Wednesday, 22 February 2017
“We just need to have a horizon of 10-15 years and solve fundamental problems” – PM discusses development prospects with the Yerevan Town Hall team
Prime Minister Karen Karapetyan discussed today four-year development program results and future plans with the Yerevan Mayor and Town Hall executives.
The meeting focused on Yerevan city development projects, municipal budget predictability, income generation and tax collection, public transport system reform, improved investment and business environment, tourism, housing modernization, expansion of cooperation with the private sector and a number of other areas.
Welcoming the Town Hall’s policy of stronger cooperation with the private sector and outsourcing the management of a number of sectors, the Prime Minister suggested discussing issues related to the distribution of the workload and budget estimation and, accordingly, deciding which steps to take ahead.
“I perfectly understand that you are short of money, but let is fix each goal and proceed accordingly. We just need a 10 to 15-year horizon, long-term money and radical solution of fundamental problems,” the Head of Government said.
Yerevan Mayor Taron Margaryan noted that, as a whole, the four-year development program of Yerevan is being completed successfully, and already visible are the problems that should be placed at the heart of the five-year development program due in 2017.
As to the focus of proportionate development, achievements have been made in road construction, urban development, utilities, housing maintenance, infrastructure improvement, environmental protection, efficient, community-private partnership carried out a number of investment projects.
Annual social surveys held on a regular basis have revealed a number of issues of public concern related to municipal transport, elevators, maintenance of green areas and so on.
Given the successful experience of outsourcing waste management to a private company, similar packages have been designed to attract more private managers in the field of landscaping, water supply and urban lighting. The Town Hall is considering the possibility of implementing pilot projects in these and other areas in collaboration with international organizations. The aforementioned issues are supposed to be addressed through community-private sector-government cooperation.
Then First Deputy Mayor Kamo Areyan reported progress in activities toward environmental protection, utilities, construction and improvement of the urban environment and infrastructure development, balanced development, improved business climate, as well as legislative initiatives and planned actions related to these sectors.
Kamo Areyan reported tangible progress in terms of improving the business environment, introducing the one-stop-shop principle, reducing building permit fees and curbing permit issuance deadlines. An electronic permit issuance system is already operational in the system of urban development.
Progress has been achieved in the field of outdoor lighting. A LED street lighting system has been installed in 10 streets of Yerevan leading to 60% saving in electricity. As a result extensive landscaping activities, green areas have significantly increased over the last 4 years.
Despite this, it is necessary to create a buffer zone of forests, and to this end, negotiations are underway with several companies. It is planned to create about 200 hectares of forest area with about AMD10-11 billion equivalent contribution.
Down to elevator-related problems, Mr. Areyan said that international best practice shows that refurbishment, management and maintenance in this industry should be performed by a single operator. Work is under way to reform elevator economy.
Coming to the maintenance of housing estate, the speaker noted that the vast majority of apartment buildings are facing maintenance problems, which callas for sizeable investment each year.
Introducing the dynamics of Yerevan budget revenues, Deputy Mayor Vahe Nikoyan advised that own revenue increased by 16.4% or about 3 billion drams in 2013-2016. The share of the capital city’s revenue constitutes 56.7 percent of that of communities; 18 thousand dram is the per capita income in Yerevan. The 2017 own revenues were planned in the same way.
In 2016, about 125 billion dram-worth capital investments were implemented in Yerevan, of which 77 percent as private investment, 17.8 percent - from the State budget, and 5.2 percent - at the expense of the community budget and other programs based on community-private sector partnership. AMD 171 billion in capital investment will be spent in 2017.
In addition, the municipality has published 45 investment proposals in a bid to activate the investment climate in the field of urban development, urban infrastructure, tourism, transport and other sectors. The estimated investment volume is around USD 600 million.
Mr. Nikoyan said that objectively Yerevan’s own revenues can no longer grow amid restricted possibility of independent decision-making and long-term planning under the applicable legislative framework. Given these problems, in order to ensure predictability of the budgetary process, the Town Hall drafted and submitted to the Ministry of Finance legislative changes by the end of 2016.
In reply to the Prime Minister’s question whether the predictability of financial flows will help the Town Hall assume the burden of the proposed reforms. Mr. Nikoyan said that, for example, reforms in the public transport and elevator maintenance systems will have an approximate cost of USD 200 million. The planned amendments will raise the Town Hall’s creditworthiness and help it assume the burden.
Deputy Mayor Aram Sukiasyan spoke about culture and education, the current and planned projects. The speaker briefed the premier on the activities aimed at promoting tourism in the capital.
Karen Karapetyan agreed to the proposal to involve private managers in the development projects aimed at improving infrastructure in the city.
”We need to calculate the multiplier effect. For example, if you sign a long-term contract with the private sector, whether they will be able to invest their own money or that of a bank in LED, and if so, whether they will govern effectively,” the Head of Government said.
Noting the importance of construction activities in Yerevan, the Prime Minister stated in part, “We should try to boost development activities in the city, and the City Hall team should participate in the work of attracting investors.”
Talking about making the city more attractive in terms of tourism, the Prime Minister suggested developing a program that might boost inbound tourism in addition to the planned international festivals and cultural events. “We have to pay attention not only to the quantity but also to the content, the market demand and promote tourism-oriented projects,” Karen Karapetyan said and urged them to cooperate with the State Tourism Committee. In this context, the Prime Minister stressed the need to make consistent efforts toward improving the outward appearance of some streets in Yerevan.
