There are too many parties involved in the first credit project of Yerevan water supply system development – the World Bank(WB), Italian company “A Utility”, The RA government, the RA ministry of finances and economy, the state committee of water economy, Yerevan Water Supply Company (YWC) and other parties.
Besides that, there are many famous people, whose names are connected with this project as well – Gagik Martirosyan, Vahan Hovhannisyan, Roger Robinson, Varazdat Avoyan and also Richard Walkling. During the past years there have been many references and harsh critics addressed to these people in connection with the mentioned project. However, it seems that among these names Richard Waking has been under shadow and introduced to the public as an authorized representative of “A Utility”. There are opinions that all violations within the YWC have been done through this man. This is what the specialists of the parliamentary commission on supervising the effectiveness of foreign grants, human aids and credits say.
The Yerevan water supply system development agreement entered into force in May 2000, when Walkling was appointed as authorized representative of “A Utility”. However, during the next month, in June, Walkling was appointed in the position of the YWC general director by the consent of the water state committee. He occupied both these positions till the end of the project. During our conversation British engineer Bruce Tasker showed us documents, in one of which the mentioned person signed as general director, and in the other document as authorized representative of “A Utility”. It is worth mentioning that the WB had a precondition that the operator in charge of carrying out that project should be independent. The mentioned appointment breached this precondition. It was expected that the WB would not agree with it. However, there hasn’t been any such announcement on the part of the WB. According to Tasker, the parliamentary commission has not received such document either. Thus, this appointment might be done having the silent consent of the World Bank. Maybe the WB knew about the violations in the project too. Tasker says that in June 2000, when Walkling was appointed as general director of the YWC, the architect of “A Utility” company, Henzel Eghiazaryan was appointed as an authorized representative of the company. This appointment was done only on the paper and Walkling continued working as an independent operator and as the YWC general director. Tasker says that they could do so many violations worth of millions due to the fact that Walkling was the general director. The problem is that the representative of “A Utility” is responsible for the project fulfillment, and the general director is responsible also for the financial performance. We wrote about one of the financial machinations in our previous edition (# 107), which discovered the details of evaluating the real property of YWC. The British engineer says that there are several such big machinations.
Usually such projects have advisers. Usually it is done on the request of the donor organization and the donor organization pays the corresponding expenses. As a rule, such advisory services are provided by high qualified international specialists. The Armenian organizations usually think that spending money on such services is not needed. The head of the parliamentary commission, Vahan Hovhannisyan made such hints during his speech in the parliament in March 2004. In 2004 Walkling presented a list of fifty people to the commission and said that those experts had come to Armenia during the project implementation period, provided advisory support and left. It is natural that the longest term for advisory support was Walkling’s term since he was the main adviser appointed by “A Utility”. Accordingly, he received the biggest share of such payments. Even it has been reported in the press that he received $12k per month, thus during his office of four years in that position he received more than a half million dollar. Tasker says that the commission applied to the RA National security services to find out whether the mentioned fifty people had really come to Armenia or no. The NSS replied that they knew only 14 names out of the mentioned 50 names. This means that the other names were written only on the paper and they have not in fact participated in the project as advisers. They have just made a long list to make more money. The commission has raised this issue during their meeting with the WB Armenia chair Roger Robinson, however they didn’t get any answer to their questions. In May 2004 “A Utility” applied to WB for the purpose of prolonging the term of the project and it expected to receive more 2 million. By the way, most of that sum had to be spent on advisory services. In this application the company presented another list of advisers consisting of 16 people. It was surprising that the name of Walkling was not included in the list. It means that Walkling is not the representative of “A Utility”, but the general director of YWC. In fact, this fact has been acknowledged by WB too. It is worth mentioning that the fact of occupying two positions at one time was accepted by GAP as a conflict of interests. By the way, the second list contains names, which were not included in the first list. In addition, there were ten positions for domestic advisers in the second list, but there were no names written against those titles. Instead of it they wrote “to be named”. If those people have provided advisory support in 2000-2004, why weren’t their names written? It is not excluded that those experts did not exist and the list was artificially exaggerated. There is one more interesting fact concerning the project. Under the project, “A Utility” had to receive $375.000 for its services despite the outcome. Besides that, in case of fulfilling all 100 requirements of the project in an excellent manner it had to receive a bonus equal to that sum every year. If the company did not fulfill at least one of those requirements, it would receive fewer bonuses, and in case of not fulfilling those requirements it would not get any bonus payments. In the first year it turned out that the company had failed the project, thus it could not get the bonus. However, at that time the parties decided to change the requirements of the contract to the extent that if the company gets one point, it can get the bonus. The undersigned persons of that document on changing the requirements of the agreement were the head of the state water committee Gagik Martirosyan, the head of the Municipality Development Project Varazdat Avoyan, and Walkling, being a representative of “A Utility”.
The reason why we are so interested in discovering the violations in the mentioned project is the fact that the Armenian government has borrowed $32 million credit from WB for the project of Yerevan water supply system development. This borrowing has certain interest rates and has to be covered soon or later. However, Tasker’s allegations and evidenced facts prove that the mentioned money was spent and dispersed on advisory services and the works were not done in a duly manner and sufficiently. Where is one of the main actors – Richard Walkling? Walkling and the others have done their job and left from here, and our coming generations have to cover the millions that these people have grabbed and dispersed. We hope that at least the Serious Fraud Office of London will investigate this case, discover the violations and institute proceedings since Walkling is a British citizen too like Robinson.