Thursday, 1 October 2015
PM: “Government will do everything to prevent the tariff rise from hindering our citizens’ normal life activities.”
A Cabinet sitting was held today, chaired by Prime Minister Hovik Abrahamyan.
Before proceeding to the agenda, the Prime Minister advised that Deloitte and Touche has submitted the first-stage report on the results of their advisory survey of the approval of energy tariffs by the Public Services Regulatory Commission and the subsequent optimizing process.
Vice Prime Minister, Minister for International Economic Integration and Reforms Vache Gabrielyan briefed the meeting on the findings of the report, which states that the decision of the regulatory authority is well-grounded as it seeks to stabilize the situation in the given field and ensure reliable energy supply..
“In fact, the main requirement consisting in whether the decision was justified or not, and what would have happened if it were not for the decision, is clearly met in the finding regarding the first-stage,” Vache Gabrielyan said.
“Thus, we can say that the prices are reasonable and there is no need for change. At the same time, we discussed the issue with the President of the Republic of Armenia and decided that the Government will do everything to ensure that tariff rise does not hinder our citizens’ normal life activities.
In addition to the question of tariffs, society is likewise concerned about the management of Electric Networks of Armenia. As the recent months; developments have shown, Electric Networks of Armenia needs introducing modern management systems.
Inter RAO’s intention to sell the Electric Networks of Armenia created favorable conditions for improving the management system. Given Tashir Group’s long experience in the provision of energy services and energy management, in particular, the fact that the Tashir Group-affiliated Cascade-Energo is deemed to be one of the best energy-related companies in Russia, the Armenian authorities asked our fellow countryman, Tashir Group President Samvel Karapetyan to negotiate with Inter RAO the possibility of ENA acquisition.
Meeting our request, within a short period of time, Tashir Group negotiated and signed a sale and purchase contract with Inter RAO, for which we express our deep gratitude.
The Public Services Regulatory Commission has already approved the deal. At our request, Tashir Group has pledged to introduce an international standards-compliant management system and reduce technical and commercial losses.
At the same time, on a parity basis with the Government of Armenia, the Company will cover part of electricity costs for those households and small businesses with a monthly consumption rate of up to 250 kilowatts by settling the difference in tariffs at the expense of its own funds until August 1, 2016, for which we express our deepest gratitude to our compatriot.
Our approach is follows: we have some 604 thousand customers out of a total of 766 thousand 889 users registered in Armenia with a consumption rate of up to 250 kilowatts, or about 79 percent of the population. We will provide refund for that segment of the population, as well as for those small businesses consuming up to 500 kilowatts per month. I believe that the citizens with greater consumption rates, that is, greater financial opportunities should commit themselves to covering the difference in tariffs at their own expense.
I instruct Minister of Energy and Natural Resources Yervand Zakharyan to hold consultations with Tashir Group representatives within a two-week period in order to submit a draft legal act along with the appropriate detailed calculations,” Prime Minister Hovik Abrahamian said.
The Government approved the 2016 State budget bill, which provides for AMD 1,183 billion in consolidated budget revenue and AMD 1, 373.7 billion in spending, with an overall deficit of 190.7 billion drams. The bill anticipates a 2.2 percent real GDP growth, 4 +/- 1.5 percent inflation and a deficit of 3.5 percent.
The Minister of Finance was instructed to amend the bill and send back to the Government Staff in order to submit a finalized version to the National Assembly in the manner established by law.
The meeting approved the Small and Medium Enterprise Development strategy for 2016-2018, which seeks to ensure smooth operations for competitive SMEs in domestic and international markets.
The Government next endorsed the Border Regions Development Program for 2016. Prime Minister Abrahamyan advised that AMD 928 million will be allocated from the State budget with a view to providing full refund of gas, electricity, irrigation water fees and part of land tax and real estate tax amounts for the residents of border communities.
The Government decided to exchange the Carousel Establishment-owned real property at Vazgen Sargsyan-1 with the Government-owned estate located at Sargsyan-3 in Yerevan.
Highlighting the importance of the above decision, the Premier said that for many years no construction work had been carried out on the land, which used to be the property of our compatriot Vache Manukyan, Hovik Abrahamyan said an agreement was reached with Vache Manukyan a few days ago over a USD 60 million-worth investment. As a result, a multifunctional hotel complex will be built starting next year. The Prime Minister once again stressed the importance of that project, especially in terms of economic activity.
