Sanitek and Hayk Marutyan: Whose statements are true?

Yesterday, August 2, representatives of both “Sanitek” company responsible for waste disposal in Yerevan and Yerevan Municipality represented by mayor Hayk Marutyan publicly expressed their views on the issue of waste management in Yerevan.

Both sides made a number of statements which were fact-checked by Fip.am.

Number of garbage bins

Representative of “Sanitek” company Knarik Arakelyan stated at the press conference that two contracts with Yerevan Municipality envisage 8,000 garbage bins each. That is to say, 16,000 garbage bins in the whole city shall be provided “throughout the overall period of two contracts.”

Mayor Hayk Marutyan had announced on “CivilNet” on July 11 that according to the contract with municipality Sanitek was obliged to provide 16,000 garbage bins each year for all of Yerevan. He also mentioned that there are 4500-5000 bins in the city at present.

Yesterday, August 2, Marutyan repeated the same statement almost identically on 1in.am. “There should be 16,000 bins according to contract made of iron, metal. Today we have only 99 (ed. metallic) garbage bins all over Yerevan.”

Yerevan Municipality has signed two contracts with “Sanitek” company to procure waste disposal services. The first contract signed in 2013 covers western part of the city (Kentron, Malatia-Sebastia, Shengavit, Davtashen, Ajapnyak), the second one of 2015 covers eastern part of (Avan, Arabkir, Erebuni, Nor Nork, Nork-Marash, Nubarashen, Kanaker-Kanaker).

Fact Investigation Platform received both contracts with Sanitek from the Yerevan Municipality in 2016. According to them, Sanitek is indeed obliged to supply and install a total of 16,000 metallic containers of 1,100 liters (8,000 under each contract) in the covered area.

That is to say, the statement of “Sanietk” representative that 16,000 garbage bins shall be provided “throughout the overall period of two contracts” is false.

Moreover, the company has also failed to fulfill the requirement for the material of bins. At present the majority of garbage bins are made of plastic rather than metal.

Geography of Sanitek’s operation

Nicholas Tawil, director of Sanitek, said at Augsut 2 press conference that the company operates in various countries including Turkey and Algeria.

The statement was countered by Hovsep Kubatyan, head of Information and Public Relations Department of Yerevan Municipality who posted information on Sanitek’s operation as of 2013 on his Facebook page stating that the company operates in Lebanon and Nigeria. “This is the company we are dealing with”- mentioned Kubatyan.

In an interview to Armenian Weekly in January 2018 Tawil noted that they were operating in three countries besides Armenia – Lebanon, Turkey and Algeria with clarification that they operate under the name “Hydrowaste.”

It is common knowledge that Sanitek is a Lebanese company with head office in the capital Beirut. The only information about Hydrowaste was found on the website of ICC engineering and construction company operating in several Arab countries, which states that Hydrowaste scope of services includes nature protection, water management, waste disposal, construction of water treatment plants and more. However, the website does not specify in which countries it particularly operates.

Fip.am couldn’t find any evidence of Hydrowaste’s operations in Turkey. There is a company in that country called Sanitek, which, however, is engaged in manufacture of sanitary ware.

Penalties

Mayor Marutyan announced on 1in.am that Municipality has fined Sanitek during the first six months of this year with 3% of the total amount transferred to the company over the same period.

Mayor’s spokesperson Hakob Karapetyan informed us that Yerevan Municipality has fined Sanitek with 90 million AMD in the first six months of 2019.

According to the contracts signed in 2013 and 2015 the municipality shall pay Sanitek 5 billion 39 million 138 thousand 120 drams every year. That is, under the two contracts, the community has paid the company 2,519,569,060 drams over a six-month period. 90 million drams comprises 3.57% of this amount.

Can the municipality unilaterally terminate the contract?

Davit Khajakyan, a member of the Luys faction of Yerevan Council of Elders, told reporters on July 30 that the contract with Sanitek should be terminated now and the Municipality has the right to do so by contract.

Yesterday, August 2, this statement was also addressed by Mayor Marutyan, “The safety airbag that the city authorities should have had, should have always been in place – five years ago, three years ago, a year ago. Instead, we are now creating it from scratch,”– the mayor said referring to “Yerevan Waste Disposal and Sanitation” community agency created to cover the omissions in Sanitek’s work.

Yerevan Municipality has the right to unilaterally terminate the contract with Sanitek. In accordance with paragraphs 2.1.2 (2013) and 2.1.3 (2015) on the Rights and Liabilities of Parties of the two contracts, the parties have the right to “unilaterally terminate the contract …. if the Contractor has substantially violated this Contract…. Violation of contract by the Contractor shall be considered substantial in case:

1. a) the Service provided does not comply with the requirements of this Contract;

and / or 

1. b) Service period is violated.”

But the problem is the “safety airbag” mentioned by Marutyan. That is to say, given Sanitek’s monopoly there is no alternative but to work with them and try to fill in the gaps before new players emerge in the market. Terminating the contract with Sanitek will mean the collapse of Yerevan’s waste disposal system, as the Waste Disposal and Sanitation agency of Municipality has has only 12 garbage trucks according to Marutyan, while 50-55 garbage trucks are needed to fully service the city as Marutyan states.

Hovhannes Nazaretyan