A country with strong economy is capable of everything! Heydar Aliyev

Tariff (price) Council of

Azerbaijan Republic

AZ|EN

The interview given by the secretary of Tariff (price) Council of the Azerbaijan Republic Elshan Asadov to Analytic Information Agency “Trend”

01.02.2011

We ask you to give detailed information related to the last decision of Tariff (price) Council of the Azerbaijan Republic.
- As we have stated, tariffs on some spheres have been reviewed and relevant decisions were made on the basis of the appeal of concerned state authorities in the meeting held yesterday of Tariff (price) Council. The principal reason of made tariff modifications is related to meeting the costs spent on those services by available tariffs and regulation of the activities of the economic subjects available in this field.

The analysis show that making changes in tariffs in three spheres have occurred as an economic necessity. For example, tariffs on passenger transportation within the country available in the railway were certified for the last time in 1997. During this period the prices of energy carriers having the principal share in the principal value of passenger transportation via railway have been increased three times. Generally, regulation of tariffs are economically substantiated, they are implemented complexly taking into account social matters and are directed to provision of the consumers by more qualitative services and rational activities of the economic subjects.
As to the concrete fields, tariffs available upon universal postal services were certified in October 2002. At the present principal value of the universal postal services prevails the available tariffs averagely 3.2 times. Damages sustained to “Azerpocht” LLC upon the postal services are more than 5 million manat because of non-correspondence of tariffs to the costs. In it turn it didn’t contribute to the rational organization of the financial-economic activities of the institution. Besides, average monthly salary of an employee of “Azerpocht” LLC was 133 manat and it is 2.4 times less than the average indicator upon the republic. The analogical problems may also be concerned to the other fields where the tariff regulations are being implemented.
 
The tariffs on water and sewer services have been reviewed by Tariff (price) Council too. Which assessments are changes made in tariffs based on?

- Yes. The appeal made by “Azersu” OJSC was considered by Tariff (price) Council and new tariffs have been fixed.
At the present 30.4 % of the costs of “Azersu” OJSC is formed by the salary and 28.3 % is formed by the costs spent on power supply. In addition, average monthly salary in the Joint-Stock company is very lower than average indicators upon the republic.
Let’s state that the tariffs for the consumers using water as raw material have not been changed and stayed in the present level. It means that the costs of the manufactures of products using water as raw material, as well as the prices of those products will be changed too.
At the same time monthly consumption norm upon the subscribers having no meter was reduced from 6m3 to 5m3 in the people consumption group and it means that such subscribers will pay less means every month.
Let’s state that monthly per head water consumption indicator is between 3-5 m3 in most countries. Taking into account the fact that the principal value of 1 m3 water is very lower than the tariffs, the tariffs on the services of water utilization were fixed as 30 copech per 1 m3 for Baku, Sumgayit, Ganja, Mingechevir, Shirvan, Khirdalan cities and Absheron region, 25 kopeck per 1m3 for the other regions including VAT, 1 manat for non-population consumption group upon all areas of the country, the tariffs on the services of floating of waste water was 6 kopeck upon the population group and 30 kopeck for the other users in the meeting.
Taking into account the new norm, monthly additional costs of a person will be 42 kopeck in the cities and 41 kopeck in the villages after the tariff modifications. In its turn it means that the costs upon water supply and sever services per head will be increased from 1.32 million manat to 1.8 million manat.
The tariff changes will contribute to payment of the current exploitation costs of “Azersu” OJSC, economical utilization of water, prevention of squandering, increase of quality of the services. The matters like increase of the numbers of the meters upon Baku city to 94% on the account of means assigned from the state budget, increase of level of collection were specially noted and special recommendation were given on strengthening of the measures to be taken in this field while discussing the matter.

What necessitates changes made in tariffs of passenger transportation via railway?
- It is necessary to state that the tariffs on passenger transportation via railway were reviewed for the last time in 1997. As we stated above, the prices of energy carriers having the principal share in the principal value of passenger transportation via railway have been increased averagely three times during this period. Costs of “Azerbaijan Demir yolu” “Azerbaijan Railway” CJSC re nearly 54.6 million manta and incomes are 5 million manta. According to the totals of 2009 damages sustained to the society was 49.4 million manat. As to the tariffs, I would like to give an example. Price in the general carriage is 1.46 manat, in the sleeping-car 1.9 manat, in the sleeping compartment 2.90 manat, in the vans of SV type 5.22 manat in Baku- Gazakh ordinary train that overcomes 450 km distance. But the tariff for the same distance per a person is 8 manat in the buses and averagely 20-25 manat in the cars. Briefly, the tariffs were many times lower than the prices fixed at alternative transportation means.
Besides, in case when the prices are like 3.2 manat in Georgia, 4.2 manat in Ukraine, 7.6 manat in Byelorussia and Russia in compartment car for every 100 km distance, this number was 70 kopeck in Azerbaijan.  It is obvious that the previous tariffs applied in the railway station were many times less than their costs. The relevant tariffs have been considered and new tariffs have been adopted on the basis of appeal of “Azerbaijan Demir Yolu” (Azerbaijan Railway) CJSC for the purposes of partial elimination of available problems and rendering qualitative services in this field. Besides making changes in the tariffs, the recommendations have been given upon increase of quality of services in this field. Thus, in the result of tariff modifications, obtaining of averagely 13 million manat additional means upon the Joint-Stock company in a year is expected and these monetary means will widen financial possibilities of the railway and will assists in improvements of quality in the services too.
It is necessary to state that though that the price of the bed set and commission costs are included in the price of the ticket, new tariffs are very lower than the relevant tariffs applied in the UNO states.

Has the social impact of the new decision of Tariff (price) Council been assessed?

- While investigating the appeals made by the concerned authorities, new tariffs have been reviewed complexly taking into account their social impact on the people. As I have stated before, according to our computations, costs per head of the people upon new tariffs applied in water will be 42 kopeck in Baku and 41 kopeck in the regions and it will not seriously influence the budget of the people. Thus, special weight of this increase in the costs of the people will be 0.17%.
Besides, basis part of pensions and minimum salary was increased 13%, social aids were increased 20%, costs on nutrition of the refugees and temporary displaced persons were increased 11 %, scholarship of the students and doctoral candidates was increased 20 % last year. As well, living minimum was increased from 85 manat to 95 manat, need criteria for the persons receiving addressed state social aid was increased from 65 manat to 75 manat for 2001. taking into account durability of social defense measures in the country, it is possible to say that new tariffs don’t influence seriously the social condition of the people.

 

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