By Siranush Adamyan
Armenia is considering creating a private water market and introducing differentiated irrigation tariffs as part of a broader overhaul aimed at attracting investment and reducing the gap between water prices and supply costs. Water Committee Chairman Aramazd Ghalamkaryan said the government was examining models under which private investors could build reservoirs and other infrastructure and sell stored water to farmers at separately set tariffs.
“The prime minister’s instruction and vision were also to try to introduce differentiated tariffs, try to involve the private sector and develop a water market,” Ghalamkaryan said in an interview with Armenia’s Public Television broadcast on Tuesday evening.
The current irrigation water tariff is AMD 11 ($0.03) per cubic meter, but Ghalamkaryan said the actual cost of supplying water can reach AMD 250-350 ($0.68-$0.96) in some areas because water must be pumped through several stages.
“There are areas in our country where, because of the terrain, we pump water through two, three or four stages,” he said.
Ghalamkaryan said private investors could potentially develop reservoirs alongside hydropower plants, tourism facilities or other projects, then sell the accumulated water to farmers at a different tariff.
“For example, in an area where there is a water source, a private investor could build a reservoir, a hydropower plant, perhaps a recreation area, hotel or restaurant — in other words, implement an investment project — and then sell the accumulated water to farmers at a different tariff,” he said.
He added that some large agricultural businesses operating intensive orchards were already willing to pay more in return for reliable supplies.
“They say openly: if you provide us with reliable irrigation water in the volume and at the pressure we need, we are ready to pay not AMD 11 ($0.03), but AMD 31 ($0.08) or AMD 51 ($0.14),” Ghalamkaryan said.
He said the current tariff did not reflect the real cost of water. The government subsidizes water user associations and the entity responsible for wholesale supply, while the wholesale price is AMD 1.01 (about $0.003) per cubic meter.
The tariff proposals are part of a wider restructuring of Armenia’s water sector. The government plans to transform the Water Committee into a Land and Water Committee, combining several functions related to water systems and agricultural land management.
Ghalamkaryan said the broader aim was to increase agricultural output while using less water by encouraging technologies such as intensive orchards and sprinkler irrigation.
“We need mechanisms that encourage farmers to use more water-efficient technologies,” he said. “That will allow us to create much greater output with much less water.”
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