( D E T a I L E

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( D E T A I L E D )

______Patrick LORIN

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TABLE OF CONTENTS

I N T R O D U C T I O N ...... 4 1. COMMERCIAL ...... 6 QUARTERLY ACTIVITIES ...... 7 2. OPERATION & MAINTENANCE ...... 18 G E N E R A L ...... 19 ACTIVITIES PLANNED FOR 2010 ...... 19 2.1 WATER PRODUCTION ...... 20 PRODUCTION DEPARTMENT ...... 21 1. PRODUCED WATER QUANTITY AND POTABLE WATER LOSSES DIAGRAMS-1,2 ...... 21 2. POTABLE WATER DISINFECTION ...... 22 DISINFECTION MATERIAL CONSUMPTION TABLE-1 ...... 22 3. ELECTRICITY CONSUMPTION & EXPENSES ...... 23 WATER QUANTITY PRODUCED BY PUMPING AND ELECTRICITY CONSUMPTION TABLE-2 ...... 23 DIAGRAMS – 3,4 ...... 24 ELECTRICITY CONSUMPTION & EXPENSES IN 2005-2009 TABLE-3 ...... 25 4. WATER METERS EQUIPMENT INSTALLATION ...... 25 2.2 WATER DISTRIBUTION ...... 26 5. REPAIRS OF DAMAGES, CAPITAL REPAIRS AND REHABILITATION OF SYSTEMS ...... 27 2.3 WASTEWATER & SEWERAGE ...... 28 6. WASTEWATER COLLECTION SYSTEMS ...... 29 DIAGRAMS 6,7,8 ...... 29 7. SPECIAL WORKS DEPARTMENT ...... 31 3. TECHNICAL ...... 33 3.1 TECHNICAL INVESTIGATIONS, DESIGN & MAPPING OF TECHNICAL SYSTEMS ...... 34 TECHNICAL INVESTIGATIONS AND DESIGN...... 35 MAPPING OF TECHNICAL SYSTEMS ...... 39 3.2 MANAGEMENT OF COMPANY’S ASSETS ...... 44 ASSETS MANAGEMENT ...... 45 3.3 WATER QUALITY CONTROL...... 48 WATER QUALITY CONTROL ...... 49 ECHMIATSTIN TRAINING CENTER ...... 51 NATURE PROTECTION AND UTILIZATION FEES PER REGIONAL BRANCH IN 2009 TABLE - 4 ...... 52 3.4 QUALITY, SAFETY & ENVIRONMENT ...... 54 2

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3.5 COMPANY’S PROCUREMENT ...... 58 INFORMATION ABOUT PROCUREMENT WITHIN AWSC BUDGET, Q I, YEAR 2010 TABLE – 5 ...... 59 3.6 TRANSPORT ...... 60 TRANSPORT ...... 61 4. ADMINISTRATION ...... 63 4.1 FINANCE & ACCOUNT ...... 64 A C C O U N T I N G ...... 65 F I N A N C E S ...... 66 AMOUNTS SPENT BY THE HEAD OFFICE IN 2005-2009 TABLE -6 ...... 66 AWSC CJSC CAPITAL EXPENDITURE TABLE-7 ...... 67 DIRECTIONS OF THE AWSC MAIN EXPENSES DIAGRAM-9 ...... 67 C O S T C O N T R O L & I N T E R N A L A U D I T ...... 69 4.2 HUMAN RESOURCES ...... 71 NUMBER OF EMPLOYEES OF AWSC DIAGRAM-10 ...... 72 AVERAGE SALARY OF EMPLOYEES OF AWSC DIAGRAM-10 ...... 73 TRAINING AND DEVELOPMENT DIVISION...... 74 TRAINING OF PERSONNEL TABLE-8 ...... 75 ACTIVITIES IMPLEMENTED BY THE TRADE UNION OF AWSC CJSC DURING 2009 ...... 77 4.3 LEGAL & INSURANCE ...... 79 2009 ANNUAL RESULTS OF THE LEGAL AND INSURANCE DEPARTMENT ...... 80 2009 QUARTERLY DATA COMPARISON DIAGRAM -12 ...... 80 2008-2009 DATA COMPARISON DIAGRAM -13 ...... 81 5. PROJECTS...... 82 5.1 W B ...... 83 5.2 A D B ...... 85 5.3 E B R D ...... 89 Physical Implementation of Works Table-10 ...... 90 5.4 U S A I D ...... 92 6. PUBLIC RELATIONS ...... 94 PUBLIC RELATION DEPARTMENT ACTIVITIES IN 2009 ...... 95 7. INDICATORS ...... 98 INDICATORS RECAPITULATION – TABLE 11 (INDICATORS 1-25) ...... 99

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I N T R O D U C T I O N

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I N T R O D U C T I O N

“We are working for a better live in our areas and a better quality of services”

The year 2009 has been the most difficult one since the beginning of the Management Contract. On financial aspects we had to face several difficulties such late rise (April 2009) of a tariff on a non-satisfactory level; reduction(around 400 mln AMD) of the state subsidiary; payment of VAT on billing not on payments as before; and finally the negative impact of the world financial crisis on good customers as mine factories.

Despite these difficulties, Armenian Water and Sewerage Company (AWSC) has made improvements and reached the performance indicators, fulfilled the objectives by increasing staff efficiency and rising customer confidence. AWSC is now on a good and sustainable basis heading to the future developments.

In 2010 SAUR, the Management Contractor of AWSC will put all the efforts to be on the same success like in 2009.

In the following pages you will find detailed information on various aspects of AWSC 2009 performance that summarizes our activities, difficulties and accomplishments of past year.

Patrick Lorin Contract Manager, General Director of AWSC

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1. COMMERCIAL

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QUARTERLY ACTIVITIES

G e n e r a l

In 2009 the economic crisis had its impact on many spheres of the country‟s economy as well as on “Armenian Water and Sewerage” CJSC. The consumption volume of big customers was decreased and even in some cases was terminated.

A G A R A K PS P l a n t Z A N G E Z U R P S P l a n t 70,0 16,0 63,5 61,4 63,5 14,6 14,2 14,6 60,0 63,5 53,3 14,0 14,6 61,4 14,2 50,0 53,3 12,0 51,6 10,0 40,0 8,0 7,4 7,4 30,0

Ñ³½.ËÙ 7,1 Ñ³½.ËÙ 6,0 20,0 5,9 3,9 18,4 14,2 14,2 4,0 5,3 5,7 10,0 13,7 13,7 2,0 3,2 0,0 0,0

K A P A N PS P l a n t B J N I W a t e r F a c t o r y 70,0 25,0 58,5 60,0 54,2 18,9 19,4 20,0 18,0 48,8 50,0 16,5 48,8 42,4 17,9 40,0 15,0

30,0 Ñ³½.ËÙ Ñ³½.ËÙ 10,0 5,3 16,9 15,7 16,1 17,1 20,0 20,5 5,0 2,6 10,0 15,0 14,0 15,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0

Even in such difficult conditions generally a serious progress was recorded by all indicators during the whole 2009. A number of projects were implemented; the control group was established in Head Office of the Company, etc.

A progress was recorded particularly among resident-customers.

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Implemented Projects

A number of projects were implemented during 2009

. Installation of water meters, debts adjustment, resigning of contracts and development of the debt discharge schedule . Publishing of the names of non-regular payers in “Hayastani Hanrapetutyun” newspaper . Regular advertisements and announcement on TV . Organization of lottery for regular payers . Random visits, struggle against illegalities . Transfer of water meters of private houses from the customers territories

It is worth mentioning that the implemented programs are justified and have continuous character.

Installation of water meters, debts adjustment, resigning of contracts , development of the debt discharge schedule

The project started in February of 2009. The aim of the project was the settlement of accounts with the customers without water meters and having payable receivables. We encourage our customers through broadcast regular reminders and announcements to come to Water Supply Company and to settle their accounts.

The deadline of the projects was December 31 of 2009. The results were satisfactory.

Number of signed and Collection from the previous years

(resigned) contracts debts (thousand dram)

North-West 9 355 76 191 8 075 114 338 Center-West

South 8 982 49 443 AWSC 26 412 239 972

The debt discharge schedule of 580 mln AMD was developed in the framework of the project. The settlement of accounts with the customers who refuse to sign the contracts, make payments will be solved through legal proceedings. Mainly the resident customers having a lot of debts, evading making payments and without water meters participated in the project.

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There was a progress in the area of water meter installation.

In the framework of the project the preference was given to the installation of the water meters (high quality, anti-magnetic) by the Company.

W B W a t e r M e t e r s S e l l i n g A W S C

14 000

12 000 11 593 10 427 10 000 8 763 8 450 8 296 8 115 7 367 8 000 7 506 7 203 7 744 5 988 9 111 6 000 5 450 000'AMD 3 329 3 966 4 093 4 000 3 036 3 133 3 754 3 309 3 317 2 000 1 197 2 957 1 159 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2008 2009

The water meters procured by the WB funds amounting 91.8 mln AMD was installed during 2009 instead of 47.4 mln in 2008 (two times more).

The calculations of 22.000 resident customers are done by normative way as of 01.01.2010. Mainly those customers of multi-apartment buildings avoid installing water meters where only one or two persons inhabit (correspondingly the consumption is 6 m3/month and 12 m3/month) and the water is supplied through 2 or 3 points. It is already time to implement the replacement of outdated, low quality water meters along with the installation of water meters of customers the calculations of which are done normatively. The analysis show that almost all low quality water meters do not correspond to required standards.

Charentsavan town pilot project is a good example. The water meters of customers (residents of multi-storey buildings) with average monthly consumption of about 1-2m3 were replaced by new “SENSUS” water meters. The old water meters were sent to the laboratory of the Company for testing. In the result of the testing it became clear that almost all water meters did not comply with the required standards. The analysis of calculations done with the new installed water meters revealed that the consumption of these customers increased 3-4 times.

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Implementation of announcements and advertisements

The coverage of the Company‟s activity, the publishing of the news, the broadcast of advertisements and announcements through mass media is also significant.

The cooperation of commercial directorate and public relation department is also important durin the implementation id such activities. The latter was active in 2009. Firstly, the Company‟s activities are broadcasted by one of the Country‟s popular TV channel H2. We encourage our customers through broadcast regular reminders and announcements to be conscientious, make regular payments through HayPost offices and banks (not through clerks). The customers are also informed about RA government decrees , legislative acts, amendments made to them as well as information is provided through advisements about the results of previous and upcoming lotteries . Another project is being implemented jointly with Public relations department - publishing of the names of the customers not making payments within a year in “Hayastani Hanrapetutjun” newspaper which has already become a tradition in the Company. Once per 3 months the data of 100 customers of 4 countries (Echmidzin Hrazdan, Gavar, Kapan) serviced by the Company during the whole year without making payments are published in “Hayastani Hanrapetutjun” newspaper indicating the customers‟ names, surnames, address and debt amount. All the customers are informed through the personal reminders and broadcast announcements before the publishing. The project has being implemented since April 2009 and 3 publishing have already been implemented.

The results here are also satisfactory.

Number of installed Nuber of paid Paid account N Towns water meters customers (thousand AMD)

1 Echmiadzin 131 121 2 926

2 Hrazdan 456 544 6 168

3 Gavar 58 44 527

4 Kapan 96 84 1 508

Total 741 793 11 130

There is a serious progress among those customers whose names haven‟t been published yet. Particularly good results are recorded in Hrazdan and Ecmiadzin towns. The project continues and these indicators should be improved.

It is worth mentioning that the Company spent 450 thousand AMD for the project implementation.

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Organization of lottery for regular paying customers

The next project being implemented jointly with Public Relations Department is the organization of Lottery once per each 4 months. The projects started in October 2008 and 4 drawings have been already organized since then. Those resident-customers can participate at the lottery, which have installed water meters and during the mentioned four months have regularly paid for the consumption. 4 customers are selected by the special computer program (one customer resident from each regional branch, during the 4 holiday lottery 6 customer residents, 2 customers from each regional branch (since July 2009 there are 3 acting regional branches)), and the winners receive 300 000 AMD. The project is implemented jointly with “VTB-Hayastan” bank. The analysis implemented each month after the drawing reveal that the number of participants is obviously increasing.

N u m b e r o f p a r t i c i p a t i n g c u s t o m e r s

66 737

70 000

60 000 48 947 46 853

50 000 38 645

40 000 customers 30 000

20 000

10 000

0 1st withdraw 2nd withdraw 3rd withdraw 4th withdraw

It is natural that the commercial indicators are also improving. One of the winners during the second lottery (2009 February) was the customer from Berdik village of Ararat marz. The analysis done for the village revealed that there was an improvement of commercial indicators.

M e t e r i n g r a t i o C o l l e c t i o n r a t i o 90% 86% 85% 80% 80% 84% 70% 82% 60% 49% 50% 80% 40% 78% 30% 78% 20% 76% 10% 0% 74% Before the withdraw After the withdraw Before the withdraw After the withdraw

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The lottery is broadcasted by H2 TV channel in a special studio designed for “Armenian Water and Sewerage” CJSC.

The project has a regular character.

Organization of periodic visits, struggle against illegalities

The struggle against illegalities is also one of the important tasks of the commercial functions. The issue is significant and has been set in the management contract since the beginning. The struggle against illegalities seems endless and the involvement of other departments (technical, exploitation, as well as PR) along with other activities is paramount.

In the framework of the project the control group was established in Commercial directorate of Head Office in June 2009. The Company‟s control group pays random visits to the communities serviced by the Company. The results of activities carried out from June to December of 2009 are satisfactory. Non-calculated legal persons are still detected; the illegal connections are more less.

The results of the activities presented in figures:

June July August Sept-r Oct-r Nov-r Dec-r Total

Number of detected 38 37 24 32 20 22 22 195 illegalities, including

Illegalities 37 32 23 31 20 16 19 178

No customer 1 5 1 1 0 6 3 17 Recorded penalty 5 346 2 710 7 314 3 031 1 537 2 345 2 913 25 196 (thousand dram)

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It is worth mentioning that recorded penalties are mainly collected, and the part that is still not paid should be collected by legal proceedings. Only legal persons were checked. It is planned to pay such visits to resident customers.

Generally the analysis shows that the number of illegal connections and non-calculated customers has been decreased in comparison with the previous years. However, there are still a lot to accomplish in this field. There are still a lot of water losses (nearly 83%), among which commercial losses have considerable weight (illegal connections, non-calculated consumptions, water abuse). There are commercial losses (mainly in multi-apartment buildings) that are result of low quality water meters or complete metering. The definite proof of the latter serves the Charentsavan town pilot project (nearly 99% of the old water meters did not correspond to standards).

The main problem in the private houses of customer residents is the bypassing water pipes as compared with multi-apartment buildings. The solution is the transfer of the water meters from the customers‟ territories (installation of water meter units). The necessity of periodical control is indisputable and a need arises to recruit more employees as the number of illegalities increases along with water meter installation and tariff increase.

Similar activities are being carried out by the control group of the regional branches and results are productive.

Charencavan town Martuni town Vayq town (magnet existence) (illegal connection, water abuse) (illegal connection, water abuse)

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The transfer of water meters from the customers’ territories

The only way for fighting against illegal connection in private houses is the transfer of water meters from the customers‟ territories.

The issue is primary in those settlements where no wastewater systems exist.

The project was implemented in a number of settlements and the results are already obvious (Yeghegnadzor, Vayk, Sisian, Meghri, Goris, Charencavan, Masis, etc.)

The data analysis of 40 resident customers of Israel Ori, Khachatryan and Khanjyan streets in Eghegnadzor town show that the consumption volume has been doubled.

E g h e g n ad z o r t o w n

900 800 762 700 600 480 500

m3 400 337 286 300 240 273 177 200 100 0 03.09 04.09 05.09 06.09 07.09 08.09 09.09

The water meter units were installed in August.

It is worth mentioning that along with the consumption volume there is also savings. That is if the water volume is fully calculated the water abuse is eliminated.

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THE COMMERCIAL INDICATORS OF 2009

. Number of customers making regular payments

N u m b e r o f r e g u l a r y p a y e r s

150 000 129 611 111 922 (76%) 130 000 108 835 (66%) (64%) 110 000 92 711 85 507 (55%) 90 000 (50%)

70 000 52 997 (31%) 50 000

30 000 Number of Customers receiving services : around 170 000 10 000

The number of customers making regular payments is increasing on monthly basis as compared with the year 2004; however, still a lot has to be done. There are still resident customers who do not make monthly payments, though no debts are accumulated. According to the analysis done for the whole year 190.000 customers out of 200. 000 serviced by the Company make regular payment (95 %).

. Installation of water meters

N u m b e r o f c u s t o m e r s w i t h W a t e r M e t e r s 200 000

180 000 183 278 160 000 (76%) 160 857 152 349 140 000 (67%) 137 399 (63%) 120 000 124 768 (57%) 100 000 (52%) 80 000 92 963 (39%) 60 000

40 000 Numner of customers: around 240 000 20 000

0 12.04 12.05 12.06 12.07 12.08 12.09

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275 947 customers are counted in the Company‟s customer base as of 01.01.2010, 255 000 out of which are connected to centralized water supply system. However, 200 000 customers use the service during the year (170000 customers on average use the service each month).

That is 70 000 customers are counted as closed doors though the data are being updated. If we consider that the number of closed doors without water meters constitutes about 45 000 then the percentage of the customers with water meters will be 87% (instead of 76 %).

23 000 customers use the service without water meters as of 01.01.2010.

It is worth mentioning that a lot of water meters (high quality) were replaced along with the installation of new water meters. Totally 27 295 water meters were installed during 2009.

I quarter 4 040

II quarter 6 561

III quarter 6 252

IV quarter 10 442

Totally 27 295

. Collection

The financial crisis had its negative impact on the collection rate of 2009 by the consumption decrease of big customers (less than 100.0 mln AMD on monthly basis). In contrast to legal persons we had rather good results of collection rate among resident customers.

from 01.04.2009 C ú L L E C T I O N incrasing of tariff 28% 3 388 3 500

3 000 2 683 2 443 from 01.05.2005 2 308 2 500 increasin of tariff 40% 1 834 2 000 1 599

1 500 mln.AMD

1 000

500

0 2004Ã. 2005Ã. 2006Ã. 2007Ã. 2008Ã. 2009Ã.

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Conclusion

The aforementioned analysis give basis to conclude that there is a progress by all indicators. However, nevertheless we have still a lot to do to improve them. There are still a lot of water losses among which commercial losses have considerable weight (illegal connections, non- calculated consumptions, water abuse). There is a need to recruit the Company‟s employees to improve the efficiency of the works. It is of paramount importance the involvement of public relations, legal, exploitation and technical services. A special attention should be paid to raise the service level of the customers where an important role plays the communication and customers‟ awareness level. It is necessary to provide more information to customers.

Planned works for 2010

2010 PLANNING 2009 actual 2010 task

1.COLLECTION / mln/AMD 3 338.0 3 957.0 with actual tariff

2. NUMBER OF PAYMENTS / payment month 130 000 150 000

3.INSTALLATION OF WATER METERS / water meter 27 295 28 000

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2. OPERATION & MAINTENANCE

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G E N E R A L

In 2009 we continued implementing the activities prioritized in 2008 and approved their efficiency, such as:

. More efficient operation works due to change of operation manner applied in water supply system;

. Activities directed at increase of water supply hours;

. More efficient operation of chlorination stations refurbished with liquid chlorine equipment;

. Planned servicing of the equipment.

The implementation of above mentioned activities improved not only the quality characteristics and efficiency of the facilities but also enhanced professional skills of the personnel involved in operation works.

We shall continue the aforementioned activities in 2010.

Activities planned for 2010

. Continuous and consecutive implementation of exploitation activities, . Increase of water supply duration, . El. energy productive consumption, . Implementation of the planned service activities within the structure, . Operation of bulk and individual water meters, calculation of the volume of produced and distributed water, . Strict separation of water production and water distribution sectors within the structure. . Increacing of disinfected water volume.

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2.1 WATER PRODUCTION

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PRODUCTION DEPARTMENT 1. PRODUCED WATER QUANTITY AND POTABLE WATER LOSSES Diagrams-1,2

In 2009 the produced water quantity constituted 182 233 thousand cubic meter (by gravity – 113 233 cubic meter, mechanically – 69 000 cubic meter).

W A T E R P R O D U C T I O N 200000 180000 160000 140000 120000 100000 80000 60000 40000 20000 0 I Quart II Quart III Quart IV Quart Annual I Quart II Quart III Quart IV Quart 2009 Plan plan plan plan plan 2009 Gravity 25382 20974 28288 21476 29223 21770 30340 21006 113233 85226 Delivered thrugh pumps 18158 17912 16459 17912 17628 17913 16755 17913 69000 71650 Total 43540 38886 44747 39388 46851 39683 47095 38919 182233 156876

In 2009 drinking water actual losses constituted 85.48 which is by 2.28% more than it was envisaged by budget indicator (83.2%).

W A T E R L O S S E S 88 86 84 82 % 80 78 76 74 72 70 I Quart II Quart III Quart IV Quart Annual 2009

Carry out Plan

ALAPARS Pumping Station HATSARAT Pumping Station

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2. POTABLE WATER DISINFECTION

In 2009 76 206 kg liquid chlorine and 24 600 kg of hypochlorite pills were used in the water and wastewater systems for water disinfection and cleaning purposes.

Disinfection Material Consumption Table-1

st st st th 2009 1 quarter 2 quarter 3 quarter 4 quarter annual N Sector & subsector name Liquid Hypochlor Liquid Hypochlor Liquid Hypochlor Liquid Hypochlor Liquid Hypochlor chlorine ite pills chlorine ite pills chlorine ite pills chlorine ite pills chlorine ite pills (kg) (kg) (kg) (kg) (kg) (kg) (kg) (kg) (kg) (kg) 1 2 3 4 5 6 7 8 9 10 11 12 1 Abovyan 858 180 1 310 95 1 589 45 684 205 4 441 525 2 Byureghavan 39 36 121 6 144 0 30 8 334 50 3 Hrazdan 1 297 240 1 604 42 1 465 0 787 168 5 153 450 4 Tsakhkadzor 23 0 0 25 68 0 0 18 91 43 5 Charentsavan 72 265 316 17 399 23 128 75 915 380 6 Ijevan 0 639 0 493 0 1 019 0 520 0 2 670 7 Berd 43 183 157 71 177 0 62 0 439 254 8 Dilijan 165 240 695 60 822 30 170 270 1 852 600 9 Noyemberyan 0 238 0 37 124 68 70 7 194 350 10 Alaverdi 602 200 980 0 1 046 0 439 150 3 067 350 11 Stepanavan 32 83 127 104 115 50 77 80 351 317 12 Spitak 70 60 86 40 86 88 28 102 270 290 13 Tashir 50 140 300 37 250 15 50 158 650 350

14 Artashat 1 539 1 600 2 911 57 3 702 187 2 013 356 10 165 2200 15 Echmiadzin 1 607 3 141 2 795 125 3 590 65 1 478 1 028 9 470 4 359 16 Masis 1 001 1 770 2 006 0 2 193 0 902 520 6 102 2 290 17 Vedi 62 324 138 57 169 17 62 96 431 494 18 Ashtarak 711 325 897 220 1 244 180 490 185 3 342 910 19 Aparan 69 435 151 170 214 65 10 69 444 739 20 Artik 549 47 1 039 53 1 768 0 414 155 3 770 255 21 Talin 38 104 60 179 302 32 38 106 438 421 22 Ashotsk 0 0 0 200 0 225 0 92 0 517

23 Eghegnadzor 0 189 438 47 462 9 150 94 1 050 339 24 Vayk 20 64 245 6 296 7 89 88 650 165 25 Jermuk 78 0 83 45 82 22 75 18 318 85 26 Sisian 42 225 235 30 180 85 100 115 557 455 27 Goris 546 115 883 0 965 15 163 298 2 557 428 28 Kapan 2 486 173 3 516 241 3 926 40 1 849 729 11 776 1 183 29 Meghri 58 499 245 110 681 274 194 217 1 178 1 100 30 Sevan 95 260 240 90 666 10 134 93 1 135 453 31 Gavar 619 250 1 060 50 1 379 64 314 117 3 372 481 32 Martuni 22 154 87 119 91 98 109 86 309 457 33 Vardenis 136 157 300 118 707 41 243 106 1 386 422 34 Tchambarak 0 46 0 54 0 64 0 55 0 219 TOTAL 12929 12381 23025 2997,4 28901 2837,9 11352 6383,6 76206 24600

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In 2009 some chlorination stations were renovated and refurbished with more modern equipment facilitating the delivery of liquid chlorine, calculation of its consumption and control. This process will be continued in 2010.

3. ELECTRICITY CONSUMPTION & EXPENSES

In 2009 electricity consumption constituted 45.8 mln kVh, with the amount of AMD 1059 mln which is by 9.4 mln kVh or 17% less than actual consumption of 2008.

In 2009 the planned electricity consumption constitutes 48 079 mln kVh with AMD 1126 mln.

This means that in 2009 compared with actual budget 2.3 mln kVh (4.8%) electricity constituting AMD 67.23 mln (6%) less was consumed

Water quantity produced by pumping and electricity consumption Table-2

Water quantity produced Electricity consumption Electricity consumption N Branch name by pumping KVh/cubic meter thousand kvh/year thousand cubic meter/ year

1 2 3 4 5 1 Ashtarak 2 480 1,3 3 150 2 Aparan 2 086 0,4 821 3 Artashat 2 110 0,4 746 4 Echmiadzin 2 004 0,5 1 068 5 Gavar 11 871 0,6 7 701 6 Sevan 2 141 0,6 1 274 7 Tashir 982 0,2 150 8 Stepanavan 1 472 0,7 1 057 9 Noyemberyan 724 1,7 1 265 10 Spitak 101 0,5 51 11 Abovyan 13 626 0,3 3 799 12 Charentsavan 1 933 1,1 2 045 13 Hrazdan, Tsakhkadzor 13 751 0,7 9 862 14 Meghri 841 0,8 657 15 Ijevan 63 0,9 54 16 Masis 12 435 0,5 5 882 17 Ashotsk 376 0,5 178 Total 68 999 0,58 39 757

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Diagrams – 3,4

WATER DELIVERED THROUGH PUMPING AND CORRESPONDING ELECTICITY CONSUMPTION 69000 63000 57000 51000 45000 39000 33000 27000 21000 15000 9000 3000 I Quart II Quart III Quart IV Quart 2009Year Water 18158 16459 17628 16753 68998 El. energy 10781 9396 10065 9515 39757

ELECTRICAL CONSUMPTION KWH/m3

0,8

0,6

0,4

0,2

0 I Quart II Quart III Quart IV Quart 2009 Year El. energy 0,59 0,57 0,57 0,57 0,58

In 2009 it is planned to implement investment programs, as well as purchase up-to-date pumps and replace the old ones which will also contribute to electricity saving.

Due to optimization of the pumps‟ operating conditions, the electricity indicator used for water production by pumping has been improved by reaching 0.58 kVt/m3 in 2009 against 0.6 kVt/m3 of 2008.

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ELECTRICITY CONSUMPTION & EXPENSES IN 2005-2009 Table-3

2005 2006 2007 2008 2009 ACTUA ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL N AWSC L 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 KWH AMD KWH AMD KWH AMD KWH AMD KWH AMD 1 2 3 4 5 6 7 8 9 10 11 12 TOTAL 61 510 1 151 300 53 109 996 007 54 265 1 023 865 55 156 1 063 082 45 788 1 058 800

4. WATER METERS EQUIPMENT INSTALLATION

During 2009 in the main facilities of the Company 16 water meters were installed and 54 were repaired.

One new bulk water meter unit with necessary equipment was installed on “Sarnaghbjur-Eghegnadzor” water main operated by “Eghegnadzor” sector and out into operation. The installation of new water meter unit enabled to fully record the water produced by the sector

W A T E R M E T E R I N G

IJEVAN ASHTARAK AREA

In the inlets of some communities water meters were installed or repaired for recording and adjusting water quantities consumed by these communities. This is one of the activities to fight against water losses.

The works for recording the water quantities taken from “Nurnus” spring operated by Abovyan sector is in progress, one water meter unit has already been built and works are being carried out for building the second unit.

Studies are in progress to install water meter units in other main facilities or repair the installed one.

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2.2 WATER DISTRIBUTION

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5. REPAIRS OF DAMAGES, CAPITAL REPAIRS AND REHABILITATION OF SYSTEMS

During the reporting year daily water supply duration has been increased in average by 0.92 hour, thus if in the beginning of the year it was 12.1 hour , at the end of the year it reached 13.02 hour.

The number of customers with minimum water supply hours (less than 4 hours per day) have been reduced, thus if at the end of 2008 the number of communities enjoying more than 4 hour water supply constituted 89%, at the end of 2009 this figure was 93 %:

Along with above mentioned works we have also carried out repairing activities such as: in the trunk mains and internal networks 7073 breakdowns have been repaired, 362 linear, 368 and 208 reinforcement repairing have been made due to which visible water losses have been considerably reduced. Diagram-6

NUMBER OF REPAIRED BREAK - DOWNS 8000

7000

6000

5000

4000 NUMBER 3000

2000

1000

0 Center West South North West Annual Repaired Break Downs 2377 2474 2222 7073 Network Leaner Repair 147 182 33 362 Network Partly Repair 216 53 99 368

Distribution unit in GORIS FROLOVO WTP Water line construction

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2.3 WASTEWATER & SEWERAGE

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6. WASTEWATER COLLECTION SYSTEMS

In the wastewater systems the operation works were focused on cleaning activities, elimination of obstructions and repairing of manholes, such as about 72.0 km of sewers and 1 628 manholes were cleaned, 6 860 obstructions were eliminated, 245 manholes and 398 sewers were renovated.

Diagrams 6,7,8

M A I N S C L E A R E D

80 70 60 50 40 KM 30 20 10 0 NORTH WEST CENTER WEST SOUTH 2009 TOTAL 8,2 23,55 40,3 72,05

R E M O V A L O B S T R U C T I O N S

8000 7000 6000 5000 4000

NUMBER 3000 2000 1000 0 NORTH WEST CENTER WEST SOUTH 2009 TOTAL 2537 1708 2615 6860

R E P A I R E D W A S T E W A T E R C O L L E C T I O N S Y S T E M S

2500

2000

1500

1000 NUMBER

500

0 NORTH WEST CENTER WEST SOUTH 2009 TOTAL WASTEWATER PIPES REPAIR 44 128 226 398 MANHOLES REPAIR 10 1 1617 1628

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REPAIRED BREAKDOWNS

VARDENIS city, Charents str.

Breakdown in the sewer Repaired breakdown

ECHMIADZIN city, Charents neighborhood

Breakdown in the sewer Repaired breakdown

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7. SPECIAL WORKS DEPARTMENT

The Department was set up on June 2009 in the operations block and deals with installation of special technical facilities, their adjustment and operation, as well as discovery of water losses and their elimination from hydro technical facilities. Visits have been paid to the regional branches, information was collected for planning and implementation of forthcoming works. Painting works have been done in Kakhtsrashen 4000m 3 and Aparan 2000m3 DRRs with polymeric materials.

Kakhtsrashen DRR The Department organized and refurbished Lchashen military unit local pumping station, as well as carried out installation works. For launching Gomadzor DRR the defects of steel pipes starting from the DRR were discovered and corrected.

Correcting of defects in Gomadzor DRR

The Department carried out water measuring works, as well as activities directed at adjustment of water supply schedules and reduction of water losses. Injections with polymeric materials have been done in “Golovino” WTP filters to eliminate the water losses from the walls. In “Golovino” WTP polyethylene strips have been repaired and adjusted for raising the level of sedimentation tanks.

Injection works have been implemented in Shinararneri DRR of Kapan town. In the basement of “Frolovo” WTP of Dilijan town the newly installed pipes and electric parts of the valves were corroded due to insufficient ventilation and high level of humidity. Therefore in the main walls of basement floors metal and plastic windows were installed, thus eliminating the humidity and ensuring required level of ventilation

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Planned activities for 2 0 1 0

One of the main objectives of the Department for 2010 is to study new measuring and adjusting equipment and devices, their parameters for installing them in the Companies facilities, as well as planning the application and opartion of such equipment. The Department will continue DRR reparing activities.

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3. TECHNICAL

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3.1 TECHNICAL INVESTIGATIONS, DESIGN & MAPPING OF TECHNICAL SYSTEMS

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DURING THE YEAR 2 0 0 9 THE TECHNICAL DEPARTMENT CARRIED OUT THE FOLLOWING WORKS:

 Technical investigations, design and mapping  Audit of the capital works  Water quality control  Assets management  Quality, safety, environment  Procurement

 Transportation

TECHNICAL INVESTIGATIONS AND DESIGN

1. Water supply norms have been calculated for receiving water use permit, the map of spring locations have been developed with relevant coordinates for:

. the springs located upwards and downwards of Mantash reservoir to improve water supply to Artik town and rural settlements;

. “Kozdashen” and “Artamet” boreholes from where Argina , Shenik, Artamet, Vanand, Arevadasht villages are supplied with water.

2. Justifications were prepared for improving water and wastewater systems of 42 settlements to submit to the European Bank for Reconstruction and Development with prior evaluation of planned activities.

BERD town DEGHCAVAN village

Investigation of the water supply systems

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3. The springs of RA Aragatsotn marz Irind area have been studied and the coordinates of existing springs were clarified. Report have been prepared and submitted to the RA SCWE about the current condition of drinking and irrigation water systems fed from “Irind-Artemni” system.

4. Technical specifications have been prepared for the procurement financed by the World Bank, including:

. pipes, fittings and pipe fixtures;

. materials required for sanitary zones;

. materials necessary for renovation of the water and wastewater internal networks of residential building basements.

5. Within the framework of “Lake Sevan water level increase” project, the schematic plan of hydrotechnical structures of the AWSC CJSC service are below 1905 mark has been worked out and submitted to the RA Ministry of Urban Development with prelimenary evaluation of the investments.

6. The tariff for servicing and operation of water and wastewater internal networks of multystored residential buildings has been calculated.

7. During the reporting period the following technical investigation and design works have been implemented :

 Detailed design of water supply to Noyemberyan town from local springs ;

Field supervision over SROCAVAN-NOYEMBERYAN water line construction

 Development of general plan for new buildings of the AWSC CJSC sectors financed by the World Bank. For this purpose vertical and territorial fixing works have been carried out and the volumes of additional works have been calculated taking into account the specifications of land parcel allotted in each town. The above mentionerd works were carried out in the following towns :

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. Sevan, Vedi, Jermuk and Gavar presented in package I . Hrazdan, Charentsavan, Sisian and Agarak presented in package II

I R I N D sources system investigation

 Measures of the AWSC CJSC sector buildings and their adjacent territories have been taken for the purpose of their renovation, the plans have been developed, the volumes of the works subject to implementation have been calculated. Based on the the above mentioned works the two tender packages were prepared :

. “Dilijan” sector building . “Vayk” subsector building . “Berd” sector building . “Sevan” sector building . “Noyemberyan” subsector building . “Ashtrak” sector building . “Ashotsk” subsector building . “Artashat” subsector building . “Alaverdi” sector building . Replacement of Head Office windows:

 Measures of Sarukhan, Gandzak, and Artak pumping stations have been taken for preparing the tender package within the framework of reparing the pumping stations of the AWSC CJSC service area planned by the World Bank financing. The work volumes of the renovation works have been calculated.

Water and wastewater technical conditions have been developed.

Capital renovation works implemented by the AWSC CJSC in the w&w systems with its own funds in 2009 Table - 4

In 2009 the Company implemented capital renovation works amounting about AMD 115.57 mln for improving the reliability of W&W systems, technical conditions, reduction of water losses, as well as improvement of sanitary conditions of the settlements serviced by the Company.

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COST NAME MATERIAL thous.dram d/mm l/m 1 2 3 4 5 North-West RB

Total 12387.9 7537 1. Water network capital renovation and system PE, steel and cast 11130.97 20-300 7360 renovation including iron a) Srotsahank water main of Noyemberyan 2807 110 5230 PE b) Water main of Dilijan Getapnja street 1511,56 250 697 Cast iron 2. Capital renovation of the sewer 1256,95 150-300 177 Аsbestos cement Center-West RB Total 32801.37 12811 1. Capital renovation of water supply system and 32149.37 25-200 12715.1 PE rehabilitation of water systems, including, Water main of Suser and Nor Artik communities 5202.08 63-110 6124 PE Capital renovation of the sewer system 652.0 200 96 Аsbestos cement

South RB

PE, steel and Total 70378,0 20-300 22435 Аsbestos cement 1. Water network capital renovation, installation 69537.95 20-200 22405..2 PE, steel of pipes, including

a) Rehabilitation of Ashotavan water network 6397,3 20-150 5289 PE, steel

b) Rehabilitation of Hatsavan water network 4307.7 20-110 2370 PE

c) Rehabilitation of Agarak water network 14086.7 20-200 35752 PE

2 Capital renovation of the sewer system 839.9 300 30 Аsbestos cement

TOTAL, including 115 567.14 water supply network 112 818.29 20-300 42480.0 sewerage network 2 748.85 150-300 303

Planned activities for 2 0 1 0

Continue the studies of operating systems and intensify control over the activities implemented

by own funds.

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MAPPING OF TECHNICAL SYSTEMS

The Mapping Division carried out the following activities

. Within the framework of Company‟s Mapping Program 2008-2010 GIS works in MapInfo Professional are continued to be implemented.

. For the purpose of creating Geographic Information Systems (GIS) in the Company‟s servicing area works are organized and coordinated to make the database of the technical characteristics (parameters), etc of the W&W systems with the participation of relevant specialists of the Company.

. In the repording period works have been carried out for mapped data collection, correlation, as well as database creation for Masis, Aparan, Charentsavan towns and Deghtsut, Ahgavnatun, Voskevaz, Bjni, Lchashen, Azatamut, Berkarat, Geghanist, Berdik, Aygepat, Aygezard, Karmirgjugh and Gandzak villages water supply systems being in the service area of the Company.

A segment of Karmirgjugh community map in MapInfo format

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Karmirgjugh community map and a segement of database in MapInfo format

Map of the settlements serviced by the AWSC CJSC regional branches with new borders

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Map of RA Aragatsotn marz

. The works on collection of mapped information, creation of database, as well as coorelation with relevant water objects for Echmiatsin, Meghri and Eghegnadzor towsn are in progress.

. Mapping for the Company‟s structural subdivisions have been made for organizing waste water activities of operation department, the maps of Sisian and Vardenis towns‟ wastewater networks have been published.

. The Divison took part in publication of booklets “Annual report 2005-2008” and “Investments and Results 2004-2008” (renovation and rehabilitation works) by preparing, designing and printing the maps.

. The “Armenia GIS” program installed in the Company by “GIS Information System” LLC has been studied. The LLC was informed in writing about the revealed defects which were discussed with the specialists of the LLC.

. The mapping, technical and operation specialists of the Company‟s regional branches collected technical characteristics about the Company‟s mapped W&W systems, as well as other database information required for correlation and elaboration of recapulated database.

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. Mapping works have been carried out for the Company‟s terriotorial subdivisions including the development of the plan for refurbishment of Laboratory of Mechanics of the AWSC Training Center.

Sample of the plan for Laboratory of Mechanics

. Pumping, chlorination stations were placed on the maps of the settlements serviced by the Company with MapInfo Professional program.

Fragment of the map with placement of pumping and chlorination stations on water supply systems

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On May a presenation was organized in the Company‟s Echmiatsin Training Center on W&W systems mapping in MapInfo Professional carried out by the Division The management of the Company, mapping specialists of sectors and subsectors, heads of technical and operations departments, as well as invited specilaists from “Jinj” and “Mocrosoft” companies participated in the presentation. The works for creation of W&W systems (GIS) on cadastrial maps in MapInfo Professional program were presented, possibilities of using the mapping materials were addressed.

Presentation of mapping activities in Echmiastin Training Center

Planned activities for 2 0 1 0

The main objective of 2 0 1 0 is to continue GIS activities of the settlements serviced by the Company

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3.2 MANAGEMENT OF COMPANY’S ASSETS

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ASSETS MANAGEMENT

In 2009 the Company‟s Assets Management Division carried out mainly the following activities:

 Assets handover and acceptance

 Assets writing off preparation works

 Solution of asset problems

 Registration of assets in the State Cadastre

Vardenis town WWTP (out of operation)

Handover and Acceptance

. Handover of newly built Bjni community (Kotayk marz) water supply system to the AWSC CJSC for gratis utilisation (Order N156-² of the RA SCWE Chairman dated 27.10.2008)

. Transfer of “Goris-Kornidzor” water main to the AWSC CJSC for safe keeping (Order N09-4097 of the RA SCWE Chairman dated 27.10.2008).

. Preparation of Draft Resolution of the RA Government for sharing “Shake-Brnakot” 9.4 km length water main between the AWSC CJSC and Brankot village sent to the RA SCWE for approval of the RA Government (Order N07-5576 of the RA SCWE Chairman dated 06.02.2009). Preparation of water main separation balance sheet for splitting the property between the South RB of the AWSC and Brnakot village.

. Handover and acceptace of the pipeline serving rural communities of Masis region, including 9 valves, as well as handover and acceptance of 2 boreholes fed from Katnaghbjur springs from YervanJur and Yerevan Water and Sewarage Company (Order N14-² of the RA SCWE Chairman dated February 16, 2009).

. Handover and acceptance of Jeghegnadzor administrative building with its adjacent yard (Order N45-² of the RA SCWE Chairman dated March 28, 2007).

. Handover and acceptance act between the AWSC CJSC and WSC CJSC of the property being in the territory of “Arevik” pumping station (RA Government Resolution N1625 of September 8, 2005, the RA Gevernment Resolution N154-Ü of February 8, 2007 and Order N43-² of March 28, 2007)

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. Full handover of Gjumush-1 pumping station property to the YerevanJur CJSC (Order N 14-² of the RA SCWE Chairman dated 16.02.09).

. Handover of the property kept by the AWSC CJSC to “Sevan-Hrazdan” CJSC (N59-² of the RA SCWE Chairman dated 25.04.2007).

. Set up of the Committee for transferring Kagsi community, Kotayk marz water systems to the AWSC CJSC for gratis utilization (Letter 07-6018 of the RA SCWE Chairman dated 23. 12. 2008) Handover and acceptance procedure is in progress.

. In accordance with Order N 09-465 of the RA SCWE Chairman dated 05.02.09 for transferring vehicles GAZ-3102, GAZ-3110-101 and GAZ-311000 from PIU to the AWSC CJSC charter capital, the evaluation of above mentioned vehicles was made by the “RA Expertise Center” and draft resolution was prepared for submitting to the approval of the RA Government.

Assets writing-off activities

. The lists of AWSC CJSC Head Office and RB fixed assets subject to write-off have been prepared and submitted to the SCWE. Additional information and justifications were provided about machinery and mechanisms, high voltage cables, water meters, electric equipment, chlorination devices, copy machines and other assets.

Solution of the property related issues (fixed assets and material stock)

. Inventory of material stock available in the AWSC CJSC Head Office and 3 regional branches„ warehouses as of December 1, 2009 (Order of the AWSC CJSC General Director N64 dated 19.11.2009). Set up of Inventory Commissions, preparation of acts and submission to the Head Office.

Inventory of the Company’s central warehouse

. Preparation of the terms and conditions of the task for registering water and wastewater systems of the AWSC CJSC service area in the RA Cadastre of Immovable Property and submission to the RA SCWE.

. Adjustment of the asset lists transferred from the WSC CJSC to the AWSC CJSC.

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Registration of the assets in the State Cadastre

. Acquisition of property right certificates of the lands necessary for constructing administrative buildings for Gavar and Spitak sectors.

. Acquisition of 900 square meter of land parcel for constructing administrative buildings in Spitak.

. Acquisition of ownership certificates of Shake-Sisian springs, Brnakot, Ashotavan pumping stations, Vaghatin springs and Mukhturyan-Goris chlorination station sanitary zones.

. Acquisition of ownership certificate for a land parcel to build a water treatment plant in Vardenis town.

. Acquisition of 3 property right certificates of Gjumush-1 pumping station, pumping station inventory and registration of non recorded property in the balance sheet.

Current activities

. On October 21, 22, 23 of 2009 the employees of Assets Management Division participated in the training session on the subject “Development of assets management concept”, got familiarized with asset management problems, long term investment strategy, foreign assets management experience, as well as different assets management programs.

Property lists to be transferred to Abovyan warehouse

. Inventory of financial and accounting documents (Order of the AWSC CJSC General Director number 54 dated November 26, 2008). Preparation of the protocol and act and submission to the General Department.

. 1971-2004. Transfer of personnel files of Armavir branch (49 books) including orders, accounting books, personal cards to the General Department for safe keeping. Preparation of handover and acceptance act and letter about inconsistencies.

Planned activities for 2 0 1 0

. Registration of the AWSC CJSC property rights in the State Register.

. Inventory of the AWSC CJSC property in full (fixed assets and property), analyses and summeraization.

. Introduction of assets management software (Armenia GIS).

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3.3 WATER QUALITY CONTROL

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WATER QUALITY CONTROL

For the purpose of regulating the control over laboratory activities, a “Regulation on organizing water control” was developed and put into operation based on the Order of the Company‟s General Director. The Regulation provides clear description of laboratory functions, obligations of the staff, the relations with the subdivisions of the Company, RA Ministry of Public Health and Ministry of Nature Protection.

Joint meetings were organized with sanitary services to discuss the program of annual water quality studies. Based on the approved schedules during 2009 the water control laboratories of the Company made 57.9 thousand residual chlorine analyses, 16.9 thousand bacteriological and 1.7 thousand general and physico-chemical analyses. Regular control was exercised over wastewater quality removed into the water basin through 27 discharge pipes and wastewater of large industrial enterprises discharged into the Company‟s sewerage network. Below is presented the comparison of actual water quality analyses made in 2008 and 2009.

Comparison of actual water quality analyses made in 2008 and 2009. (thousand dram)

16,9 1,7 57,9 11,8 40,2

0,45

2008 2009 2008 2009 2008 2009

Residual chlorine Microbiological Generalized and physico-chemical

Due to failure of chlorine gas supply during several months of the reporting year, chloride lime was used in the main facilities and daily regulating reservoirs for water disinfection purposes. The disinfection was made in approximate manner due to tack of accurate dosing equipment, hence such disinfection was not always effective.

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Comparison of drinking water disinfection efficiency/1/ and consistency with residual chlorine norms /2/ per year (%)

90,3 91,2 99,1 98,3 98,6 82,5 80,1 96,8 78,3 96,4

2005 2006 2007 2008 2009 2005 2006 2007 2008 2009

1 2

Dynamics of reducing insufficient results based on water quality microbiological analyses (%)

6,2 6,1

3,8 3,4 Notwithstanding the disinfection efficiency decrease during the year, outbreak of water 1,4 born diseases was not recorded. Due to water supply systems‟ renovation and reconstruction programs, as well as breakdown repairing and prevention activities 2005 2006 2007 2008 2009 in 2009 the water quality was improved.

During spring and summer water supply main facilities, some sections of water supply network, daily regulating reservoirs, the treatment plant facilities were washed and disinfected. The disinfection activities of DRRs were protocoled. In general 262 reservoirs with 203.6 thousand m3 were disinfected out of which 100 with 74.3 thousand m3 of North-West RB, 89 with 72.4 thousand m3 of Center -West RB and 73 with 56.8 thousand m3 of South RB .

280 employees having direct contact with drinking water have undergone regular medical check up.

In Echmiatsin Training Center a session was conducted on the subject “Creation of internal system for controlling the accuracy of data received as a result of analytical works”.

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A Manual on “Organization of control over the water production quality in the water treatment plants” has been worked out and introduced in Dilijan water treatment plants. The purpose of this Manual is to ensure permanent control over the technological indicators of certain treatment operations.

Echmiatstin Training Center

Training session on “Creation of internal system for Laboratory work controlling the accuracy of data received as a result of analytical works”

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NATURE PROTECTION REPORTS

Qquarterly and annual reports on nature protection and utilization fees were submitted to the Environment Division of the RA Nature Protection Ministry. Below is presented the comparison of nature protection and utilization fees according to the years

The increase of nature protection fee in 2009 as compared with 2008 is explained by increase of hazordous substances discharge volumes and excess of norms due to which additional AMD 1.8 mln was paid under Coefficient “3” (in regard to households, water discharge volumes have been increased from 9.7 thousand m3 to 10.0 thousand m3).

In 2009 nature utilization fees constitutes AMD 20.6 mln and nature protection fees - AMD 32.9 mln

Nature protection and utilization fees per regional branch in 2009 Table - 4

Calculated Fee for Natural Resource Utilization Calculated Ecological Fee (thous. AMD) (thous. AMD) Sector Underground Underground By index By Index Surface Water Water by TOTAL TOTAL Water §1¦ §3¦ Index §3¦ “North-West” Regional Branch Abovyan 0.0 1 658.0 0.0 1 658.0 0.0 0.0 0.0 Hrazdan 47.2 1 741.2 0.0 1 788.4 2 517.2 158.9 2 676.1 Charentsavan 0.0 1 130.8 0.0 1 130.8 0.0 0.0 0.0 Ijevan 63.2 3 32.4 0.0 395.6 1 750.0 159.5 1 909.5 Dilijan 142.0 8.0 0.0 150.0 558.4 167.2 725.6 Alaverdi 0.0 985.6 0.0 985.6 1 026.8 133.0 1 159.8 Atepanavan 118.0 1 010.8 0.0 1 128.8 2 982.4 15.4 2 997.8 Total 370.4 6 866.8 0.0 7237.2 8 834.8 634.0 9 468.8 “Center-West” Regional Branch Artashat 0.0 1 387.6 0.0 1 387.6 892.0 690.5 1 582.5 Echmiatsin 0.0 1 702.8 92.0 1 794.8 2 720.8 1 419.6 4 140.4 Masis 0.0 768.8 0.0 768.8 2 030.0 339.0 2 369.0 Vedi 0.0 728.8 0.0 728.8 1 743.2 283.1 2 026.3 Ashtarak 0.0 1 208.0 0.0 1 208.0 1 330.0 56.9 1 386.9 Artik 0.0 796.0 118.4 914.4 1 426.8 766.9 2 193.7 Total 0.0 6 592.0 210.4 6 802.4 10 142.8 3 556.0 13 698.8 “South” Regional Branch Sisian 0.0 830.8 0.0 830.8 689.6 694.5 1 384.1 Goris 0.0 778.8 0.0 778.8 537.6 467.0 1 004.6 Kapan 540.0 518.0 0.0 1 058.0 2 099.6 321.9 2 421.5 Egheghnadzor 0.0 757.6 0.0 757.6 808.0 58.0 866.0 Sevan 0.0 1053.6 0.0 1 053.6 1 268.8 0.0 1 268.8 Gavar 0.0 2187.2 0.0 2 187.2 2 088.8 820.5 2 909.3 Total 540.0 6126.0 0.0 6 666.0 7 492.4 2 361.9 9 854.3 Grand total 910.4 19551.6 210.4 20 672.4 26 369.6 6 551.9 32 921.5

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Compariosn of nature utilization and protection fees according to the years (mln AMD)

Nature utilization fee Nature protection fee

20,5 20,6 20,6 19,6 31,1 32,9 15,2 26,3 27,7 19,6

2005 2006 2007 2008 2009 2005 2006 2007 2008 2009

Works planned for 2010

. Set up and equip 17 laboratories for making bacteriological analyses.

. Organize certification of laboratory assistants and conduct trainings for selected personnel to work in newely refurbished laboratories.

. Ensure the organization of sampling process and fulfillment of agreed water control schedules approved by sanitary services.

. Toughen water quality control process.

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3.4 QUALITY, SAFETY & ENVIRONMENT

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QUALITY, SAFETY, ENVIROMENT DEPARTMENT

Activities carried out in 2009

The activities carried out by Quality & Environment Division:

In 2009 considerable works were carried out to introduce efficient quality control system in the Company.

Based on the Company‟s goals and objectives, as well as operations and requirements implemented by the Company‟s General Director, 70 regulations, procedures and instructions have been developed and put into operation.

Special importance was attached to the following:

. Regulations developed for the activities of the Company‟s structural subdivisions; . Contract conclusion procedure; . Capital construction procedure and maintenance of relevant register; . Procedure of providing technical conditions to be connected to the W&W systems; . Internal disciplinary regulation; . Regulation of receiving proposals and recommendations from the Company‟s employees

and their discussion, regulation of the commission set up for above mentioned purposes.

Sixty job descriptions were worked out and agreed with Head Office employees. 130 regulations, procedures, Together with the employees of Safety and Work Protection Division of the instructions, Deparment visits were paid to the hydro power structures operated by the job descriptions Company‟s regional branches

The fulfillment of safety and work protection requirements by the operating staff, as well as the quality of meeting mainteance and operation instructions were checked and relevant instructions were provided, reports on the visits were prepared and submitted to the Company‟s management, the Directors of regional branches were informed about the discovered defects to control their elimination.

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Discovered defects Repaired defects

Labels were prepared and fixed for valve units, control panels, pumps, equipment and devices ²ñÓ³Ý³·ñ³Í in “Hatsarat”, “Makravan” pumping stations, “Karbi” boreholes, “Geghi”, “Frolovo” and Ã»ñáõÃÛáõÝÝ “Golovino” WTPs, “Dzknget” chlorination station, “Kakhtsrashen” DRR. »ñ

G A V A R

L A B E L I N G

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Safety and Work protection activities

Information was prepared about the adherence and application of the safety requirements in 68 dangerous production units and submitted to the “Technical Safety National Center” State Non Profit Organization.

Set of tools, equipment, warning and alarm devices were purchased for chlorine transporting “Kamaz“ trucks. By the order of the Company the “Technical Safety National Center” SNPO carried out technical safety expertise of “Kamaz“ trucks and truck cranes. Training was orgnized for the drivers and relevant licences were provided.

The need and appropriate amounts for purchasing individual protection means, special overalls and boots for the employees of structural subdivision were calculated. These estimations were included in the Company‟s expenses to be planned for 2010 budget.

Works planned by the QSI deaprtment for 2010

. Continuation of activities directed at development of procedures, their approval and operation based on regulations of the Compan‟y subdivisions;

. Control over fuilfillment of the Company‟s General Director orders, decisions, instructions;

. Participation in organization and implementation of environment improvement activities planned in the Company;

. Purchase of summer, winter uniforms, boots for the personnel operating W&W systems and their distribution among the branches;

. Study of dangerous production units, implementation of technical safety expertise, preparation of technical safety certificates required by the RA legislation;

. Organization and implementation of necessary activities, training sessions for meeting safety and work protection rules to prevent risks in technically dangerous objects.

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3.5 COMPANY’S PROCUREMENT

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COMPANY’S PROCUREMENT

Information about Procurement within AWSC Budget, Q I, Year 2010 Table – 5

PROCUREMENT AMMOUNT AMD

1. Car services, petrol diesel and gas 199 752 054 2. Pipes, fittings, valves and other 46 193 560

3. Water chlorination 18 896 752 4. Office supply, IT and cellular phones 5 935 659 5. Safety devices 847 720 6. Equipment for works 16 376 504

7. Other works/ goods 20 262 981

8. Echmiatsin Training Center 446 720

9. Laboratories 21 715 000 10. Publications and TV broadcasting. 25 826 920

TOTAL ALLOCATED 356 253 870

TOTAL REQUESTED 428 455 116

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3.6 TRANSPORT

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TRANSPORT

 Gas filling system: In 2009 transport facilities equipped with gas bottles and operating with natural gas saved AMD 14 000 000 /fourteen million/ due to difference of natural gas and petrol prices

 Replenishment: The AWSC CJSC transport fleet was replenished with 8 new CASE- 580SR CASE-580R excavators which with their technical and functional parameters exceed “Amkodor” excavators and have large capacities.

CASE-580 excavator in the Company’s warehouse Testing of CASE-580 excavator

 The Head Office Transport Division examined the operation of CASE-580SR excavators and revealed that after 200-300 hours of operation the rear tires became defective. The supplier was informed about the discovered defects. The suppler and representatives of “GOOD YEAR” company studied the case as a result of which the rear tires of the excavator were replaced with new ones.  A contract was signed with the official representative of CNH ITALIA S.p.A. factory in Armenia “EV Trans” company for technical maintenance and repairing of CASE-580SR excavators.

The representative of “GOOD YEAR” company studies rear tires of CASE-580SR excavators

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CASE excavators were equipped with “Lokator” system enabling control of the excavators` operation in “direct connection” regime. With the help of new system it will be possible to raise operation efficiency of the machinery and mechanisms, as well as the discipline of operating staff.

At the end of 2009 the fleet of the AWSC CJSC was replenished with 43 Vaz 2121 and 21 Uaz 390945 vehicles.

New Uaz 390945 vehicles New Vaz 21214 vehicles

Works planned for 2010

. In 2010 it is planned to equip all the vehicles and machinery with “Lokator” system.

. In 2010 it is envisaged to replenish the fleet of the Company with 7 Uaz 390945, 4 cesspool machines and 3 Kamaz trucks equipped with crane manipulators. Such a replenishment of the Company‟s fleet will allow not renting passenger vehicles and trucks.

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4. ADMINISTRATION

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4.1 FINANCE & ACCOUNT

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A C C O U N T I N G

In 2009 (hereinafter the reporting period) the maintenance of the Company’s accounting system continued to be improved. In is worth mentioning that after making changes in the Company’s structure under which Company continued implementing its activities with 3 regional branches and Head office a lot off efforts wеre made to incorporate these changers in the accounting system. These works are still in progress to be reflected in the financial statements of the reporting period. The Company’s accounting was maintained based on the RA Accounting standards applying Soft Master software application. Based on the requirements set forth in Resolution N597-Ü, 30.11.07 of the RA Public Services Regulatory Commission a number of issues was arisen in relation to the consolidated balance sheet and financial statements. For the purpose of solving these issues the employees of the Company’s Accounting Division carried out joint works with the employees of the Company servicing the accounting software.

With participation of invited specialists a series of discussions were organized (including the Audit Company making the financial audit of the AWSC CJSC) As a result, all the issues were solved within the framework of the RA legislation.

Taking into account the Company‟s assets depreciation, during the reporting period the management decided to make evaluation of losses from depreciation through relevant specialized organization (standard 36 “Depreciation of Assets”). As a result of these activities, the assets of the AWSC CJSC amounting AMD 3.32 billion were depreciated. These figures were included in the Company‟s financial statements.

During the reporting period the Company’s accounting subdivisions were actively involved in the works specified by the “Management improvement and capacity development” project under the ADB loan program and some documents were developed with the advisers to improve the maintenance of the Company’s accounting system, including the accounting strategy, accounting policy with new version. In 2010 based on the above mentioned documents it is planned to adopt new internal legal acts.

The employees of Company’s Financial Division participated in the workshops organized by the Tax authorities of the State Incomes Committee at the RA Government relating to the amendments and additions to the taxation laws. The reports to the taxation authorities and tax liabilities were fulfilled in due time. It should be mentioned that the total amount of taxes and compulsory payments paid to the RA state budget constituted AMD 991.4 mln. In the reporting period the amount of subsidy provided by the RA state budget constituted AMD 863.36.

ANNUAL REPORT 2 0 0 9

F I N A N C E S

During the reporting period the Finance Division successfully carried out the coordination works for discussing the applications prepared for raising the W&W service tariffs. Due to implemented works from April 1, 2009 new tariff was put into operation with 28.4% growth in comparison with the previous tariff. However, it should be mentioned that new tariffs cannot be considered sufficient to cover the Company‟s operation and maintenance costs. It is therefore envisaged to prepare appropriate applications for gradual increase of acting tariff.

Given to the fact that the new tariff was enacted later than it was planned (should be enacted from January 1, 2009), as well as the fact that the Company had financial difficulties from the beginning of 2009, the Company continued the cooperation with “Ardshininvestbank” and “VTB _Armenia” for receiving short term loans in the form of overdrafts. As a result, the Company was obliged to pay AMD 28.8 mln interest for provided overdrafts.

The employee of the Company‟s financial subdivisions updated the cooperation contracts with commercial banks collecting the payments for provided W&W services aiming to raise collection efficiency. Owing to such activities a centralized system was introduced speeding up the entry of collected amounts into the Company‟s accounts by 1-2 days.

At the same time contracts were signed with 8 new companies (including 6 commercial banks and 2 companies with ATMs) contributing to the convenience of the customers to make payments, as well as increasing the volume of payments.

Below is presented a comparative table on main directions of the Company‟s expenses in 2005-2009 and a diagram showing changes of these expenses over the years.

Amounts spent by the Head Office in 2005-2009 Table -6

AMOUNTS SPENT BY THE COMPANY Including P E R I O D Payments from subsidies From own revenue TOTAL

thousand dram % thousand dram % 1 2 3 4 5 6 2005 3 485 543 1 366 490 39,2% 2 119 053 60,8%

2006 3 755 376 1 381 260 36,8% 2 374 116 63,2%

2007 3 967 189 1 381 260 34,8% 2 585 929 65,2%

2008 4 300 571 1 213 530 28,2% 3 087 041 71,8% 2009 4 384 346 863 360 19.7% 3 520 986 80.3%

ANNUAL REPORT 2 0 0 9

AWSC CJSC CAPITAL EXPENDITURE Table-7

mln dram

Capital expenditure 2005 2006 2007 2008 2009 (VAT inclusive)

1 2 3 4 5 6

mln dram 1151.0 996.1 1023.9 1063.1 1058.8 Electricity mln kVt/hour 61,53 53,12 54,21 55,16 45.78

Fuel 173.3 184.5 140.3 205.0 186.9

Material expenses for current repairs (without fuel) 220.5 171.9 150.4 143.7 141.9 Chlorine, Chloride lime and reagent expenses 34.6 52.1 50.7 53.5 61.0 Purchased water and sewerage payments 50.7 55.9 58.9 78.2 67.5 Salary, including 1081.3 1180.9 1247.7 1439.4 1503.2 Average number of employees (person) 2129 1861 1789 1803 1844 Average monthly salary (thousand dram) 41,9 52,6 57,8 60,8 67.9 Social payments 216.2 255.5 257.4 275.8 285.1 VAT, other taxes and mandatory payments 162.9 171.2 200.2 202.8 518.3 Capital construction expenses from own funds 137.1 177.1 272.4 297.4 200.2

Directions of the AWSC main expenses Diagram-9

4 000 000

3 520 986 3 500 000 ì×³ñáõÙ Ý»ñ ëáõµëÇ ¹Ç³ÛÇó ê»÷³Ï³Ý Ñ³ëáõÛÃÇ Ñ³ßíÇÝ 3 087 041 3 000 000 2 585 929 2 500 000 2 374 116 2 119 053 2 000 000

1 381 260 1 381 260 1 500 000 1 366 490 1 213 530

1 000 000 863 360

500 000

2005 2006 2007 2008 2009

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During the reporting period the cooperation of the AWSC CJSC with “VTB-Armenia Bank” continued by providing financial assistance (through drawing of lots) to award good customers making regular payments.

The employee of Finance Division prepared applications and justifications, made relevant calculations for the programs to be financed in 2010 from the RA state budget. In 2010 the subsidy to be provided to the Company will constitute AMD 811.59 which is by about AMD 52 mln less from the subsidy allocated in 2009 and

included in the calculations of acting tariff.

For transparent and effective management of the Company‟s 2010 activities, the Finance Division successfully organized the development of financial plan (incomes and expenditure and financial flows) and at the end of 2009submitted to the discussion of the Company‟s Board of Directors. The financial plan has been worked about based on 2009 actual results and realistic possibilities to make improvements.

Works planned for 2010

. Carry out necessary activities to make financial statements of the Company in conformity with international accounting standards based on the RA law on Accounting.

. Continue organaizing traninig sessions and workshops for the employees of the Company‟s Head Office and branches.

. Continue cooperation with all Company‟s subdvisions for average and long-term planning of the Company‟s activities to prepare relevant calculations, analyses and documents for possible increase of the tariff against water and wastewater services provided by the Company.

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C O S T C O N T R O L & I N T E R N A L A U D I T

In 2009 the AWSC CJSC Cost Control and Internal Audit Department carried out the following works:

The main objectives of Cost Control and Internal Audit Department are as follows:

. More efficient cost control based on the financial plan worked out for the Company‟s regional branches and Head Office;

. Ensuring business calculations and saving regime in the Company;

. Implementation of internal audit activities in the company.

In 2009 the Department implemented the following works: . Control has been exercised over the expenses per budget articles , accounting data has been compared with budget articles of expenses, analyses have been made and relevant conclusions and proposal submitted.

. Required document circulation and target usage of finances of capital repairing have been controlled and studied and respective conclusions have been submitted.

. The authenticity of payables in the regional branches and their repayment process, as well as the justification of new payable debts have been controlled and studied.

. The use of salary fund has been controlled based on the Company‟s budget, the fulfillment of requirements of the General Director Order number ²-452 of 19.12.2007 by the regional branches has been regularly checked comparing them with presented salary calculations and staff list. In case of mismatches the regional directors have been informed in writing.

. Control has been exercised over the process of selling the water meters obtained under the WB project, as well as the movements of revolving fund accumulated from their sale.

. The procurement process of Head Office has been controlled based on the Company‟s budget

. Telecommunication (stationary and cellular), transport facilities maintenance and operation expenses have been controlled and analyzed per individual telephone and vehicles plate numbers.

. Control and analyses of monthly statistic reports (Form 2, capital construction) submitted by the Head Office and regional branches have been made which were summarized and submitted to the National Statistical Service of the RA.

ANNUAL REPORT 2 0 0 9

Works planned for 2010

. Demand and study of weekly and monthly information on cash flows for strengthening the control over more effective, target and economical use of expenses.

. Monthly study and control over the fulfillment of the requirements the Company‟s General Director order number ²- 277 dated 16.12.2008.

. Internal audit activities in the Company‟s Head Office and regional branches.

. Regular control over document circulation and finances necessary for capital repairing works made in the Company.

. Intensification of visits to the regional branches.

. Improvement of the Company‟s budget structure through analysis of planned and made expenses.

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4.2 HUMAN RESOURCES

ANNUAL REPORT 2 0 0 9

THE FOLLOWING ACTIVITIES WERE IMPLEMENTED BY THE HUMAN RESOURCES DEPARTMENT IN 2 0 0 9

HR POLICY & ACCOUNT DIVISION

. In the beginning of 2009 new “HR policy and account” division was established in HR department which intended to implement a detailed development of staffing policy and its consistency to the Company’s strategy.

. Water production was separated from water distribution and for this aim corresponding changes were made in the Company’s structure. The Production department have been established which is operating in the Company’s regional branches in the form of production units. The activities of latter are mainly directed at ensuring the uninterrupted operation works of all main facilities in sectors and subsectors.

. The activity of “North East” branch was terminated. The service area of the Company has been distributed among three regional branches. The following change is intended to improve the management and operational level and to raise the work efficiency by reducing management expenses.

. The tariff of water supply and wastewater services was increased in 2009 by which the salary increase was planned. However, as a result of financial and economic crisis it didn’t give the expected results. There was no staff reduction either.

NUMBER OF EMPLOYEES OF AWSC Diagram-10

2 150 2 100 2 098 2 050 2 000 Average quantity 1 950 1 900 1 850 1 830 1 800 1 844 1 750 1 787 1 798 1 700 1 650 1 600 2005 2006 2007 2008 2009

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. The Company’s structure and staff list for the year 2010 was developed as result of joint discussions with regional and functional subdivisions. The main changes in HR policy were directed at redistribution of workforce from commercial to operational.

. A number of regulations on the Company’s functions, subdivisions, internal normative documents and passport positions were developed with Quality Safety Environment (QSE) department.

. All mandatory reports were submitted to state bodies as well as analytical, accounting and prediction works were carried out for 2010 in compliance with RA Legislation.

. Cooperation with “Unibank” CJSC has started for improving the salary payment conditions of the employees. The employees of the Company have the opportunity to make use of the credit package at triple rate of monthly salary.

AVERAGE SALARY OF EMPLOYEES OF AWSC Diagram-10

70 000

65 000 67 500 65 500 60 000

55 000 57 700

50 000 52 600

45 000 41 800

40 000 2005 2006 2007 2008 2009

Average salary

. Summer holidays of the Company’s employees children, football competition and other holiday events were organized jointly with Trade Union.

Summarized Indicators a/ Increase of average salary constituted 5.74 % b/ 98% of employees made use of vacation c/19 training programs with 304 participants were organized

ANNUAL REPORT 2 0 0 9

Works planned for 2010

For the second stage of implementation of management contract in HR sphere was already presented in the summer 2008. In the second stage the works will mainly have continuous nature. The activities in the below-mentioned sphere will be more expanded:

. Process analysis, effeciency rasie . Ongoing tainings, profssional growth . Enhancement of corporate culture, organization of social life

TRAINING AND DEVELOPMENT DIVISION.

. During 2009 the Training Center organized 19 trainings for the Company’s employees. 304 participants out of 369 invited took part in the trainings organized in the frameworks of different projects.

. During the whole year for the aim of the training and development of the employees the cooperation with similar company’s and corresponding faculties of higher education institutes had an ongoing character. Particularly the educational practice of the students studying in Yerevan State University of Architecture and Construction and Armenian State Agrarian University was organized in Training and Attestation Center as well as in other subdivisions of the Company.

. The training and development was organized by “Jinj” Ltd within the frameworks of the programs organized by the Asian Development Bank as well as by “Crisis Management State Academy” state non-profit and other organizations.

Below are presented the activities carried out by training and development division during 2009

ANNUAL REPORT 2 0 0 9

Training of Personnel Table-8

Number of Number of N Program name participants absentees

1 2 3 4 1 Inventory of customers base 19 0 Establishment of inner system for the monitoring of precise results of 2 8 0 water analysis

3 Activities for increasing efficiency of water supply system operation 23 1

4 Water supply waste water removal and engineering investigation 2 0

Operation, technical maintenance and technical safety of Italian CASE- 5 9 0 580 Super R excavators

6 Personnel records management and labor code 10 0 Assembling and operation of Italian CASE-580 Super R excavator’s 7 7 2 hydro hammer Correct operation and requirements of technical safety of the vehicles 8 100 0 operating with compressed natural gas

9 Educational training 7 0 Development of concept paper directives on “AWS” CJSC asset 10 2 0 management

Monitoring of further water quality regarding the management AWS 11 5 0 CJSC new structure

12 Critical management 1 0

13 Hydraulic calculation of pipeline 36 28

14 Water supply and wastewater 22 0 Assets management in the companies providing water supply and 15 6 0 waste water services

16 Water supply and wastewater 15 0

17 Critical management 1 1

18 Documentation of material stock in the Company’s storehouse 11 3

Structure of water supply system, the scientific conditions of efficient 19 30 30 operation and discussions of the previous training topics

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TRAINING COURSES IN ECHMIADZIN TRAINING AND ATTESTATION CENTER

Training of fifth year students of Agrarian university

Training for the operation of water supply system Training of Assets division employees

Trainings of financiers and storemen

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Activities implemented by the Trade Union of AWSC CJSC during 2009

The Trade Union carried out daily works directed at improvement of working conditions as well as material welfare of the employees and their families through the ongoing cooperation with the company and its branches, extending the founded traditions during 2009. These activities considerably contributed to the improvement of performance indicators, as well as moral and physiological atmosphere of the Company.

Like previous years an important precondition of the work is the organization of employees sport and cultural entertainment. A number of events were organized for celebrating the national holidays. A special importance was attached to the events organized for Women Day, Christmas and New Year holidays. The activities directed at solving the social issues of the employees had an ongoing character during the year.

The Company provided financial and material support to the family members of 20 employees, who have passed accidents or are in need. Theatrical and concert mass viewing was also organized.

The football team of the Company often participated in competitions organized in the country.

Inter-system football competition organized by the initiative of the General Manager of the Company Mr. Lorin became traditional and along with it a badminton competition was also organized in September. The competition was rather strong and the participants as well as the employees of the Company enjoyed it. Separate players were awarded with prizes defined by the Trade Union.

ANNUAL REPORT 2 0 0 9

This year the summer rest of the structures employees „schoolchildren was organized in Vahagnadzor Gugarq camp, where the 50 children of sectors and subsectors employees with comparatively less remuneration of the Company were involved.

Each year for stimulation of educational process during academic year, stationeries of about AMD 900 thousand are bought and distributed between the schoolchildren of the same contingent.

Vahagnadzor GUGARQ camp

During the year the Trade Union had its participation in solving number disagreements aroused in the Company.

In 2009 total amount of AMD 14 881 377 thousand has been accrued to the account of Trade Union.

Activities planned for 2010

On the basis of the experience the founded traditions will be continued and expanded during 2010, paying more attention to the rest and education of the employees of the structure and their children.

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4.3 LEGAL & INSURANCE

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2009 ANNUAL RESULTS OF THE LEGAL AND INSURANCE DEPARTMENT

PAYMENT OF RECEIVABLES

Due to the activities of AWSC CJSC legal services AMD 122 481.8 of accumulated receivables has been collected for the Company‟s water supply and waste water removal services from total claim amount of AMD 1 183 615.8 and AMD 519 024. 1 satisfied by court judgments. The judgments of compulsory enforcement passed in favor of the Company as a creditor by Judicial Act Compulsory Enforcement Service is in process.

INSURANCE

Transport facilities and construction machinery of the Company has been insured against the accidents and damages caused by the third parties.

REPRESENTATION IN THE COURTS

The lawyers of Legal Division during 2009 participated in numerous legal cases defending the interests of the Company the overwhelming majority of which were labor disputes, claims on compensation of losses, as well as appeals against the activities of state authorities.

2009 Quarterly Data Comparison Diagram -12

Submitted claim price Paid claim price 600 000 000 517 469 500

500 000 000

400 000 000

271 352 800 293 193 600

300 000 000 AMD dram AMD 201 714 400 176 156 700 200 000 000 123 230 200 101 599 900 100 000 000

17 922 800 0 I quarter II quarter III quarter IV quarter

ANNUAL REPORT 2 0 0 9

The indicators of the diagram show that the Legal Department of the Company was actively working towards confiscating the debts (including bad debts) of the Customers with legal proceedings, which contributed to increase of collection indicators in the Branches, as the customers acknowledged that if they will not pay on time for the consumed W&W services, as well as for the old debts, the Company will be forced to collect the debts through legal proceedings.

2008-2009 Data Comparison Diagram -13

quantity 2008 quantity 2009

8000 7715

7000

5946 6000

5000

4000 3818

3000 2694

2000 1466 1581 1141 1091 1000 588 379 333 331 380 87 0 Claimes Satisfied claims Pending cases Refused claims Claims Suspended Finished submitted to the submitted to the claims proceedings court law inforcement bodies

Activities to be implemented during 2010

. Coordination of the branch lawyers activities, . Control over fulfillment of insurance contracts, . Evaluation of legal activities of branches, . Legal expertise of new contracts, . Editing of contracts, internal orders, powers of attorney, regulations and other documents, . Legal consultations to the Manager within the framework of Management Contract.

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5. PROJECTS

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5.1 W B

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Realization of SCHEDULED PROJECTS under MWWP Fund

MUNICIPAL WATER SUPPLY AND WASTE WATER PROJECT II FUNDED BY THE WORLD BANK

The additional financing of Municipal Water Supply and Waste Water Project II would support the scaling up of the ongoing program of water system rehabilitation and improvements, including extension of the ongoing management contract. The proposed additional financing helps to enhance the sustainability, impact and development effectiveness of the ongoing project, maximizes its development outcomes as well as continues with the institutional and financial capacity building of AWSC.

During the reporting year the following procurements were on place in the frame of the Project, as follows:

PROCUREMENT Table A

Contract value Contract number Contract description Implemented /USD/ works /USD/ 1 2 3 4 Procurement of water meter chambers - MWWP II-C2.5/2-05 10 000 pcs 819,000.00 400, 500.00

MWWP II-B1.3/2-03 Procurement of Pickup Vehicles -28 pcs 445,200.00 333,900.00 Procurement of Cesspool Emptier - 4 pcs MWWP II-B1.2/2-02 and Crane Manipulator trucks -3 pcs 620,870.00 - MWWP II-B1.4/2-04 Procurement of vehicles -43 pcs 516,783.19 530,201.69 MWWP II-B1.1/2-01 Procurement of Excavators 894,969.67 Total 1,264,601.7

CONSULTING SERVICES Table B

Contract number Contract description Contract value EUR

1 2 3

Preparation of Feasibility Studies and Detailed Engineering Design for Water MWWP II-C2.12/3-01 361, 983.96 Supply and Wastewater Collection/Discharge for Hrazdan Town

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5.2 A D B

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“Water Supply and Sanitation (Sector) Project” financed by Asian Development Bank”

Water Supply and Sanitation Sector Project comprises two components: municipal infrastructure rehabilitation and improvement (Component A), and management improvement and capacity development (Component B). The output of the first component is rehabilitated, replaced, and expended water supply and sewerage systems in project towns and villages. The outputs of the second component are (i) improved water services in project towns and villages; (ii) strengthened AWSC and institutionalized project villages not covered by AWSC; and (iii) improved community management skills.

For municipal infrastructure rehabilitation and improvement the selected subprojects are in various stages of engineering design, bidding process, and construction. For management improvement and capacity development, AWSC has initiated several activities such as training of Technical and Human resources staff, improving the financial management and asset management systems, and increasing public awareness.

Below are presented few images from the annual activities.

Qarashamb – Construction of DDR Pablic hearings

Artik (Mantash) Artashat region – Pipe laying

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Below mentioned table summarizes the physical implementation of civil contracts for year 2009 as follows: Implementation of Civil Contracts in 2 0 0 9 Table-9

Actually paid Contract Implemented works /USD/ Contract Number Contract Name value /USD/ works/USD/ as of 31.12.2009 1 2 3 4 5 Civil Works L2363 NCB 1-01 Improvement of Goris WS System 692493,8 573280,12 559594,61 L2363 ICB 1-02 Improvement of Artik WS System 1251288,9 989301,04 969009,71 L2363 ICB 1-03 Improvement of Echmiatsin WS System 973050,5 716915,43 711079,64 L2363 NCB 1-04 Improvement of Talin WS System 293259,8 235546,25 236720,65 L2363 ICB 1-05 Improvement of Surenavan, Armash, Eraskh WS syst 1206932,0 1016761,5 997639,31 L2363 NCB 1-06 Improvement of Artashat region villages WS System 931251,6 882341,83 851515,43 L2363 NCB 1-07/1 Improvement of Vedi WS System 356582,3 358536,44 338283,58 Improvement of Vedi-Ararat region 546898,4 L2363 NCB 1-07/2 Taperakan,Ginevet,NorUghi,Vanashen,Urtsadzor, 526284,13 501283,42 Dashatqar WS System Improvement of Masis region Getapnya, Dashtavan, 889449,5 L2363 NCB 1-08/1 672710,36 660360,09 Darakert, Norabats WS System Improvement of Masis region Nor Kyurin, Marmarashen 846819,2 L2363 NCB 1-08/2 673860,1 660639,04 WS System Improvement of Masis region Ghukasavan, Geghanist, 893414,4 L2363 NCB 1-08/3 753316,93 716894,57 Khachpar WS System L2363 NCB 1-08/4 Improvement of Ayntap WS System 790964,9 605075,48 581467,43 Construction for Masis area Norabats DRRs, Pump 1102408,5 L2363 ICB 1-08/5 403403,13 466594,40 Station and I segment of Norabats - Ghukasavan WM Improvement of Masis region Ghukasavan, Geghanist L2363 NCB 1-08/6 693034,1 553435,36 525844,9 WS System L2363 NCB 1-09/1 Improvement of Sevan WS System 561588,3 588671,88 558564,87 Improvement of Sevan region Hajravanq, L2363 NCB 1-09/2 944861,5 235567,93 318279,12 Berdkunq and Lchap villages WS System L2363 NCB 1-10/1 Improvement of Echmiatsin and Voskevaz vil.WS 504670,5 517013,09 492196,18 Improvement of Oshakan and Voskehat villages L2363 NCB 1-10/2 492639,7 159819,07 194499,76 WS System L2363 ICB 1-11 Improvement of Abovyan WS System 2864004,4 988556,39 1069109,15

L2363 ICB 1-12 Improvement of 10 vil-s of Aparan area WS system 1311427,9 - 196714,19 L2363 NCB 1-13 Improvement of Berd WS system 804397,8 139366,04 216636,59 Improvement of Agarak and Khachevan villages 595696,2 L2363 NCB 1-18 - 80418,98 WS System L2363 NCB 1-20 Improvement of Sisian Town WWS systems 807009,0 - - L2363 ICB 1-24 Improvement of Artashat village WS System 941925,0 933168,21 885265,07 Procurement of Goods L2363-ICB-2-05 Procurement of Excavators 1 135 902,65 938 560,00 L2363-DC-2-09 Office Equipment 635,12 630,00 Insurance 12 067,78 12 360,00 L2363-DC-2-08 Furniture 1 891,49 1 930,00 Consulting Services Engineering Design, Supervision and Management WSSP-07/4-01 2 185 564,67 1 428 509,51 Improvement Services TOTAL 12 522 307.1 15 170 600.2

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Environmental and Social Safeguards

In parallel with the designing works were also prepared the Initial Environmental Examination (IEE) and Environmental Management Plans (EMP) for all the subprojects. The subjected EMPs were provided to all the Contractors who were obliged to apply and follow all the mitigation and safety measures.

Moreover, periodically were organized the information meetings regarding the implementation of the mitigation and safety measures for Implementing organizations and technical supervisors. During the reporting year many field visits were conducted by the Environmental specialist to all subproject sites to reveal the compliance with the EMP and notify the Contractors about the deviations. A range of activities on public notification and participation were organized in the urban and rural communities of the subprojects which objective is to discuss the detailed design with the public and record the concerns and opinions of civil society, self-governing and state bodies.

MAIN OBJECTIVES FOR 2010

Nine civil works contracts in the frame of the Project are planned to be implemented in 2010:

Contract Number Contract Name Improvement of Ayrum, Noyemberyan towns and Deghdzavan, Haghtanak villages 1 L2363-ICB-1-14 WWS system Improvement of Charentsavan town, Solak and Argel villages WWS systems, 2 L2363-ICB-1-15 reconstruction of Makravan N 2 pumping station Improvement of Ujan, Aragatsotn, Nor Edesia, Dprevanq, Shamiram villages WS 3 L2363-ICB-1-16 systems

4 L2363-ICB-1-17 Improvement of Armavir region villages WS systems

5 L2363-NCB-1-19 Improvement of Goris Town WWS systems 6 L2363-ICB-1-21 Improvement of Artik town and region‟s villages WS systems 7 L2363-ICB-1-22 Improvement of Ashotsk region villages WS systems Improvement of Yeghegnadzor town and Getap, Gonq, Malishka, Nor Aznaberd, 8 L2363-NCB-1-23 Shatin villages WWS systems

9 L2363-NCB-1-25 Improvement of Artashat town WWS systems

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5.3 E B R D

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“LAKE SEVAN ENVIRONMENTAL PROJECT” FUNDED BY EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT

Lot 1. Contract LSEP-WORKS-2009

“Rehabilitation of Wastewater Networks in Gavar, Martouni, Vardenis, Sevan and Jermuk towns”

Lot 2. Contract LSEP-WWTP-2009

“Design and Construction of Waste Water Treatment plants in Gavar, Martouni and Vardenis towns”.

Contract LSEP-WORKS-2009 “Rehabilitation of Wastewater Networks in Gavar, Martouni, Vardenis, Sevan and Jermuk towns” was signed between the AWSC and Griar CJSC-Dorojnik LLC consortium on 25 September 2009 with contract value 4,559,679.32 (excluding VAT).

During the reporting year the construction activities in the frame of Lot 1 were spread in all the construction sites. Contractor provided adequate housing with all the necessary amenities and facilities for his staff and labor in all towns of the project. All construction sites are equipped with office and store for the contractors own use.

Physical Implementation of Works under Lot1 during the reporting year is summarized in the below mentioned table:

Physical Implementation of Works Table-10 Location Description of works Implemented works/EUR/ Sevan Waste water network 144,685.8 Gavar Waste water network 124,121.2 Martuni Waste water network 90,063.7 Vardenis Waste water network 51,836.2 Jermuk Waste water network 109,920.4 Advance for the Project 455,968.00 Total 976,595.3

JERMUK GAVAR 90

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Environmental and Social Safeguards

The Contractor of Lot 1 has been provided with the EMP which includes the table with the applicable mitigation measures and environmental safeguards.

The Environmental specialist of AWSC organized the working meeting-discussion, during which the EMPs were detailed discussed. The field visits organized by the Consultant and Environmental Specialist revealed that the Contractor installed on all store some places with special conditions for storage of fuel, oil polishing material etc. The technical equipment operating on the construction sites are mostly of the new production and are passes through the rotation special technical observation.

Pablic hearings

MAIN OBJECTIVES FOR 2010

Contract LSEP-WWTP-2009 “Design and Construction of Waste Water Treatment Plants in Gavar, Vardeni and Martuni towns” is planned to sign in January 2010 with the lowest evaluated Bidder Ludwig Pfeiffer Hoch- und Tiefbau GmbH, Germany company with contract value of 3, 923, 920.00 EUR without the VAT.

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5.4 U S A I D

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“Improvement of Water Supply Systems of Artashat town and Adjacent 27 Villages” financed by USAID.

Project launched in May 2007 and on August 26, 2009, U.S. Ambassador Marie L. Yovanovitch, the Catholicos of All Armenians Garegin II, Governor of Ararat Marz, representatives from the Armenian government, USAID, and the Armenian Water Company joined the community members of Qaghtsrashen community members to mark the successful completion of the $3.16 million USAID Artashat Water Supply Project and the official hand-over ceremony of three project-supported daily regulating reservoirs to the Armenian Water Company.

By increasing the volume of water delivered by gravity flow from Garni sources, which will be accumulated in new and rehabilitated reservoirs and distributed through new water mains, about 100,000 residents of Artashat town and 27 surrounding villages will benefit from significantly improved safe drinking water supply. The project has also helped reduce energy consumption by eliminating the need to pump water from the deep wells around Artashat.

Project activities included installation of approximately 50 kilometers of new water mains and distribution lines, construction of a new 4,000 cubic meter reservoir and rehabilitation of two existing ones.

End of ASHTARAK town water reservoir construction

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6. PUBLIC RELATIONS

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PUBLIC RELATION DEPARTMENT ACTIVITIES IN 2009

In 2009 AWSC has implemented organized and targeted public relations programs, campaigns and pilot projects. The goal of the PR programs was to improve the communication with customers and increase the quality of provided service. All the implemented projects and campaigns were successful due to visible results registered at the end of the year.

Many of the implemented projects were conducted jointly with AWSC departments (commercial, exploitation, etc). Some of the pilot projects conducted together with the commercial department had considerable impact on AWSC revenue. These projects varied with their size and shape, they included both published and broadcasted formats.

Certainly, the most successful PR campaign was the drawing of lots for regularly paying customers. The idea of awarding regularly paying customers was initiated by SAUR, AWSC Mangement Contractor in 2008 and continued all through 2009. Every four months AWSC organized a drawing of lots and awarded 300.000 to four customers. This campaign was unique in its form because it stimulated customers to regularly make payments and, what is more important, spread the word about becoming a good customer.

As a result, at the end of 2009 the number of regularly doubled (from 38,000 to 72,000). AWSC will continue this initiative in 2010. The awarded prices are being given by our partner VTB Armenia bank.

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Another successful commercial PR project was constant TV announcements and advertisement. During 2009 the daily announcements had huge impact and contributed to the purchase 741 water meters.

One of the most popular projects was publication of non-paying customers name in the state daily newspaper. As pilot projects, four towns from the AWSC service are were chosen which had a big number of customers without payment. Every two months 100 names from each town was published.

During each publication the company gave one month deadline to make payments or at least sign a payment schedule, otherwise the service would be stopped for them. At the end of the year it was clear that the project was a success because the AWSC was able to receive 11 130,0 thousand AMD payments and most of al 793 customers starting paying regularly.

While organizing various PR projects and campaigns, press conferences and TV interview programs were also organized for AWSC Management staff. It must be noticed that the relation with media has improved as more information was transferred to them in the frame of transparency and collaboration.

In parallel to making a positive change in Armenia, SAUR has also contributed to the professional development of Armenian local authorities. Last year SAUR Group invited three Armenian mayors to take part in annual meeting of Mayors‟ Association of France. This visit to France was one more link to the developed world and a great opportunity to network with colleagues, explore new ways of partnership and strengthen the collaboration of Armenian and French communities.

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P u b l I c a t I o n o f p o s t e r s

“Limiting the risk of infection of flu” “Warning to population: keep the manhole areas clean”

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Taking into consideration all of the positive changes mention above, it is clear that Public Relation is becoming one of the important policies of AWSC. In 2010 it is planned to do more creative projects to contribute image making and sustainable development of AWSC.

In 2010 it is planned to continue the drawing of lots for the regularly paying customers. It will again be organized every four months. Also, various other PR projects and campaigns will be organized such as publication of non-paying customers names, which will be published every two months. Informative flyers and other publications will continue as well.

AWSC PR Department plans to implements PR projects in regions by putting advertisements and announcements on regional TV and print media, as well as implementing creative campaigns at schools.

In parallel to projects and campaigns, PR department plans to implement representative actions (publication of name billboards, printing of letterheads, calendars, working with media, NGO and local companies) to raise the image of the company and assure a solid name in the society.

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7. INDICATORS

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As requested by the contract, the Contract Manager shall monitor 25 indicators (3 aren‟t used) on individual branch and Company level. These indicators will give a possibility to check on the improvement of the AWSC.

INDICATORS RECAPITULATION – TABLE 11 (INDICATORS 1-25)

BASE Average Average Average Average Average № INDICATORS UNIT YEARS 2005 2006 2007 2008 2009

1 2 3 4 5 6 7 8 9

hours/ 1 Weighted average number of daily 6,04 7,39 9,62 10,98 12,10 12,23 hours of drinking water service day

2 % of individual subscribers billed on the % 40,2 53,6 57,3 62,5 64,6 73,9 basis of metered consumption

3 Weighted average water bacteriological % 93,8 93,8 93,9 96,2 96,6 98,6 safety compliance

4 Company working ratio % 194,9 176,4 138,8 133,8 133,7 106,6

% of cities with minimal daily hours of % 68,1 74,1 80,1 83,9 85,6 80,7 5 services

6 % of block apartment buildings with % 38,6 56,3 61,6 67,5 70,6 76,8 individual or common block meter

7 % of block apartment buildings under % contractual agreement with the company

Drams/ 8 Revenue collected on domestic 166 181 242 250 286 396 subscribers per registered inhabitant month Collection ratio (excluding budget 9 % 47,9 36,2 62,6 72,3 75,9 83,5 organizations) % of subscriber with more than 4 10 % 79,5 75,1 76,7 77,8 79,5 78,1 months debt

Liters/ 11 Average domestic metered consumption 81 71 75 78 87 87 per metered registered inhabitant cap/day

Drams/ 12 Average price of m3 metered and billed 100,41 126,80 140,00 140,00 140,00 159,50 to domestic subscribers m3

Growth of the total collected revenue 13 (excluding budget organization) from % 114 568 16,2 46,9 54,8 72,6 119,5 base year

Ratio of water volume billed on the 14 basis of metering to the total metered % 25,0 26,0 47,3 56,2 59,1 64,5 and normative billed volume Average daily production per equivalent Liters/ 15 registered inhabitant at water cap/day 668 759 754 790 827 792 catchments levels

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BASE Average Average Average Average Average № INDICATORS UNIT YEARS 2005 2006 2007 2008 2009

1 2 3 4 5 6 7 8 9

Average daily supply to distribution Liters/ 16 reservoir per equivalent registered cap/day inhabitant

Ratio of metered final consumption 17 (m3) to water production at water % 6,8 6,4 7,8 8,1 8,5 9,4 catchments levels

Working ratio for branches with gravity % 89,7 121,0 97,5 94,5 85,2 65,9 18 systems

19 Working ratio for branches with % 223,3 196,8 155,2 148,9 147,2 115,5 pumping stations or treatment plants

Electricity cost as % of revenue 20 collected in systems with pumping or % 72,6 63,1 42,6 39,7 39,2 30,8 treatment plants

g/cap/ 21 Amount of chlorine effectively used per equivalent inhabitant per year year

Total staff per 1000 individual u 9,45 8,34 7,15 6,87 6,85 6,87 22 subscribers

23 Staff and assignment contractors total % 70,2 68,9 61,9 61,4 62,2 51,1 costs as % of collected revenue

24 Electricity consumption kwh/m3 0,43 0,38 0,31 0,30 0,29 0,25

25 % of water disinfected % 60,9 67,8 80,0 90,3 91,2 82,6

Remark* All information concerning performance indicators is presented by attached CD.

100

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INDICATOR 1

WEIGHTED AVERAGE NUMBER OF DAILY HOURS OF DRINKING WATER SERVICE ÐáõÝÇë ³ÙëÇÝ çñ³Ù³ï³Ï³ñ³ñÙ³Ý ÙÇçÇÝ ïևáÕáõÃÛáõÝÁ ûñí³ ÁÝÃ³óùáõÙ

24,00

AWSC/ ÐæÎÀ

20,00

áÕáõÃÛáõÝÁ ¨ 16,00 North-West Region/ ÐÛáõëÇë-²ñ¨Ùáõïù 12,10 12,23 î³ñ³Í³ßñç³Ý 10,98 12,00 9,62 Center-West Region/ Î»ÝïñáÝ-²ñ¨Ùáõïù

8,00 î³ñ³Í³ßñç³Ý Number of hours of water supplies water of hours of Number 7,39 æñ³Ù³ï³Ï³ñ³ñÙ³Ý Å³Ù»ñÇ ï Å³Ù»ñÇ æñ³Ù³ï³Ï³ñ³ñÙ³Ý 6,04 4,00 South Region/ Ð³ñ³í î³ñ³Í³ßñç³Ý

0,00 Average 2004 Average 2005 Average 2006 Average 2007 Average 2008 Average 2009

Months ³ÙÇëÝ»ñ

INDICATOR 2

% OF INDIVIDUAL SUBSCRIBERS BILLED ON THE BASIS OF METRED CONSUMPTION æñ³ã³÷»ñ áõÝ»óáÕ µ³Å³Ýáñ¹Ý»ñÇ %-Á

80,0% 73,9% AWSC/ ÐæÎ

70,0% 62,5% 64,6%

57,3% North West Region 60,0% ÐÛáõëÇë ³ñ¨ÙïÛ³Ý 53,6% ï³ñ³Í³ßñç³Ý

50,0% % Center West Region Î»ÝïñáÝ 40,0% ³ñ¨ÙïÛ³Ý 39,9% ï³ñ³Í³ßñç³Ý

South Region 30,0% Ð³ñ³í³ÛÇÝ ï³ñ³Í³ßñç³Ý

20,0% Base year / December 05 December 06 December 07 December 08 December 09 ÐÇÙÝ³Ï³Ý ï³ñÇÝ ¸»Ïï»Ùµ»ñ 05 ¸»Ïï»Ùµ»ñ 06 ¸»Ïï»Ùµ»ñ 07 ¸»Ïï»Ùµ»ñ 08 ¸»Ïï»Ùµ»ñ 09 Months ²ÙÇëÝ»ñ

101

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INDICATOR 3

% of implemented analyses in compliance with bacteriological safety æñÇ áñ³ÏÇ Ñ³Ù³å³ï³ëË³ÝáõÃÛáõÝÁ ÑÇ·Ç»ÝÇÏ ëï³Ý¹³ñïÝ»ñÇÝ

100,00% 98,58% 99,00% AWSC/ÐæÎ

98,00% 96,56% 97,00% 96,24% 96,00% North West Region/ 95,00% ÐÛáõëÇë ³ñ¨ÙïÛ³Ý 93,81% Ù³ëÝ³×ÛáõÕ 94,00% 93,84% 93,86%

93,00% % Center West Region/ 92,00% Î»ÝïñáÝ ³ñ¨ÙïÛ³Ý Ù³ëÝ³×ÛáõÕ 91,00%

90,00%

89,00% South Region/ Ð³ñ³í³ÛÇÝ 88,00% Ù³ëÝ³×ÛáõÕ

87,00% Base year / Average 05 Average 06 Average 07 Average 08 Average 09 ÐÇÙÝ³Ï³Ý ï³ñÇÝ ØÇçÇÝÁ 05 ØÇçÇÝÁ 06 ØÇçÇÝÁ 07 ØÇçÇÝÁ 08 ØÇçÇÝÁ 09 Months

INDICATOR 4

COMPANY WORKING RATIO ÀÝÏ»ñáõÃÛ³Ý ³ßË³ï³ÝùÇ ³ñ¹ÛáõÝ³í»ïáõÃÛáõÝÁ 240,0% AWSC/ ÐæÎ 220,0%

200,0% 194,9% 180,0% North West Region 176,4% ÐÛáõëÇë ³ñ¨ÙïÛ³Ý 160,0% ï³ñ³Í³ßñç³Ý

140,0% 138,8% Center West % 133,8% 133,7% 120,0% Region Î»ÝïñáÝ ³ñ¨ÙïÛ³Ý 100,0% ï³ñ³Í³ßñç³Ý 106,6% 80,0% South Region Ð³ñ³í³ÛÇÝ ï³ñ³Í³ßñç³Ý 60,0%

40,0% Base year / Average 05 Average 06 Average 07 Average 08 Average 09 ÐÇÙÝ³Ï³Ý ï³ñÇÝ ØÇçÇÝÁ 05 ØÇçÇÝÁ 06 ØÇçÇÝÁ 07 ØÇçÇÝÁ 08 ØÇçÇÝÁ 09 Months ²ÙÇëÝ»ñ

102

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INDICATOR 5

% OF CITIES WITH MINIMAL DAILY HOURS OF SERVICE FROM THE BEGINNING OF 2009 Üí³½³·áõÛÝ çñ³Ù³ï³Ï³ñ³ñÙ³Ý Å³Ù»ñáí ëå³ë³ñÏíáÕ µÝ³Ï³í³Ûñ»ñÇ % 2009 Ã-Ç ³ÙÇëÝ»ñÇÝ

105% AWSC/ ÐæÎ 100%

95%

South Region 90% Ð³ñ³í³ÛÇÝ ï³ñ³Í³ßñç³Ý

85% 85,55% 83,93% 80% North West 80,10% 80,65% Region ÐÛáõëÇë 75% ³ñ¨ÙïÛ³Ý ï³ñ³Í³ßñç³Ý 74,07% 70% Center East 68,01% Region 65% Î»ÝïñáÝ ³ñ¨ÙïÛ³Ý ï³ñ³Í³ßñç³Ý 60% Base year / Average 05 Average 06 Average 07 Average 08 Average 09 ÐÇÙÝ³Ï³Ý ï³ñÇÝ ØÇçÇÝÁ 05 ØÇçÇÝÁ 06 ØÇçÇÝÁ 07 ØÇçÇÝÁ 08 ØÇçÇÝÁ 09

Months ²ÙÇëÝ»ñ

INDICATOR 6

% OF BLOCK APARTMENT BUILDINGS WITH INDIVIDUAL OR COMMON BLOC METERS ²ÝÑ³ï³Ï³Ý Ï³Ù ÁÝ¹Ñ³Ýáõñ çñ³ã³փ áõÝ»óáÕ µ³½Ù³µÝ³Ï³ñ³Ý ß»Ýù»ñÇ µ³Å³Ýáñ¹Ý»ñÇ ïáÏáëÁ

85%

AWSC/ ÐæÎ 75% 76,8%

70,6% 65% 67,5% North West Region 61,6% ÐÛáõëÇë ³ñ¨ÙïÛ³Ý ï³ñ³Í³ßñç³Ý 55% % 56,3%

45% Center West Region Î»ÝïñáÝ ³ñ¨ÙïÛ³Ý ï³ñ³Í³ßñç³Ý 35% 37,6%

25% South Region Ð³ñ³í³ÛÇÝ ï³ñ³Í³ßñç³Ý

15% Base year / December 05 December 06 December 07 December 08 December 09 ÐÇÙÝ³Ï³Ý ï³ñÇÝ ¸»Ïï»Ùµ»ñ 05 ¸»Ïï»Ùµ»ñ 06 ¸»Ïï»Ùµ»ñ 07 ¸»Ïï»Ùµ»ñ 08 ¸»Ïï»Ùµ»ñ 09

Months

103

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INDICATOR 8

REVENUE COLLECTED ON DOMESTIC SUBSCRIBERS PER REGISTERED INHABITANT ´Ý³ÏÇã µ³Å³Ýáñ¹Ý»ñÇó ³Ùë³Ï³Ý Ñ³í³ù³·ñáõÙÁ Áëï ·ñ³Ýóí³Í µÝ³ÏãÇ

500

AWSC/ ÐæÎ 450

396 400

North West Region 350 ÐÛáõëÇë ³ñ¨ÙïÛ³Ý ï³ñ³Í³ßñç³Ý

300

286 Center West Region ¸ñ³Ù/³ÝÓ/³ÙÇë Drams/cap/month 250 Î»ÝïñáÝ ³ñ¨ÙïÛ³Ý 250 ï³ñ³Í³ßñç³Ý 242 200

181 South Region 150 Ð³ñ³í³ÛÇÝ 166 ï³ñ³Í³ßñç³Ý

100 Base year / Average 05 Average 06 Average 07 Average 08 Average 09 ÐÇÙÝ³Ï³Ý ï³ñÇÝ ØÇçÇÝÁ 05 ØÇçÇÝÁ 06 ØÇçÇÝÁ 07 ØÇçÇÝÁ 08 ØÇçÇÝÁ 09

Months ²ÙÇëÝ»ñ

INDICATOR 9

COLLECTION RATIO (EXCLUDING BUDGET ORGANISATIONS) Ð³í³ù³·ñÙ³Ý ³ñ¹ÛáõÝ³í»ïáõÃÛ³Ý ïáÏáëÁ (µ³ó³éáõÃÛ³Ùµ µÛáõç»ï³ÛÇÝ Ï³½Ù³Ï»ñåáõÃÛáõÝÝ»ñÇ)

100% AWSC/ ÐæÎ

90% 83%

80% North West Region 76% ÐÛáõëÇë ³ñ¨ÙïÛ³Ý 70% ï³ñ³Í³ßñç³Ý 72%

60% 63% Center West Region 50% Î»ÝïñáÝ

·³ÝÓí³Í »Ï³ÙïÇ % »Ï³ÙïÇ ·³ÝÓí³Í ³ñ¨ÙïÛ³Ý 47,9% ï³ñ³Í³ßñç³Ý % OF COLLECTION REVENU COLLECTIONOF % 40% South Region 36,2% Ð³ñ³í³ÛÇÝ 30% ï³ñ³Í³ßñç³Ý

20% Base year / Average 05 Average 06 Average 07 Average 08 Average 09 ÐÇÙÝ³Ï³Ý ï³ñÇÝ ØÇçÇÝÁ 05 ØÇçÇÝÁ 06 ØÇçÇÝÁ 07 ØÇçÇÝÁ 08 ØÇçÇÝÁ 09

Months ²ÙÇëÝ»ñ

104

ANNUAL REPORT 2 0 0 9

INDICATOR 10

% OF SUBSCRIBERS WITH 4 MONTHS DEBT OR MORE THAN 4 MONTHS ²í»ÉÇ ù³Ý 4 ³Ùëí³ å³ñïù áõÝ»óáÕ µ³Å³Ýáñ¹Ý»ñÇ ïáÏáëÁ 90%

AWSC/ ÐæÎ

85%

80% 78,1% North West Region 77,8% ÐÛáõëÇë ³ñ¨ÙïÛ³Ý 79,5% 76,7% 79,5% ï³ñ³Í³ßñç³Ý

75,1% % 75%

Center West Region Î»ÝïñáÝ ³ñ¨ÙïÛ³Ý 70% ï³ñ³Í³ßñç³Ý

65% South Region Ð³ñ³í³ÛÇÝ ï³ñ³Í³ßñç³Ý

60% Base year / Average 05 Average 06 Average 07 Average 08 Average 09 ÐÇÙÝ³Ï³Ý ï³ñÇÝ ØÇçÇÝÁ 05 ØÇçÇÝÁ 06 ØÇçÇÝÁ 07 ØÇçÇÝÁ 08 ØÇçÇÝÁ 09 Month ²ÙÇëÝ»ñ

INDICATOR 11

AVERAGE DOMESTIC METERED CONSUMPTION PER METERED REGISTRED INHABITANT ØÇçÇÝ ëå³éáõÙÁ ßÝãÇ Ñ³ßíáí` çñ³ã³փ áõÝ»óáÕ µÝ³ÏÇã-µ³Å³Ýáñ¹Ý»ñÇ Ñ³Ù³ñ 95

AWSC/ ÐæÎ

90 87

87 85 North West Region ÐÛáõëÇë ³ñ¨ÙïÛ³Ý ï³ñ³Í³ßñç³Ý

80 81 Center West Region

ÈÇïñ/³ÝÓ/ûñ 78 Liters/cap/day Î»ÝïñáÝ ³ñ¨ÙïÛ³Ý 75 ï³ñ³Í³ßñç³Ý 75 71

70 South Region Ð³ñ³í³ÛÇÝ ï³ñ³Í³ßñç³Ý

65 Base year / Average 05 Average 06 Average 07 Average 08 Average 09 ÐÇÙÝ³Ï³Ý ï³ñÇÝ ØÇçÇÝÁ 05 ØÇçÇÝÁ 06 ØÇçÇÝÁ 07 ØÇçÇÝÁ 08 ØÇçÇÝÁ 09 Months ²ÙÇëÝ»ñ

105

ANNUAL REPORT 2 0 0 9

INDICATOR 12

PRICE OF M3 METERED AND BILLED TO DOMESTIC SUBSCRIBERS ê³Ï³·ÇÝÁ çñ³ã³փ áõÝ»óáÕ µÝ³ÏÇã-µ³Å³Ýáñ¹Ý»ñÇ Ñ³Ù³ñ

200 179,78 180

160 154,47 140,00 140 115,65 120 3 100,41

100 90,36 Drams/m ¸ñ³Ù/Ëáñ.Ù. 80

40 24,35 25,31 20 10,05

0 Period Water/æáõñ Sewerage/ Total/ ÀÝ¹³Ù»ÝÁ Ժամանակահատված ÎáÛáõÕÇ

INDICATOR 13

GROWTH OF TOTAL COLLECTED REVENUE FROM BASE YEAR (EXCLUDING BUDGET ORGANISATIONS) ÀÝ¹Ñ³Ýáõñ Ñ³í³ù³·ñÙ³Ý ³×Á (µ³ó³éáõÃÛ³Ùµ µÛáõç»ï³ÛÇÝ Ï³½Ù-ñÇ) µ³½³ÛÇÝ ï³ñí³ Ñ³Ù»Ù³ï

140% AWSC/ ÐæÎ

120% 119,5%

100% North West Region 80% ÐÛáõëÇë ³ñ¨ÙïÛ³Ý ï³ñ³Í³ßñç³Ý 54,8% 60% 46,9% 72,6% Center West Region 40% Î»ÝïñáÝ ³ñ¨ÙïÛ³Ý ï³ñ³Í³ßñç³Ý 20% %O FCOLLECTION REVENU 16,2% South Region 0% Ð ³í³ù³·ñáõÙóëï³óí³Í »Ï³ÙïÇ % Ð³ñ³í³ÛÇÝ ï³ñ³Í³ßñç³Ý

AWSC/ ÐæÎ

ØÇçÇÝÁ 05 ØÇçÇÝÁ

Average Average 05

ØÇçÇÝÁ 06 ØÇçÇÝÁ

Average Average 06

Base year year Base

ØÇçÇÝÁ 07 ØÇçÇÝÁ

Average 07 Average

ØÇçÇÝÁ 08 ØÇçÇÝÁ

Average 08 Average

ØÇçÇÝÁ 09 ØÇçÇÝÁ

Average Average 09 ÐÇÙÝ³Ï³Ý ï³ñÇÝ

106

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INDICATOR 14

Ratio of water volume billed on the basis of metering to the total metered and normative billed volume æñ³ã³փ áõÝ»óáÕ µ³Å³Ýáñ¹Ý»ñÇÝ ïñíáÕ çñ³ù³Ý³ÏÇ ïáÏáëÁ µ³Å³Ýáñ¹Ý»ñÇÝ ïñí³Í ÁÝ¹Ñ³Ýáõñ çñ³ù³Ý³ÏÇ ÝÏ³ïÙ³Ùµ

80% AWSC/ ÐæÎ

70% 65%

North West Region 60% ÐÛáõëÇë ³ñ¨ÙïÛ³Ý ï³ñ³Í³ßñç³Ý 59% % 56% 50% Center West 47% Region Î»ÝïñáÝ 40% ³ñ¨ÙïÛ³Ý ï³ñ³Í³ßñç³Ý

South Region 30% Ð³ñ³í³ÛÇÝ ï³ñ³Í³ßñç³Ý

25% 26% 20% Base year / Average 05 Average 06 Average 07 Average 08 Average 09 ÐÇÙÝ³Ï³Ý ï³ñÇÝ ØÇçÇÝÁ 05 ØÇçÇÝÁ 06 ØÇçÇÝÁ 07 ØÇçÇÝÁ 08 ØÇçÇÝÁ 09

INDICATOR 15

AVERAGE DAILY PRODUCTION PER EQUIVALENT REGISTRED INHABITANT úñ³Ï³Ý ³ñï³¹ñí³Í ÙÇçÇÝ çñ³ù³Ý³ÏÁ Ù»Ï ßÝãÇ Ñ³ßíáí 1 090

AWSC/ ÐæÎ 1 040

990

940 North West Region ÐÛáõëÇë ³ñ¨ÙïÛ³Ý 890 ï³ñ³Í³ßñç³Ý

840 ÉÇïñ/³ÝÓ/ûñ

liters /cap/dayliters 827 Center West Region 790 759 Î»ÝïñáÝ 790 792 ³ñ¨ÙïÛ³Ý 740 ï³ñ³Í³ßñç³Ý 754 690 South Region 668 Ð³ñ³í³ÛÇÝ 640 ï³ñ³Í³ßñç³Ý

590 Base year / Average 05 Average 06 Average 07 Average 08 Average 09 ÐÇÙÝ³Ï³Ý ï³ñÇÝ ØÇçÇÝÁ 05 ØÇçÇÝÁ 06 ØÇçÇÝÁ 07 ØÇçÇÝÁ 08 ØÇçÇÝÁ 09 Months ²ÙÇë

107

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INDICATOR 17

RATIO OF METERED FINAL CONSUMPTION M3 TO WATER PRODUCED æñ³ã³÷ áõÝ»óáÕ µ³Å³Ýáñ¹Ý»ñÇ ÏáÕÙÇó ëå³éí³Í çñÇ Í³í³ÉÇ ïáÏáëÁ ` ³ñï³¹ñí³Í çñÇ ÁÝ¹Ñ³Ýáõñ Í³í³ÉÇ Ñ³Ù»Ù³ï

11%

AWSC/ÐæÎ 10% 9,4% 9% North West Region/ 8,5% ÐÛáõëÇë ³ñ¨ÙïÛ³Ý 8% Ù³ëÝ³×ÛáõÕ 8,1%

7,8% % 7% 6,4% Center West Region/ 6,8% Î»ÝïñáÝ ³ñ¨ÙïÛ³Ý Ù³ëÝ³×ÛáõÕ 6%

5% South Region/ Ð³ñ³í³ÛÇÝ Ù³ëÝ³×ÛáõÕ

4% Base year / Average 05 Average 06 Average 07 Average 08 Average 09 ÐÇÙÝ³Ï³Ý ï³ñÇÝ ØÇçÇÝÁ 05 ØÇçÇÝÁ 06 ØÇçÇÝÁ 07 ØÇçÇÝÁ 08 ØÇçÇÝÁ 09

INDICATOR 18

WORKING RATIO FOR THE BRANCHES WITH GRAVITY SYSTEMS ÆÝùÝ³Ñáë Ñ³Ù³Ï³ñ· áõÝ»óáÕ Ù³ëÝ³×ÛáõÕ»ñÇ ³ßË³ï³ÝùÇ ³ñ¹ÛáõÝ³í»ïáõÃÛ³Ý ïáÏáëÁ

160,0%

AWSC/ ÐæÎ 140,0%

121,0% 120,0% North West Region ÐÛáõëÇë ³ñ¨ÙïÛ³Ý 100,0% ï³ñ³Í³ßñç³Ý 89,7% 97,5% 94,5%

80,0% Center West Region % 85,2% 65,9% Î»ÝïñáÝ ³ñ¨ÙïÛ³Ý ï³ñ³Í³ßñç³Ý 60,0%

40,0% South Region Ð³ñ³í³ÛÇÝ ï³ñ³Í³ßñç³Ý

20,0% Base year / Average 05 Average 06 Average 07 Average 08 Average 09 ÐÇÙÝ³Ï³Ý ï³ñÇÝ ØÇçÇÝÁ 05 ØÇçÇÝÁ 06 ØÇçÇÝÁ 07 ØÇçÇÝÁ 08 ØÇçÇÝÁ 09

Months ²ÙÇëÝ»ñ

108

ANNUAL REPORT 2 0 0 9

INDICATOR 19

COMPANY WORKING RATIO FOR BRANCHES WITH PUMPING STATIONS OR WATER TREATMENT PLANTS äáÙå³Ï³Û³ÝÝ»ñáí Ï³Ù Ù³ùñÙ³Ý Ï³Û³ÝÝ»ñáí ³ßË³ïáÕ Ù³ëÝ³×ÛáõÕ»ñÇ ³ßË³ï³ÝùÇ ³ñ¹ÛáõÝ³í»ïáõÃÛ³Ý ïáÏáëÁ 250,0% 223,3% 230,0% AWSC/ ÐæÎ

210,0% 196,8%

190,0% North West Region ÐÛáõëÇë ³ñ¨ÙïÛ³Ý 170,0% ï³ñ³Í³ßñç³Ý

% 155,2% 148,9% 147,2% 150,0%

130,0% Center West Region Î»ÝïñáÝ ³ñ¨ÙïÛ³Ý ï³ñ³Í³ßñç³Ý 110,0% 115,5%

90,0% South Region Ð³ñ³í³ÛÇÝ 70,0% ï³ñ³Í³ßñç³Ý

50,0% Base year / Average 05 Average 06 Average 07 Average 08 Average 09 ÐÇÙÝ³Ï³Ý ï³ñÇÝ ØÇçÇÝÁ 05 ØÇçÇÝÁ 06 ØÇçÇÝÁ 07 ØÇçÇÝÁ 08 ØÇçÇÝÁ 09

INDICATOR 20

ELECTRICITY COST AS % OF REVENUE COLLECTED IN SYSTEMS WITH PUMPING OR TREATMENT PLANTS äáÙå³Ï³Û³ÝÝ»ñÇ ¨ Ù³ùñÙ³Ý Ï³Û³ÝÝ»ñÇ Í³Ëë³Í ¿É»Ïïñ³¿Ý»ñ·Ç³ÛÇ ³ñÅ»ùÇ ïáÏáëÁ ÀÝÏ»ñáõÃÛ³Ý ÁÝ¹Ñ³Ýáõñ Ñ³í³ù³·ñÙ³Ý ÝÏ³ïÙ³Ùµ

120% ³ñÙ³Ý Ñ³Ù³ñ³ñÙ³Ý

× AWSC/ÐæÎ

100%

80% North West Region/ÐÛáõëÇë 72,6% ³ñ¨ÙïÛ³Ý Ù³ëÝ³×ÛáõÕ 60% 63,1% Center West Region/Î»ÝïñáÝ 40% ³ñ¨Ùáõïù Ù³ëÝ³×ÛáõÕ 42,6% 39,7% 39,2%

20% South 30,8% Region/Ð³ñ³í³ÛÇÝ Ù³ëÝ³×ÛáõÕ

% OF COLLECTION USED FOR ELECTRICITY EXPENSIES ELECTRICITY FOR USED COLLECTIONOF % 0% Base year / Average 05 Average 07 Average 07 Average 08 Average 09 ÐÇÙÝ³Ï³Ý ØÇçÇÝÁ 05 ØÇçÇÝÁ 06 ØÇçÇÝÁ 07 ØÇçÇÝÁ 08 ØÇçÇÝÁ 09 ï³ñÇÝ

Ð³í³ù³·ñÙ³Ý % û·ï³·áñÍí³Í¿É»Ïïñ³¿Ý»ñ·Ç³ÛÇÐ³í³ù³·ñÙ³Ý%Í³Ëë»ñÇ í Month ²ÙÇë

109

ANNUAL REPORT 2 0 0 9

INDICATOR 22

TOTAL STAFF FOR 1000 INDIVIDUAL SUBSCRIBERS 1 000 µ³Å³Ýáñ¹ÇÝ µ³ÅÇÝ ÁÝÏÝáÕ ³ßË³ïáÕÝ»ñÇ թիվÁ

12,00

AWSC/ÐæÎ 11,00

10,00 9,45 North West Region/ÐÛáõëÇë 9,00 ³ñ¨ÙïÛ³Ý Ù³ëÝ³×ÛáõÕ

8,00 8,34 Center West 7,00 Region/Î»ÝïñáÝ ³ñ¨Ùáõïù 7,15 Ù³ëÝ³×ÛáõÕ 6,87 6,85 6,87

6,00 Staff per 1000 Staff1000 per Individual Subscribers

South Region/Ð³ñ³í³ÛÇÝ

5,00 Ù³ëÝ³×ÛáõÕ ²ßË³ï³Ï³½Ù ³Ù»Ý 1000 ³ÝÑ³ï µ³Å³Ýáñ¹Ç Ñ³Ù³ñ

4,00 Base year / Average 05 Average 06 Average 07 Average 08 Average 09 ÐÇÙÝ³Ï³Ý ØÇçÇÝÁ 05 ØÇçÇÝÁ 06 ØÇçÇÝÁ 07 ØÇçÇÝÁ 08 ØÇçÇÝÁ 09 ï³ñÇÝ

INDICATOR 23

STAFF AND ASSIGNMENT CONTRACTOR TOTAL COST AS % OF COLLECTED REVENUE ²ÝÓÝ³Ï³½ÙÇ å³Ñå³ÝÙ³Ý ÁÝ¹Ñ³Ýáõñ Í³ËëÇ ïáÏáëÁ Ñ³í³ù³·ñÙ³Ý ÝÏ³ïÙ³Ùµ

75,0% 70,2% 68,9% 70,0% AWSC/ÐæÎ

65,0% 61,9% 61,4% 62,2%

60,0% North West Region/ÐÛáõëÇë ³ñ¨ÙïÛ³Ý Ù³ëÝ³×ÛáõÕ 55,0% 51,1%

% of collection of revenue% 50,0% Ð³í³ù³·ñí³Í»Ï³ÙïÇ% Center West Region/Î»ÝïñáÝ 45,0% ³ñ¨ÙïÛ³Ý Ù³ëÝ³×ÛáõÕ

40,0%

South Region/Ð³ñ³í 35,0% Ù³ëÝ³×ÛáõÕ

30,0% Base year / Average 05 Average 06 Average 07 Average 08 Average 09 ÐÇÙÝ³Ï³Ý ï³ñÇÝ ØÇçÇÝÁ 05 ØÇçÇÝÁ 06 ØÇçÇÝÁ 07 ØÇçÇÝÁ 08 ØÇçÇÝÁ 09

110

ANNUAL REPORT 2 0 0 9

INDICATOR 24

ELECTRICITY CONSUMPTION IN Kwh/m3 ¾É»Ïïñ³¿Ý»ñ·Ç³ÛÇ ï»ë³Ï³ñ³ñ ëå³éáõÙÁ ÏíïÅ/Ù3

0,70

AWSC/ÐæÎ 0,60

0,50 0,43 North West Region/ ÐÛáõëÇë ³ñ¨ÙïÛ³Ý 0,38 Ù³ëÝ³×ÛáõÕ

0,40 /ÏíïÅ/Ë.Ù3 0,31 0,30 0,29 0,30

KWH/m3 KWH/m3 0,25 Center West Region/ Î»ÝïñáÝ ³ñ¨ÙïÛ³Ý Ù³ëÝ³×ÛáõÕ 0,20

0,10 South Region/ Ð³ñ³í³ÛÇÝ Ù³ëÝ³×ÛáõÕ

0,00 Base year / Average 05 Average 06 Average 07 Average 08 Average 09 ÐÇÙÝ³Ï³Ý ï³ñÇÝ ØÇçÇÝÁ 05 ØÇçÇÝÁ 06 ØÇçÇÝÁ 07 ØÇçÇÝÁ 08 ØÇçÇÝÁ 09

INDICATOR 25

PERCENTAGE OF WATER DISINFECTED ²Ëï³Ñ³ÝíáÕ çñÇ %

100,0%

AWSC/ ÐæÎ

90,0% 90,30% 91,21% 82,61%

80,0% North West Region 80,02% ÐÛáõëÇë ³ñ¨ÙïÛ³Ý ï³ñ³Í³ßñç³Ý

% 70,0%

67,83% Center West Region Î»ÝïñáÝ ³ñ¨ÙïÛ³Ý 60,0% ï³ñ³Í³ßñç³Ý 60,87%

50,0% South Region Ð³ñ³í³ÛÇÝ ï³ñ³Í³ßñç³Ý

40,0% Base year / Average 05 Average 06 Average 07 Average 08 Average 09 ÐÇÙÝ³Ï³Ý ï³ñÇÝ ØÇçÇÝÁ 05 ØÇçÇÝÁ 06 ØÇçÇÝÁ 07 ØÇçÇÝÁ 08 ØÇçÇÝÁ 09

111