State versus private sector provision of water services in Armenia
2012
Harutyunyan, Naira
Despite increasing advocacy and adaptation of public-private model of water governance worldwide since the 1990s, today only 5% of the world’s population is served by water utilities with private involvement. The present article examines the experience of the water sector in Armenia with private sector participation. The study describes the process of the introduction of public-private partnerships in the water sector and focuses on analyzing the impact of privatization on water utility performance. The analysis employs the partial indicator method for evaluating the impacts in relation to operational, finance, and environmental performance, done by drawing on the database for the five water companies in Armenia. The empirical evidence shows that private participation in general led to improved overall performance. In particular, private involvement resulted in increased operational efficiency in terms of labor productivity, water metering, continuity of service, and revenue collection efficiency. There were mixed improvements in the operating cost coverage ratio. As for environmental performance, there were gains in the reduction of residential water consumption, accompanied, however, by an increase in nonrevenue water.
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