete - Lchashen 150 0,9 1,1 135,0 165,0 3.2 - 4.0 500 Operating

Complete/El. 11 Hopoi-Var 110 0,7 0,9 77,0 99,0 1.8 - 2.4 250 Power - Wiring Martuni Martuni

Complete - A kner 64 0,6 0,8 38,4 51,2 0.9 - 1.2 250 Operating 12

Complete -

Vardenis Vardenis Shat Jrek 140 0,6 0,8 84,0 112,0 2.0 - 2.7 500

Operating

QUARTERLY REPORT October-December 2008

ation ation N sector - m3 Sector kg/day Loc Rate g/h Rate g/h Rate

Minimum Minimum Flow Rate Rate Flow Maximum Maximum Sub Water Flow Description

Chlorine Dose Chlorine Dose Chlorine Flow Chlorine Flow of Chlorinator of Daily Chlorine Metering Type Type Metering 1 2 3 4 5 6 7 8 9 10 11 12

Complete - Jrashen 63 0,7 0,9 44,1 56,7 1.0 - 1.4 100 Operating Complete - Spitak Shirakamut 63 0,7 0,9 44,1 56,7 1.0 - 1.4 100 Operating

Complete/El. - Katnaghbyur 50 0,8 0,9 40,0 45,0 0.9 - 1.0 250 P r o b l e m - 500m, Ta shir

Meter

- 160 0,7 0,9 112,0 144,0 Ta 13 shir Novoseltsovo 8.7-11.2 500-500 Under Repair 360 0,7 0,9 252,0 324,0 Stepanavan Complete - Problem of Getavan PS 600 0,7 0,9 420,0 540,0 7.1 - 9.2 500-500 Installation and Connection

Stepanavan Complete/El. Gyulidari 45 0,6 0,9 27,0 40,5 0.6 - 1.0 250 P r o b l e m - 500m, Meter Center West

1000- Araratyan-1, Ayntap, Complete - 1 2500 0,9 1,2 2250,0 3000 54-72 1000- Argavand Operating Masis 2000

Araratyan-1, Masis 500-500- Complete - 2 2400 0,9 1,2 2160,0 2880 52-70 villages, Argavand 1000 Operating Artashat

South Complete/El.

Sarnaghbyur 250 0,7 180 4,3 500 P r o b l e m - 1020m, Meter Complete/El. 1 Karasun 290 0,7 200 4,8 500 P r o b l e m - 520m, Meter Complete/El. Yeghegnadzor Yeghegnadzor Vostan 250 0,7 180 4,3 500 P r o b l e m - 600m, Meter Under Installation

i Setants 90 0,6 1,2 54,0 108,0 1,3-2,6 500 - Chlorinator and 2 Fittings Complete/El. Meghri Meghr Agarak WTP 300 1,3 1,5 390,0 450,0 9.3-10.8 500-500 P r o b l e m - 1020m, Meter

QUARTERLY REPORT October-December 2008

WORKS ON THE NETWORK AWSC self-financing, main actions

NORTH-WEST REGION

APARAN: Zoning and pressure regulation have been implemented in the internal town network (Duryan, Mashtots, Griboyedov, Narekatsi streets) using PE pipes DN 50-90mm.

ASHTARAK: Individual water-meters chambers have been installed in Ohanavan and Mughni villages, as well as 300m of internal network has been renewed.

HRAZDAN: A 255m water line has been laid in Banavan 5th District with DN 110mm pipes, which has significantly improved the local water supply duration.

A R A M U S

New pipeline from Aramus PS to Abovyan Connection to the new reservoir Reservoir

CENTER-WEST REGION

MASIS: A total length of 800m DN 200/75mm pipelines have been laid in the 10th and 3rd districts, as well as in Marmarashen village.

ARTASHAT: A rather big flow loss has been restored via replacement of damaged pipelines with DN 25-160mm pipes in the internal distribution networks of Shahumyan, Isakov, Aghayan, Arazi, Orbeli, Kasyan and Ayvazovski streets, as well as in Vostan, Berdik, Aygezard and Mkhchyan villages.

QUARTERLY REPORT October-December 2008

SOUTH REGION

VAYK: Water feeders of Shahumyan Street, Yerkrabanneri Street, Bazmaghbyuri Avenue and 22 Shahumyan Street.

A new PE pipeline d=35mm - l=200m has been laid and 22 individual water-meter chambers have been installed.

EGHEGNADZOR GOMADZOR New trench for distribution network Pipe line of reservoir

GORIS: New water pipelines have been installed in Arzumanyan, Syunik, Yolyan and Shahumyan streets, as well as in Tegh village.

SISIAN: The Mukhuturyan-Ashotavan-Hatsavan gravity conduit has been laid.

KAPAN: The water pipelines of Shahumyan 102 Street, R. Minasyan Street, Yerkatughayinneri 2n d Alley and Azatamartikneri Street have been replaced.

QUARTERLY REPORT October-December 2008

NORTH-EAST REGION

DILIJAN: The water lines of Sayat-Nova, Getapnya, Myasnikyan, Usanoghakan streets, as well as of Andranik and Kalinin districts have been replaced with DN 20-160 mm PE pipes (total length – 5.2km).

ALAVERDI - Odzun: The civil works are in process: 3200m of DN 160-20mm PE pipelines have been laid and 85 customers connected.

ECHMIADZIN CENTRAL WAREHOUSE

• This quarter the transportation of manholes ordered last quarter is completely over. All the manholes were transferred and distributed in the relevant destinations of the regions.

• A part of surplus construction materials planned to use for the World Bank projects has been returned to the storehouse.

QUARTERLY REPORT October-December 2008

TRANSPORTATION

 Gas feeding system: Due to the difference of natural gas and petrol prices the transport facilities equipped with gas bottle system and operated with natural gas saved about AMD 10 000 000 (ten million dram).

 Maintenance of transport facilities: The AWSC Head Office worked out annual maintenance program for the AWSC Head Office and branches’ transport facilities which was included in the Budget of 2009.

Works have been carried out to record the batteries of the Company’s transport facilities and purchase necessary batteries.

Maintenance of GAZ 31029

The tyres of Company’s transport facilities have been replaced with winter tyres.

U A Z with new winter tyres

 Operation of transport facilities: In the 4th quarter works have been carried out to compare operation indicators of similar vehicles of the regional branches and Head Office. The above mentioned process will enable us to improve operation indicators by 5-7%.

QUARTERLY REPORT October-December 2008

 Elimination of accident consequences: During the 4th quarter three vehicles of the Company have been repaired.

GAZ 3110 in broken condition and after repairing

 Budget 2009: The Head Office of the “AWSC” CJSC made expenses for procurement of tyres, batteries, lubricants necessary for the Head Office and branches fleet, maintenance, current and capital repairing expenses, as well as fuel expenses necessary for operation of transport facilities.

 Replenishment of the fleet: Works have been started to prepare the list of vehicles and machinery necessary for the Head Office and branches.

 Inventory 2009: The Head Office started to make the inventory of the Company’s Head Office and branches transport facilities.

QUARTERLY REPORT October-December 2008

1.3 OPERATION & MAINTENANCE

QUARTERLY REPORT October-December 2008

OPERATION & MAINTENANCE WORKS

1. Produced and supplied water quantities, potable water losses

Water quantity produced in the 4th quarter of 2008 constituted 47 411 thousand cubic meter (by gravity – 27 141 thousand cubic meter, mechanically - 20 270 thousand cubic meter).

During the 3nd quarter potable water losses constituted 84.9%, which is by 1.3 %-more than the planned indicator is (83.6%). At the end of this quarter as compared with the 3th quarter a water losses are increased (about 0.4%) which is the result of more efficient use of produced water quantities.

2. Elimination of breakdowns, capital repairing and renovation of facilities

In the water supply systems:

In the 4th quarter, 2008 the operation works implemented in the water supply systems had mainly breakdown repairing character.

During the reporting quarter about 1 982 breakdowns were repaired.

As a result of implemented works daily water supply schedule reached 11.83 hour.

In wastewater systems:

The works carried out in the wastewater network were directed at elimination of obstructions, partially at cleaning of networks and repairing of manholes.

During this reporting quarter 13 548 km of sewers were cleaned, 1 810 obstructions were eliminated, 90 sewers and 57 manholes were repaired.

3. Potable water disinfection

In the 4th quarter potable water disinfection works were fully implemented. In this quarter 30 238 kg liquid chlorine and 1 763 kg of hypochlorite pills were used for disinfection purposes.

The process of replacing old, faulty disinfection equipment with new and modern ones planned for 2008 is completed.

QUARTERLY REPORT October-December 2008

NEW EQUIPMENT OPERATED IN IV QUARTER 2008

MASIS PUMPING STATION

New pumping station New automatic control panel for pump

S E V A N L T C H A S H E N

New regulation chamber Maintenance of the regulation chamber of borehole pump N1

QUARTERLY REPORT

October-December 2008

OPERATION END MAINTENANCE OF WATER TRANSMISSION AND DISTRIBUTION SYSTEMS TABLE-3, DIAGRAM-6

NUMBER OF BREAK-DOWNS NUMBER OF LIQUIDATED BREAK-DOWNS

NETWORK PARTLY NETWORK LINEAR ARMATURE

ILLEGAL MAIN TOTAL REPAIRED REPAIRED REPAIRED DOWNS NOT NOT DOWNS

- WATER WATER WATER WATER DISTRIBUTION

SYSTEMS

REPAIRED TRANSMISSION ARMATURE TOTAL INSPECTION

SYSTEM YSTEM DISTRIBUTION

TOTAL SYSTEM WATER WATER WATER SYSTEM S TRANSMISSION AND ARMATURE BREAK TRANSMISSON DISTRIBUTION

) ) ) ) ) )

AMD AMD AMD AMD

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AMD) AMD) AMD) AMD) AMD) AMD) AMD) AMD) AMD) al cost cost NAME OF REGIONAL BRANCH M M M M M M M (thousand (thou (thousand (thousand (thousand (thousand (thousand (thousand (thousand thous. AMD) thous. AMD thous. AMD (thous. (thous. (thous. (thous. ( ( (

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 NORTH EAST 0 0 0 10 96 841 0 0 0 7 45 12 10 72 755 24 851 137 55 476 1145 647 1593 7161 12 114 203 714 2183 8509 2279 9406 NORTH WEST 21 317 731 11 19 349 9 1 404 0 0 10 18 28 231 6 265 1 28 10 1041 231 181 5832 5 35 88 264 226 6961 563 8464 CENTE R WEST 50 83 262 38 270 581 1 6 30 0 0 2 12 24 359 7 390 0 24 208 939 359 4502 7518 7 94 316 390 4804 8773 5163 9658

SOUTH 17 211 370 73 1280 2123 28 215 283 10 2 3 13 145 181 30 354 -2 145 464 1895 181 412 1698 30 513 679 356 1388 4271 3094 7062

TOTAL 88 611 1 363 132 1 665 3 894 38 222 717 17 47 27 54 269 1 526 67 1 860 136 252 1 157 5 020 1 418 6 688 22 209 54 757 1 286 1 724 8 601 28 515 11 099 34 590

CUMU- LATIVE 280 1 989 4 762 478 7 631 15 350 110 2 256 5 183 147 175 193 256 928 6 038 258 7 222 420 878 4 247 18 524 5 686 25 846 83 901 238 5 957 9 034 6 802 36 050 111 459 47 925 137 184

REMARK* The information is presented in base of operative data.

NUMBER OF REPAIRED BREAK-DOWNS, ARMATURE AND WATER TRANSMISSION & DISTRIBUTION SYSTEMS

2500

2000

1500

1000

500

0 I Quart II Quart III Quart October November December IV Quart SOUTH 466 417 476 152 153 169 474 CENTER WEST 393 417 421 154 171 154 479 NORTH WEST 323 320 302 102 93 110 305 NORTH EAST 684 762 707 245 246 233 724

QUARTERLY REPORT October-December 2008

MAINTENANCE OF WESTWATER COLLECTION SYSTEMS TABLE-4

INCLUDING INSPECTION OF MANHOLES WESTEWATER REMOVAL OF MAINS CLEARED MAIN REPAIRED TOTAL

REPAIRED COLLECTION OBSTRUCTIONS

m m SYSTEMS >300m <300m

REGIONS

km km km pc pc cost rial km pc Total Total Total Total Total Total AMD) AMD) AMD) AMD) AMD) AMD) AMD) AMD) AMD) AMD) Total Total expenses expenses expenses expenses expenses expenses expenses expenses (thousand (thousand (thousand (thousand (thousand (thousand (thousand (thousand (thousand (thousand Material cost cost Material cost Material Mate cost Material cost Material Total other other Total

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

NORTH-EAST 2,246 0 112 0 2,246 6 144 216 8 192 239 0 0 0 461 105 2 159 441 2 726

NORTH-WEST 2,31 0,00 116 1,79 0,520 20 349 1 169 11 561 654 0 0 0 448 0 1 964 909 3 903

CENTER- WEST 4,2 0 210 0,95 3,250 0 0 0 13 273 379 0 0 0 258 1 602 274 1 191

SOUTH 4,792 0 240 1,265 3,527 64 917 1 541 25 610 708 0 0 0 643 0 582 1 527 3 070

TOTAL 13,548 0 677 4,005 9,543 90 1 410 2 926 57 1 636 1 980 0 0 0 1 810 106 5 306 3 152 10 889

CUMULATIVE 57,502 0 2 875 18,389 39,113 318 6 148 11 439 201 7 243 8 806 0 0 0 6 675 604 19 670 13 996 42 791

QUARTERLY REPORT October-December 2008

DIAGRAMS-7.8

MAINS CLEARED

8 7 6

KM 5 4 3 2 1 0 I Quart II Quart III Quart October November December IV Quart NORTH EAST 0 0 0,07 0,1 2,146 0 2,246 NORTH WEST 7,323 2,28 2,16 0,69 1,1 0,52 2,31 CENTER WEST 2,692 7,26 6,1 2,2 1,1 0,9 4,2 SOUTH 4,253 5,358 6,458 1,677 1,365 1,75 4,792

NUMBER OF REMOVAL OF OBSTRUCTIONS, MAINS AND MANHOLES REPAIRED 800 700 600 500 400 300 200 100 0 I Quart II Quart III Quart October November December IV Quart NORTH EAST 447 487 533 207 138 130 475 NORTH WEST 397 432 501 151 173 155 479 CENTER WEST 174 270 193 86 105 80 271 SOUTH 617 487 699 204 287 241 732

QUARTERLY REPORT October-December 2008

NETWORK ANALYSING TABLE - 5

WATER TRANSMISSION AND DYSTRIBUTION SYSTEMS WASTEWATER COLLECTION SYSTEM

Water Water Number of Water Wastewater Cleaned # REGIONS Transmission Distribution Total Break - downs Collectors Total Obstructio ns Losses System Network System System ( k m ) piec e/km km km Collection m3/day km km % (k m ) ( k m ) piece/ km

1 2 3 4 5 6 7 8 9 10 11 12 1 NORTH-EAST 841 1 515 2 356 51 0,36 258 32 87 118,4 0,8 2 NORTH-WEST 567 689 1 256 116 0,21 132 555 687 0,7 0,4 3 CENTER-WEST 634 1 034 1 669 59 0,23 46 176 222 1,2 1,9 4 SOUTH 611 433 1 045 63 0,34 46 314 360 2,0 1,3

TOTAL 2 654 3 671 6 324 68 0,3 356 1 558 1 914 1,1 0.7

QUARTERLY REPORT October-December 2008

DIAGRAMS – 9,10

NUMBER OF OBSTRUCTION IN KM 2,5

1,5

0,5

0 I Quart II Quart III Quart October November December IV Quart NORTH-EAST 0,7 0,5 0,8 0,3 0,2 0,3 0,9 NORTH-WEST 0,6 0,4 0,7 0,2 0,3 0,2 0,7 CENTER-WEST 0,8 1,2 0,9 0,4 0,5 0,4 1,2 SOUTH 1,7 1,4 1,9 0,6 0,8 0,7 2

LENGTH OF CLEANED WESTEWATER PIPELINE IN % 3,5

2,5

1,5

0,5

0 I Quart II Quart III Quart October November December IV Quart NORTH-EAST 0 0 0,01 0,02 0,3 0,02 0,4 NORTH-WEST 1,1 0,2 0,3 0,1 0,16 0,1 0,4 CENTER-WEST 1,2 3,3 2,7 1 0,5 0,4 1,9 SOUTH 1,2 1,5 1,8 0,5 0,4 0,5 1,3

QUARTERLY REPORT October-December 2008

DIAGRAMS – 11,12

NUMBEROF BREAK-DOWNS ON 1 KM WATER PIPE 0,45 0,4 0,35 0,3 0,25 0,2 0,15 0,1 0,05 0 I Quart II Quart III Quart October NovemberDecember IV Quart NORTH-EAST 0,3 0,4 0,3 0,12 0,13 0,11 0,4 NORTH-WEST 0,2 0,2 0,2 0,08 0,06 0,07 0,2 CENTER-WEST 0,2 0,2 0,2 0,08 0,08 0,07 0,2 SOUTH 0,3 0,3 0,3 0,11 0,1 0,13 0,3

WATER LOSSES - M3/DAY*KM 140

120

100

0 I Quart II Quart III Quart October NovemberDecember IV Quart NORTH-EAST 47 50 53 49 49 54 51 NORTH-WEST 124 109 117 115 113 120 116 CENTER-WEST 73 65 63 64 61 51 59 SOUTH 65 66 64 68 63 60 63

QUARTERLY REPORT October-December 2008

WATER PRODUCTION & LOSSES TABLE-6

WATER PRODUCTION WATER DELIVE RED UN-ACCOUTED FOR WATER /thousand m3/ /thousand m3/

Name of Source October November December IV Quart N ECTORS (pumping station) water water water

Quart Quart Thous. Thous. water Thous. Thous.

SECTORS 3 l o s se s 3 3 losses 3 losses V V

October October m m losses% m m SUBS I I December December November November % % % 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 NORTH-WEST REGION

Makravan - 4 p/s 642 612 654 1909

Bujakan s. 16 15 16 47

Abovyan Ara mus b-h 73 125 161 359 120 118 128 365 677 85 697 86 777 86 2151 85

Dzoragbyur p/s 0 0 0 0

1 Akunq p/s 65 62 74 202 Abovyan Total 797 814 904 2516 120 118 128 365 677 85 697 86 777 86 2151 85

Byuregavan Nurnus s. 93 90 93 277 28 26 26 80 66 70 64 71 68 73 197 71

Total 93 90 93 277 28 26 26 80 66 70 64 71 68 73 197 71

Total 890 904 998 2792 148 144 153 445 743 83 760 84 845 85 2348 84

Solak p/s 24 22 20 66

Alapars s. 141 126 130 397 Charencava Makravan-4 - 434 420 434 1288 85 72 67 224 564 87 542 88 563 89 1668 88 2 n Abovyan main

Charencavan Gyumush s. 43 39 40 122

Fantan b-h 7 6 7 20

Total 648 614 630 1892 85 72 67 224 564 87 542 88 563 89 1668 88

Makravan-2 p/s 100 126 157 383

Tsaghkadzor Tegenis s. 8 6 5 19 21 20 21 62 91 81 115 85 146 88 352 85

Ulashik WCS 4 3 5 12

Total 112 135 167 414 21 20 21 62 91 81 115 85 146 88 352 85 Makravan-4 - 3 188 181 188 556

Hrazdan Abovyan main Hrazdan Solak p/s 7 7 7 21 96 98 93 287 1282 93 1098 92 1280 93 3660 93 Makravan 2-3 1183 1007 1178 3369 p/s Total 1378 1196 1373 3946 96 98 93 287 1282 93 1098 92 1280 93 3660 93 Total 1490 1330 1540 4360 117 117 114 348 1372 92 1213 91 1426 93 4012 92 Artik reservoir 360 349 360 1068 Artik Mantash 85 85 80 250 585 87 563 87 589 88 1738 87 310 299 310 919 reservoir Total 670 648 670 1987 85 85 80 250 585 87 563 87 589 88 1738 87 Zovasar s. 20 19 19 58 Talin Jinj Akner s. 26 26 24 76 22 45 22 46 23 49 66 47 Kentagbyur s., N 28 28 28 84 809 s. Total 48 47 47 142 26 26 24 76 22 45 22 46 23 49 66 47

Dagdzutner s. 37 36 37 111

4 Artik Sari s. 3 3 3 8

Ghazanchi s. 8 19 21 48

Lusagbyur s. 4 4 5 13 Ashotsk 19 17 18 55 57 75 69 80 77 81 202 79 Zuygaghbyur s. 7 8 12 27

Gazanchi s. 7 7 8 22

Dzragacneri s. 0 0 0 0

Bavra b-h 9 9 10 28

Total 75 86 95 257 19 17 18 55 57 75 69 80 77 81 202 79

Total 793 782 812 2386 130 128 123 380 663 84 654 84 689 85 2006 84

QUARTERLY REPORT October-December 2008

WATER PRODUCTION WATER DELIVE RED UN-ACCOUTED FOR WATER /thousand m3/ /thousand m3/

Name of Source October November December IV Quart N ECTORS (pumping station) water water water

Quart Quart Thous. Thous. water Thous. Thous.

SECTORS 3 l o s se s 3 3 losses 3 losses V V

October October m m losses% m m SUBS I I December December November November % % % 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Karbi b-h 84 84 84 253 Artak p/s 95 86 116 297 Artashavan s. 105 105 105 315 Sagmusavan s. 81 81 81 243 Ashtarak Wosketas s. 8 7 8 23 95 88 99 282 946 91 923 91 964 91 2833 91 Bazmagbyur b-h 15 15 14 44

Kazaravan b-h 7 7 7 20 Bazmagbyur-3 s. 5 646 626 648 1920 Ashtarak Kazaravan s Total 1042 1011 1063 3116 95 88 99 282 946 91 923 91 964 91 2833 91 Ortachit s. 34 34 34 102 Geghagzor s. Aparan 18 17 16 51 182 91 172 91 197 92 551 92 Eznak p/s 87 74 0 161 J a m i p / s 80 80 179 339 Total 201 188 213 602 18 17 16 51 182 91 172 91 197 92 551 92 Total 1242 1199 1276 3717 114 104 115 333 1129 91 1095 91 1161 91 3384 91

MAIN TOTAL 5063 4829 5255 15148 593 565 571 1730 4470 88 4264 88 4684 89 13418 89

NORTH-EAST REGION Dzknget s. 0 0 0 0

Hacarat p/t 270 180 180 630 Sevan Maqravan-2- 42 64 34 141 370 90 325 84 404 92 1098 89 1 Sevan 20 34 37 91 Gagarin main. Lchashen b-h 122 175 221 518 Total 412 389 438 1239 42 64 34 141 370 90 325 84 404 92 1098 89 Golovino WCS 72 62 54 188 Florovi Balka

73 66 60 199 WCS Dilijan Bldan WCS 75 65 59 199 81 38 39 159 144 64 162 81 141 78 447 74 2 Dilijan Shamakhyan s. 4 4 5 13 Jiliut Tala s. 2 3 2 7

Total 226 200 180 606 81 38 39 159 144 64 162 81 141 78 447 74

Qarqarut s. 94 91 67 251 Spitak dzur s. 80 73 56 209 Getahovit s. 75 65 43 183 Anapat s. 40 39 24 103 Ijevan Khozmarag s. 21 21 19 61 46 47 38 132 293 86 268 85 195 84 756 85 Getapnya p/s 7 7 5 19 Dzr i dzor s. 11 10 8 29

Gmbet s. 5 5 5 16 Azatamut s. 5 5 5 16 3 Ijevan Total 339 315 233 887 46 47 38 132 293 86 268 85 195 84 756 85 Berd WTP 87 84 76 247 Berd 31 20 18 69 61 67 69 77 62 77 192 73 Chatakh s. 5 5 4 14 Total 92 89 80 261 31 20 18 69 61 67 69 77 62 77 192 73 Kushchinski s. 15 15 15 45 Chambarak 7 7 6 19 23 77 8 54 9 63 41 68 Taqa s. 15 0 0 15 Total 30 15 15 60 7 7 6 19 23 77 8 54 9 63 41 68

Total 461 419 328 1208 84 74 62 220 377 82 345 82 266 81 988 82

QUARTERLY REPORT October-December 2008

WATER PRODUCTION WATER DELIVE RED UN-ACCOUTED FOR WATER /thousand m3/ /thousand m3/

Name of Source October November December IV Quart N ECTORS (pumping station) water water water

Quart Quart Thous. Thous. water Thous. Thous.

SECTORS 3 l o s se s 3 3 losses 3 losses V V

October October m m losses% m m SUBS I I December December November November % % % 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Akunq s. 188 176 177 541 St. Vardan s. 72 69 68 209 Vartenis 95 87 59 241 570 86 553 86 578 91 1701 88 Akner s. 204 197 196 597 Shat Jreq s. 201 198 196 595 Total 665 640 637 1942 95 87 59 241 570 86 553 86 578 91 1701 88

Tsakqari s. 180 180 180 540 Martuni 56 56 32 144 186 77 186 77 210 87 582 80 Hopoy var s. 62 62 62 186

4 Gavar Total 242 242 242 726 56 56 32 144 186 77 186 77 210 87 582 80 Kaler p/s Hatsarat p/s 742 748 915 2405 Gavar Khacher p/s 163 159 103 426 698 81 669 81 947 90 2314 84 Sarukhan p/s 97 57 97 252 Gandzak b-h 21 24 37 82 Total 861 829 1050 2740 163 159 103 426 698 81 669 81 947 90 2314 84 Total 1768 1711 1929 5408 314 302 195 811 1454 82 1409 82 1734 90 4597 85 Berdavan b-h 27 25 47 98 Ayrumi p/s 27 19 26 72 Noyemberya Noyemberyan p/s 0 0 0 0 18 12 14 45 36 66 32 72 60 81 129 74 n Gij sari s. 0 0 0 0

Spitakashen s. 1 1 1 2 Varar agbyur s. 1 1 1 2 5 Alaverdi Total 55 45 74 173 18 12 14 45 36 66 32 72 60 81 129 74 Lori berd s, 643 622 643 1908 Alaverdi 80 90 47 218 777 91 739 89 810 95 2326 91 Agarak s. 214 207 214 636 Total 857 830 857 2544 80 90 47 218 777 91 739 89 810 95 2326 91

Total 912 874 931 2717 99 103 61 262 813 89 772 88 870 93 2455 90 Chakhkali s. 28 28 27 83 Drashen b-h 28 25 44 97 Spitak Nalband b-h 26 23 34 83 48 29 22 99 49 50 61 68 100 82 209 68 Ghazanchi s, 4 4 4 12 Spitak b-h 11 9 13 33

Total 97 89 122 308 48 29 22 99 49 50 61 68 100 82 209 68

Gyulidar s, 8 8 8 25 Getavan p/s 120 127 151 398 6 Stepanavan 61 49 39 149 299 83 309 86 343 90 951 86

Stepanavan Novoseltsovo s, 232 223 223 678

Total 360 358 383 1100 61 49 39 149 299 83 309 86 343 90 951 86

Novoseltsov p/s 62 60 62 184 Tashir Sevaberd s. 47 46 47 139 47 54 36 137 98 68 87 62 109 75 294 68 Bazu m i s . 36 36 36 107 Total 145 141 145 430 47 54 36 137 98 68 87 62 109 75 294 68 Total 601 588 649 1838 156 131 97 384 445 74 457 78 552 85 1454 79

MAIN TOTAL 4379 4181 4455 13016 776 713 488 1977 3603 82 3468 83 3967 89 11039 85

CENTER-WEST REGION

Masis c. Araratyan 1,2 p/s 706 566 640 1912 79 77 68 224 627 89 489 86 572 89 1688 88

Total 706 566 640 1912 79 77 68 224 627 89 489 86 572 89 1688 88

1 Araratyan 1,2 p/s 863 692 782 2337

Masis Masis v. 78 73 76 227 821 91 655 90 743 91 2219 91 Yerevan Djur 37 36 36 109 Total 899 729 818 2446 78 73 76 227 821 91 655 90 743 91 2219 91

QUARTERLY REPORT October-December 2008

WATER PRODUCTION WATER DELIVE RED UN-ACCOUTED FOR WATER /thousand m3/ /thousand m3/

Name of Source October November December IV Quart N ECTORS (pumping station) water water water

Quart Quart Thous. Thous. water Thous. Thous.

SECTORS 3 l o s se s 3 3 losses 3 losses V V

October October m m losses% m m SUBS I I December December November November % % % 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Total 1605 1295 1458 4358 157 151 143 451 1448 90 1144 88 1315 90 3907 90 Ghazaravani b-h 102 91 93 285 Bazmagbyur b-h 35 34 33 102 Bazmagbyur 3 s. 715 715 738 2168 236 215 209 660 633 73 641 75 707 77 1982 75 Ghazaravani s. Artameti p/s 9 8 6 23 Kozdasheni p/s 9 8 47 63 Total 869 856 916 2641 236 215 209 660 633 73 641 75 707 77 1982 75

Artashati b-h 215 238 242 694

Artashat 216 195 209 620 924 81 968 83 989 83 2881 82 3 Garni s. 926 925 956 2807 Artashat

Total 1141 1163 1198 3501 216 195 209 620 924 81 968 83 989 83 2881 82 Garni s. 198 196 202 596 Vedi 129 104 112 345 176 58 198 65 200 64 574 62 Dzermanis s. 107 106 110 323

Total 305 302 312 919 129 104 112 345 176 58 198 65 200 64 574 62 4 Vedi Ararat Garni s. 165 164 164 493 49 52 44 144 116 70 112 69 120 73 349 71 Total 165 164 164 493 49 52 44 144 116 70 112 69 120 73 349 71 Total 470 466 476 1412 178 156 156 490 292 62 310 67 321 67 922 65

MAIN TOTAL 4085 3779 4048 11913 788 716 717 2220 3298 81 3063 81 3331 82 9692 81

SOUTH REGION Sarnagbyur s. 44 44 44 132 11 10 10 31 33 75 34 77 34 78 101 76 Eghegnadzor Qarasun s. 57 56 56 169 7 6 6 19 50 88 50 89 50 90 150 89

Vostan s. 47 46 46 140 21 16 15 52 26 55 30 65 31 67 87 62 Total 148 146 146 440 39 32 31 102 109 74 114 78 115 79 338 77 1 Vayk Bazmagbyur s. 159 126 122 407 26 21 23 70 133 83 105 83 99 81 337 83

Eghegnadzor Total 159 126 122 407 26 21 23 70 133 83 105 83 99 81 337 83 J e r m u k Dzrasar s. 78 70 64 212 18 16 17 51 60 77 54 77 47 74 161 76 Total 78 70 64 212 18 16 17 51 60 77 54 77 47 74 161 76 Total 385 342 332 1059 83 70 70 223 302 78 272 80 262 79 836 79

Shaqe s. 178 168 172 518 51 49 52 152 127 71 119 71 120 70 366 71 Sisyan Mukhutyan s. 7 6 6 20 2 2 2 5 5 78 5 76 5 73 15 76

2 Sisyan Z o r - zor s. 4 4 4 11 1 1 1 3 3 72 3 73 3 66 8 70 Total 188 178 182 548 53 52 55 160 135 72 126 71 127 70 388 71

Akner s. 137 114 112 362 27 24 26 77 110 80 89 78 86 77 285 79 Goris

3 Goris M ukhutyan s. 361 301 296 958 40 39 40 119 322 89 262 87 256 86 840 88

Total 498 414 408 1320 66 63 66 195 432 87 351 85 342 84 1125 85 Geghi s, 290 271 267 828 30 24 24 78 260 90 248 91 243 91 750 91 Surin kap s. 73 68 67 208 11 8 8 27 62 85 60 88 60 89 181 87 Kapan Geghi WCS 717 671 660 2048 82 63 64 209 635 89 607 91 596 90 1838 90 Chanakhchi WCS 167 157 154 478 28 22 21 71 139 83 135 86 133 86 407 85

Vachagan WCS 4 3 3 10 2 2 2 6 1 36 2 47 1 41 4 41 Total 1250 1170 1151 3572 153 119 119 391 1097 88 1051 90 1033 90 3181 89 4 Kapan Agarak b-h 85 90 124 300 42 35 36 113 43 51 55 61 89 71 187 62 Agarak WCS 118 80 63 261 41 34 35 110 77 65 46 57 29 45 151 58 Megri Setenc s. 35 24 19 78 11 9 9 29 24 69 15 62 10 53 49 63 Megri WCS 89 61 48 197 10 8 8 26 79 89 53 87 41 84 172 87 Total 327 255 255 837 104 87 87 278 223 68 168 66 168 66 559 67 Total 1577 1425 1406 4409 257 206 206 668 1320 84 1219 86 1201 85 3740 85 Total 2648 2359 2328 7336 460 391 396 1247 2189 83 1969 83 1932 83 6089 83

GRAND TOTAL 16176 15149 16086 47412 2617 2385 2172 7174 13560 84 12764 84 13914 86 40238 84.9

QUARTERLY REPORT October-December 2008

DIAGRAMS – 13,14

W A T E R L O S S E S 90 88 86 84 82 % 80 78 76 74 72 70 I Quart II Quart III Quart October November December IV Quart Plan Carry out

W A T E R P R O D U C T I O N

60000 50000 40000 30000 20000 10000 0 I Quart II Quart III Quart IV Quart I Quart II Quart III Quart October November December IV Quart plan plan plan plan Gravity 26591 21183 27001 21710 27604 22070 9373 8885 8883 27141 21246 Delivered thrugh pumps 20582 15954 19033 15953 20761 15955 6803 6264 7203 20270 15958 Total 47173 37137 46035 37663 48365 38025 16176 15149 16086 47411 37204

QUARTERLY REPORT October-December 2008

WATER DELIVERED THROUGH PUMPING AND CORRESPONDING ELECTICITY CONSUMPTION TABLE- 7

WATER CUMULATIVE DELIVERED ELECTRICITY ELECTRICITY during 2008 THROUGH CONSUMPTION CONSUMPTION N SUBSECTORS PUMPING ELECTRICITY WATER 3 3 thousand m / KWH/m thous.KWH/ thousand KWH thousand m3 IV quarter IV quarter

1 2 3 4 5 6 7 1 Ashtarak 550 1,7 937 3 460 2 194

2 Aparan 500 0,6 279 1068 1451

3 Artashat 694 0,3 237 1104 3 172

4 Echmiadzin 538 0,5 296 1237 2 195

5 Gavar 3 370 0,7 2 420 9 492 12 811

6 Sevan 518 0,5 280 1 109 1 841

7 Tashir 184 0,4 73 73 721

8 Stepanavan 398 0,7 291 1134 1552

9 Noyemberyan 170 1,7 296 904 554

10 Spitak 33 0,5 17 62 120

11 Abovyan 4 313 0,2 890 3 277 16 666

12 Charentsavan 506 1,2 596 2 784 1 998 Hrazdan and 13 3 842 0,8 2 901 12 135 16 530 Tsakhkadzor

14 Meghri 300 0,8 234 861 1102

15 Ijevan 19 0,8 15 64 81

16 Masis 4 249 0,5 2 020 8 565 17 235

17 Ashotsk 85 0,5 41 207 424

TOTAL 20 270 0,58 11 822 47 536 80 645

QUARTERLY REPORT October-December 2008

DIAGRAMS – 15,16

ELECTRICAL CONSUMPTION KWH/m3

0,8 0,6 0,4 0,2 0 I Quart II Quart III Quart October November December IV Quart El. energy 0,6 0,59 0,59 0,58 0,58 0,6 0,58

WATER DELIVERED THROUGH PUMPING AND CORRESPONDING ELECTICITY CONSUMPTION

22000

18000

14000

10000

6000

2000 I Quart II Quart III Quart October November December IV Quart Water 20582 19033 20761 6803 6264 7203 20270 El. energy 12279 11144 12292 3920 3612 4290 11822

QUARTERLY REPORT October-December 2008

PROGRESS OF THE WATER METERS EQUIPMENT INSTALLATION BY THE AWS CJSC IN ITS MAINTENANCE AREA TABLE - 8, DIAGRAM - 17

WATER METERS REQUIRED & INSTALLED In entrance of Individual Bulk water Budget Other apartment apartment of Private houses Total Including meters organizations organizations buildings building

SECTORS N NAME condition Installed in Installed in in Installed

requirements requirements requirements requirements requirements requirements requirements Not in working reporting quart meters installed meters installed meters installed meters installed meters installed meters installed meters installed meters reporting month

number number number number number number number number number number number number number number number number number

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 NORTH EAST

1 Gavar 16 39 120 28 2 428 1 943 13 619 4 063 85 89 94 262 16 362 6 424 - 12 6 150

2 Sevan 0 5 134 12 1 319 5 024 488 1 599 14 31 42 306 1 997 6 977 56 162 38

3 Dilijan 0 9 97 1 1 946 1 343 1 519 1 731 18 38 28 103 3 608 3 225 42 96 35

4 Ijevan 0 14 177 0 2 369 3 784 756 3 342 18 73 16 278 3 336 7 491 63 246 40

5 Spitak 1 48 148 34 1 585 3 238 3 841 7 014 11 87 38 324 5 624 10 745 171 298 88

6 Alaverdi 0 40 246 0 2 237 5 531 2 797 4 281 13 74 25 177 5 318 10 103 181 191 30 Total 17 155 922 75 11 884 20 863 23 020 22 030 159 392 243 1 450 36 245 44 965 501 999 381 NORTH WEST 1 Abovyan 10 7 308 34 4 054 18 278 2 508 2 761 11 49 61 488 6 952 21 617 82 200 62

2 Charentsavan 5 8 178 18 2 261 7 760 1 490 2 337 14 52 89 285 4 037 10 460 126 204 25

3 Hrazdan 4 9 339 0 6 457 10 035 2 608 2 572 34 82 122 483 9 564 13 181 182 356 28

4 Ashtarak 1 58 209 0 1 303 3 603 8 446 5 044 53 57 53 248 10 065 9 010 130 241 36

5 Artik 15 61 257 0 2 444 2 831 9 464 3 550 65 86 86 258 12 331 6 786 51 121 48 Total 35 143 1291 52 16 519 42 507 24 516 16 264 177 326 411 1 762 42 949 61 054 571 1 122 199 CENTER WEST 1 Artashat 1 78 123 0 3 019 3 071 16 412 8 527 73 72 112 288 19 740 12 036 188 416 138

2 Vedi 0 28 159 0 1 733 4 164 7 421 5 286 46 52 68 215 9 427 9 745 84 241 241

3 Echmiatsin 0 85 247 0 1 164 8 186 10 492 9 194 71 62 56 626 12 030 18 153 143 240 198

4 Masis 14 17 69 0 1 566 2 817 5 596 4 164 30 49 29 383 7 304 7 430 99 122 81 Total 15 208 598 0 7 482 18 238 39 921 27 171 220 235 265 1 512 48 501 47 364 514 1 019 658 SOUTH 1 Goris 2 12 154 0 658 2 736 1 026 3 056 23 58 42 183 1 905 6 045 45 109 25

2 Eghegnadzor 1 16 124 1 1 501 4 769 716 2 038 6 78 37 423 2 385 7 325 1 50 39

3 Sisian 2 12 97 0 259 3 612 319 1 527 0 62 1 219 678 5 432 19 57 18

4 Kapan 1 15 339 1 2 558 14 265 1 549 2 086 24 109 88 714 4 559 17 190 100 188 32 Total 6 55 714 2 4 976 25 382 3 610 8 707 53 307 168 1 539 9 527 35 992 165 404 114

MAIN TOTAL 73 561 3 525 129 40 861 106 990 91 067 74 172 609 1 260 1 087 6 263 137 222 189 375 1 751 3 544 1 352

NUMBER OF WATER METERS INSTALLED IN REPORTING QUARTER

1800

1600

1400

1200

1000

800

600

400

200

-200

-400 I Quart II Quart III Quart October November December I V Q u a r t North East 427 953 630 218 280 501 999 North West 1096 1223 1547 273 278 571 1122 Center West 465 371 698 270 235 514 1019 South -130 603 527 135 104 165 404

REMARK* 1. The report figures were presented by the sectors in base of collection and should be correct. 2. Because some customers have use more than one water line (connection point) in the flats, houses, budget and other organizations, the numbers of used water meters was calculated with the coefficient q=1,2 39

QUARTERLY REPORT October-December 2008

DISINFECTANT RECORDS IN IV QUARTER 2008 TABLE- 9

BALANCE in the BALANCE as of RECEIVED UTILIZED SECTORS beginning of IV quarter the end of IV quarter N AND LIQUID POWDER LIQUID POWDER LIQUID POWDER LIQUID POWDER SUBSECTORS CHLORINE CHLORINE CHLORINE CHLORINE CHLORINE CHLORINE CHLORINE CHLORINE (kg) (kg) (kg) (kg) (kg) (kg) (kg) (kg) 1 2 3 4 5 6 7 8 9 10 NORTH-EAST 1 Sevan 60 25 310 0 335 15 35 10 2 Gavar 288 18 1 150 100 1 361 18 27 100 3 Martuni 20 38 100 150 111 90 9 98 4 Vardenis 120 9 560 175 644 84 36 100 5 Dilijan 160 38 620 0 705 38 75 0 6 Ijevan 0 28 0 250 0 278 0 0 7 Chambarak 0 0 0 75 0 75 0 0 8 Berd 75 22 200 0 275 18 0 4 9 Alaverdi 232 0 920 0 1 152 0 0 0 10 Nojemberyan 59 0 0 50 2 50 57 0 11 Spitak 0 0 120 150 50 150 70 0 12 Stepanavan 0 6 200 50 191 14 9 42 13 Tashir 50 21 300 0 350 21 0 0 TOTAL 1 064 205 4 480 1 000 5 176 851 318 354 NORTH-WEST 1 Abovyan 43 29 1 870 0 1 840 29 73 0 2 Bjureghavan 44 0 100 0 112 0 32 0 3 Hrazdan 715 0 2 400 0 2 651 0 464 0 4 Tsaghkadzor 0 0 100 0 35 0 65 0 5 Charentsavan 82 3 260 5 327 8 15 0 6 Ashtarak 1 029 10 1 700 50 1 439 60 830 0 7 Aparan 81 31 200 0 239 31 43 0 8 Artik 50 0 1 020 0 1 070 0 0 0 9 Ashotsk 0 0 0 200 0 200 0 0 10 Talin 0 38 100 100 62 110 38 28 TOTAL 2 044 111 7 750 355 7 775 438 1 560 28 CENTER-WEST 1 Artashat 468 18 3 660 0 4 068 16 60 2 2 Echmiatsin 320 9 2 560 245 2 880 83 0 172 3 Masis 233 3 2 870 0 3 080 3 23 0 4 Vedi 0 53 200 0 158 11 42 42 TOTAL 1 021 83 9 290 245 10 186 113 125 216

QUARTERLY REPORT October-December 2008

Note * The information is presented based on operative data. In December 460 kg of liquid chlorine was transferred from “Ashtarak” sector to “Kapan” sector and 50 kg from “Gavar” sector to “Sevan” sector.

QUARTERLY REPORT October-December 2008

ELECTRICITY CONSUMPTION & EXPENSES TABLE-10,11

During year 2008 electricity consumption constituted 55 156 thousand kwt/hour with the amount of AMD 1 063 082 thousand. This indicator exceeded a little (1.64%) the indicator of the same period of the last year caused mostly by parallel work of pumping aggregates of some newly renovated stations (Sevan, Charentsavan, Dilijan, Masis, Aparan,Gavar, Tsakhkadzor) and pumping aggregates of old stations, as well as the increase of pumps working hours directed at water supply improvement of some villages of Masis area.

ELECTRICITY CONSUMPTION & EXPENSES IN PERIOD OF 13 LAST MONTHS DIAGRAM - 18

120000 7000

6000 100000

5000 80000

4000

60000 1000 AMD 1000 1000KWH 3000

40000 2000

20000 1000

0 0 Cost 2008 July May June April Cost 2007 March August October January

February KWH 2007 December November September KWH 2008

MONTH

Please, see attached tables # 10,11

QUARTERLY REPORT October-December 2008

2. TECHNICAL

QUARTERLY REPORT October-December 2008

2.1 TECHNICAL INVESTIGATIONS & DESIGN

QUARTERLY REPORT October-December 2008

THE FUNCTIONS OF THE TECHNICAL DEPARTMENT FOR IV QUARTER 2008 INCLUDING:

• TECHNICAL INVESTIGATIONS & DESIGN

• MAPPING OF TECHNICAL SYSTEMS

• WATER QUALITY CONTROL

• MANAGEMENT OF THE COMPANY’S ASSETS

• QUALITY, SAFETY AND ENVIRONMENT

• COMPANY’S PROCUREMENT

TECHNICAL INVESTIGATIONS & DESIGN

During reporting period the following technical investigation and design works have been carried out:

. Working design has been developed for repairing 2, 3, 4 floors sanitary systems of the State Committee of Water Economy at the RA Ministry of Territorial Administration.

. Technical investigations of the following water & wastewater systems have been made and proposals have been submitted for their improvement, as well as estimations for the planned works have been made:

 Water & wastewater systems of the RA Vayots Dzor and Aragatsotn marz settlements;

 Improvement of Dilijan town wastewater systems;

 Delivery of additional water quantity to Tsakhkahovit water supply system from “Geghadzor” catchments of the RA Aragatsotn marz;

 Irind, Dashtadem, Ghabaghtapa, Lusakn and Arteni villages of the RA Aragatsotn marz for the purpose of including them in the Company’s servicing area;

 “Amberd”, “Bjurakan”, “Shamiram” springs of the RA Aragatsotn marz for supplying water to the villages of the region by gravity;

“Shamiram” springs

QUARTERLY REPORT October-December 2008

 Gravity water supply to Ashtarak town low-lying residential districts from the RA Aragatsotn marz “Karbi” catchments.

“Karbi” springs

. Damages to Kapan Polytechnic Institute caused by the breakdown of “Gjard-Kapan” water main were studied and work volumes have been worked out to eliminate the consequences of the accident.

. Preliminary designs of the below mentioned projects implemented within the framework of the Asian Development Bank credit program under contract NWSSP-07/4-01 have been studied and discussed with consulting companies:

 “Water supply improvement of Artashat villages”;

 Echmiatsin town and Oshakan, Voskevaz, Voskehat, Amberd, Lernamerts, Aygeshat, Dasht, Shahumyan, Aghavnatun, Doghs villages”;

 “Water supply improvement of Abovyan town and Kotayk, Kaghsi, Karashamb, Hatsavan, Geghadir villages”;

 “Water supply improvement of Aparan region 9 villages;

 “Water supply improvement of Berd and Noyemberyan towns and adjacent villages.

. Water & wastewater technical conditions have been worked out for:

 Number 37 land parcel of “Mikrob” horticultural union of Nurnus community;

 Land parcel 406-042 of 2nd district, Arzni community;

 “Arzni group” mineral water factory;

 Hrazdan iron-ore mill of the RA Kotayk marz.

QUARTERLY REPORT October-December 2008

. Together with the working group created in the Company the available and dismantled parts of the RA Shirak marz “Mantash water main- Artik town WTP” and “Mantash reservoir-rural WTP” have been teachnically investigated, as well as relevant works have been carried out for gridding, definition of work volumes and development of required documents.

“Mantash” reservoir checkup

. Clarification of the water main lists passing through the territories of the cemeteries or adjacent to them areas of the settlements being in the servicing area of the Company and approximate estimation of required works.

. Terms of Reference have been worked out for water supply improvement of Tegh village, RA Sjunik marz.

Investigation of Tegh village water supply system

. Information has been prepared about water demand and losses of the settlements serviced by bulk tariff for including them in the calculations of water supply tariffs.

. The list of works to be made by the Company in 2009 has been developed and submitted to the RA State Committee of Water Economy.

. The work schedule planned by the 2nd stage of the World Bank credit program has been worked out.

. Design Terms of Reference have been developed for “Water supply improvement of Hrazdan town” planned by the 2nd stage of the World Bank credit program.

QUARTERLY REPORT October-December 2008

2.2 MAPPING OF TECHNICAL SYSTEMS

QUARTERLY REPORT October-December 2008

MAPPING OF TECHNICAL SYSTEMS

During this reporting period works have been started and completed for collection of mapped data, their correlation and database creation for Sevan town, Nor Kjurin, Doghs, Amberd and Voskevaz rural community’s water supply systems.

Currently the data collection and database creation works for Goris, Eghegmnadzor towns and V. Artashat, Norashen, Karmirgjugh, Gandzak and Lchasen villages water supply systems, as well as their correlation with relevant map objects and system creation works are in progress.

Part of SEVAN city map by MapINFO format

QUARTERLY REPORT October-December 2008

Together with the representatives of “Armenia GIS” company we have worked out and implemented works on placing the “AWSC” CJSC servicing area settlements’ water and wastewater systems in WGS -84 coordinate system, as well as participated in the works for creation of Interface for the Company’s Management Information System.

Thematic maps of breakdowns on Ashtarak and Sisian towns water supply systems have been made based on which it is palnned to make similar maps for the remaining settlements serviced by the Company.

Thematic map of Sisian town water supply internal network breakdowns

During this quarter other necessary mapping works have been done connected to the activities of the other structural subdivisions of the Company.

On December 16 of this year the specialists of Technical Department participated in “GIS and Remote Sensing Conference” organized by the American University of Armenia and „Geokom“ LLC where the Mapping Division presented the works made in GIS format.

QUARTERLY REPORT October-December 2008

Based on information of the Commercial and Operations Department database a dynamic map was created about the average daily water supply hours of the towns for 2004-2008 included in the servicing area of the Comapany.

Water supply daily hour schedules in MapINFO format

Planned activities

The objective of 2008-2010 is to continue the implementation of Geographic Information System (GIS) program of the settlements serviced by the Company.

QUARTERLY REPORT October-December 2008

2.3 MANAGEMENT OF COMPANY’S ASSETS

QUARTERLY REPORT October-December 2008

ASSETS MANAGEMENT

In the 4th quarter 2008 the Assets Management Divisions implemented the following works:

1. The list of sanitary zones and constructions and buildings thereon, as well as information about immovable property and state registration of other property rights have been made and submitted to the SCWE at the RA Ministry of Territorial Administration.

2. Works have been carried out to transfer “GAZ 3102” of 2002 and “GAZ 311000” of 1997 from the balance sheet of the “Municipal Development Programs Office’ State Enterprise to the Company’s balance sheet.

3. Partial inventory works have been carried out connecting to illegal dismantling and theft of some sections of water supply pipelines of Artik sector, “North-West” RB and rural communities of the region.

Illegaly dismantled sections of „Artik“ sector

4. Protection issues of „Mkhchyan“ pumping station of the „Center-West“ regional branch, as well as materials and equipment therein were discussed and written anwser was submitted to the „WSC“ CJSC.

5. A meeting has been organized with the mayor of Chambarak village, RA Gegharkunik marz to adjust the accounting data of the systems to be handed over to the Company. The list of documents package required for handover and acceptance have been clarified. The SCWE of the RA Ministry of Territorial Administration was informed about the fulfilment of the above mentioned task.

6. A Committee was set up in the Company’s Head Office for providing additional and documented information to the police departments of the RA different marzes relating to the shortage of the Company’s property. The Committee also made the inventory of the documents kept in the Accounting Department. The revealed documents were recorded, registered and prepared to hand over to the RA Police employees. Works have been carrieed out in the places for revealing the property and restoring the shortage.

QUARTERLY REPORT October-December 2008

7. Together with representatives of investigation bodies of the RA Police works have been carried out in the places to reveal and rerstore the shortage of property registered in the balanche sheets of „Artik“, „Ashtarak“ sectors and „Aparan“, „Tsakhkadzor“ subsectors of the „North- West“ RB and detected as a result of inventory.

Illegally dismantled trench

8. The list of Company’s Head Office and branches property subject to alienation has been adjusted and submitted to the RA SCWE.

9. Visits have been made to the “North-East”, “North-West” and South regional branches and provide them necessary assistance for state registration of property rights.

10. The Head Office property labeling activities have been completed.

11. During the reporting quarter in accordance with the orders of Company’s General Director the employees of the division were involved in different inventory committees.

12. For the purpose of improving the division activities some orders, instructions of the General Director have been worked out, the documents assigned to the division have been timely discussed, answered and sent.

13. Assistance have been provided to the specialists installing Geographic Information System in the Company for entering inventoty lists of the Company’s movable and immovable property to have complete information about the location and necesssaty information per property.

QUARTERLY REPORT October-December 2008

2.4 WATER QUALITY CONTROL

QUARTERLY REPORT October-December 2008

WATER QUALITY CONTROL

Within the 4th quarter of 2008 water control laboratories of the Company made bacteriological analyses of more than 3.8 thousand samples and 183 general and physico-chemical analyses (Table # 12). According to the bacteriological indicators the deviations constituted 1.7 %.

Laboratories of the Company’s regional branches completed water quality analyses of the springs planned for 2008 (Table #13). The analyses of wastewaters discharged into the water objects by wastewater networks are in progress. Averaging samples taken from a sewer outlet or manhole within a day have been examined (Table #14).

QUARTERLY REPORT October-December 2008

POTABLE WATER INVESTIGATION IN QUARTER IV, 2008 – TABLE 12

NUMBER OF SAMPLES TAKEN AND FAILED

M I C R O B I O L O G Y # REGARDING CHLORINE RESIDUAL SECTORS Factually investigated in entrance of NAME IN DISTRIBUTION NETWORK IN DISTRIBUTION NETWORK chemical lized and and lized distribution network - D e m a n d Water town village intake town village correspond total doesn’t correspond doesn’t correspond

t o n o r m s Genera discovered discovered physico total total total t o n o r m s total t o n o r m s NORTH-WEST 1 Abovyan 515 509 9 9 3 3 8 206 5 182 0 36 10 2 Hrazdan 330 330 226 226 28 28 8 271 108 274 3 10 0 3 Charentsavan 237 220 69 69 24 11 9 125 7 45 0 74 3 4 Ashtarak 0 0 366 358 64 59 21 239 9 149 2 71 10 5 Artik 309 309 696 589 163 153 30 389 8 61 0 29 6 TOTAL 1 391 1373 1 366 1 251 282 254 76 1 230 137 711 5 220 29 NORTH-EAST 1 Sevan 157 154 147 145 0 0 3 83 10 81 2 0 0 2 Gavar 195 191 308 277 65 60 14 152 31 110 4 18 0 3 Ijevan 282 281 187 179 14 11 12 116 41 64 3 0 0 4 Dilijan 1068 1068 0 0 0 0 6 49 28 21 0 0 0 5 Alaverdi 57 57 79 76 18 18 11 91 21 67 3 4 0 6 Stepanavan 154 132 224 185 0 0 9 142 2 72 7 0 0 TOTAL 1 913 1 883 945 862 97 89 55 633 133 415 19 22 0 CENTER-WEST 1 Artashat 234 234 153 153 181 181 1 203 32 124 2 215 2 2 Echmiadzin 48 48 213 213 124 124 2 175 0 212 0 122 0 3 Masis 74 74 414 414 69 69 1 99 0 0 0 0 0 4 Vedi 348 348 185 185 35 35 1 172 0 0 0 0 0 TOTAL 704 704 965 965 409 409 5 649 32 336 2 337 2 57

QUARTERLY REPORT October-December 2008

NUMBER OF SAMPLES TAKEN AND FAILED

t o n o r m s Genera discovered discovered physico total total total t o n o r m s total t o n o r m s SOUTH

1 Sisyan 322 322 173 173 125 125 3 121 1 48 0 0 0

2 Goris 332 332 306 306 12 12 11 309 4 175 0 15 0 3 Kapan 458 458 1811 1735 0 0 26 660 25 964 0 0 0 4 Eghegnadzor 130 130 191 191 60 60 7 319 7 167 0 21 0

TOTAL 1242 1242 2481 2405 197 197 47 1409 37 1354 0 36 0

TOTAL 5250 5202 5757 5483 985 949 183 3921 339 2816 26 615 31

REMARK * The calculation of demand has been done according to the bacteriological analysis schedule, which is approved by the branches and agreed upon with the State Hygienic and Anti-epidemic inspectorates.

QUARTERLY REPORT October-December 2008

Data on mainly operated underground and surface potable water sources - TABLE-13

Chlo- Sulpha- Silica- Fluo Ammo- Magne Hard- Alkali- Nitrites Nitrates Iron Zi n c Copper Oxida Minera- pH rides tes tes ride nium - - sium 2+ + Name of sources ness, nity, NO , NO , Fe total, Zn , Cu , tion, lization, Cl- , SO 2-, SiO 2-, F-, NH + 2 3 Mg2+, mmol/l mmol/l 4 4 4 mg/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Center-West Regional Branch Araratyan 915.1 6.31 8.67 7.5 82.2 13.4 72.0 0.53 0.01 0.00 2.99 35.5 0.102 0.170 0.083 2.46

Jermanis 220.5 0.7 1.45 6.9 3.0 8.2 86.5 0.51 0.00 0.00 0.79 2.5 0.073 0.043 0.083 1.53

Bazmaghbyur 296.4 1.96 2.39 7.2 2.3 8.1 94.0 0.36 0.01 0.00 1.15 9.3 0.066 0.157 0.095 1.72 Ghazaravan 194.8 1.46 1.44 7.2 3.0 8.3 66.5 0.13 0.00 0.00 1.20 3.31 0.076 0.094 0.074 1.59 Garni 168.0 1.10 1.68 7.2 3.0 8.5 41.7 0.18 0.00 0.00 1.12 1.13 0.067 0.005 0.055 2.09

Note: The average samples of the catchments, boreholes and water intakes have been taken for making the analyses.

QUARTERLY REPORT October-December 2008

Data on wastewater analyses - TABLE 14

Sampling place Concentration mg/l (discharge, wastewater Suspended Ammonium Nitrites Nitrates collecting BOD5 + - - Phenol Formaldehyde solids NH4 NO2 NO3 manholes) 1 2 3 4 5 6 7 8 Abovyan 250 120 62.0 1.20 0.02 3.00 3.80 Hrazdan 260 130 16.0 0.14 - - - Charentsavan 150 165 6.0 0.05 - - - Ashtarak 160 105 19.3 0.26 - - - Aparan 45 150 5.8 0.20 - - - Artik 310 130 17.5 0.20 - - - Tsakhkadzor 48 20 2.5 0.09 - - - Sevan 180 150 10.9 0.08 0.05 0.63 0.83 Gavar 190 97 11.1 0.85 0.45 0.56 0.50 Martuni 50 45 4.2 0.91 0.53 0.19 0.17 Vardenis 15 9 0.61 0.03 0.23 0.06 0.06 Ijevan 210 68 9.7 0.25 0.00 0.44 0.45 Berd 80 42 11.5 0.06 0.05 - 0.59 Chambarak 30 57 10.3 0.12 1.05 0.23 1.00 Dilijan 130 80 1.57 0.07 1.09 0.28 0.30 Stepanavan 70 49 4.4 0.02 1.00 0.32 0.41 Alaverdi 40 31 8.1 0.42 0.26 0.50 0.32 Artashat 130 110 9.9 0.24 1.70 0.43 0.21 Echmiadzin 220 135 11.5 0.18 0.20 0.69 0.60 Masis 150 132 7.5 0.25 1.38 0.27 0.19 Vedi 32 20 8.0 0.29 1.29 0.32 0.22 Ararat 28 10 3.2 0.35 1.19 0.98 0.21 Sisian 21 15 2.3 0.90 0.54 0.10 0.10 Goris 45 19 7.5 0.08 1.08 0.40 0.55 Kapan 120 130 18.5 1.00 1.51 1.00 0.90 Meghri 30 25 8.3 0.60 0.60 0.20 0.19 Agarak 25 25 8.2 0.20 0.90 0.25 0.26 Eghegnadzor 70 75 5.2 0.12 0.65 0.40 0.28 Jermuk 15 10 2.0 0.30 1.07 0.30 0.40 Vayk 10 10 2.1 0.55 0.96 0.50 0.20

Note: The analysis has been made for an average sample taken during a day

QUARTERLY REPORT October-December 2008

NATURE PROTECTION

Nature utilization fee of the Company for the 4th quarter of 2008 constituted about AMD 5.24 million, nature protection fee - AMD 8.65 million (about AMD 2.1 million has been formed with coefficient “3”) Table #15. The volumes of hazardous substances discharged into the water basin (ton/quarter) constituted: biological demand of oxygen: 163.3 tons, suspended substances- 151.6 tons, ammonium - 3.87 tons, nitrites- 0.66 ton, nitrates- 6.00 ton (Table #16).

ENVIRONMENTAL UTILIZATION & PROTECTION FEES BY THE REGIONS AND SECTORS TABLE-15

REGISTERED REGISTERED ENVIRONMENTAL UTILIZATION FEES (thous AMD) ENVIRONMENTAL PROTECTION FEES (thous AMD SECTORS SURFACE GROUND WITH RATIO WITH RATIO TOTAL TOTAL WATER WATER “1” “3” NORTH-WEST Abovyan 0 387.7 387.7 0 0 0 Hrazdan 11.5 436.0 447.5 629.3 82.8 712.1 Charentsavan 0 283.7 283.7 0 0 0 Ashtarak 0 258.6 258.6 332.5 0 332.5 Artik 0 120.2 120.2 356.7 249.9 606.6

TOTAL 11.5 1 486.2 1 497.7 1 318.5 332.7 1 651.2 NORTH-EAST Sevan 0 223.1 223.1 267.0 13.8 280.8 Gavar 0 540.8 540.8 522.2 51.3 573.5 Ijevan 15.8 91.9 107.7 462.6 75.6 538.2 Dilijan 37.5 2.0 39.5 139.6 237.7 377.3 Alaverdi 0 311.8 311.8 256.7 76.7 333.4 Spitak 118.3 313.4 431.7 745.6 212.0 957.6 TOTAL 171.6 1 483.0 1 654.6 2 393.7 667.1 3 060.8 CENTER-WEST Artashat 0 346.9 346.9 223.0 190.4 413.4 Echmiadzin 0 425.7 425.7 680.2 426.7 1106.9 Masis 0 192.2 192.2 507.5 98.8 606.3 Vedi 0 205.9 205.9 435.8 71.2 507.0 TOTAL 0 1 170.7 1 170.7 1 846.5 787.1 2 633.6 SOUTH Sisyan 0 213.7 213.7 172.4 139.7 312.1 Goris 0 194.7 194.7 134.4 78.4 212.8 Kapan 79.5 240.5 320.0 524.9 44.1 569.0 Eghegnadzor 0 189.4 189.4 202.0 11.6 213.6 TOTAL 79.5 838.3 917.8 1 033.7 273.8 1 307.5 MAIN TOTAL 262.6 4 978.2 5 240.8 6 592.4 2 060.7 8 653.1

QUARTERLY REPORT October-December 2008

CONTAMINANTS VOLUME THREW TO WATER BASIN & PERMITTED MAXIMUM OUTLET (PMO) TABLE-16

TON / QUARTER WATER SECTORS / DISCHARGE BOD SUSPENDED SOLIDS AMMONIUM NITRITE NITRATE SUBSECTORS thous. Cub.m 5 NAME IN FACT PMO IN FACT PMO IN FACT PMO IN FACT PMO IN FACT PMO 1 2 3 4 5 6 7 8 9 10 11 12 Abovyan 459.28 0 0 0 0 0 0 0 0 0 0 Byureghavan 54.39 0 0 0 0 0 0 0 0 0 0 Charencavan 163.17 0 0 0 0 0 0 0 0 0 0 Hrazdan 261.57 13.9 12.77 6.8 25.75 0.50 1.02 0.040 0.375 0.800 2.350 Tsakhkadzor 74.41 0.8 0.47 0.4 0.94 0.03 0.09 0.002 0.075 0.050 0.700 Ashtarak 74.56 5.7 6.15 5.4 12.62 0.10 0.62 0.010 0.083 0.150 1.040 Aparan 21.88 1.0 2.58 0.8 5.28 0.01 0.15 0.005 0.060 0.030 0.563 Artik 108.12 5.2 1.45 5.8 3.05 0.20 0.25 0.030 0.500 0.160 0.360 Talin 27.47 0.5 1.49 0.4 2.23 0.02 0.09 0.001 0.005 0.040 0.775 Ashotsk 16.85 0.3 0.39 0.3 0.61 0.01 0.01 0.001 0.005 0.020 0.095 Sevan 89.47 6.1 5.85 3.0 11.79 0.24 1.09 0.020 0.175 0.330 1.625 Gavar 90.98 4.9 6.78 4.5 13.67 0.07 0.45 0.007 0.073 0.140 1.448 Martuni 65.88 3.2 3.23 3.0 6.51 0.08 0.26 0.010 0.093 0.160 1.210 Vardenis 119.51 4.3 3.37 3.6 6.80 0.01 0.27 0.015 0.078 0.200 1.008 Tchambarak 14.01 0.3 1.80 0.2 2.77 0.01 0.11 0.000 0.003 0.030 0.295 Ijevan 118.83 6.4 5.03 5.9 10.32 0.14 0.64 0.070 0.355 0.130 0.645 Berd 45.19 1.4 2.45 1.4 5.03 0.02 0.13 0.001 0.013 0.050 0.475 Dilijan 147.35 8.3 4.16 9.1 8.52 0.14 0.39 0.008 0.030 0.190 0.683 Alaverdi 98.39 6.8 5.41 7.2 11.10 0.15 0.58 0.008 0.068 0.260 2.058 Noyemberyan 19.87 0.3 0.94 0.3 2.98 0.01 0.12 0.000 0.013 0.030 0.005 Spitak 59.76 3.6 3.96 3.4 8.11 0.07 0.32 0.015 0.068 0.140 0.750 Stepanavan 126.35 8.0 4.16 7.4 8.39 0.23 0.58 0.020 0.735 0.200 0.788 Tashir 21.44 0.8 2.82 0.4 5.64 0.01 0.17 0.001 0.018 0.003 0.450 Artashat 193.3 10.2 6.75 9.3 13.84 0.17 0.67 0.007 0.040 0.280 1.400

QUARTERLY REPORT October-December 2008

TON / QUARTER WATER SECTORS / DISCHARGE BOD SUSPENDED SOLIDS AMMONIUM NITRITE NITRATE SUBSECTORS thous. Cub.m 5 NAME IN FACT PMO IN FACT PMO IN FACT PMO IN FACT PMO IN FACT PMO 1 2 3 4 5 6 7 8 9 10 11 12 Echmiadzin 320.98 22.8 15.07 24.8 30.90 0.31 1.25 0.090 0.448 0.730 3.775 Masis 184.35 10.5 8.71 9.9 17.85 0.24 1.22 0.070 0.478 0.330 2.228 Vedi 59.65 4.1 2.82 3.9 5.78 0.09 0.33 0.020 0.200 0.170 1.293 Ararat 115.34 4.9 5.69 4.7 11.67 0.10 0.66 0.020 0.150 0.210 1.125 Sisyan 128.97 6.9 4.36 6.8 8.80 0.08 0.29 0.012 0.085 0.190 1.305 Goris 139.54 5.2 3.75 5.8 7.69 0.22 0.68 0.007 0.043 0.180 1.155 Kapan 321.14 10.2 10.09 11.1 20.35 0.41 1.68 0.060 0.250 0.510 1.995 Meghri 38.00 0.8 1.21 0.8 2.48 0.02 0.12 0.001 0.013 0.030 0.470 Agarak 50.38 2.1 1.38 1.9 2.83 0.06 0.14 0.002 0.018 0.090 0.810 Eghegnadzor 49.19 1.5 1.98 1.4 4.05 0.06 0.22 0.005 0.040 0.050 0.358 Vayk 57.09 1.5 1.60 1.0 3.28 0.04 0.13 0.007 0.050 0.060 0.380 Jermuk 95.22 0.8 1.59 0.9 1.18 0.02 0.03 0.008 0.060 0.060 0.385 T O T A L 4 031.87 163.30 140.26 151.60 282.81 3.87 14.76 0.573 4.70 6.003 34.002

REMARKS* . Exceeding of PMO ( P e r m i tted Maximum Outlet) is conditioned by the absent of WCS (Waste water Cleaning Stations) . BOD – Biochemical Oxygen Demand

1. The actual volumes of detrimental substances discharged into the waters will be clarified upon making examination of the wastewaters in the laboratories being set up in four regional branches.

2. Nature utilization and nature protection fees have been calculated according to the water use and discharge quantities (without industrial discharge) defined by the Water Use Permission.

QUARTERLY REPORT October-December 2008

2.5 QUALITY, SAFETY & ENVIRONMENT

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QUALITY, SAFETY & ENVIRONMENT

In the 4th quarter the list of reports to be submitted by the „AWSC“ CJSC to the RA state authorized bodies have been prepaired and approved by the order of General Director based on which the list of reports per structural devision, their submission deadlines have been approved, as well as the responsible persons and framework of their responsibilities have been defined.

By direct participation of the department employees the works have been carried out to eliminate the leakages from valve regulation chamber and contact reservoirs in the territory of „Eznak“ main facilities of Aparan town, as well as the chlorination station was adjusted and put into operation.

Waterproofing in Aparan

The works on developing, discussing and approving the manuals and regulations of Company’s subdivisions have been completed which were submitted to the General Director’s approval.

Based on the order of the Company’s General Director the following documents also were submitted for approval:

„Register of the AWSC CJSC subdivisions, positions and the documents required for them“;

„Regulation on maintaining the register of the AWSC CJSC subdivisions, positions and documents required for them“;

„Regulation on concluding contracts in the AWSC CJSC“;

„Regulation on concluding employment contracts in the AWSC CJSC“;

„Instruction on analysing sales indicators of AWSC CJSC regional branches and encouraging the inspectors“.

During this quarter works have been fulfilled ensuring the hermeticity of the pools in the newly constructued structures of the Company handed over for operation, as well as adjustment of the up-to-date equipment according to the defined requirements and instructions. Training sessions have been organized in the places for the employees operating these structures immediately during the work process. In general coopeartion and necessary assistance were provided to the Company’s subdivisions to ensure technical safety, work protection and increase of work efficiency

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The electromechanical valves of newly constructed Masis pumping station were repaired.

A videocamera operating with infrared rays have been purchased for technical checkup, maintenance and servicing of equipment used in big depths without enough light.

Random visits have been paid to „Gavar“, „Dilijan“ „Sevan“, „Abovyan“, „Hrazdan“, „Charentsavan“ „Masis“ „Aparan“, „Artik“, „Ashtarak“ and other sectors. The protection of technical safety requirements, quality of fulfilling maintenance instructions of the employees operating the systems have been checked and the employees have been instructed relevantely.

Necessary labels have been prepared and fixed on the equipment. The works have been carried out to arrange the equipment in newly built „Masis“, „Yeznak“ and „Alapars“ pumping stations and indicate water movement technological process through them.

Labelling in „Alapars“ and „Masis“ pumping stations

The committees set up by the order of Company’s General Director made technical checkup of non-finished Stepanavan-Gugark (Kamenka-Herher-Vanadzor) and Mantash-Artik water mains. The documents summerizing the checkup results and the acts thereon with appropriate conclusions and proposals have been submitted to relevant bodies.

During the reporting quarter the employees of the Department participated in different discussions organised in various organizations relating to the department activities and duely presented the Company’s interests.

QUARTERLY REPORT October-December 2008

2.6 COMPANY’S PROCUREMENT

QUARTERLY REPORT October-December 2008

COMPANY’S PROCUREMENT

Information about procurement within AWSC budget, Q IV, Year 2008 Table – 17

PROCUREMENT AMMOUNT, AMD

1. Car services, petrol diesel and gas 72,283,783

2. Pipes, fittings, valves and other 12,581,292

3. Water chlorination 19,600,600

4. Office supply, IT and cellular phones 4,257,855

5. Safety devices 204,375 6. Equipment for works 13,844,400 7. Other works/ goods 25,385,370 8. ADB PIU 3,217,984 9. Echmiadsin Training Center 608,870 10. Laboratories 1,898,600 11.Newspapers typing, ether time providing. 6,265,508

TOTAL ALLOCATED 159,148,637

TOTAL REQUESTED 945, 477, 089

QUARTERLY REPORT October-December 2008

3. ADMINISTRATION

QUARTERLY REPORT October-December 2008

3.1 FINANCE & ACCOUNT

QUARTERLY REPORT October-December 2008

SUBSIDY TABLE-18

Subsidy

FROM RA GOVERNMENT

RECEIVED AMOUNT MONTH 2008 COMMENTS (mln AMD)

42,1 electricity consumption payment 6,3 VAT 24,5 social security payment 300,0 January 5,1 water fore payment 2,0 income tax 1,6 other tax

103,2 electricity consumption payment _ February 19,1 VAT

March _ 96,1 electricity consumption payment

83,8 electricity consumption payment 15,4 VAT 25,0 social security payment 300,0 April 5,2 water fore payment 9,0 income tax 1,5 other tax

81,5 electricity consumption payment 6,6 VAT _ May 25,0 social security payment 14,0 income tax

18,8 electricity consumption payment 6,8 June 21,0 social security payment

110,3 salary 14,2 VAT 25,9 social security payment 303,4 July 5,1 water fore payment 10,7 income tax 1,5 other tax

QUARTERLY REPORT October-December 2008

38,6 salary 11,0 VAT - August 27,1 social security payment 21,8 income tax

2,0 VAT September - 26,2 social security payment 10,0 income tax

70,6 salary 10,7 VAT 26,3 social security payment

October 5,1 payment for water use 5,0 income tax 1,6 mandatory payments for Regulatory Commision

87,7 salary 10,2 VAT

November 35,6 social security payment 4,0 income tax

18,0 VAT December 18,0 social security payment 10,6 income tax

TOTAL AMOUNT 1 213,6

QUARTERLY REPORT October-December 2008

INFORMATION CONCERNING INCOMES AND EXPENSES OF AWS CJSC IN IV QUARTER, 2008 TABLE-19

1000 AMD

Proceeds Current expenses

from main Net salary Total Social N H/O P a y m e n t . Covering Other Total water activity of sell expenses activity activity meters) Subsidy

Current Electricity insurance Taxes expenses Received (including (including

from other of credit payments fund Total income Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NORTH–WEST REGION 1 Abovyan 185 765,5 1 575,3 187 340,8 12 133,6 77 283,1 157 975,5 157 975,5 247 392,2 TOTAL 185 765,5 1 575,3 187 340,8 12 133,6 77 283,1 157 975,5 157 975,5 247 392,2 NORTH–EAST REGION 2 Sevan 162 803,8 5 833,4 168 637,2 20 500,0 82 915,6 60 955,4 60 955,4 164 371,0 TOTAL 162 803,8 5 833,4 168 637,2 20 500,0 82 915,6 60 955,4 60 955,4 164 371,0 CENTER–WEST REGION 3 Artashat 185 254.5 1 871,2 187 125,7 12 900,0 57 375,0 57 240,9 57 240,9 127 515,9 TOTAL 185 254.5 1 871,2 187 125,7 12 900,0 57 375,0 57 240,9 57 240,9 127 515,9 SOUTH REGION 4 Sisian 145 355,9 2 234,0 147 589,9 13 000,0 70 818,8 7 591.4 7 591,4 91 410,2 TOTAL 145 355,9 2 234,0 147 589,9 13 000,0 70 818,8 7 591.4 7 591,4 91 410,2 Total from 679 179,7 11 513,9 690 693,6 58 533,6 288 392,5 283 763,2 283 763,2 630 689,3 Branches HEAD OFFICE TOTAL 76 274,7 303 382,5 99 775,9 479 433,1 18 204,0 54 750,3 2 299,8 79 885,9 87 259,8 0 320 108.4 489 553,9 562 508,2 MAIN TOTAL 755 454,4 303 382,5 111 289,8 1 170 126,7 76 737,6 343 142,8 286 063,0 79 885,9 87 259,8 0 320 108.4 773 317,1 1 193 197,5

See, also attached Diagram-19 73

QUARTERLY REPORT October-December 2008

3.2 HUMAN RESOURCES

QUARTERLY REPORT October-December 2008

In the reporting quarter Human Resources Department carried out the following works:

1. Personnel & Contract Division

a) External relations

Contracts were prepared for the newly recruited employees, recorded in the registers and entered into the database.

In case of making amendments to the contracts of the employees, agreements were prepared which were also recorded in the registers and entered into the database.

Monthly and quarterly reports on number of employees and salary were submitted to the State Statistical Department.

Each month together with the “ArdShinInvestBank” CJSC we checked and prepared the list for re-issuing salary payment cards, as well as submitted applications for the newly recruited employees. Applications for opening individual accounts, as well as individual reports were submitted to the Social Security Fund. Answers to the letters addressed to us have been prepared.

b) Internal activities

Business trips, holidays, employment and resignation orders, as well as orders on providing overtime and bonuses have been prepared.

The employees were provided with relevant references. The Department continues cooperating with the Trade Unions. The children of Company’s employees aging 1-13 were provided with presents and tickets for New Year celebration activities. In the Company’s Head Office New Year celebration ceremony has been organized.

Protocoles have been made relating to the Trade Unions activities.

QUARTERLY REPORT October-December 2008

c) Main HR indicators

. Number of employees Diagram 20

1880 1867 1862 1856 1860

1840 1818 1820 1809 1798 1801 1800 1787 1782 1780 1765 1764 1760 1745

Number of Employees 1740

1720 1723 1700

1680 2007 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 Av erage J anuary F ebruary March A p r il May J une J u ly August September O c tober November December

M o n t h s

. Labor turnover

Diagram 21

0,3 1,3 4,3 2,4

3,3

North West North East Center West

South Head Office

QUARTERLY REPORT October-December 2008

2. Training & Development Division

In the quarter IV the Division carried out the following activities:

In the beginning of the 4th quarter the Training Center of the “AWSC” CJSC finished the training session on the subject “Safe operation and certifying of the vehicles operating with natural gas„ as a result of which the Company’s 35 employees were provided with driving licenses for the vehicles operating with natural gas.

On October 9-10 training on the subject “Prevention of the breakdowns in the water and wastewater systems„ was conducted participated by the employees of the Company’s Works Departments.

In the beginning of November - end of December of this reporting quarter additional training sessions have been conducted for the employees not participated in previous training on the subject “Operation of distribution networks, types, structure and operation of hydraulic equipment“.

On November 15 training session was organized for the employees of the Company’s water quality laboratories on the subject “Organization of water quality control, elimination of detected defects, summarizing the results of physicochemical and bacteriological analyses, making of protocols, summarizing the results of I-III training stages”.

On October 29 the Training Center together with Jinj LLC organized training session on the subject “Design and operation of water treatment plants” for the Head Office relevant department heads and employees, as well as heads of regional branches’ Operations Departments.

The training session for the heads of Company’s Commercial Departments and billing specialists conducted on November 14 was devoted to “Sales and accounting reports, transfer of accounting data to the Accounting Department and other commercial issues”.

In accordance with the order of Company’s General Director the Training Center together with Operations Department checked the knowledge of operation and commercial specialists of the “North-East” regional branch.

QUARTERLY REPORT October-December 2008

Summarizing the activities carried out by the TC in the 4th quarter 2008, the picture will be as follows:

Number of Number of # Name of the program Subject of the session participants absentees

Training of the Works and “Prevention of the breakdowns in the 1 18 20 Operations Departments staff water and wastewater systems

Training of the employees “Safe operation and certifying of the 2 having driving license vehicles operating with natural gas”. 35 0

“Organization of water quality control, elimination of detected defects, Training session for summarizing the results of 3 employees of the Company’s physicochemical and bacteriological 9 0 water quality laboratories analyses, making of protocols, summarizing the results of I-III training stages”.

Training of the Technical “Design and operation of water 4 Department employees treatment plants” 14 5

“Sales and accounting reports, transfer Training for the commercial of accounting data to the accounting 5 departments and billing department and other commercial 6 3 specialists issues”.

“Operation of distribution networks, Training for the Operations 6 types, structure and operation of and Works Departments 13 13 hydraulic equipment„

Checking the knowledge of 7 the “North-East” RB Works - 7 0 Department employees

Checking the knowledge of the “North-East” RB 8 - Commercial Department 9 3 employees

QUARTERLY REPORT October-December 2008

ECHMIADZIN TRAINING CENTER

Training on Water Treatment Plants

Training of commercial specialists Training of laboratory assistants

Training on prevention of the breakdowns

QUARTERLY REPORT October-December 2008

3.3 LEGAL & INSURANCE

QUARTERLY REPORT October-December 2008

BRIEF DESCRIPTION OF ACTIVITIES AND RESULTS OF LEGAL AND INSURANCE DIVISION

QUARTER IV, 2008

• The number of cases entered into the court is 2203 with total amount of AMD 143.318.955

• 800 cases with total amount of AMD 41.928.817 were satisfied by the courts.

• AMD 8.006.900 debt was paid as a result of different actions of legal charachter, including previous pending cases.

The main directions of the Department activities were the protection of Company’s legitimate interests in different court instances, coordination of the works of regional branch lawyers, organization of Company’s property insurance activities, as well as provision of legal consultancy to the management.

QUARTERLY REPORT October-December 2008

4. PROJECTS

QUARTERLY REPORT October-December 2008

4.1 W B

QUARTERLY REPORT October-December 2008

Realization of SCHEDULED PROJECTS under MWWP Fund

A NEW STRUCTURE HAS BEEN CREATED AT THE END OF THE YEAR FOR COORDINATING ALL EXTERNALLY FINANCED PROCESSES

G A V A R

MWWP-C1,2(07)1-12.“Improvement of Water Supply System of Gavar city”.

Time of construction works: start of civil works 14.06.2007 end of civil works 30.11.2008

The cost of civil works 169.649.33 mln AMD

1. Construction of Hatsarat pumping station 2. Installation of 3 pump groups 3. Renovation of Hatsarat DRR-500m3 4. Renovation of DRR cables 2x800m3 5. Construction of contact reservoir 100m3 6. Renovation of distribution network and zoning 9800m 7. Construction of electrical sub-station for p/s 2x1000kW 6/04

The civil works are undertaken by “Artashes and Tatevik” LLC

G A V A R Pumping station –Inside View

QUARTERLY REPORT October-December 2008

M A S I S

MWWP-C2,2(07)1-16. “Improvement of Water Supply and Waste Water Systems of Masis city”.

Time of construction works: start of civil works 03.12.2007 end of civil works 15.11.2008

The cost of civil works 126 700 000 AMD

1. Installations done in new water production facility; a) 2 pump aggregates 250-600/503.5 to combined electrical engine N=315kW, Q=200l/sec, H=100m b) 2 pump aggregates SP200-670/499 type, with combined electrical engine, N=315kW, Q=175l/sec, H=125m

2. New PE pipes have been installed in Masis city Masis – PS –Control Panel d=63mm- d=225mm, 5400m

The civil works are undertaken by “SHMSH-23” OJSC

Masis – PS- Administrative Building Masis – PS- Outside View

V E D I

MWWP-C2,2(07)1-17. “Improvement of Water Supply Systems of Vedi city”.

Time of construction works: start of civil works 03.07.2008 end of civil works 11.11.2008

The cost of civil works 23 6 11 3 57 mln AMD

1. Renovation of distribution network – 4700 m 2. Individual household connections - 275 households

The civil works are undertaken by “Montazhtransshin” CJSC

QUARTERLY REPORT October-December 2008

A P A R A N

MWWP-C1,2(07)1-11. “Improvement of Water Supply System of Aparan city”.

Time of construction works: start of civil works 08.04.2007 end of civil works 30.11.2008

The cost of civil works 120 020 259 mln AMD

1. Reconstruction of distribution network and zoning - 9879m 2. Renovation of DRR -1x2000m3 3. Renovation of Yeznak p/s 4. Construction of contact reservoir -1x 100m3 5. Construction of 1 chlorination station 6. Renovation of Yeznak catchments 7. Montage of in-house connections: 440household 8. Construction of sanitary zone 250m

The civil works are undertaken by “Hyrdoshinarar” OJSC

A p a r a n - PS Outside view A p a r a n - PS Inside view

A R A R A T

MWWP-C2,2(07)1-14. “Improvement of Water Supply Systems of Ararat city”.

Time of construction works: start of civil works 03.07.2008 end of civil works 15.11.2008

The cost of civil works 257 916 84 AMD

1. Renovation of distribution network and zoning -3300m 2. Individual house connections- 153 households

The civil works are undertaken by “Montazhtransshin” CJSC

QUARTERLY REPORT October-December 2008

A L A V E R D I

MWWP-C2,2(07)1-18. “Improvement of Water Supply System of Alaverdi city”.

Time of construction works: start of civil works 29.06.2008 end of civil works 30.11.2008

The cost of civil works 104.000.000 mln AMD

1. Reconstruction of distribution network- 2772 m 2. Construction of the road to Lori-Berd catchments – 6km 3. Renovation of Agarak catchments

The civil works are undertaken by “Shinashkharh” LLC

Alaverdi – Spring intake

Y E G H E G N A D Z O R

MWWP-C2,2(07)1-15. “Improvement of Water Supply System of Yeghegnadzor town”.

Time of construction works: start of civil works 09.11.2007 end of civil works 15.11.2008

The cost of civil works 486.326.45 mln AMD

1. Renovation of distribution network and zoning; 8445m 2. Individual house connections- 307households

The civil works are undertaken by “Montazhtransshin” CJSC

QUARTERLY REPORT October-December 2008

N O Y E M B E R Y A N

MWWP-C2,2(07)1-19. “Improvement of Water Supply System of Noyemberyan city”.

Time of construction works: start of civil works 07.07.2008 end of civil works 30.11.2008

The cost of civil works 457.034.95 mln AMD

1. Installation of valves in Berdavan p/s- 8pcs

2. Renovation of distribution network and zoning- 4700m

3. Individual house connections – 156 households

Noyemberyan city view

The civil works are undertaken by “Shinashkharh” LLC

S T E P A N A V A N

MWWP-C2,2(07)1-20. “Improvement of Water Supply Systems of Stepanavan city”.

Time of construction works: start of civil works: 17.06.2008 end of civil: works pending

The cost of civil works 150.928.41 mln AMD

1. Renovation of distribution network and zoning: 3000m

2. Individual house connections; 274 households

The civil works are undertaken by “Fredo and Friends” LLC

QUARTERLY REPORT October-December 2008

C H A R E N T S A V A N

Contract No MWWP-C2.2/06/1-09: “Improvement of Water Supply System of Charentsavan city”

Time of construction works: start of civil works 03.03.2007 end of civil works 08.30.2008

The cost of civil works 879 124 25 AMD

1. Renovation of Alapars p/s- 2 groups of pumps 2. Renovation of Makravan-Abovyan p/s - 1 group of pumps 3. Renovation of DRR territory- 2 DDRs 4. Renovation of distribution network and zoning- 3074m 5. Renovation of yard sewerage pipes - 217 m

The civil works are undertaken by “SHMSH-23” OJSC

Charentsavan – Alapars PS- Control Panel

QUARTERLY REPORT October-December 2008

AWS SCJC

MUNICIPAL WATER AND WASTEWATER PROJECT

PROCUREMENT MANAGEMENT AND PROGRESS REPORT October-December 2008 During reporting period have been carried out the following WB procurement:

COMPONENT A – GENERAL EXPENSES – IMPLEMENTING BY CMU

COMPONENT B – AWSC INVESTMENTS

Subcomponent B1 – Strengthening of AWSC B1.3 – AWSC Audit – Ongoing (Implementing by CMU).

Subcomponent B2 – Redundancy Plan – Completed in Q4, 2005.

Subcomponent B3 – Training and Requalification – Completed in Q3, 2007.

Subcomponent B4 – Chemical and Bacteriolog. Labs – Completed in Q1, 2007.

Subcomponent B5 – Water Meter Testing Laboratory – Completed in Q3, 2007.

Subcomponent B6 – Water Meter Financing – Completed in Q1, 2007.

Subcomponent B7 – Assistance to Condominiums – Completed in Q4, 2007.

Subcomponent B8 – Operating Expenses – Completed in Q1, 2008

COMPONENT C – IMMEDIATE INVESTMENT PROGRAM

Subcomponent C1 – Immediate Investment Program

C1.1 – Goods – Completed in Q3, 2007.

C1.2 – Works – Completed in Q2, 2008.

C1.3 – Consultants Service and Training C1.3 – Audits of Management Contract – Ongoing (Implementing by CMU).

Subcomponent C2 –Investment in AWSC Branches

C2.1 – Goods – Completed in Q2, 2008.

C2.2 – Works – Completed in Q4, 2008.

C2.3 – Design – Completed in Q1, 2008.

QUARTERLY REPORT October-December 2008

DIAGRAM – 22

Contracting & Disbursement

Signed Contracts Paid Amounts 30 000

25484 24700 24345 24345 24345 25 000 24168 24345 23068 23068 23068 23068 23068 23068 24007 24393 24345 24413 23165 23413 23631 21641 21800 22100 20 000 21366 20176 19454

15 000 000 USD 000

10 000

5 000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 Month