QUARTERLY REPORT January-March 2005

Done by the Management Contractor The 15-th of April 2005

______Patrick Lorin

TABLE OF CONTENTS

1. GENERAL VIEW ...... 5 2. OPERATION ...... 8 2.1 COMMERCIAL ...... 9 BILLING AND COLLECTION TABLE-1 ...... 10 COLLECTION OF AWSC CJSC FOR MARCH 2005 – TABLE 2 ...... 11 DIAGRAM-1 ...... 12 DIAGRAM 2 ...... 13 COLLECTION FROM ALL THE BRANCHES OF AWSC, IN JANUARY-MARCH 2005 ...... 14 TABLE 3 ...... 14 TABLE 4 ...... 16 COLLECTION FROM ALL BRANCHES OF AWSC ...... 16 TABLE 5 ...... 17 QUANTITY OF INSTALLED WATER METERS OF AWS CJSC ...... 17 REPORT...... 18 On trips to “Hrazdan” and “Echmiadzin” Sectors of AWSC CJSC ...... 18 2.2 WORKS ...... 21 HAND OVER PROCESS under USAID PROGRAM ...... 22 AWSC Survey of Drinking Water and Sewage Infrastructures ...... 25 TABLE-6 ...... 25 ADVANCEMENT OF THE AWSC SURVEY AT THE 31ST OF MARCH 2005 ...... 25 2.3 TECHNICAL ...... 27 TECHNICAL STUDIES ...... 28 POTABLE WATER DISINFECTION...... 29 TABLE-7 ...... 30 THE INFORMATION CONCERNING THE QUANTITY OF POTABLE WATER DISINFECTION STATIONS, TYPES OF DISINFECTANT AND THOSE WORKING CONDITION...... 30 TABLE – 8 ...... 37 REQUIREMENT DISINFECTANT RECORDS ...... 37 MARCH 2005 ...... 37 TABLE-9 ...... 39 REQUIREMENT DISINFECTANT RECORDS ...... 39 I QUART, 2005 ...... 39

QUARTERLY REPORT January-March 2005

WATER CHLORINATION (Disinfection of potable water) ...... 41 DISINFECTION OF WATER SUPPLY SYSTEMS ...... 42 TABLE-10 ...... 42 QUANTITY AND CAPACITY OF DAILY REGULATION RESERVOIRS (DRR), ECSPLOTATED BY THE AWS CJSC ...... 42 WATER QUALITY CONTROL ...... 48 TABLE-11 ...... 49 Quantity of patterns (samples), testing frequency, protection of bacteriological analyses, have been done by approved schedules with the State Control for the laboratories during year 2005...... 49 TABLE-12 ...... 51 The information concerning the analyses of the moved sewage water quality...... 51 TABLE-13 ...... 52 Drinking water quality investigation March 2005 ...... 52 SAUR S. A. – AWS SCJC...... 53 MWW PROJECT PROCUREMENT REPORT ...... 53 TABLE-15 ...... 53 2.4 EXPLOITATION ...... 54 EXPLOITATION WORKS ...... 55 TABLE-16 ...... 56 MAIN WATER PIPES & WATER LINES EXPLOTATION ...... 56 DIAGRAM-3 ...... 57 COLLECTORS & WASTEWATER NETWORK EXPLOTATION - TABLE 17, DIAGRAM 4,5 ...... 58 NETWORK ANALYSING -TABLE 18, DIAGRAMS 6-9 ...... 59 WATER PRODUCTION & LOSSES - TABLE 19, DIAGRAM 10 ...... 61 WATER VOLUME, PRODUCTED BY THE MECHANICAL WAY AND USED ELECTRICAL ENERGY VOLUME - TABLE 20, DIAGRAM 11-13 ...... 63 TABLE 21 ...... 65 THE WATER METERS EQUIPMENT INSTALLATION PROCESS BY AWS CJSC (growth figures on date April, 2005) ...... 65 ELECTRICITY CONSUMPTION, TABLE-22,23 ...... 68 DIAGRAM 14 ...... 68 3. FINANCE & ACCOUNT ...... 69 4. HUMAN RESOURCES ...... 71 ACTIVITIES PERFORMED BY HUMAN RESOURCES DEPARTMENT DURING ...... 72 EDUCATION AND TRAINING DEPARTMENT ...... 73

QUARTERLY REPORT January-March 2005

TABLE- 24 ...... 73 ON REDUCTION OF EMPLOYEES OF FOUR CJSC AWSC REGIONAL BRANCHES ...... 74 INFORMATION CONCERNING THE REDUCED EMPLOYEES ...... 74 REDUCED STAFF ANALYSES ...... 75 5. PUBLIC RELATION ...... 77 ON ACTIVITIES IMPLEMENTED BY THE PUBLIC RELATIONS DEPARTMENT OF “AWS” CJSC ...... 78 6. LEGAL & INSURANCE ...... 82 TABLE-25 ...... 84 On procedure of covering AWSC CJSC debts receivable by court order and confiscating through Obligatory Implementation of Actions at Law ...... 84

QUARTERLY REPORT January-March 2005

1. GENERAL VIEW

QUARTERLY REPORT January-March 2005

GENERAL VIEW

This Report covers the period from 1st of January to 31st March 2005.

This report covers the first quarter of 2005, during this period The Management Contractor has done several thinks:

 New organization  Tariff & Budget

The new organization which is implemented now and operational. The implementation of this organization faced different obstacles, the fact to remove the power to the previous branch Managers has been the first one, they tried to use their circle of influence in order to brake the process.

Despite these problems we want ahead and now the first report we are able to do is :

 We have a better control of the money collected, in March the totality of the collection has been sent to the Head Office

 We have a better control of the expenses through the Regional Branch Directors, for example we divided by two the previous gasoline consumption

 We have a better control of our employees, 610 has been redeployed during the implementation of the new organization

 We are more close to the field in order to react at the technical problems

We still have a lot of way to do, our employees have to assume their assigned tasks, they have to react as professional people, they have to forget to mix their business with the job of the Company. And more, a lot of suspicious illegal thinks are implemented by our own staff.

The new Tariff is also a good step for the improvement of the Company, our management Staff despite a limited understanding of the Company are arrived to build an acceptable dossier for the Tariff Commission in order to rise the actual tariff. This exercise showed to us the lack of record in the Company and the importance to have a good record of our activities in the future that will be done with the new accounting system, the improvements of the billing system and our technical records done by the other Departments.

QUARTERLY REPORT January-March 2005

After the result of this new tariff, our team was working on the preparation of the 2005 budget and also to the budget vision for 2006, 2007 and 2008. The budget 2005 will be presented soon to the Board of the Company.

There are others activities, which have been done during this period, during the day to day management and especially technical activities, which contribute to the day to day improvement of the services as replacement of pumps, the repair of leaks, the replacement of part of canalizations and also important, the monitoring of the commercial activities on site, which has shown a lot of “non good practices”.

Of course, to have a good picture of the improvement within our perimeter, indicators have to be implemented, month after month we start new indicators, the difficulty for us is to get the good based figures. From April all required indicators will appear in the monthly reports, a review as to be done by the PIU and its external Auditor in order to correct and to accept our based indicators.

In the frame of our dynamic organization, in March we have brought a change in the organization, the Legal & Insurance Division is now attached to the General Director. During the first months of activities, we understood that the legal activities of the Company were in a low level, we have proposed to the PIU a new Management Contractor staff member in order to reorganize this part of the Company especially in the regions.

QUARTERLY REPORT January-March 2005

2. OPERATION

QUARTERLY REPORT January-March 2005

2.1 COMMERCIAL

QUARTERLY REPORT January-March 2005 BILLING AND COLLECTION TABLE-1 2003 2004 2005 The% of Including Including The% of expenses expenses done done in # Month Total Total Total in branches in branches in Collection Collection Transferred Used in Collection Transferred Used in compliance compliance to AWSC branches to AWSC branches with collection with collection 1 January 70 99 48 51 52% 85 60 25 29% 2 February 66 97 55 42 43% 115 93 22 19% 3 March 100 146 86 60 41% 121 120 1 1% 4 April (3)* 134 130 68 62 48% 5 May 109 128 60 68 53% 6 June (2)* 201 172 95 77 45% 7 July 123 154 93 60 39% 8 August 128 150 87 62 41% 9 September 199 141 59 82 58% 10 October 148 126 31 95 75% 11 November 138 116 36 80 69% 12 December 177 141 89 52 37% Total 1 593 1 600 807 791 49% 321 273 48 15% Notes (1)*The data of “Vanadzor”,”Shirak”, “Armavir” and “Yeghvard” Branches is not included in this table (2)* The deadline for new law (June 2003) (3)* New methods of calculation and new tariff (April 2004)

QUARTERLY REPORT January-March 2005

COLLECTION OF AWSC CJSC FOR MARCH 2005 – TABLE 2

1000 AMD

Task of # Branches Total Collection % Collection

1 2 3 4 5 1 Abovyan 12 500 9 651 77,2% 2 Charentsavan 5 500 4 047 73,6% 3 Hrazdan 13 000 5 926 45,6% 4 Ashtarak 7 000 4 963 70,9% 5 Artik 7 100 7 430 104,6% TOTAL NORTH WEST REGION 45 100 32 016 71,0% 6 Sevan 4 500 2 853 63,4% 7 Dilijan 2 000 1 426 71,3% 8 Ijevan 5 200 4 255 81,8% 9 Gavar 10 500 5 742 54,7% 10 Alaverdi 5 500 4 238 77,0% 11 Spitak 7 000 5 464 78,1% TOTAL NORTH EAST REGION 34 700 23 978 69,1% 12 Masis 9 000 6 378 70,9% 13 Artashat 10 000 7 279 72,8% 14 Vedi 9 000 8 586 95,4% 15 Echmiadzin 14 700 11 019 75,0% TOTAL CENTER REGION 42 700 33 262 77,9% 16 Eghegnadzor 6 800 6 106 89,8% 17 Sisyan 3 500 3 960 113,2% 18 Goris 5 000 3 995 79,9% 19 Kapan 19 500 17 819 91,4% TOTAL SOUTH REGION 34 800 31 880 91,6%

TOTAL 157 300 121 136 77,0%

QUARTERLY REPORT January-March 2005

DIAGRAM-1

Collection of AWSC CJSC for March 2005

100,0% 90,0% 78% 92% 77% 80,0% 71% 70,0% 69% 60,0% 50,0% 40,0% 30,0% 20,0% 10,0%

0,0%

Total

South

Center

Region Region

Region

North East North North West North

QUARTERLY REPORT January-March 2005

DIAGRAM 2

Collection of AWSC CJSC for February 2005 and March 2005 (by days)

100,0%

90,0%

80,0%

70,0%

60,0% % of collection of %

50,0%

40,0%

30,0%

20,0% % of collection in February 2005 % of collection in March 2005 10,0%

0,0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

QUARTERLY REPORT January-March 2005

COLLECTION FROM ALL THE BRANCHES OF AWSC, IN JANUARY-MARCH 2005 TABLE 3 Thousand AMD JANUARY 2005 FEBRUARY 2005 MARCH 2005 TOTAL YEAR

% of the spent amount in the # BRANCHES Total Transfered Total Transfered Total Transfered Total Transfered Used in branches in collection to AWSC collection to AWSC collection to AWSC collection to AWSC Branches comparsion with the total collection (9/7*100)

1 2 3 4 5 6 7 8 9 10 11 12 1 ABOVYAN 6 861 5 565 9 154 8 027 9 651 9 736 25 665 23 328 2 337 9% 2 CHARENTSAVAN 2 440 1 874 3 027 2 999 4 047 4 007 9 513 8 880 633 7% 3 HRAZDAN 4 458 3 330 5 889 5 045 5 926 6 522 16 273 14 897 1 376 8% 4 ASHTARAK 2 957 1 033 5 026 3 237 4 963 4 932 12 946 9 202 3 744 29% 5 ARTIK 4 081 2 216 5 832 3 947 7 430 7 188 17 343 13 350 3 993 23% TOTAL NORTH WEST REGION 20 797 14 018 28 927 23 255 32 016 32 385 81 740 69 658 12 083 15% 6 SEVAN 1 212 660 1 873 1 432 2 853 2 764 5 938 4 856 1 082 18% 7 DILIJAN 825 452 1 668 1 264 1 426 1 115 3 919 2 831 1 088 28% 8 IJEVAN 1 930 1 254 5 062 4 104 4 255 4 213 11 247 9 570 1 677 15% 9 GAVAR 5 138 3 675 6 654 4 923 5 742 5 361 17 534 13 959 3 575 20% 10 ALAVERDI 2 917 1 987 3 865 3 331 4 238 4 040 11 020 9 357 1 663 15% 11 SPITAK 3 788 2 729 5 122 4 257 5 464 5 200 14 374 12 186 2 188 15% TOTAL NORTH EAST REGION 15 809 10 757 24 245 19 311 23 978 22 692 64 033 52 759 11 273 18%

QUARTERLY REPORT January-March 2005

January 2005 February 2005 March 2005 Total Year

% of the spent amount in the # BRANCHES Total Transferred Total Transferred Total Transferred Total Transferred Used in branches in collection to AWSC collection to AWSC collection to AWSC collection to AWSC Branches comparsion with the total collection (9/7*100)

1 2 3 4 5 6 7 8 9 10 11 12 12 ARTASHAT 8 576 7 562 7 605 5 429 7 279 7 022 23 459 20 013 3 446 15% 13 MASIS 4 916 3 387 5 585 4 639 6 378 6 170 16 879 14 195 2 684 16% 14 VEDI 6 405 4 653 8 015 6 735 8 586 8 507 23 006 19 895 3 111 14% 15 ECHMIADZIN 6 437 4 555 7 531 6 078 11 019 11 212 24 987 21 845 3 142 13% TOTAL CENTER REGION 26 334 20 157 28 735 22 880 33 262 32 911 88 331 75 948 12 383 14% 16 SISYAN 2 453 1 757 4 416 3 032 3 960 4 594 10 830 9 383 1 447 13% 17 EGHEGNADZOR 2 352 1 401 5 496 3 701 6 106 5 758 13 954 10 860 3 095 22% 18 GORIS 2 062 180 4 333 4 319 3 995 4 270 10 389 8 769 1 621 16% 19 KAPAN 15 249 12 063 19 593 16 992 17 819 17 380 52 661 46 435 6 226 12% TOTAL SOUTH REGION 22 116 15 401 33 838 28 044 31 880 32 002 87 834 75 446 12 388 14% TOTAL 85 056 60 332 115 746 93 489 121 136 119 990 321 938 273 812 48 127 15%

QUARTERLY REPORT January-March 2005

TABLE 4

COLLECTION FROM ALL BRANCHES OF AWSC

Including %

Total Total Against From the Time of of debts of # Billing Collection

Collection monthly previous

(5/3*100)

payable

(5/4*100) (6/4*100) Against of

expends months against profit

Increase of bills Increase of bills

Month collection %

previous months

monthly expends

payable(7/4*100) Fromthe of debts

AMD*10 3 AMD*10 3 AMD*10 3 AMD*10 3 AMD*10 3 % % % % 1 2 3 4 5 6 7 8 9 10 11 2004 1 January 152 837 93 450 37 323 33 522 22 604 40% 36% 24% 24% 2 February 161 757 98 204 39 968 42 099 16 137 41% 43% 16% 25% 3 March 143 241 149 523 42 977 84 786 21 760 29% 57% 15% 30% 4 April 154 493 120 409 43 934 51 666 24 810 36% 43% 21% 28% 5 May 186 826 132 225 60 535 48 679 23 011 46% 37% 17% 32% 6 June 183 997 172 343 65 552 95 707 11 084 38% 56% 6% 36% 7 July 182 461 153 738 66 371 56 789 30 578 43% 37% 20% 36% 8 August 423 879 146 026 71 346 40 970 33 710 49% 28% 23% 17% 9 September 407 366 139 244 74 975 36 731 27 539 54% 26% 20% 18% 10 October 374 542 129 933 73 554 42 453 13 926 57% 33% 11% 20% 11 November 369 783 117 030 67 498 33 903 15 630 58% 29% 13% 18% 12 December 343 415 147 512 69 488 44 821 33 202 47% 30% 23% 20% Total 2004 3 084 598 1 599 639 713 522 612 124 273 992 45% 38% 17% 23% 2005 1 January 347 340 84 803 48 354 24 435 12 014 57% 29% 14% 14% 2 February 338 985 115 341 67 466 33 040 14 835 58% 29% 13% 20% 3 March 317 806 121 136 71 311 30 933 18 892 59% 26% 16% 22% Total 2005 1 004 131 321 280 187 131 88 407 45 741 58% 28% 14% 19%

QUARTERLY REPORT January-March 2005

TABLE 5

QUANTITY OF INSTALLED WATER METERS OF AWS CJSC on date 01.03.2005

Including TOTAL Total count # Name of branches installed in watermeters Residential Juridical customers persons February

1 2 3 4 5 6 1 Abovyan 16 786 16 451 335 151 2 Charentsavan 6 542 6 340 202 48 3 Hrazdan 4 653 4 317 336 102 4 Ashtarak 5 726 5 543 183 8 5 Artik 2 014 1 830 184 208 Total North West Region 35 721 34 481 1 240 517 6 Sevan 5 436 5 248 188 41 7 Dilijan 1 958 1 894 64 25 8 Ijevan 4 023 3 878 145 59 9 Gavar 4 702 4 502 200 8 10 Alaverdi 6 438 6 320 118 10 11 Spitak 7 216 7 001 215 92 Total North East Region 29 773 28 843 930 235 12 Artashat 4 529 4 333 196 29 13 Masis 4 921 4 682 239 99 14 Vedi 6 197 6 089 108 8 15 Echmiadzin 13 045 12 725 320 79 Total Center Region 28 692 27 829 863 215 16 Sisyan 4 197 4 004 193 41 17 Eghegnadzor 3 095 2 841 254 148 18 Goris 1 391 1 334 57 84 19 Kapan 1 636 1 387 249 60 Total South Region 10 319 9 566 753 333 Total 104 505 100 719 3 786 1 300

QUARTERLY REPORT January-March 2005

REPORT

On trips to “Hrazdan” and “Echmiadzin” Sectors of AWSC CJSC

“HRAZDAN SECTOR

On March 14-15 of the current year the Commercial Director of the Company Jean Nicolas Pons, his Deputy V. Manandyan, Head of the Sales Department A. Mkrtchyan and Deputy Director of “Center” Regional Branch D. Grigoryan had a trip to “Hrazdan” sector of the Company with the purpose to check the work of the water meters of subscribers and water provision and sewerage services registration procedures. “Hrazdan” Sector provides services to 16270 resident-subscribers, out of which on average 9858 resident subscribers receive services every month and 299 legal entities, out of which on average only 127 services every month. As of 01.03.2005 3109 subscribers, including 2991 resident- subscribers and 247 legal entities have water meters. During February of 2005 only 1824 subscribers (or 58.7%) out of 3109 subscribers with water meters, including 1706 (or 57.0%) out of 2991 resident subscribers and 118 (or 47.7%) out of 247 legal entities have received services. During the first day of the visit the check-ups of randomly selected subscribers from apartment buildings, private houses and legal entities were realized.

Resident-subscribers

The apartments of 6 resident subscribers were randomly selected, out of which the violations were observed in 2 cases: in one house 3 people were living, but no billing was realized (in the database the number of people was indicated 0), in the second case 3 people were living in the house, however the billing was realized for only 1 of them.

Legal entities If we compare the legal entities with resident-subscribers, we can state that the billing of legal entities was on a very law level in the Sector. Random check-ups were realized in about 20 legal entities, out of which 2 subscribers (“Dvin Holding” and “Car-wash”) had water meters, but were out of billing (were not included in the database): During the visit some discrepancies in the water meter indexes as well as unsealed water meters were found:  The water meter of “Polyclinic” SCJSC was not sealed, the index of March 14 (502) was less than the index presented in the subscribers’ database as of February 28.

 The water meter index of private entrepreneur Zhora Galstyan as of March 14 (92) was less than the index presented in the subscribers’ database as of February 28 (94).

QUARTERLY REPORT January-March 2005

 The water meter index of a Maternity House SCJSC as of March 14 (1450) was less than the index presented in the subscribers’ database as of February 28 (1574).

 The water meter index of the Secondary School No. 8 as of March 14 (826) was less than the index presented in the subscribers’ database as of February 28 (860).

 The water meter index of Kotayk Marz Department as of March 14 was 3865 and the index presented in the subscribers’ database as of February 28 was 3360, the difference equaled to 505 cubic m. (according to the reports the average monthly consumption of the Department equaled to 100).

 The water meter index of Hrazdan IAD as of March 14 was 9372 and the index presented in the subscribers’ database as of February 28 was 7500, the difference equaled to 1872 cubic m. (according to the reports the average monthly consumption equaled to 250).

4 car-washes were randomly selected and checked. One of the subscribers had a water meter (index – 4006) but was not registered in the subscribers’ database, 3 of the subscribers did not have water meters, but their billing was realized by subscribers. The “Armano” bath-house was also checked. The water meter of the subscriber was not working. The index of the water meter as of March 14 was 325, and the index presented in the subscribers database as of February 28 was 419 (in the reports the average monthly consumption equaled to 20- 25 cubic m).

If we summarize the information, we can state: 2 out of the 6 randomly selected and checked resident-subscribers had inaccuracies, and regarding the legal entities the situation was considerably worse. Out of 20 randomly selected subscribers the 2 were not included in the billing and 13 had different kind of inaccuracies.

After completing the works the results of the check-ups were discussed with the Head of the Sector S. Tigranyan. The Commercial director evaluated the billing works of the sector as unsatisfactory and the Head of the Sector was assigned to eliminate the observed shortcomings in 1 month.

QUARTERLY REPORT January-March 2005

ECHMIADZIN SECTOR

On February 17 of the current year a similar check-up was realized in “Echmiadzin” Sector with the purpose of checking the water meter indexes of the subscribers and the sales data.

Resident-subscribers

The flats of 16 resident-subscribers were randomly checked and 2 of them had violations: the information reflected in the customers’ database did not correspond to the actual indexes of water meters.

Legal entities

17 (large and small) legal entities receiving services from the Sector were randomly checked:  The Secondary School No.2 is receiving services, but no billing is registered in the database.

 According to the subscribers’ database one military base is not being billed and does not have a water meter, however in reality it receives services and has a water meter with index 89.  In Polyclinics the water meter index does not correspond to the index reflected in the subscribers’ database.

 In Andir Gas Station the index as of March 17 was 2682, and as of February 28 the index was 1201 (the difference equaled to 1480 cubic m).

During the check-up it was impossible to check the water meters of some subscribers due to different reasons. If we summarize the results of the realized check-ups, out of 16 randomly checked resident-subscribers only 2 had some inaccuracies. The legal entities had a larger number of inaccuracies.

Currently the Company continues to realize similar type of visits to other Branches and Sectors. Most likely the same type of inaccuracies are present in all the other Branches. The main purpose of the visits is to regulate the billing of the subscribers with water meters, the work of the water meters, accurate registration of the indexes and other issues.

QUARTERLY REPORT January-March 2005

2.2 WORKS

QUARTERLY REPORT January-March 2005

HAND OVER PROCESS under USAID PROGRAM

BULK FLOW METERS INSTALLATION:

Conformity with the design

1. All the technical documents relatives to the site checking have been signed by the Branches. All defects observed before the date of signature have been mentioned in the "defect list". In some places the Constructors have restarted the installation but still in non-conformity with the design for some locations ( Berd ).In Alaverdi it was necessary to remove the DN 200mm flow meter installed on a DN 500mm pipeline, this due to a lack of water in some downstream lines according to the sector observation. In Alaverdi also a DN 50 flow meter has been installed ( ref: 14.11 ) instead of a DN 100mm.The result was a lack of water for Shahumyan sector during more than 10 days. The situation has been temporary solved by A.W.S.C until the conformity will be ordered to the Constructor by P.I.U. In Echmiatsin perimeter several leakages of water appeared after installation of some flow meters (strangulation of pipes ).Several have been dismantled by the sector in view to re-irrigate the network. A site detailed flow checking will be necessary to measure the real impact of some strangulations in the dynamic of the network. The corresponding calculation in the design gives generally enough downstream flow but the data takes in consideration a uniform function of the systems , that is not the real situation due to abnormal configuration of some parts of the network and also to the local impact of many leaks or detoured water (unknown factors).

Checking program

2. A.W.S.C has given order to the new Sectors to have a real site observation on the further installation of new flow meters. As soon as a deviation from the design will be observed to inform immediately the Head Office and P.I.U.

Hand over acceptance Commission

3. Still waiting for the decision concerning installation of filters on all mechanical and turbine flow meters Only electro-mechanical flow meters will not receive filters. The total number of filters deemed to be installed is 497. The total number of chambers deemed to be extended is 60. The total number of additional fittings ( filters, gate valves ) to be provided is 84.

QUARTERLY REPORT January-March 2005

Stopped or non working flow meters

4. Some flow meters cannot be handover until replacement of the broken turbines. A difficult point is the re-stopping of flow meters after the site checking or cleaning, this was observed on several points. This is the clear confirmation that the reality has to be considered instead of any other theoretical or normative consideration.

Uninstalled flow meters on February 28th

5. The restarting of some installation ( 7 or 8 ) give occasion to reorganize the control process. Several other non-conformity have been observed. It seems that some Constructors modify the design to facilitate the installation.

Non ad equation between installation and the design

6. To be checked on the site for the remaining part of the program in view to avoid the same deviations observed in 2004. A.W.S.C will organize it's own control on the future installation coming soon in Spring and will inform immediately the P.I.U about all deviations from the design during the construction steps.

Absence of guarantee 7. Same remark as in December report. This point should be solved after installation of filters. A.W.S.C remain hoping that the good issue will be found to solve the question of the filters.

Restarting of the last part of installation program ( Lori - Shirak + other Marzes )

8. Still waiting for better weather conditions all over the country. Many locations remain inaccessible to day, due to the snow cover. The melting of snow started in several locations. Installation program to be provided by P.I.U in view to follow the installation and schedule the shortages of water.

Installation of filters

9. * According to the meeting of 21-th March between A.W.S.C and P.I.U all modalities relatives to the conditions of installation have been defined. A report has been transmitted to P.I.U and information’s given to the Branches to clarify their position according to the different situations of next installations. A.W.S.C is waiting now for the scheduled installation program under P.I.U control in view to operate the next necessary cuts of water. * A separate program for all other location not entering in P.I.U agreement to solve the question of installation of the filters will be established between USAID – Constructors - A.W.S.C to complete the remaining filters.

QUARTERLY REPORT January-March 2005

Temporary storage of existing filters

10. Following the meeting on March 22nd between P.I.U and A.W.S.C, the total quantity of filters available in the "Fourmanov" store have been transferred to A.W.S.C Abovyan-sector store. The detail is the following:

 DN 50 226  DN 80 50  DN 100 85  DN 150 62  DN 200 31  DN 250 6 TOTAL 460

REMARKS: * The USAID has informed that as soon as the detailed checking will be completed in view to fix the real budget, one month will be necessary for the usual administrative formalities before starting the installation with the Constructors. A.W.S.C will provide the latest information’s as soon as we will receive the final breakdown from P.I.U for the detailed locations remaining under P.I.U control according to the agreements of the 22nd of March meeting. A.W.S.C has provided to P.I.U the internal detailed checking on March 24th, for a revision and saturating. The design of the installation of filters has also been provided.

QUARTERLY REPORT January-March 2005

AWSC SURVEY OF DRINKING WATER AND SEWAGE INFRASTRUCTURES

The National Survey Program is covering 19 months of checking all AWSC installations with regards to all water supply system. It also concentrates in identifying any project with the aspect of reducing the energy consumption, and to improve services by the meaning of good operation.

Three groups of sectors were identified:

 The so-called “Priority Sectors” are those with high energy consumption, and will be treated as a priority. This represents a group of 14 entities (dates : from the 8/11/04 to 01/08/05),

 The second group so-called “Routine Sectors” involves 11 sectors which are consuming energy to produce water, but using less energy in comparisons with the first group. They will be treated as routine ones (dates : from the 01/09/05 to 08/02/06),

 And the last group, “Sectors with not Pumping Station” or using gravity systems, involves also 11 sectors, they are those which are using only gravity systems, but checking will be done to see how the water supply systems can be improved if required to provide better services by improving operations (dates: from the 09/02/06 to 29/05/06).

TABLE-6

ADVANCEMENT OF THE AWSC SURVEY AT THE 31ST OF MARCH 2005

COMPLETED

AWSC SURVEY SITUATION Previous month Finishing month

AWSC Survey 28 % 33 % Priority Sectors 51 % 58 % Routine Sectors 0 % 0 % Other Sectors 0 % 0 %

QUARTERLY REPORT January-March 2005 ECHMIADZIN SECTOR

Since February, the survey is concentrating on Echmiadzin Sector. The initial and required time to carry on this checking work should have been one month. However, due to the very large Sector areas to be covered and also due to the complexity of the water system, much more time is required to understand precisely how the system of production and distribution of water is organized.

The Sector is dealing with Echmiadzin city and 45 villages all over Armavir Marz. Three different networks are providing water to the population (35 121 inhabitants for Echmiadzin, and 54 582 for villages) through boreholes, catchments, and pumping station systems.

 The first and the most important network is the one coming from the Bazmaghbyur and Ghozaravan sources, including boreholes field areas, catchment, and pumping system for the line Agarak/Kosh villages. The network is providing water to Echmiadzin city and 39 villages.  The second network is a system from borehole, providing water to Hushakert village. This one is totally autonomous.  The third one, is the one so-called Artamet system, where one borehole in working condition is providing water which is pushed through a pumping station to three villages such Artamet, Vanand, and, Arevadash.  The last system is providing water to two villages, Argina and Shenik, using one borehole in working condition.

The analysis of the survey is in process. However Echmiadzin Sector is unfortunately in a similar shape than Sectors previously checked. The infrastructures from production to distribution network are in a very poor condition, there is a lot of losses, and suspicious connections. The last point mentioned is even worth in comparison with the other sectors. The regulations of the network need major improvements.

In term of reducing the energy consumption it may be possible, but at the moment it is too early to confirm with accuracy what could be the possibilities to reduce or even to shut down the pumping station of Agarak and Kosh, and eventually the boreholes pumps from Bazmaghbyur and Ghozaravan.

However, there are three projects that could play a significant issue in term of reducing the energy consumption. These are the Ambert Sources Project, the Vosketas Project, and to setup a strong regulation program. Of course these projects need to be deeply analyzed before to take any action.

With regards to Sewage, the WWTP of Echmiadzin is in very poor state. Also it was design for 15.000 m3 per day to be treated the actual amount of sewage incoming through this treatment plant is actually less than 4.000 m3 per day. The sewage network is also suffering of lacks of operation and maintenance.

QUARTERLY REPORT January-March 2005

2.3 TECHNICAL

QUARTERLY REPORT January-March 2005

TECHNICAL STUDIES

The technical studies for the period of March 2005 were as follows:

 The Company discussed Rehabilitation of water supply system of Sevan town, Rehabilitation of water supply system of Dilijan town, Protection of water supply systems sanitary zones as well as Preliminary calculation and design of water meter joint for multi- apartment buildings for Charentsavan, Hrazdan, Tsaghkadzor town implemented by the Consultants, while the above documents have been submitted to the PIU.

 Agreement has been concluded with CJSC Jrhan for study of deep wells on the territory of Lchashen village envisaged for water supply of Sevan town. According to the agreement, the study results must be presented by April 10, 2005.

 Detailed studies and have been performed and volumes of works have been identified and calculated jointly with Transport Department targeted at changing of water supply system of Argel village to one based on gravity.  For implementation of Rehabilitation of water supply system of Sevan town and for the purpose of seeking alternative water sources an information was provided by Hydro- Geological Fund of Ministry of Nature Protection of the Republic of Armenia as per established order about existence of deep wells on the area of Sevan town.  Jointly with relevant department, the Company coordinated the works targeted at preparation of financial programs of CJSC AWSC for the years 2005-2008 to discuss them at Directors Board and the Ministry of Finance of the Republic of Armenia.

Since March 9, 2005 two employees of the Technical Department were dispatched on mission to Branches for property inventory works as Chairmen of Inventory Commissions.

 The Company carried out inventory of “South” branch including main assets, incomplete capital construction, non-material-assets, resources, financial assets, finance-related documentation, debtors and creditors accounts.  The Inventory Commission prepared list of actually available material values.  The actually present assets have been compared to those registered assets by Accounting Department.  Statement on the results mentioning deficit or surplus have been compiled. The inventory works have been completed on April 3, while its results have included in the relevant forms.

QUARTERLY REPORT January-March 2005

POTABLE WATER DISINFECTION

1. 2.

Out of 81 potable water treatment plants formerly involved in the Company’s system only 54 are operating currently. At 43 plants potable water disinfection is carried out by liquid chlorine, at 11 plants - by chlorine carrier. The disinfection of water supplied to Jermuk city is performed through germicidal lamps.

Whenever the disinfection (water treatment) plants are absent, water disinfection is carried out in daily-regulated reservoir by facilitated method - through chlorine carrier. In this case it is difficult to provide for the required dose of active chlorine and the time contact with water.

Over the recent years, as a main reason for the insufficient disinfection of potable water in the Republic was the absence of water treatment plants and the present technical state of operating plants. The sanitary zones fences were demolished and in some places destroyed thoroughly.

The chlorine stores and the buildings of chlorine plants need in overhaul. The buildings do not have door and window, roofs are in state of emergency, and ventilators are out of order. The chlorine extinguishing holes destined for damaged balloons, as well as drainage streams, balloons and container transporting elevators are in poor condition. The pipes entering into chlorination apparatus and removing chlorine water need in substitution. LONII – 100 equipments installed in chlorine plants are morally and technically out of date and fail to provide for the correct dosage of liquid chlorine. The equipments require constant technical control; everywhere the leakage of liquid chlorine is frequently recorded. The ventilators and the special personal safety means are absent.

Chlorine dosage control is insufficient at chlorine plants: the hourly required titration method applied for analysis is laborious and basically is not performed by chlorinating operator. Therefore, the required concentration of residual chlorine is not provided until pumped into distribution station. The chlorinating operators of chlorine plants do not have professional qualification.

By estimation, the annual liquid chlorine demand for potable water disinfection amounts to about 130tons, for chlorine carrier – 22tons.

QUARTERLY REPORT January-March 2005

TABLE-7

THE INFORMATION CONCERNING THE QUANTITY OF POTABLE WATER DISINFECTION STATIONS, TYPES OF DISINFECTANT AND THOSE WORKING CONDITION.

Name of water supply Name of water used sites Quantity Disinfection Working systems and sources location (piece) type condition

NORTH-WEST REGION Maqravan Abovyan city,Kotayq village 1 Chlorine gas working

Bujakan Bujakan village, Aragjux village, Saralang village not disinfecting Akunq Akunq village not disinfecting

Dzoraxbjur Dzoraxbjur village not disinfecting

Nurnus Byureghavan city 1 Chlorine gas working Maqravan – 2,3 Hrazdan city, Kaghsi village, 2 Chlorine gas working Gagarinavan village,·. Jraratavan village Texenis Tsaghkadzor city not disinfecting

Ulashik WTP Artavaz village, Pjunik village 1 Chlorine gas working

Karbi DW Ashtarak city 1 Chlorine gas Not working Artak, Karbi Ashtarak city, Oshakan village (left 1 Chlorine gas working coast)

Saxmosavan, Artashavan Ashtarak city, Ushi village, 1 Chlorine gas Not working Ohanavan village, Karbi village, Karin village, Sasunik village

Ortachia Sangjar village, Rja-Taza village, Vardablur village not disinfecting

Gexadzor Geghadzor village, Hnaberd village, Geghadir village, Berqarat village, not disinfecting Amre-Taza village, Shenkani village Eznak Aparan city 1 Chlorine gas ·áñÍáÕ Jami not disinfecting Mantash rezervoir (WTP Artik city 1 Chlorine gas ·áñÍáÕ Artik villages)

QUARTERLY REPORT January-March 2005

Name of water supply Name of water used sites Quantity Disinfection Working systems and sources location (piece) type condition

Mantash rezervoir (WTP Horom village, Mec Mantash 1 Chlorine gas Works in May Artik) village, Poqr Mantash village, and Oktober Tufashen village, Getapi village, Anushavan village,Hovtashen village, Nor Kjanq village ,Panik village, Arevshat village, Saralange village, Hajkasar village, Meghrashen village ,Geghanist village , Harich village, Spandarjan village, Zardaqar village, Norashen village Daghcutner Ashotsk village, Musajelyan village not disinfecting Sari Saragjugh village, Tavshut village not disinfecting Khazanchi Mec Sepasar village, Poqr Sepasar village, Khazanchi village not disinfecting Lusaghbyur Zujgaghbyur village, Hartashen village not disinfecting Zujgaghbyur Karmravan village not disinfecting Gharakhachi Vardaghbyur village , Salut village , Torosgjugh village not disinfecting Bavra Bavra village not disinfecting Kentaghbyur N809 Talin city 1 chlorine working powder Zovasar, Caghkasar village , Mastara village , 1 chlorine working Ginge Akner Areg village , Borosh village, powder Karaberd village Langik village, Dzorakap village Maralik p/s, Zaringa village, Tsamaqasar village, Disinfect from Gyumri chlorine station (Krasar) Suser village, Nor Artik village, Hacashen village, Sorik village, Dzithanqov village, Gjalto village, Hakko village NORTH-EAST REGION Dzknget Sevan city not disinfecting

Hatsarat Sevan city, Gavar city, Berdkunq 1 Chlorine gas working village, Tsovazard village, Hayravanq village, Lchap village, Chkalovka village, Shorsha village, Lchashen village, Varser village, Norashen village

QUARTERLY REPORT January-March 2005

Name of water supply Name of water used sites Quantity Disinfection Working systems and sources location (piece) type condition

Kushchinski Chambarak city not disinfecting

Taqa Taqa Khacher, Gavar city, Noratus village, 1 Chlorine gas Khacher, Kaler Karmir gjugh village, Gandzak Kaler village Sarughan Sarughan village, Karmir gjugh 1 Chlorine gas Sarughan village Gandzak Gandzak village 1 Chlorine gas Gandzak Tsak-Qar Martuni city, Tsakqar village, Lich 1 Chlorine gas Tsak-Qar village , Nor Getashen village Hopoj Var Martuni city not disinfecting Akner Vardenis city 1 Chlorine gas Akner Akunq not disinfecting Karkarut Ijevan city 1 chlorine Karkarut powder Spitak gur Spitak gur Getahovit 1 chlorine Getahovit powder Anapat 1 chlorine Anapat powder Khozmarag 1 chlorine Khozmarag powder Getapnja 1 chlorine Getapnja powder Gri dzor 1 chlorine Gri dzor powder Gmbet 1 chlorine Gmbet powder Saldakh Azatamut village not disinfecting

Berd WTP Berd city 1 Chlorine gas Berd WTP

Galavino WTP Dilijan city 1 Chlorine gas Galavino WTP Bldan WTP 1 Chlorine gas Bldan WTP Shamakhyan not disinfecting Chilut Tala not disinfecting Lori-Berd, Alaverdi city, Tumanyan city, 1 Chlorine gas Lori-Berd, Agarak Aqori village, Arevatsaq village, Agarak Cater village,Ajgehat village, Hagvi village, Odzun village

QUARTERLY REPORT January-March 2005

Name of water supply Name of water used sites Quantity Disinfection Working systems and sources location (piece) type condition

Berdavan, Noyemberyan city,Berdavan village, Gish sar Verin Qjurpja village, Koghb village not disinfecting

Ajrum Haxtanak village, Deghcavan village, Ptghavan village, Ajrum not disinfecting village

Kushchinski Chambarak city not Kushchinski disinfecting

Taqa Khacher, Gavar city, Noratus village, 1 Chlorine gas Kaler Karmir gjugh village, Gandzak village

Sarughan Sarughan village, Karmir gjugh 1 Chlorine gas village

Gandzak Gandzak village 1 Chlorine gas Gandzak Tsak-Qar Martuni city, Tsakqar village, Lich 1 Chlorine gas Tsak-Qar village , Nor Getashen village Hopoj Var Martuni city not disin- Hopoj Var fecting Akner Vardenis city 1 Chlorine gas Akunq not disin- Akunq fecting

QUARTERLY REPORT January-March 2005

Name of water supply Name of water used sites Quantity Disinfection Working systems and sources location (piece) type condition

CENTER-WEST REGION Artashat DW Artashat city not disinfecting Garni Artashat, Ararat, 1 Chlorine gas ·áñÍáÕ Nshavan village, Baghramyan villages, Arevshat village, Ajgepat village, Ajgestan village, Deghtsut village, Kanachut village, Masis village, Mrgavan village, Burastan village, Dimitrov village,Getazat village, Qaghcrashen village, Dalar village, Shahumyan village, Berdik village, Azatavan village, Ajgezard village, Bjuravan village, Vardashen village, Hnaberd village, Vostan village, Abovyan village, Berkanush village , Araksavan village , Langazat village , Verin Dvin village , Nerqin Dvin village , Verin Artashat, Narek village, Mrgavet village, Mrganush village, Norashen village, Mghchyan village, Hovtashen village, Vedi village, Ptghni village

æ»ñÙ³ÝÇë Vedi city, Urcadzor village, 1 Chlorine gas Dashtavan village, Ararat village ²Û·³í³Ý Ajgavan village not disinfecting

QUARTERLY REPORT January-March 2005

Name of water supply Name of water used sites Quantity Disinfection Working systems and sources location (piece) type condition

Bazmakhbyur Echmiadzin city,Amberd village, 2 Chlorine gas Bazmakhbyur Ghazaravan Khoronk village, Nor Edesia village, Ghazaravan Doghs village, Shahumyan village, Artimet village, Caghkalanch village,Tsiacan village, Hajtagh village, Norakert village, Arevshat village, Geghakert (Samalar) village, Geghanist village, Tsaghkunq village, Aghavnatun village, Ajgeshat village, Aragac village, Baghramyan village, Ferik village, Lernamerdz village, Hovtameg village, Arshalujs village, Dasht village, Mrgastan village, Ajgek village, Musaler village, Ptghkunq village, Voskehat village, Aragtscotn village, Bazmaghbjur village, Ghazaravan village, Shamiram village, Voskevaz village, Agarak village,, Voskehat village, Ugan village, Oshakan village, Kosh village, Dprevank village, Nor Amanus, Parpi village,

Araratyan 1,2 Masis city, Nor Kharberd 1 Chlorine gas Araratyan 1,2 village,Arevabujr village, Nor Kjuri village, Marmarashen village, Grahovit, Ajntap village, Arbat village, Ghukasavan village, Azatashen village, Getap village, Noraberd village, Darakert village, Darbnik village, Hajanist village, Geghanist village, Argavand village, Dashtavan village, Dzorak village, Khachpar village, Sajat-Nova village

QUARTERLY REPORT January-March 2005

Name of water supply Name of water used sites Quantity Disinfection Working systems and sources location (piece) type condition

SOUTH REGION Akner,Mughutaryan Goris city, Hargis village, Shinuhajr 1 Chlorine gas working village, Khot village, Halidzor village, Hartashen village, Karahung village Mughutaryan Noravan village, Sarnakunq village, not disinfecting Spandaryan village, Ishghanasar village, Angeghakot

Shake Sisyan city, Ujc village, Hacavan 1 Chlorine gas working village, Ashotavan village Zor-Zor Shamp not disinfecting Geghi Kapan city 2 Chlorine gas working Surin Kap Geghi WTP Vachagan WTP 1 chlorine Working powder Chanaghchi Kapan city, Andranikashen village, 1 Chlorine gas Working Sjunik village, Agarak WTP Agarak city, Karchevan village 1 Chlorine gas working Õ Agarak DW Agarak city not disinfecting Meghri WTP Meghri city 1 Chlorine gas working Setenc 1 Chlorine gas working Karasun Eghegnadzor city, Shatin village, 1 Chlorine gas working Artabujnq village, Gladzor village, Vostan Eghegnadzor village, Getap village, 1 Chlorine gas Not works

Sarnaghbjur Eghegnadzor city 1 Chlorine gas Not works

Her-her Vajk city 1 Chlorine gas Not works

Spitak çáõñ Jermuk city 1 BL working

QUARTERLY REPORT January-March 2005 TABLE – 8

REQUIREMENT DISINFECTANT RECORDS MARCH 2005

Requirement* Remainder Turned out Utilized Remainder 01.03.05 – 01.03.2005 01.03.05 - 01.04.05 01.03.05 - 01.04.05 # BRANCHES 01.04.05 (kg) (kg) (kg) 01.04.05 (kg) (kg) Chlorin Chlorine Chlorine Chlorine Chlorine Chlorine Chlorine Chlorine Chlorine Chlorine e gas gas powder gas powder gas powder gas powder powder NORTH-WEST

1 Abovyan 400 - 79 60 100 - 114 - 65 60 2 450 - 50 50 300 - 300 - 50 50 Hrazdan

3 Charentsavan 160 - 69 55 150 - 124 - 95 55

4 Ashtarak 200 100 60 120 300 240 147 80 213 280

5 Artik 250 100 21 238 200 120 190 94 31 264 TOTAL 1 460 200 279 523 1 050 360 875 174 454 709

NORTH-EAST

1 Sevan - 120 - 160 - 120 - 160 - 120

2 Gavar 250 60 - - 400 - 230 - 170 -

3 Ijevan - 120 - 112 150 200 - 92 150 220

4 Dilijan - 200 - 420 250 - - 150 250 270

5 Alaverdi 250 - 250 74 300 80 277 36 273 118

6 Spitak - 160 - 518 200 120 - 159 200 479

TOTAL 500 660 250 1 284 1 300 520 507 597 1 043 1 207

CENTER-WEST

1 Artashat 800 - 300 - 150 - 375 - 75 -

2 Echmiadzin 800 - - - 250 - 70 - 180 -

3 Masis 1000 - 705 57 250 - 955 - - 57

4 Vedi - 25 - 5 - 80 - 25 - 60 TOTAL 2 600 25 1 005 62 650 80 1 400 25 255 117

QUARTERLY REPORT January-March 2005 SOUTH

1 Goris 110 - 96 80 100 - 105 - 91 80

2 Eghegnadzor 80 - - 360 100 40 - - 100 400

3 Sisyan 45 - 205 - - - 5 - 200 -

4 Kapan 950 - 640 - 1 650 - 840 - 1 450 - TOTAL 1 185 0 941 440 1 850 40 950 0 1 841 480

MAIN TOTAL 5 745 885 2 475 2309 4850 1000 3732 796 3 593 2 513

Remark :*) The requirements calculation was done without used water expenditures for the water over chlorination and disinfection of structures.

QUARTERLY REPORT January-March 2005 TABLE-9 REQUIREMENT DISINFECTANT RECORDS I QUART, 2005

Requirement* Remainder Turned out Utilized Remainder 01.01.05 – 01.04.05 01.01.2005 01.01.05 – 01.04.05 01.01.05 – 01.04.05 01.04.05 # BRANCHES (kg) (kg) (kg) (kg) (kg) Chlorine Chlorine Chlorine Chlorine Chlorine Chlorine Chlorine Chlorine Chlorine Chlorine gas powder gas powder gas powder gas powder gas powder

NORTH-WEST

1 Abovyan 1150 30 - 80 900 - 835 20 65 60 2 1350 - - 180 1350 - 1300 130 50 50 Hrazdan

3 Charentsavan 480 - - 60 450 - 355 5 95 55

4 Ashtarak 850 160 - 120 1100 240 887 80 213 280

5 Artik 740 305 400 416 200 120 569 272 31 264 TOTAL 4570 495 400 856 4000 360 3946 507 454 709 NORTH-EAST

1 Sevan - 360 - 580 - 120 - 580 - 120

2 Gavar 260 180 - 160 400 - 230 160 170 -

3 Ijevan 150 220 - 180 150 200 - 160 150 220

4 Dilijan - 350 - 520 250 - - 250 250 270

5 Alaverdi 650 180 - 114 1100 80 827 76 273 118

6 Spitak 300 500 - 918 200 120 - 559 200 479 TOTAL 1360 1790 - 2472 2100 520 1057 1785 1043 1207 CENTER-WEST

1 Artashat 2550 - - - 1400 - 1325 - 75 -

2 Echmiadzin 2500 - - - 1650 - 1470 - 180 -

3 Masis 2700 - - 57 2250 - 2250 - - 57

4 Vedi - 100 - 45 - 80 - 65 - 60

TOTAL 7750 100 0 102 5300 80 5045 65 255 117

QUARTERLY REPORT January-March 2005 SOUTH

1 Goris 780 - - 80 900 - 809 - 91 80

2 Eghegnadzor 150 90 - 420 100 40 - 60 100 400

3 Sisyan 50 100 249 80 - - 49 80 200 -

4 Kapan 2700 - - - 3250 - 1800 - 1450 - TOTAL 3680 190 249 580 4250 40 2658 140 1841 480

MAIN TOTAL 17 360 2 575 649 4 010 15 650 1 000 12 706 2 497 3 593 2 513

Remark :*) The requirements calculation was done without used water expenditures for the water over chlorination and disinfection of structures.

QUARTERLY REPORT January-March 2005

WATER CHLORINATION (Disinfection of potable water)

The Company faced difficulties related to import of chlorine-carrying agents from the Islamic Republic of Iran (the agreement was concluded with Tompak Ltd. According to the agreement Tompak was to import chlorine in containers used by AWSC. For this purposes AWSC provided 7 containers that passed technical expertise. They have been transported to Iran, however chlorine producing company CLOR-PARS refused to fill them, informing us that our Russian-made containers do not meet the Iranian standards. The scanned copy of this statement is presented below.

QUARTERLY REPORT January-March 2005

DISINFECTION OF WATER SUPPLY SYSTEMS

Out of 322 daily-regulated reservoirs (DRR) involved in the Company’s system 262 are operating currently with 211.8thous.cubic meter total volume.

The daily-regulated reservoirs are currently need in overhaul and renovation, in most cases the fences of sanitary protected zones are missing, the lighting and guard service are absent. The disinfection of water supply system (DRR, deep wells, treatment plants structures, etc.) is mandatory for each year (and afterwards – upon necessity) in May-June months and is carried out with the participation of a representative of State Hygienic and Quarantine Inspection, and an appropriate protocol whereof is drawn up.

TABLE-10

QUANTITY AND CAPACITY OF DAILY REGULATION RESERVOIRS (DRR), ECSPLOTATED BY THE AWS CJSC ON DATE 01.01.2005.

Water Supply System, Cub. # SECTORS DRR Name & Location Place Piece Capacity Source m

NORTH-WEST 1 Abovyan Abovyan I zone N1 Maqravan 1 2000 2000 Abovyan I zone N2 Maqravan 1 2000 2000 Abovyan I zone N3 Maqravan 1 2000 2000 Abovyan I zone N4 Maqravan 1 2000 2000 Abovyan II zone N1 Maqravan 1 3000 3000 Abovyan II zone N2 Maqravan 1 3000 3000 Kotayq village Maqravan 1 5000 5000 Saralang village Maqravan 1 100 100 Aragjugh village N1 Maqravan 1 75 75 Aragjugh village N2 Maqravan 1 400 400 Aragjugh village N3 Maqravan 1 400 400 2 Byureghavan Byureghavan city N1 Nurnus 1 1000 1000 Byureghavan city N2 Nurnus 1 1000 1000 Arzni village Gjumush, Nurnus 1 300 300

QUARTERLY REPORT January-March 2005 Water Supply System, Cub. # SECTORS DRR Name & Location Place Piece Capacity Source m 3 Hrazdan Hrazdan central N1 Maqravan 2 2000 4000 Hrazdan central N2 Maqravan 2 2000 4000 Hrazdan central N3 Maqravan 1 2000 2000 Hrazdan central N4 Maqravan 1 2000 2000 Hrazdan central N5 Maqravan 1 2000 2000 Hrazdan central N6 Maqravan 1 300 300 Aghbjuraki Maqravan 1 500 500 4 Tsaghkadzor Tsaghkadzor city N1 Maqravan 1 300 300 Tsaghkadzor city N2 Maqravan 1 400 400 Tsaghkadzor city N3 Maqravan 1 400 400 Tsaghkadzor city N4 Maqravan 1 500 500 Tsaghkadzor city N5 (srort complex) Maqravan 1 1000 1000 Ulashik reservoir Ulashik 1 1000 1000 5 Charentsavan Solak Charentsavan city Solak 2 2000 4000 Gjumush Charentsavan city Gjumush 2 2000 4000 Solak village Solak 1 110 110 Bgni village Solak 1 130 130 1 500 500 Karenis city Gjumush 1 200 200 6 Ashtarak Ashtarak city N1 Artashavan, Saghmosavan, 1 2000 2000 Karbi 2 1000 2000 2 500 1000 Ashtarak city N2 N3 úÎæ-Çó 2 500 1000 Ashtarak city N3 Artak, Artashavan 2 2000 4000 1 750 750 Ashtarak city N4 Artak, Artashavan 1 500 500 Ashtarak city N5 from N3 reservoir 1 500 500 7 Aparan Aparan city N1 Jami 1 2000 2000 Aparan city N2 Eznaki 1 1200 1200 Geghair village Gexadzor 2 250 500 8 Artik Artik city N1 Mantash rezervoir 2 1000 2000 Artik city N2 Mantash rezervoir 2 500 1000 Artik city N3 (Lmbat) Mantash rezervoir 1 300 300 Hajkasar village Mantash rezervoir 1 400 400 Poqr Mantash village Mantash rezervoir 1 500 500 Geghanist Mantashi DRR 2 400 800

QUARTERLY REPORT January-March 2005 Water Supply System, Cub. # SECTORS DRR Name & Location Place Piece Capacity Source m 9 Ashotsk Ashotsk village Jraxhacner 2 1000 2000 Ghazanchi village Ghazanchi 2 300 600 Goghovit village Ghazanchi1 3 80 240 Karmravan village Lokal, Zujgarbjur 2 150 300 Toros village Gharakhach 2 200 400 Musaelyan village Daghdzutner 2 120 240 Tavshut village Daghdzutner 2 120 240 Mec Sepasar village Lokal, Zujgarbjur 1 100 100 Zujgaghbjur village Hartashen 2 300 600 Hartashen village Hartashen 2 100 200 10 Talin Talin village N1 Kentaghbjur 2 250 500 Tali sity N2 N.809 2 1000 2000

NORTH-EAST 1 Sevan Central area Hacarat 2 2000 4000 Mikro area Hacarat 2 500 1000 2 Chambarak ù.Chambarak kushinsky, Taqa 1 1000 1000 3 ù. Gavar Avznoci Hacarat, Khacher 2 2000 4000 Gavar ù. Gavar Medei Dar Hacarat, Khacher 1 400 400 ù. Gavar Memoi Dar Hacarat, Khacher 2 1000 2000 ù. Gavar Arcvaqari Hacarat, Khacher 1 400 400 ù. Gavar Kaleri Kaler 1 800 800 Sarukhan village, Sarukhan 2 250 500 Karmir village, Sarukhan, Hacarat 2 500 1000 Gandzak village, Gandzak, Hacarat 1 1000 1000 2 500 1000 Noratus village, Hacarat, Khacher 1 1000 1000 1 500 500 4 Martuni Martuni sity Caq qar 2 2000 4000

5 Vardenis Zori Shatjreq 1 500 500 Taperi Akunq 1 2000 2000 6 Ijevan Ijevan city N1 Khozmarag 2 250 500 Ijevan city N2 Getpnia 1 1000 1000 Ijevan city N3 Gethovit 2 500 1000 Ijevan city N4 Spitak Jur 1 500 500 Ijevan city N5 Gmbet 1 300 300 Ijevan city N6 Qarqarut 2 500 1000 Ijevan cty N7 Qarqarut 2 500 1000

QUARTERLY REPORT January-March 2005 Water Supply System, Cub. # SECTORS DRR Name & Location Place Piece Capacity Source m 7 Berd Sorani N1 Berd cty Berd WTP 2 500 1000 Sorani N2 Berd cty Berd WTP 1 300 300 Honut Berd cty Berd WTP 1 500 500 Prunkanc Berd cty Berd WTP 1 300 300 Berd-military cty Berd WTP 1 500 500

8 Dilijan Diligan city N1 Bltan WTP 1 1000 1000 Diligan city N2 Shamakhyan 2 500 1000 Takhta Diligan city GalovinoWTP 1 1000 1000 Hagharcin village Local 1 500 500 1 100 100 9 Alaverdi Alaverdi city Lori,Berd, Agarak 2 300 600 Piruzyan Alaverdi city Lori,Berd, Agarak 2 400 800 Sarahart Alaverdi city Lori,Berd, Agarak 1 300 300 Sanahin Alaverdi city Lori,Berd, Agarak 4 300 1200 Tumanyan city Lori,Berd, Agarak 4 100 400 Aghtala city Getavan 1 500 500 10 Noyemberyan Noyemberyan city Gij Sar 1 1000 1000 1 500 500 Haghtanak village Airum(previous Getavan) 2 250 500 Deghcavan village Airum(previous Getavan) 2 250 500 Ptghavan village Airum(previous Getavan) 1 500 500 11 Stepanavan Stepanavan city N1 Gjulidar 2 150 300 Stepanavan city N3 Getavan 2 500 1000 12 Spitak Spitak city N1 Chaghkal 2 2000 4000 Spitak city N2 Jrashen 1 1000 1000 Spitak city N3 Shirakamut 1 500 500 Mec Parni village Chachkal 1 500 500 Grashen village Jrashen 1 500 500

13 Tashir Tashir city Novoselcovo-Aksjutin 1 1850 1850

Medovka village Novoselcovo 1 300 300 Saratovka village Novoselcovo 1 300 300

QUARTERLY REPORT January-March 2005

Water Supply System, Cub. # SECTORS DRR Name & Location Place Piece Capacity Source m

CENTER-WEST 1 Artashat Arevshat village Garni 3 2000 6000 2 750 1500 Qaghcrashen village Garni 2 2000 4000 Norashen village Garni 1 300 300 2 Echmiadzin Shahumjan village Bazmaghbjur, 2 2000 4000 Ghazaravan 1 6000 6000 1 2000 2000 Aragac village Bazmaghbjur, 1 1000 1000 Ghazaravan Nor Edesia village 1 500 500 Aragacotn village Bazmaghbjur, 1 500 500 Ghazaravan Shamiram village 2 250 500 Voskevaz village Bazmaghbjur, 1 250 250 Ghazaravan Agarak village 1 500 500 Dzorap village Bazmaghbjur, 1 500 500 Ghazaravan Kosh village 1 500 500 Dprevanq village Bazmaghbjur, 1 250 250 Ghazaravan Nor Amanos village 2 250 500 Oshakan village ( ight site) Bazmaghbjur, 1 500 500 Ghazaravan Partizak village 2 250 500 3 Masis Kharberd village N1 Araratyan PS 2 2000 4000 Kharberd village N2 Araratyan PS 2 2000 4000 Kharberd village N3 Araratyan PS 2 1000 2000 4 Vedi Vedi sity Jermanis 2 1000 2000 Urcadzor village Jermanis 2 250 500 Goravan village Garni 2 250 500 Sisavan village Garni 2 2000 4000 Vanashen village Garni 1 500 500 Nor Ughi village Garni 1 500 500

5 Ararat Ararat city central Garni 2 2000 4000

Ararat city Araratyan Garni 2 1000 2000

QUARTERLY REPORT January-March 2005 Water Supply System, Cub. # SECTORS DRR Name & Location Place Piece Capacity Source m SOUTH 1 Goris Goris city N1 Mukhutaryan Akner 1 1000 1000 Goris city N 2 Mukhutaryan Akner 1 1000 1000 Goris city N 3 Mukhutaryan Akner 1 500 500 Goris city N 4 Mukhutaryan Akner 1 500 500 Hargis village Mukhutaryan 1 250 250 Halidzor village Mukhutaryan 1 300 300 2 Eghegnadzor Eghegnadzor city N 1 Vostan 1 1000 1000 Eghegnadzor city N 2 Sarnaghbjur 1 500 500 Eghegnadzor city N 3 Qarasun Aghbjur 1 500 500 3 Jermuk Jermuk city Spitak æáõñ 2 500 1000 4 Sisyan Sisian city N1 Shaqe 1 1000 1000 Sisian city N2 Shaqe 1 2000 2000 Ujc village Shaqe 1 100 100 Ashotavan village Shaqe 1 500 500 5 Kapan H. Avetisyan Kapan city Geghi WTP 1 1000 1000 A. Manukyan Kapan city Geghi WTP 1 300 300 Shinararner Kapan city (N1,N2,N3) Geghi WTP 2 300 600 R. Minasyan Kapan city Geghi WTP 2 300 600 1 200 200 David Beki, Kapan city Geghi WTP 2 1000 2000 Baghaberdi, Kapan city Begh 1 150 150 Halidzori, Kapan city Vachagan 1 150 150 Banavan - Shahumyan N1 2 300 600 Banavan –Shahumyan N2 2 1000 2000 Banavan Barabatum Geghi WTP 1 1000 1000 Banavan Kavart Geghi WTP 1 300 300 Banavan Lenhanq Geghi WTP 2 300 600 Banavan Arpik Geghi WTP 2 300 600 1 200 200 Banavan Baghaburg Geghi WTP 2 1000 2000 Banavan Begh Begh 1 150 150 Banavan Vachagan Vachagan 1 150 150 Chanaghchi WTP 2 300 600 Geghi WTP 2 1000 2000 6 Meghri Meghri city N1 Zvar WTP 1 500 500 Meghri city N2 Zvar WTP 1 1000 1000

TOTAL 262 211785

QUARTERLY REPORT January-March 2005

WATER QUALITY CONTROL

The twelve laboratories currently operating in the Company’s branches exercise the production control over water quality in compliance with “Sanitary rules and norms No. 2 – III – AGh – 1” requirements. Annual schedules (plan-graphics) are worked out for each region concerning the sampling control points, intensity of the conducted tests, and quantity of samples.

The schedules are to be reconciled with State Hygienic and Quarantine Inspections of marzes and inter-marzes. According to them, the quantity of samples for the microbiological tests in 2005 made about 170 thous. (this quantity does not include those tests which are carried out during accidents, technical works, emergency situations), while, by estimation, 220.8 microbiological tests are necessary to be carried out for water quality control of the settlements served by the Company .

About 4.4 thous. microbiological tests were carried out in the course of the first quarter of this year (including 1.5 thousands in March month), 4.9% whereof have not meet the sanitary norms, including in January month – 6.3%, in February – 9.5%, in March – 6.4%. The deviations mainly were attributed by the accidents occurred in water supply systems and by insufficient disinfection. Disease cases were not recorded during January-March months. The structural modifications within the Company enabled to work out sampling schedules for Aparan and Byureghavan cities (tests will be conducted respectively in the laboratories of Ashtarak and Abovyan cities). It is envisaged to establish 4 regional branch bacteriological laboratories. Only then it will be possible to organize the monitoring for potable water supplied to all settlements.

QUARTERLY REPORT January-March 2005 TABLE-11 Quantity of patterns (samples), testing frequency, protection of bacteriological analyses, have been done by approved schedules with the State Control for the laboratories during year 2005.

PATTERNS QUANTITY OF TESTING PATTERNS PATTERNS TESTING FREQUENCY QUANTITY LABORATORIES (YEAR)

LOCATION including Before network Before In distribution In distribution VILLAGE COMMUNITIES TOTAL Villages Community network network network 1 2 3 4 5 6 7 8 Abovyan 36 4 14 18 2-4 time per month twice per week Once per month 792 Hrazdan 32 1 28 3 Once per week Every day Once per month 724 Ashtarak 46 9 35 2 Once per month Every day Twice per month 3285 Artik 42 3 21 18 Once per month Twice per week Once per month 1100 Talin 32 4 25 3 4 time per year Once per week Once per month 240 Sevan 40 4 26 10 Once per month Once per week Once per month 744 Gavar 41 9 28 4 3 time per month 1-2 time per week Once per month 876 Alaverdi 17 7 6 4 2-8 time per month 1-2 time per week Once per month 792 Artashat 70 3 45 22 4time per month Every day Twice per month 3300 Echmiadzin 66 6 21 39 5 time per month 2-3 time per week Twice per month 2284 Goris 60 2 52 6 4time per month Twice per week Once per month 720 Kapan 66 29 31 6 1-4 time per month 1-3 time per week Twice per month 2230

QUARTERLY REPORT January-March 2005 REMARK*

By schedule is provident:

 Remainder chlorine control in chlorine stations –once per hour, before distribution network 1-2 time per day  Water’s chlorine requirement 4-12 time per year  General chimicle analyse of source 4 time per year

The patterns,which are taken for the damages liquidation or for thetechnical works implementation, are not including in the quantity of patterns, providented by schedule.

QUARTERLY REPORT January-March 2005 TABLE-12

The information concerning the analyses of the moved sewage water quality. I Quarter, 2005

Concentration mg/l LOCATION Testing Time Testing Place Pendent Dissolved BOD Fraction Oxygen 1 2 3 4 5 6

Sewerage collector in 37.2 60.0 8.9 area of cleaning station

Village Qaghsi before Ashtarak 22.03.05 15.0 28.0 10.0 the sewerage collector

Village Qaghsi after 28.4 32.0 9.6 the sewerage collector

Sewerage collector in 31.9 65.0 8.0 area of cleaning station

Kapan 10.03.05 Village Voghji before 9.8 15.1 10.9 the sewerage collector

Village Voghji after the 21.2 32.0 11.2 sewerage collector

Sewerage collector in 60.8 55.2 3.5 area of cleaning station

Village Hrazdan before Masis 23.02.05 20.9 28.4 8.3 the sewerage collector

Village Hrazdan after 42.8 39.0 4.0 the sewerage collector

QUARTERLY REPORT January-March 2005 TABLE-13 Drinking water quality investigation March 2005 (I Quarter – growth)

Does not correspond ANALYSES QUANTITY to N 2-III-²2-1 sanitary norms # SECTORS Residual Chlorine Bacteriological (%) month growth month growth month growth 1 2 3 4 5 6 7 8 NORTH-WEST 1 Abovyan 73 193 57 169 5.3 5.3 2 Hrazdan 50 120 102 319 1.0 1.0 3 Ashtarak 50 148 21 137 4.8 6.6 4 Artik 382 1 019 144 353 1.4 1.0 TOTAL 555 1 480 324 978 2.5 2.3 NORTH-EAST 1 Sevan 11 28 79 218 17.7 16.1 2 Gavar 61 61 130 262 0.0 1.5 3 Alaverdi 44 123 39 118 7.7 6.8 4 Spitak 82 161 - - - - 5 Ijevan 282 587 22 66 40.0 31.8 TOTAL 480 960 270 664 9.6 10.2 CENTER-WEST 1 Artisan 156 454 377 1 144 10.9 5.1 2 Echmiadzin 54 434 133 615 2.3 2.9 3 Masis 94 252 - - - - TOTAL 304 1 140 510 1 759 8.6 4.3 SOUTH 1 Gwris 130 410 110 293 10.0 8.2 2 Kapan 421 1 047 257 671 1.9 3.3 TOTAL 551 1 457 367 964 4.4 4.8 MAIN TOTAL 1 890 5 037 1 471 4 365 6.4 4.9

ÌÝáRRemark* ) The investigations have been done by the experimental centers of Hygienic and anti-epidemiological State Con Control of RA.

QUARTERLY REPORT January-March 2005 SAUR S. A. – AWS SCJC

MWW PROJECT PROCUREMENT REPORT

Procurement Monitoring and Progress Report – March 2005

During reporting period has been carried out following WB procurement:

Part B – AWSC Investments

B8.1 – Chlorine – Ongoing: International Shopping has been invited.

B8.2 – Fuel – Completed:

Part C 1 – Immediate Investment Program

C1.1.1 – Machinery and Equipment – Ongoing: Technical Specifications and Bidding Documents have been approved by CMB and WB and the tender has been announced. C1.1.1 – Treatment Equipment – Ongoing: Technical Specifications and Bidding Documents have been approved by CMB and WB and the tender has been announced. C1.1.1 – Pipes, Fittings and Valves – Ongoing: Technical Specifications and Biding Documents have been prepared and submitted for CMB and WB approval.

C1.1.2 – Vehicles – Ongoing: The bid has been opened and evaluated; the Evaluation Report has been submitted for CMB and WB approval. C1.1.2 – Tools – Ongoing: National Shopping has been invited. C1.1.2 – Office Furniture – Ongoing: The Contract is signed. C1.1.2 – Office Equipment – Ongoing: The Contract is signed.

C1.1.3 – Domestic Water Meters – Ongoing: Technical Specifications and Bidding Documents are prepared and submitted for CMB and WB approval.

C1.3.1 – Design of Sevan and Dilijan – Ongoing in Contract implementation stage.

C1.3.2 – Design of Protection Facilities – Ongoing in Contract implementation stage.

C1.3.4 – Design of Block Meters Installation – Ongoing in Contract implementation stage.

C1.3.5 – Audit of Management Contract – Ongoing in Contract implementation stage.

Note: See the attached table. TABLE-15

QUARTERLY REPORT January-March 2005

2.4 EXPLOITATION

QUARTERLY REPORT January-March 2005

EXPLOITATION WORKS

The exploitation and operation works were concentrated on the network repair and elimination of failures. After the winter season the quantity of network failures increased as well as repairs too.

In consequently, water losses were lower - about 2,5% to compare with February and about 3% in compare with January.

The Energy consumption was lower over 3% than in March 2004. It has a trend to decrease during last three months.

The exploitation activity is presenting below by the tables, charts and graphs.

This Quarterly Reports additionally includes the table, which presents the time of water supply to the customers in all regions of Armenia and important information concerning flow meters - status quo and requirements.

QUARTERLY REPORT January-March 2005

TABLE-16 MAIN WATER PIPES & WATER LINES EXPLOTATION

ARM REPAIR

EMERGENCIES QUANTITY REPAIRED EMERGENCIES

# REGIONS

pipe pipe

Ar Arm

NETWORK NETWORK NETWORK

CHECKING Inside Inside

VENT

NETWORK'S NETWORK'S

VALVE TOTAL TOTAL TOTAL

Network Network

WORK HOURS WORK

DRR'S OVER OVER DRR'S

HYDRANT

TOTAL COST OF COST TOTAL

Main Water Water Main Water Main

LEANER REPAIR LEANER

PARTLY REPAIR PARTLY OVER CHECKING OVER piece hour piece hour piece piece piece piece hour piece hour piece hour piece piece piece piece piece piece piece piece hour

1 2 3 4 5 6 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NORTH- 32 234 8 201 21 1 - 22 262 93 411 42 194 24 106 30 160 24 106 30 160 1 302 1 WEST NORTH- 138 929 36 134 35 15 4 54 196 174 619 49 543 33 411 26 470 31 343 26 400 2 421 2 EAST CENTER- 140 368 95 306 12 - - 12 25 31 40 3 8 29 295 22 346 17 247 5 269 747 3 WEST 112 815 37 178 31 1 8 40 180 36 125 17 79 46 145 40 231 27 114 19 160 1 377 4 SOUTH 5 TOTAL 422 2 346 176 819 99 17 12 128 663 333 1 195 111 824 132 957 118 1 207 99 810 80 989 5 847

GROWTH 1 335 8 199 530 2 851 254 39 29 322 1 499 1 191 3 480 450 2 261 392 2 777 394 3 563 292 2 031 206 2 529 18 326

QUARTERLY REPORT January-March 2005

DIAGRAM-3

Quantity of repaired network , arms and liquidated break - downs

5000 4000 3000

2000 Quantity 1000 0 January February March Total South 418 309 349 1076 Center West 400 458 516 1374 North East 477 552 628 1657 North West 211 176 222 609

QUARTERLY REPORT January-March 2005

COLLECTORS & WASTEWATER NETWORK EXPLOTATION - TABLE 17, DIAGRAM 4,5

INCLUDING INCLUDING

N REGIONS

ES OVER ES OVER

HOURS

WELL WELL

CLEANED CLEANED

WORKING WORKING

OTHER OTHER

REPAIR

CHECKING

> 300mm < 300mm

PIP

COVERING

PIPES REPAIR

LINE LENGTH LINE

WELL REPAIR WELL

OBSERVATION OBSERVATION

WASTEWATER WASTEWATER WASTEWATER WASTEWATER OBSTRUCTION

TOTAL SUM TOTAL OF

OTHER REPAIR OTHER

OBSERVATION OBSERVATION LIQUIDATION OF OF LIQUIDATION km w.h km km piece w.h piece w.h piece w.h km w.h piece w.h w.h w.h 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 1 NORTH-WEST 21 645 4 17 18 12 61 78 25 15 22 320 227 1 218 - 2 272 2 NORTH-EAST 20 1 146 3 16 10 82 24 62 18 9 53 526 165 657 - 2 473 CENTER- 3 16 192 11 5 - - 59 50 28 5 31 98 75 132 - 471 WEST 4 SOUTH 8 438 6 3 3 28 8 35 7 1 17 94 199 446 26 1 067 TOTAL 65 2 420 24 41 31 122 152 225 78 30 122 1 038 662 2 452 26 6 283 GROWTH 267 8 859 95 172 56 442 257 489 193 48 475 4 365 2 054 8 116 221 22 629

Cleaned Wastwater Line Length Repair of and deep wells , as well as liquidate of wastewater system blocks 300 3000 200

2000 Km 100

1000 Quontity 0 0 January February March Total January February March Total South 7 8 8 23 South 201 221 210 632 Center West 39 46 16 101 Center West 126 89 134 349 North East 20 21 20 61 North East 122 319 199 640 North West 33 28 21 82 North West 207 237 306 750

QUARTERLY REPORT January-March 2005

NETWORK ANALYSING -TABLE 18, DIAGRAMS 6-9

MAIN WATER PIPE & WATER LINES WASTEWATER NETWORK

MAIN INSIDE WATER Wastewater Break- # REGIONS WATER TOTAL Cleaned NETWORK LOSSES EMERGENCIES COLLECTOR Network TOTAL douwns PIPE (km) Network % (km) m3/day *km piece/km km km km piece/ km (km)

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

1 NORTH-WEST 234 423 658 167 0 78 484 563 0 4

2 NORTH-EAST 429 846 1 274 62 0 75 343 418 0 5

3 CENTER-WEST 557 913 1 467 67 0 46 152 198 0 8

4 SOUTH 488 362 850 29 0 30 270 300 1 3

5 TOTAL 1 707 2 544 4 251 73 0 229 1 250 1 479 1 4

QUARTERLY REPORT January-March 2005

Water loss Cleaned Wastwater Line Length in %

200 30

/day*km) 150 3 20

100 % 10 50 0 0 North Center North North Center

Water loss (m Water North East South Total South Total West West West East West January 94 32 66 21 52 January 4,8 3,1 18 1,9 5,2 Fabruary 95 35 68 23 54 Fabruary 4,1 3,26 21 2,2 5,4 March 167 62 67 29 73 March 3,7 4,7 8,1 2,7 4,4

Emergencies quantity on 1 km water pipe Emergencies quantity on 1 km wastwater network

0,6 0,8 0,6 0,4 0,4 0,2 0,2 0 0 North Center North North Center North East South Total South Total West West West East West

Emergencies quantity (piece/km Emergencies quantity January 0,12 0,13 0,27 0,28 0,19 January 0,3 0,16 0,45 0,52 0,31 Emergencies quantity (piece/km) Emergencies quantity Fabruary 0,15 0,15 0,25 0,18 0,18 Fabruary 0,34 0,44 0,33 0,58 0,42 March 0,2 0,4 0,2 0,3 0,3 March 0,4 0,4 0,4 0,7 0,5

QUARTERLY REPORT January-March 2005

WATER PRODUCTION & LOSSES - TABLE 19, DIAGRAM 10

WATER ACTUAL LOSSES WATER VOLUME N BRANCHES WATER VOLUME IN HAD GIVEN TO NETWORK CO N SUMERS th.m3/month % th.m3/month th.m3/month

1 2 3 4 5 6 CENTER-WEST REGION 1 Artashat 1 260 515 745 59 2 Echmiadzin 1 484 376 1 108 75 3 Masis city. 589 122 467 79 4 Masis villages. 884 428 456 52 5 Vedi 246 61 185 75 6 Ararat 130 54 76 58 TOTAL 4 593 1 556 3 037 66 SOUTH REGION 7 Goris 240 114 126 52 8 Vayk 50 27 23 46 9 Jermuk 77 31 46 60 10 Eghegnadzor 220 72 148 67 11 Sisyan 86 43 43 50 12 Kapan 452 183 269 60 13 Meghri 212 113 99 47 TOTAL 1 338 584 754 56 NORTH-WEST REGION 14 Abovyan 903 145 758 84 15 Byureghavan 96 20 76 79 16 Charentsavan 308 133 175 57 17 Hrazdan 1 390 318 1 072 77 18 Tsakhkadzor 82 17 65 79 19 Ashtarak 382 106 275 72 20 Aparan 120 33 87 73 21 Talin 123 74 49 40 22 Artik 1 071 308 763 71 23 Ashotsk 107 22 85 79 TOTAL 4 582 1 177 3 404 74

QUARTERLY REPORT January-March 2005

NORTH-EAST REGION 24 Gavar 607 131 476 78 25 Martuni 151 65 86 57 26 Vardenis 138 57 80 58 27 Sevan 660 44 616 93 28 Chambarak 50 25 25 50 29 Dilijan 125 31 94 75 30 Ijevan 142 49 93 65 31 Berd 58 20 38 65 32 Stepanavan 222 36 186 84 33 Tashir 124 52 72 58 34 Spitak 79 26 53 68 35 Alaverdi 616 79 537 87 36 Nwyemberyan 96 11 85 88 TOTAL 3 066 627 2 439 80

MAIN TOTAL 13 578 3 944 9 634 71

REMARK * -TEMPORERY FIGURES

Water losses

74 73

% 72

71 70

69 January Fabruary March Water loss 74 73,4 71

Note - Data in the report is operative

QUARTERLY REPORT January-March 2005

WATER VOLUME, PRODUCTED BY THE MECHANICAL WAY AND USED ELECTRICAL ENERGY VOLUME - TABLE 20, DIAGRAM 11-13

WATER VOLUME, PRODUCTED ELECTRICAL ELECTRICAL GROUTH N BRANCHES BY THE CONSUMPTION CONSUMPTION during 2005 MECHANICAL kvt/m3 kvt/month WAY thousand m3/month 1 3 4 5 6 7 1 Ashtarak 135 0,8 123,8 345 2 Aparan 105 0,8 72,0 208 3 Artisan 266 0,3 92,9 266 4 Echmiadzin 406 0,9 375 1 096 5 Gavar 607 0,5 420 1 237 6 Sevan 659 0,4 624 1 883 7 Tashir 53 1,7 89 249 8 Stepanavan 118 0,7 106 295 9 Noyemberyan 96 1,3 158 409 10 Spitak 11 0,5 6 21 11 Abovyan 818 0,2 189 535 12 Charentsavan 297 1,6 473 1 366

13 Hrazdan and Tsakhkadzor 1 400 0,8 1 078 3 582 14 Martuni 41 0,6 26 89 15 Meghri 138 0,5 107 304 16 Sisyan 9 0,9 8 23 17 Ijevan 7 0,9 5 16 18 Ashotsk 1 470 0,5 740 2 168 19 Masis 36 0,8 24 49 20 Talin 27 0,9 24 71 21 Byureghavan 2 3,5 7 17 TOTAL 6 702 0,7 4 747 14 227

QUARTERLY REPORT January-March 2005

Water volume , produced by the mechanical way and used electrical energi volume in March 2005 on comporison with March 2004

100 50 0 -50 -100 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Water and Ennergy (%) Ennergy and Water Water -65,6 -6,38 -2,67 -61 -14,5 18,9 4,83 18,7 15,7 -42,1 5,78 -15,2 8,25 -36,5 13,6 51,6 17,5 -8,08 Energy -35,2 -2,5 -11,1 -32,8 -8,46 12,6 4,83 24,2 32 -49,2 -8,53 -6,49 -1,94 -36,5 4,66 51,6 -1,96 -8,09 Sectors

Comparison of the total electrical energy consumption and Electrical consuption kvt/m3 producted water volume in 2005 - 2004 0,8 0 0,6

-5 3 0,4

-10 kvt/m 0,2 -15 Water and Energy (%) Water January Fabruary March 0 Water -12,4 -9,3 -3,25 January Fabruary March Energy -10,9 -10,8 -3,32 Energy 0,7 0,7 0,7

QUARTERLY REPORT January-March 2005 TABLE 21

THE WATER METERS EQUIPMENT INSTALLATION PROCESS BY AWS CJSC (growth figures on date April, 2005)

WATER METER EQUIPMENT QUANTITY Multy Multy IN SOURCE OWN BUDGET OTHER TOTAL INCLUDING

Appartment Appartment

ERS ERS

# SECTORS

DEMAGED

QUANTITY QUANTITY QUANTITY QUANTITY QUANTITY QUANTITY QUANTITY QUANTITY QUANTITY QUANTITY QUANTITY QUANTITY QUANTITY QUANTITY QUANTITY

INSTALLED INSTALLED INSTALLED INSTALLED INSTALLED INSTALLED INSTALLED INSTALLED

NECESSARY NECESSARY NECESSARY NECESSARY NECESSARY NECESSARY NECESSARY

WATER MET WATER METERS WATER METERS WATER METERS WATER METERS WATER METERS WATER METERS WATER METERS WATER MET WATER METERS WATER METERS WATER METERS WATER METERS WATER METERS WATER METERS

PIECE PIECE PIECE PIECE PIECE PIECE PIECE PIECE PIECE PIECE PIECE PIECE PIECE PIECE PIECE PIECE 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 1 CENTER-WEST 1 Artashat 82 0 249 0 9 507 574 22 737 3 961 116 42 126 161 32 817 4 738 307 50

2 Vedi 25 0 33 0 0 1 822 8 708 4 110 32 42 0 66 8 799 6 040 21 0

3 Echmiadzin 112 0 184 0 3 695 5 244 18 708 6 512 86 36 103 268 22 888 12 060 131 6

4 Masis city 47 0 69 0 2 932 1 054 8 553 1 070 44 35 134 111 11 779 2 270 23 30 TOTAL 266 0 535 0 16 134 8 694 58 706 15 653 278 155 362 606 76 283 25 108 482 86

QUARTERLY REPORT January-March 2005

2 SOUTH 1 Goris 14 0 154 0 2682 412 3 502 1 012 38 20 38 38 6 427 1 482 79 2 2 Vajk 4 0 34 0 486 96 951 346 2 20 12 60 1 489 522 50 28 3 Jermuk 2 0 54 1 2 406 251 1 5 7 12 37 41 2 507 310 29 13

4 Eghegnadzor 11 0 36 0 262 1 134 1 340 1 096 21 31 27 95 1 697 2 356 22 4 5 Sisyan 2 0 97 0 0 2 559 1 453 1 445 21 50 54 143 1 627 4 197 0 0 6 Kapan 7 0 285 1 11 899 514 2 248 183 33 49 72 156 14 544 903 58 30 7 Meghri 9 0 54 0 1 613 162 621 554 10 18 25 25 2 332 759 15 72 TOTAL 49 0 714 2 19 347 5 128 10 117 4 641 130 200 265 558 30 621 10 529 253 149 3 NORTH_WEST 1 Abovjan 28 0 238 34 2 158 13 956 1 830 1 933 5 51 0 298 4 259 16 272 45 29 2 Charentsavan 12 0 178 18 0 5 592 8 181 776 17 39 89 168 8 477 6 593 71 31

3 Hrazdan 13 0 339 0 11 033 3 812 4 649 836 41 69 136 262 16 212 4 979 121 2 4 Ashtarak 40 0 209 0 2 805 2 014 5 144 3 288 47 55 99 123 8 345 5 480 133 0 5 Artik 76 0 257 0 4 501 856 11 774 1 104 82 58 74 125 16 765 2 143 233 34 TOTAL 169 0 1 221 52 20 496 26 230 31 579 7 937 193 272 398 976 54 057 35 467 603 96

QUARTERLY REPORT January-March 2005

4 NORTH_EAST 1 Gavar 34 0 120 28 2 110 1 249 14 429 3 572 74 75 78 137 16 845 5 061 18 719 2 Sevan 16 0 134 31 1 810 3 345 2 601 1 757 32 28 75 148 4 669 5 309 8 131 3 Dilijan 9 0 97 1 1 864 95 2 693 1 549 21 19 23 49 4 707 1 713 19 524 4 Ijevan 14 0 177 0 3 342 1 649 2 444 2 321 45 37 53 91 6 075 4 098 128 4 5 Spitak 56 0 148 7 0 1 788 6 095 5 246 0 105 103 106 6 402 7 252 66 5 6 Alaverdi 40 0 246 0 2 315 4 158 4 221 2 183 30 66 21 58 6 874 6 465 77 71 TOTAL 169 0 922 67 11 441 12 284 32 484 16 628 201 330 353 589 45 570 29 898 316 1 454 Grand Total 653 0 3 392 121 67 418 52 336 132 886 44 859 802 957 1 379 2 729 206 532 101 002 1 654 1 785

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

QUARTERLY REPORT January-March 2005

ELECTRICITY CONSUMPTION, TABLE-22,23

In March 108.7 ml AMD was paid to the power supply company and had liquidated totally the previous debt. In comparison between March 2004 and March 2005 the cost of electricity decreased about 1.5 %. In comparison, the same section without some of the sectors Talin, Martuni, Vajk, Eghegnadzor, Ashotsk, which were included in the AWSC Balance in April 2004, the electricity consumption decreased about 2.2%.

In Quart I, 2004 the electricity consumption composed 319.9 mln.AMD and in Quart I, 2005 - 315.1 mln.AMD. Because the expenses of 2005 includes 45.6 mln.AMD for the sectors: Talin, Martuni, Masis, Eghegnadzor (in year 2004 it is not be included), the electricity saving compose 45.6 mln.AMD.

DIAGRAM 14

Electricity consumption 13 last months

140 000 8 000

7 000 120 000

6 000 100 000

5 000 80 000

4 000 1000 KW 1000 1000 AMD 1000 60 000 3 000

40 000 2 000

20 000 1 000

0 0

April May June July Electricity cost March August March October January february KW September November December

QUARTERLY REPORT January-March 2005

3. FINANCE & ACCOUNT

QUARTERLY REPORT January-March 2005

SUBSIDY

Subsidy FROM RA GOVERNMENT

Month 2005 Received Amount Comments

103.0 electricity consumption payment January 130,0 18.5 social payment 8.5 other 205.0 debt repaying 3.5 debt repaying % February 350,0 110.0 electricity consumption payment 18.0 social payment 15.5 other

March 100,0 100.0 electricity consumption payment

Total Amount 580,0

QUARTERLY REPORT January-March 2005

4. HUMAN RESOURCES

QUARTERLY REPORT January-March 2005

ACTIVITIES PERFORMED BY HUMAN RESOURCES DEPARTMENT DURING THE Q1 2005

The Human Resources Department performed the following activities:

 The Department worked out and prepared the contracts to be concluded with the Head office employees. Relevant decrees have been prepared for 73 employees as per new staff list.

 Relevant operations related to human resources were instructed and controlled in newly established branches. This included working out of agreements, decrees on release or moving the staff to other working places, preparation of labor books, social cards and other decrees.

 The Department made relevant additions and resolutions related to preparation of labor books of the released employees and their registration to the Social Protection Ministry of the Republic of Armenia on consecutive manner.

 Monthly salaries paid to the Company Head Office and their attending and internal discipline were controlled.

 According to the Labor Code of the Republic of Armenia, the human resources movement during the structural changes was controlled and led, while relevant decrees and instructions have been prepared.

 The Department prepared the order of additional payment altitude (harmful for health) allowances.

 The personal files of employees were rechecked and systemized.

QUARTERLY REPORT January-March 2005

EDUCATION AND TRAINING DEPARTMENT

The Education and Training Department systemized and created the database for the Company whole staff. The Department carried out analyses per sex, age, profession, education census, service length that will be target at development and adjustment of the human resources. The mentioned data in the Company’s system as of 1 March, 2005 were as follows

TABLE- 24

AGE EXPERIENCE EDUCATION Until 30 year 14% Until 1 year 27% High - 20% 30-40 year 14% Until 3 year 31% Special, Average 21%

40-50 year 40% 3- 5 year 10% Average 50%

50-60 year 25% 5-10 year 7% 8 classes 9%

More than 60 17% More than 15 5%

The Department developed internal by-laws of the Company, training program and organization order, evaluation of the staff, it prepared questions and tests for the Evaluation Committee.

The training program includes organizational issues (creation of a training center). Issue related to planning of the training and topics of the training programs that have been worked out jointly with Neptun Saur Gdansk experts.

After the visit to regions and analyse the situation, the experts from Gdansk presented a new methodology and special instruction to the Company in case of manage the human resources, as well as organize and implement the training process. The practice action of training will be start from the next visit of above-mentioned experts.

The company developed criteria and requirements for any position in the Company. The Department is preparing human resources motivational and social development systems for the Company management and branches.

Also the Department prepared a scheme for securing safety and emergency prevention as well as instruction.

QUARTERLY REPORT January-March 2005

ON REDUCTION OF EMPLOYEES OF FOUR CJSC AWSC REGIONAL BRANCHES

According to the decree of Executive Director dated 07 January, 2005 the Company received warning lists from 36 branches on possible reduction that were compared to basic lists of CJSC AWSC.

Based on the Labor Code of the Republic of Armenia, in order not to fail the reduction it was necessary to issue a decree stating the necessity of organizing of correct process i.e. the following steps.

Preparation of information statement as per sectors. Thus, we have completed the first stage of reduction (30 March, 2005) as a result of which 610 employees were released out of 2417. 167 of them were pensioners that makes 27.4% of the number of total redundant. Those who have not reached the age of pension was 443, i.e. 72.6%. Please see attached

CERTIFICATE-1 INFORMATION CONCERNING THE REDUCED EMPLOYEES 30.03.2005

SEX AGE EXPERIENCE

50 60 5 15

Total 40

- - - - -

MALE FEMALE -

30 40 50 10

Until 3 Until

Until 30Until

More 60 than More 15 than 2417 1684 733 350 349 696 609 413 1401 253 475 171 117 610 388 222 98 78 128 130 178 362 44 115 61 28 1807 1296 511 252 271 568 479 235 1039 209 360 110 89

QUARTERLY REPORT January-March 2005

CERTIFÍCATE - 1.1 REDUCED STAFF ANALYSES

30.03.2005.

SEX AGE EXPERIENCE

50 60 15

REDUCED STAFF TOTAL 40

------

MALE FEMALE than 60

30 40 50 10

Until 30

Less thanLess 3

More More than 15 More

TOTAL 610 388 222 98 76 128 130 178 362 44 115 61 28

PENSION 167 135 32 0 0 0 0 167 82 8 40 23 14

NON PENSION 443 253 190 98 76 128 130 11 280 36 75 38 14

280, 36, 75, 38 and 14out of 443 employees those who have not reached the age of pension have up to 3, from 3 to 5, from 5 to 10, from 10 to 5 and over 15 years of service length respectively.

98, 76, 128, 130 and 11 of these 443 who have not reached pension age are up to 30, 30-40, 40-50, 50-60 and over 60 years old. (Please see Certificate 2, 2-1).

QUARTERLY REPORT January-March 2005

CERTIFICATE – 2

INFORMATION CONCERNING THE REDUCED EMPLOYEES

30.03.2005 A G E

Experience 60- to pension Until 30 30-40 40-50 50-60 GRAND TOTAL age

Less than 3 80 51 74 68 89 362 3-5 6 9 14 7 8 44 5-10 10 6 22 34 43 115 10-15 2 10 14 11 24 61 More than 15 0 0 4 10 14 28 Grand 98 76 128 130 178 610 Total

CERTIFICATE – 2.1

REDUCED STAFF ANALYSES (not contain pension age)

30.03.2005Ã. A G E Experience Until 30 30-40 40-50 50-60 60- to pension age GRAND TOTAL

Less than 3 80 51 74 68 7 280 3-5 6 9 14 7 0 36 5-10 10 6 22 34 3 75

10-15 2 10 14 11 1 38

More than 15 0 0 4 10 0 14 Grand 98 76 128 130 11 443 Total

QUARTERLY REPORT January-March 2005

5. PUBLIC RELATION

QUARTERLY REPORT January-March 2005

ON ACTIVITIES IMPLEMENTED BY THE PUBLIC RELATIONS DEPARTMENT OF “AWS” CJSC (January-March)

On January were organized meeting by the General Director of the Company Mr. Patrick Lorin with the journalists of information agencies “Arminfo” and “Armenpress”. The materials related with the directions, goals, main issues and implementation stages of the activity of the Company. As a result of meetings, the materials were published in the newspaper “Hayots Ashkhar”, broadcasted on “Radiolur” and different programs of the Armenian Television Company, launched in the reference books of information agencies.

The main questions of the Company were discussed with the representatives of NGO-es.

On February-March were organized the meetings by the General Director of “AWS” CJSC with the Governors of Ararat, Kotayk, Gegharqunik, Armavir, Syunik, Shirak, Lori, Tavush, Aragatzotn, Mayors of Artashat, Masis, Gavar, Sevan, Alavardi, Stepanavan, Tashir, Spitak, Idjevan, Noyemberian, Ashtarak, Aparan, Hrazdan, Tzaghkadzor, Biureghavan, Abovyan, Charentsavan and the representatives of local Mass Media.

During the meetings were discussed the main issues of the “Management Contract”, the goals of the newly established Structure, the urgent programs of the current Year, the presently situation of water supply and waste water systems (structures and networks), the problems of paramount importance, as well as presented a rich experience of “SAUR S. A.” organization. Especially, were discussed the possibilities of collaboration with the Local Governance Bodies (Municipality, Community, Condominium), the conditions and the chief tasks of potable water and sewerage networks, which are the property of the communities, were suggested to solve the problems, to overcome the difficulties of the activities with joint efforts.

During the meetings, the General Director of the Company Mr. P. lorin, was visited the water intake structures, water springs, pump stations, chlorination stations of different residential areas and was considered the barest necessity of implementation the rehabilitation works. In the separate regions Mr. P. lorin was instructed to Regional Directors, Head of the Sectors to regulate the condition of water supply, repair the damages without any delays, insure the pump replacement.

The General Director of the Company was answered the questions regarding to the quality of water supply and sewerage services, payments for the collection, reduction and Staff training, technical, financial conditions of the system and new financial sources. Razed questions were classified and presented to the Regional Branches Directors of the Company.

QUARTERLY REPORT January-March 2005

During the program “LRABER” of the Armenian Television company “H-2” on 09.02.2005 was presented an interview with the head of PIU, Mr. Adibek Ghazaryan about the rehabilitation and improvement projects in the Water Economy systems. It’s said that “SAUR S.A.” Company has a rich experience in the field of water supply and waste water and started for implementation of activities.

Were prepared an article under the title ”Improvement of the structure in “AWS” CJSC”, which were published in the newspaper “Aravot”, were distributed among the Directors of the Regional Branches in order to be informed the subscribers through the local mass communication media. On 09.02.2005, during the meeting with the Mayor of the town of Masis, the General Director of the Company was discussed the main issues, which were related to the possible programs on implementation of the technical improvement of the water supply and wastewater networks of the town. Though, during the program of the Armenian Television company “ALM” on 03.03.2005 was presented an interview with the Mayor of the town of Masis and on 04.03.2005. “Pakagits” (“Brackets”) Newspaper was published “Dragon Demands Girl” publication of Masis Mayor S. Hakobian, where were criticized the activities of the Company appropriately and inappropriately, without deepening in the essence of the problem.

On 15.02.2005. “Pakagits” (“Brackets”) Newspaper was published an article by the title “Elucidates “AWS” CJSC” prepared by the Public Relations’ Department of the Company, where was mentioned: “…The Mayor ex officio should render support to water-suppliers in the matter of the payments collection, explain the inhabitants-consumers, give to understand (especially to the Masis station, which not only doesn’t pay but doesn’t install water meters by artificial causes) that free water is given to nobody, hence the residents should conscientiously pay for used water.”. Meantime, on January-March, “AWS” CJSC have been repaired a water-line with the length of 300 m. in the Masis town.

During the program “Haylur” (“ArmNews”) of the Armenian Television company “H-1” on 01.03.2005 was presented the unsatisfactory conditions of water supply of the Stepanavan town (“Ashotaberd” block), about of which was informed to the General Director of the Company. On 23.03.2005. during the program “lurer” (“News”) of the Armenian Television company “Armenia” was broadcasted a program about the situation of water supply of the Stepanavan town (“Ashotaberd” block), which is in the same content were already presented on 01.03.2005. Naturally, the facts are old. After the first telecast, the situation and raised questions of water supply of the Stepanavan town were regulated. The misunderstanding was discussed with the local Television company “Fortuna” of the Stepanavan town and Armenian Television company “Armenia”. As a result, was prevented the reiteration of the program. It’s suggested, to prepare a new program about the condition of water supply in Stepanavan town after conclusion the works by the “North-East” Regional Branch.

Were prepared a questionnaire for identifying the attitude the subscribers of the Sevan, Dilidjan towns towards the water supply and sewerage services. The analysis the answers of the

QUARTERLY REPORT January-March 2005 questionnaire will make clear the customer’s attitude both to the currently provided services, the planned improvements and the level of the service required by them as a result of improvements.

About the changing the tariff of water supply, water removal and treatment of wastewater were prepared the announcement, which were published in the newspapers “Hayastani Hanrapetutiun”, “Azg”, “Aravot”.

In the newspaper “Hayastani Hanrapetutiun” on February 2 information were published about the tariff of potable water (under the title “The tariff don’t reconsidered for the time present”). In answer to publication, the Public Relations Department of “AWS” CJSC was prepared a letter (twice) to the Editor-in-chief of the daily newspaper “Hayastani Hanrapetutiun” and to the Chairman of Public Services of Settling Commission of RA and was disproved information. In the newspaper “Hayastani Hanrapetutiun”on February 4 information was launched under the title “Substantiation” and was corrected mistake.

The RA Public Services of Settling Commission was approved the tariff of water supply, water removal and treatment of wastewater for the subscribers of the “AWS” CJSC (Decree No. 27-N, signed on 22.03.2005). Were prepared information material for notification to the subscribers of the “AWS” CJSC, which published in the “Hayastani Hanrapetutiun” (“Republic of the Armenia”) newspaper on 31.03.2005. The above mentioned Decree were distributed among the Directors of the Regional Branches in order to be informed the subscribers through the mass media.

The “AWS’s customers awareness and public information program and schedule (annual) about the types of information provision to the public (through the mass communication media) were developed and submitted for consideration, on which suggested to increase the degree of public awareness and participation in the service provision process.

Were prepared information materials about the activities of the Company, which to be launched in the Bulletin.

All materials were presented to the General Director in Armenian and English.

QUARTERLY REPORT January-March 2005

ANNOUNCEMENT “AWS” CJSC Vardanants blind 8a To take into consideration Phone: 54 28 77

The RA Public Services of Settling Commission was approved the tariff of water supply, water removal and treatment of wastewater for the subscribers of the “AWS” CJSC (Decree No 27-N, signed on 22.03.2005).

The tariff of potable water for 1 m3 -115 dram 65 luma, including Value Added Tax (VAT).

The tariff of water removal and treatment of waste water for 1 m3 - 24 dram 35 luma, including Value Added Tax (VAT).

The wholesale tariff of potable water for 1 m3 - 51 dram 49 luma, including Value Added Tax (VAT).

The new tariff takes effect on 01.05.2005.

“AWS” CJSC

115.65 AMD AMD AAMD

QUARTERLY REPORT January-March 2005

6. LEGAL & INSURANCE

QUARTERLY REPORT January-March 2005

The structural reforms taking place in AWSC CJS Company reflected on the Legal Departments functioning in the Head Office and branches. About four tens positions of lawyers were reduced in branches, which will be replaced by attorneys working on the basis of Employment Contract with the Company. The main direction of the activities of the latter will be issuing action at law against debtors and following correct implementation of the accepted court decision.

The Legal and Insurance Department of AWSC CJS Company will have the following functions:

 present and defend the Company’s interests in degrees of jurisdictions and state structures;  coordinate and supervise the work of attorneys serving the branches;  give a legal conclusion of the contracts, documents signed with the participation of the Company;  in relation to functional reforms of the Company – start the insuring process of the assets belonging to the Company and some types of the activities.

QUARTERLY REPORT January-March 2005 TABLE-25 On procedure of covering AWSC CJSC debts receivable by court order and confiscating through Obligatory Implementation of Actions at Law As of 01.04.2005 Cases delivered to Cases delivered to To be Satisfied In process Rejected Case stopped Case finished N/ court OIAL Confiscat confisc Branches Paid N Quanti- Quanti- Quan- Quan- Quan- ed Quan- Quan- ated by Amount Amount Amount Amount Amount Amount Amount ty ty tity tity tity tity tity OIAL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

1 443 19723,9 0 0,0 443 19723,9 0 0,0 0,0 0 0,0 0,0 0 0,0 0 0,0 0,0 NORTH- 0,0 2 WEST 3 0 0,0 0 0,0 0 0,0 0 0,0 0,0 0 0,0 0,0 0 0,0 0 0,0 0,0

TOTAL 443 19723,9 0 0,0 443 19723,9 0 0,0 0,0 0 0,0 0,0 0 0,0 0 0,0 0,0 56 2878,6 15 413,8 41 2099,9 0 364,9 215,4 0 0,0 0,0 0 0,0 0 0,0 0,0 1 NORTH- 2 EAST 20 0,0 3 0,0

TOTAL 56 2878,6 15 413,8 41 2099,9 0 364,9 215,4 0 0,0 0,0 0 0,0 0 0,0 0,0 40 1829,5 40 1622,6 206,9 191,6 36 1431,0 1431,0 1 CENTER- 2 WEST 0,0 3 0,0

TOTAL 40 1829,5 40 1622,6 0 0,0 0 206,9 191,6 36 1431,0 0,0 0 0,0 0 0,0 1431,0

1 314 13254,5 207 6767,4 107 6487,1 340,0 181 8695,9 730,0 18 410,0 10 301,0 7664,9 2 SOUTH 0,0 3 0,0

TOTAL 314 13254,5 207 6767,4 107 6487,1 0 0,0 340,0 181 8695,9 730,0 18 410,0 10 301,0 7664,9

CUSTOMERS 853 37686,5 262 8803,8 591 28310,9 0 571,8 747,0 217 10126,9 730,0 18 410,0 10 301,0 9095,9 BUDGET ORGANIZA- TIONS 0 0,0 0 0,0 0 0,0 0 0,0 0,0 0 0,0 0,0 0 0,0 0 0,0 0,0 OTHER 0 0,0 0 0,0 0 0,0 0 0,0 0,0 0 0,0 0,0 0 0,0 0 0,0 0,0 9 095 GRAND TOTAL 853 37 686 500 262 8 803 800 591 28 310 900 0 571 800 747 000 217 10 126 900 730,0 18 410 000 10 301 000 900

QUARTERLY REPORT January-March 2005

ATTENTION

ADDITIONAL INFORMATION

According to the Management Contract, the following Tables and Diagrams from this Report are inconformity with the indicated points in the Part 2, 5.3.4 – “Monthly and Quarterly Report” of Management Contract.

Management Contract Points Numbers of Tables Numbers of Diagrams

1 2 3

5.3.4 (a)

5.3.4 (b)

5.3.4 (c)

5.3.4 (d)

5.3.4 (e)

5.3.4 (f)

5.3.4 (g)

5.3.4 (h)

5.3.4 (i)

5.3.4 (j)

5.3.4 (k)

5.3.4 (l)

5.3.4 (m)