Project Number: 45415 February 2015

Armenia: Urban Development in Secondary Cities (Financed by the Urban Environmental Infrastructure Fund under the Urban Financing Partnership Facility)

CITY DEVELOPMENT PLAN DILIJAN

Prepared by Fernando de Marcos

Yerevan, Armenia; 03-06-2014

For: Internal document for Consultants team

Technical Assistance Consultant’s Report

2 CDP Dilijan

CURRENCY EQUIVALENTS (as of 03 June 2014)

Currency Unit – Dram (AMD)

AMD1.00 = $0.00242 $1.00 = AMD 413,487

ABBREVIATIONS ADB - Asian Development Bank ARDEP - Armenia Regional Development Project ARRM - Armenian Resident Mission, CDIA - Cities Development Initiative for Asia CDP - City development/investment plan CBA - Central Bank of Armenia CBS - Cost breakdown structure CMS - Consultant Management System COE - Council of Europe CoP - Communities of Practice DMC - ADB Developing member country DFID - Department for International Development (UK) GIZ - Gesellschaft für Internationale Zusammenarbeit GoA - Government of Armenia LSG - Local Self-Government Bodies KFW - Kreditanstalt für Wiederaufbau MOE - Ministry of Economy MOU - Memorandum of understanding MTA - Ministry of Territorial Administration MTEF - Medium-term expenditure framework MOUD - Ministry of Urban Development NGO - Nongovernment organization NSS - National Statistical Service PATA - Policy and Advisory Technical Assistance PPP - Private Public Projects PPTA - Project preparatory technical assistance OSCE - Organization for security and co-operation in Europe UNDP - United Nations Development Programme UOP - Urban Operational Plan USAID - United States Agency for International Development USS - Urban Sector Strategy Q - Quarter REDAM - Regional Development in Armenia SDC - Swiss Agency for Development and Cooperation SUDIP - Sustainable Urban Development Investment Program SWOT - strengths, weaknesses, opportunities, and threats TA - technical assistance TACIS - Technical Assistance for the CIS and Mongolia UN - United Nation UNDP - United Nation Development Programm WB - World Bank Municipality is synonymous with Community and both terms are used in this document.

CDP Dilijan 3

Staff (according Terms of reference)

Fernando de Marco FDM – Senior urban planner and team leader (intl.) Robert Romo RR – Senior urban infrastructure engineer (intl.) James Jessamine JJ – Cultural heritage and tourism specialist (intl.) Mónica Batán Zamora MBZ – Economic development specialist (intl.) François Moulin FM – Urban finance specialist and economist (intl.)) Jörg Fischer JF – Geographic information system specialist and Urban

planner (intl.) Armen Keshishyan AK – Urban infrastructure, transport, tourism, and

institutional support consultant (national) Samvel Bareyan SB – Urban Finance and Economic Support Consultant

(national) Hayk Yeritsian HY – Urban Planner and GIS Support (national)

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

4 CDP Dilijan

VOLUME I

CONTENTS

Page I. INTRODUCTION 13

A. Background and Objectives 13

II. CITY DEVELOPMENT PLANS 13 A. CDP for Secondary cities - Theoretical framework for Integrated Urban Region Planning 13

1. Potential Project Interventions 14 a. Competitiveness 14 b. Environmental Sustainability 14 c. Inclusiveness 14

III. DIAGNOSTICS 16 A. Detailed description of local situation 16

1. Geographical context, 16 2. Socio-economic situation and living conditions 18

a. Historical context 18 b. Demography 18 c. Basic and prospective branches of Economy 21 d. Economy and Employment 22 e. Family Income and expenditure 26 f. Poverty situation 29 g. Social transfers for households and Family Benefit system 33 h. Household agriculture 34 i. Educational level of population 34 j. Health care system 35 k. Education system 35 l. Culture-Sports (Museums, Theatre, Cultural organizations, Sport

organizations). 38 3. Urban infrastructure 40

a. Roads and streets network, 41 b. Anti-landslides structures: 43 c. Street lighting, 43 d. Drinking water supply 43 e. Sewage water and waste water treatment, 44 f. Disaster announcement system, 44 g. Waste management 45 h. Environmental issues (Air pollution, Water pollution, Trash) 46 i. Communication (Postoffice, Telephone connection landline, Mobile

Operators and Internet Availability. 47 j. Housing 47 k. Public transport 50 l. Energy supply (gas, electricity) 52 m. Cultural heritage and tourism 52

4. Urban financial assessment of the city 58 a. Capacity or necessity of financing 58 b. Incomes 59 c. Expenses 63 d. Expenses economic 67 e. Sources of financing 68 f. Main Weaknesses 70

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g. Challenges 71 h. Points to work 72 i. Conclusions 73

IV. COMMUNITY DEVELOPMENT STRATEGY 75 A. Existing development plans, programs and projects 75

1. Community Planning framework 75 a. Socio-economic development plan 75 b. Master plan: 76 c. 4 Year plan 77 d. Ongoing projects 79

2. Community enlargement 81 B. Analysis of strategic urban subsectors and SWOT analysis 86

1. Analysis of strategic urban subsectors 86 2. SWOT analysis 87 3. Identification of stakeholders and champions 88

V. 10 YEARS STRATEGIC VISION: 91 A. General vision of Dilijan CDP 91 B. Mission statement 92 C. Goals 92 D. Objectives 93 E. Tasks, activities and potential intervention areas 95 F. Stakeholders, champions and target groups 97

1. Identification of stakeholders and champions 97

VI. INVESTMENT PLAN: SHORT, MEDIUM AND LONG TERM ACTIONS TO IMPROVE INFRASTRUCTURES AND SERVICES 101

A. Considerations about the economic and financial sustainability of the projects 103 B. Considerations about the environmental impact of the projects 103

VII. IDENTIFY PRIVATE SECTOR OPPORTUNITITES 104

VIII. PRIORITIZE SUBPROJECTS 106 A. Improvement of Public Transport 109

1. Specific case 1: Modernization of Central Bus Station in Dilijan 109 a. Current situation 109 b. Project rationale and linkages with other projects 110 c. Institutional issues 111 d. Investment items 111 e. Time-line 111 f. Financial estimation 112 a. Alternatives considered 112 b. Asset owner and responsible and costs for O&M 112 c. Possible PPP partner 112 d. Co-financing 112 e. Impact on 3 guiding principles 112

2. Specific case 2: Modernization and Improvement of Municipal Transport Service Delivery 113

a. Current situation 113 b. Project rationale and linkages with other projects 115 c. Institutional setup 115 d. Investment items 116 e. Time-line 116 f. Financial estimation 116 a. Alternatives considered 116

6 CDP Dilijan

b. Asset owner and responsible and costs for O&M 116 c. Possible PPP partner 117 d. Co-financing 117 e. Impact on 3 guiding principles 117

3. Specific case 3: Improvement of the existing train service and station and connection to the city centre 117

a. Current situation 117 b. Project rationale and linkages with other projects 117 c. Institutional setup 119 d. Investment items 120 e. Time-line 120 f. Financial estimation 120 g. Future passenger connection Yerevan-Dilijan 120 h. Investment items 120 i. Time-line 121 j. Financial estimation 121 k. Alternatives considered 122 l. Asset owner and responsible and costs for O&M 122 m. Possible PPP partner 122 n. Co-financing 122 o. Impact on 3 guiding principles 122

4. Specific case 4: Improvement of the existing connection between Dilijan with the capital of the TA and Zvarnots airport 123

a. Current situation 123 b. Project rationale and linkages with other projects 123 c. Institutional setup 123 d. Investment items 124 e. Time-line 124 f. Financial estimation 124 g. Alternatives considered 124 h. Asset owner and responsible and costs for O&M 124 i. Possible PPP partner 124 j. Co-financing 124 k. Impact on 3 guiding principles 124

B. Improvement of urban street network 125 1. Specific case 1: Construction of the City entrances 125

a. Current situation 125 b. Project rationale and linkages with other projects 125 c. Institutional issues 126 d. Investment items 126 e. Time-line 126 f. Financial estimation 126 g. Alternatives considered 126 h. Asset own and responsible and costs for O&M 126 i. Possible PPP partner 126 j. Co-financing 127 k. Impact on 3 guiding principles 127

2. Specific case 2: Renovation of Road from KaghniKhach to Tbilisyan Highway 127

a. Current situation 127 b. Project rationale and linkages with other projects 129 c. Institutional issues 130 d. Investment items 130 e. Time-line 130 f. Financial estimation 130 g. Alternatives considered 130

CDP Dilijan 7

h. Asset owner and responsible and costs for O&M 130 i. Possible PPP partner 131 j. Co-financing 131 k. Impact on 3 guiding principles 131

3. Specific case 3: Renovation of Section of Hakobjanyan St. 131 a. Current situation 131 b. Project rationale and linkages with other projects 132 c. Institutional issues 133 d. Investment items 133 e. Time-line 133 f. Financial estimation 134 g. Alternatives considered 134 h. Asset owner and responsible and costs for O&M 134 i. Possible PPP partner 134 j. Co-financing 134 k. Impact on 3 guiding principles 134

C. Improvement of Traffic safety 135 D. Improvement of Walkability/Cycleability/Safety 136

a. Alternatives considered 136 b. Asset owner and responsible and costs for O&M 136 c. Possible PPP partner 136 d. Co-financing 136 e. Impact on 3 guiding principles 136

E. Improvement of Touristic infrastructure 137 1. Specific case: Tourist Information Centre 137

a. Current situation 137 b. Project rationale and linkages with other projects 138 c. Institutional issues 138 d. Investment items 138 e. Time-line 139 f. Financial estimation 139 g. Alternatives considered 139 h. Asset owner and responsible and costs for O&M 139 i. Possible PPP partner 139 j. Co-financing 139 k. Impact on 3 guiding principles 139

F. Improvement of Waste management 140 1. Specific case: Procurement of equipment, advisory (TA) and modernisation of deposal strategy (landfill, transfer) 140

a. Current situation 140 b. Project rationale and linkages with other projects 140 c. Institutional issues 140 d. Alternatives considered 141 e. Investment items 141 f. Financial estimation 141 g. Time-line 141 h. Asset owner and responsible and costs for O&M 141 i. Possible PPP partner 142 j. Co-financing 142 k. Impact on 3 guiding principles 142

IX. BIBLIOGRAPHY 143

X. LIST OF TABLES AND FIGURES 144 A. List of tables 144

8 CDP Dilijan

B. List of figures 145 C. List of maps 146 D. List of boxes 146

I. INTRODUCTION 9 A. Background and Objectives 9

II. CITY DEVELOPMENT PLANS 9 A. CDP for Secondary cities - Theoretical framework for Integrated Urban Region Planning 9

1. Potential Project Interventions 10 a. Competitiveness 10 b. Environmental Sustainability 10 c. Inclusiveness 10

III. DIAGNOSTICS 12 A. Detailed description of local situation 12

1. Geographical context, 12 2. Socio-economic situation and living conditions 14

a. Historical context 14 b. Demography 14 c. Basic and prospective branches of Economy 17 d. Economy and Employment 18 e. Family Income and expenditure 22 f. Poverty situation 25 g. Social transfers for households and Family Benefit system 29 h. Household agriculture 30 i. Educational level of population 30 j. Health care system 31 k. Education system 31 l. Culture-Sports (Museums, Theatre, Cultural organizations, Sport

organizations). 34 3. Urban infrastructure 36

a. Roads and streets network, 37 b. Anti-landslides structures: 39 c. Street lighting, 39 d. Drinking water supply 39 e. Sewage water and waste water treatment, 40 f. Disaster announcement system, 40 g. Waste management 41 h. Environmental issues (Air pollution, Water pollution, Trash) 42 i. Communication (Postoffice, Telephone connection landline, Mobile

Operators and Internet Availability. 43 j. Housing 43 k. Public transport 46 l. Energy supply (gas, electricity) 48 m. Cultural heritage and tourism 48

4. Urban financial assessment of the city 54 a. Capacity or necessity of financing 54 b. Incomes 55 c. Expenses 59 d. Expenses economic 62 e. Sources of financing 64 f. Main Weaknesses 66 g. Challenges 67 h. Points to work 67

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CDP Dilijan 9

i. Conclusions 69

IV. COMMUNITY DEVELOPMENT STRATEGY 70 A. Existing development plans, programs and projects 70

1. Community Planning framework 70 a. Socio-economic development plan 70 b. Master plan: 71 c. 4 Year plan 72 d. Ongoing projects 74

2. Community enlargement 75 B. Analysis of strategic urban subsectors and SWOT analysis 81

1. Analysis of strategic urban subsectors 81 2. SWOT analysis 82 3. Identification of stakeholders and champions 83

V. 10 YEARS STRATEGIC VISION: 86 A. General vision of Dilijan CDP 86 B. Mission statement 87 C. Goals 87 D. Objectives 88 E. Tasks, activities and potential intervention areas 90 F. Stakeholders, champions and target groups 92

1. Identification of stakeholders and champions 92

VI. INVESTMENT PLAN: SHORT, MEDIUM AND LONG TERM ACTIONS TO IMPROVE INFRASTRUCTURES AND SERVICES 95

A. Considerations about the economic and financial sustainability of the projects 97 B. Considerations about the environmental impact of the projects 97

VII. IDENTIFY PRIVATE SECTOR OPPORTUNITITES 98

VIII. PRIORITIZE SUBPROJECTS 100 A. Improvement of Public Transport 103

1. Specific case 1: Modernization of Central Bus Station in Dilijan 103 a. Current situation 103 b. Project rationale and linkages with other projects 104 c. Institutional issues 105 d. Investment items 105 e. Time-line 105 f. Financial estimation 106 a. Alternatives considered 106 b. Asset owner and responsible and costs for O&M 106 c. Possible PPP partner 106 d. Co-financing 106 e. Impact on 3 guiding principles 106

2. Specific case 2: Modernization and Improvement of Municipal Transport Service Delivery 107

a. Current situation 107 b. Project rationale and linkages with other projects 109 c. Institutional setup 109 d. Investment items 110 e. Time-line 110 f. Financial estimation 110 g. Alternatives considered 110 h. Asset owner and responsible and costs for O&M 110 i. Possible PPP partner 111

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10 CDP Dilijan

j. Co-financing 111 k. Impact on 3 guiding principles 111

3. Specific case 3: Improvement of the existing train service and station and connection to the city centre 111

a. Current situation 111 b. Project rationale and linkages with other projects 111 c. Institutional setup 113 d. Investment items 114 e. Time-line 114 f. Financial estimation 114 g. Future passenger connection Yerevan-Dilijan 114 h. Investment items 114 i. Time-line 115 j. Financial estimation 115 k. Alternatives considered 116 l. Asset owner and responsible and costs for O&M 116 m. Possible PPP partner 116 n. Co-financing 116 o. Impact on 3 guiding principles 116

4. Specific case 4: Improvement of the existing connection between Dilijan with the capital of the TA and Zvarnots airport 117

a. Current situation 117 b. Project rationale and linkages with other projects 117 c. Institutional setup 117 d. Investment items 118 e. Time-line 118 f. Financial estimation 118 g. Alternatives considered 118 h. Asset owner and responsible and costs for O&M 118 i. Possible PPP partner 118 j. Co-financing 118 k. Impact on 3 guiding principles 118

B. Improvement of urban street network 119 1. Specific case 1: Construction of the City entrances 119

a. Current situation 119 b. Project rationale and linkages with other projects 119 c. Institutional issues 120 d. Investment items 120 e. Time-line 120 f. Financial estimation 120 g. Alternatives considered 120 h. Asset own and responsible and costs for O&M 120 i. Possible PPP partner 120 j. Co-financing 121 k. Impact on 3 guiding principles 121

2. Specific case 2: Renovation of Road from KaghniKhach to Tbilisyan Highway 121

a. Current situation 121 b. Project rationale and linkages with other projects 123 c. Institutional issues 124 d. Investment items 124 e. Time-line 124 f. Financial estimation 124 g. Alternatives considered 124 h. Asset owner and responsible and costs for O&M 124 i. Possible PPP partner 125

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CDP Dilijan 11

j. Co-financing 125 k. Impact on 3 guiding principles 125

3. Specific case 3: Renovation of Section of Hakobjanyan St. 125 a. Current situation 125 b. Project rationale and linkages with other projects 126 c. Institutional issues 127 d. Investment items 127 e. Time-line 127 f. Financial estimation 128 g. Alternatives considered 128 h. Asset owner and responsible and costs for O&M 128 i. Possible PPP partner 128 j. Co-financing 128 k. Impact on 3 guiding principles 128

C. Improvement of Traffic safety 129 D. Improvement of Walkability/Cycleability/Safety 130

a. Alternatives considered 130 b. Asset owner and responsible and costs for O&M 130 c. Possible PPP partner 130 d. Co-financing 130 e. Impact on 3 guiding principles 130

E. Improvement of Touristic infrastructure 131 1. Specific case: Tourist Information Centre 131

a. Current situation 131 b. Project rationale and linkages with other projects 132 c. Institutional issues 132 d. Investment items 132 e. Time-line 133 f. Financial estimation 133 g. Alternatives considered 133 h. Asset owner and responsible and costs for O&M 133 i. Possible PPP partner 133 j. Co-financing 133 k. Impact on 3 guiding principles 133

F. Improvement of Waste management 134 1. Specific case: Procurement of equipment, advisory (TA) and modernisation of deposal strategy (landfill, transfer) 134

a. Current situation 134 b. Project rationale and linkages with other projects 134 c. Institutional issues 134 d. Alternatives considered 135 e. Investment items 135 f. Financial estimation 135 g. Time-line 135 h. Asset owner and responsible and costs for O&M 135 i. Possible PPP partner 136 j. Co-financing 136 k. Impact on 3 guiding principles 136

IX. BIBLIOGRAPHY 137

X. LIST OF TABLES AND FIGURES 138 A. List of tables 138 B. List of figures 139 C. List of maps 140

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12 CDP Dilijan

D. List of boxes 140

VOLUME II I. APPENDIX 1: ENVIRONMENTAL CONDITIONS

A. Geographical situation, B. Climate C. Geology D. Hydrology E. Soils F. Vegetation G. Fauna H. Natural risks and hazards I. Protected Areas

II. APPENDIX 2: TOURIST ASSESSMENT 16 A. Introduction B. Current Situation C. Strengths and Weaknesses of the Tourism Sector D. Tourism Market Assessment E. . Economic Development F. Dilijan Draft Tourism Business Strategy G. Potential Tourism Projects H. Draft Project Evaluation Matrix

III. APPENDIX 3: COMMUNICATION MATERIAL A. GIS-Mapping B. Desk study to provide examples of cities in Europe and Asia with similar

development issues, C. Organization of a public consultation to share the objectives and main

components, and finalize the CDP based on the feedback from all stakeholders.

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CDP Dilijan 13

I. INTRODUCTION

A. Background and Objectives

1. The Government of Armenia (GoA) requested the Asian Development Bank (ADB) to provide Policy and Advisory Technical Assistance (PATA) to create City Development Plans (CDPs) in the four secondary cities: Gyumri, Vanadzor, Dilijan, and Jermuk. The CDPs will focus on key development and policy challenges related to urban sectors including urban transport, water supply and sanitation, solid waste management, district heating, housing, economic development, logistics, tourism, and lighting. The CDPs will span a 10-year period and will specify and prioritize a list of urban investment projects and improvements in the selected cities within the city development/investment plan. 2. This PATA will address the government’s strategic orientation to improve economic growth by developing cities along trade gateways and those with tourism potential. It will eventually inform the government’s growth strategy and facilitate balanced development in the country. It will focus on key development and policy challenges related to the urban sector; and help list and prioritize urban investment projects in the selected cities. The detailing (detailed engineering, feasibility study, or due diligence) of projects are not part of the scope of this PATA. This PATA will also help Ministry of Economy (MOE) and the Ministry of Territorial Administration (MTA) design the best organizational arrangement to implement urban and municipal projects in participating cities. It will define the organization, prepare job descriptions and the operational budget, and underline the coordination mechanisms between national and local governments to ensure successful implementation. This PATA will help the MOE and the MTA prepare medium and long term investment projections for four secondary cities. Some of the identified projects within the city development/investment plans may be considered by the government to seek funding support from International Financing Institutes (IFIs) including ADB. For e.g. the Government and ADB approved the Sustainable Urban Development Investment Program (SUDIP) in 2011 to finance priority infrastructure projects in urban areas of Armenia for a total amount of $400 million equivalent. SUDIP’s first tranche for $50 million is financing transport projects in Yerevan. The subsequent tranches to be approved in 2015 and onward will also focus on Yerevan and secondary cities.

II. CITY DEVELOPMENT PLANS

A. CDP for Secondary cities - Theoretical framework for Integrated Urban Region

Planning1

3. CDPs are rapid and strategic planning exercises which respond to the need for more results-focused planning. They will be undertaken in selected cities and will follow a similar structure. Such assessments will also provide the basis for project screening and prioritization to determine the most appropriate implementation modality—public, private, PPP, sovereign, or non-sovereign. Prioritized projects with high potential impact and/or demonstration value will be detailed. Resources for this project development facilities are currently included in SUDIP to finance priority infrastructure projects. CDPs will follow some of the components of a traditional master plan, but the assessment will be structured so as 1 ADB (2013): Urban Operational Plan 2012–2020. ISBN 978-92-9092-995-6 (Print), 978-92-9092-996-3 (PDF) Publication Stock No. RPS135428; pp. 11-12

14 CDP Dilijan

to focus on identifying the main constraints to competitive, inclusive, and environmentally sustainable development, the potential financing envelope available, and the priority investments needed to address these constraints within this envelope. 4. Urban Development Planning and Design of CDPs is intended to contribute to build a liveable city through the provision of (i) accessible and affordable infrastructure and services for water supply and sanitation, waste disposal, electricity, transport, and housing; (ii) security of tenure; (iii) employment and income-generating opportunities through formal and informal labour markets; and (iv) safety and security for all citizens in urban neighbourhoods.

1. Potential Project Interventions

a. Competitiveness

5. Based on CDP, ADB will, in consultation with the Armenian government, prioritize its interventions so as to build strategic infrastructure for development. The identification of this infrastructure will be the results of the city competitiveness analysis—both opportunities and vulnerabilities. At the urban region level, understanding roles and contributions of economic clusters in the national and global context is fundamental to designing a value-adding approach to inclusive economic development. Urban regions should effectively lead a country’s sustainable development and poverty reduction agenda by providing economic opportunities, jobs, social services and crowding in private sector investment. The implication is that the government needs to target resources in key areas to catalyse “competitive cities” infrastructure, shelter, skills development, research and development (R&D), specialized finance, and regional cooperation structures.

b. Environmental Sustainability

6. The “Green Cities” approach focuses on concrete measures to bolster urban regions’ Central role in improving quality of life and in mitigating and adapting to climate change. ADB’s value added in this area is its ability to plan in an integrated way across environmental infrastructure sectors and to provide the convening power required for an integrated approach to implementation by responsible agencies. Cities themselves must be planned to become more to reduce their carbon footprint, using fewer natural resources (including land and water), and less energy (including for buildings, urban transport and industry), while improving the quality of life for their citizens. In particular, the3R approach —reduce, reuse, recycle—to service provision can be used to increase energy and materials efficiencies. Cities’ infrastructure also needs to become “smarter”, improve synergy between transport and land use patterns, foster such efficiencies, and become more resilient.

c. Inclusiveness

7. ADB support to inclusive liveable cities will build on ‘competitive’ and ‘green’ cities and support community services, employment opportunities, and livelihood development. The poor and vulnerable have been impacted in the transition towards a market based economy in Armenia. As in all CIS countries. enormous socioeconomic changes are occurring, and governments will need to respond to growing demands for the provision of basic services for the urban poor and poor communities in city hinterlands. There is also a growing awareness that the poor are most vulnerable to climate change impacts and disasters, and that support is needed to improve urban management to deal with these issues in an integrated manner. ADB’s value added in this area is to make governments aware of the range of inclusive urban renewal options available, tapping the resources of communities to augment formal sector funding. ADB can provide lines of credit to agencies specialized in developing poor communities, and ensure its large-scale investments are inclusive

CDP Dilijan 15

8. Dilijan CDP will focus on key development and policy challenges related to urban sectors, including urban transport, water supply and sanitation, housing, economic development, logistics, tourism, and lighting. The Dilijan CDP is intended to cover a 10-year period. 9. The primary goal of this CDP is to create a shared financially sustainable vision's action plan for the city. The services will achieve the following objectives:

i. elaborate diagnostic reports for reference in preparing the CDPs and investment plans;

ii. build with local stakeholders a 10-year strategic vision and CDP focusing on economic and tourism development;

iii. identify necessary investments to improve infrastructure and services and prepare an investment plan in the short, medium, and long term, for endorsement;

iv. identify private sector opportunities and define arrangements, institutional reform, and capacity building to stimulate community-based ecotourism and locally produced industry;

v. list and prioritize the identified subprojects and coordinate with the future team of consultants in preparing assessments and project due diligence (technical, economic and financial assessment, cost estimate, implementation schedule, and safeguards screening); and

vi. help prepare communication materials to market, promote, and display these CDPs and the investment opportunities offered in each city for private sector interventions.

10. These inputs will prepare an investment plan with cost estimates and implementation schedule. To market this city vision, communication materials and brochures will be prepared to be able to design a city website and prepare an exhibition on the economic development opportunities in the city.

16 CDP Dilijan

III. DIAGNOSTICS

A. Detailed description of local situation

11. The diagnosis report analyses natural constraints; the geographic distribution of population and jobs; existing urban infrastructure (public education, health facilities, traditional and recent economic activities, food, and agriculture industry); historical and tourism infrastructure; description of economic trends and geo-political competiveness.

1. Geographical context,

12. Administratively and territorially Armenia is divided into 10 marzes (provinces)2.

13. Dilijan is situated in Tavush marz (Region).Tavush marz is situated in north-east of Armenia, one of the ten marzes (provinces) in the country. It has common borders with Lori marz (West), Kotayk marz (South-West) and Gegharkunik marz (South). It also has common borders with Azerbaijan (East) and Georgia (North). 14. Lying some kilometres to the northeast of Yerevan, Dilijan is reputed to be one of the most attractive towns in Armenia by virtue of its natural setting. It is situation in a heavily forested mountain valley and has a distinctive ‘alpine’ architectural vocabulary, indeed Dilijan is often referred to as ‘Little Switzerland’. Dilijan and Tavush Marz are one of the major tourism destinations in Armenia. 2 The ten marzes are Aragatsotn, Ararat, Armavir, Gegharkunik, Kotayk, Lori, Syunik, Shirak, Tavush and Vayots

Dzor. In marz terms, the operations of the ADB TA-8361 AMR are implemented in Shirak (Gyumri), Vayots Dzor (Jermuk), Tavush (Dilijan) and Lori (Vanadzor).

Map 1: Tavush province in administrative divisions context

CDP Dilijan 17

15. Focussing primarily on serving the domestic tourism market this forested resort, which is surrounded by the Dilijan National Park, has been home to many Armenian artists, composers and filmmakers. As a resort Dilijan reached its zenith during the Soviet era when it functioned largely as a health spa. 16. Dilijan, is occupying actually rank 22th in the ranking of the largest cities of Armenia and is the second largest city of the five cities in the province alongside with Ijevan (Tavush marz center), Noyemberyan, Berd and Ayrum. It is located in the south-west of the Tavushmarz.

Map 2. Dilijan in Tavush province context

17. Dilijan city is divided into five administrative districts (these are not administrative units; rather these represent a provisional, conventional division for the purposes of planning, statistics collection and allocation of financial resources to facilitate infrastructure investments). The six districts include Golovino (when one enters the city coming from Yerevan), Kaghni, Khach, Shamakhyan, Papanino (where the international school is situated), and Takhta. 18. Annex I. ENVIRONMENTAL CONDITIONS gives a general description of the geographical situation, natural resources and environmental conditions of Dilijan and its surroundings analysing opportunities and local constraints for: (i) Climatic conditions, (ii), Geology, and geo-resources/Mining, (iii) Hydrological situation, flooding risks and mineral water resources, (iv) Soil condition, (v) Biodiversity, (vi). Natural risks and hazards and (vii) Environmental protection.

18 CDP Dilijan

2. Socio-economic situation and living conditions

a. Historical context

19. Pre-Soviet Dilijan was a culturally diverse town, with a population belonging to different nationalities and cultural backgrounds. Dilijan was renowned for its natural springs which attracted many visitors over the years. Vocational resorts grew by the mid-19th century, and the lush mountainous setting attracted educational and cultural development projects. Rich people from Tbilisi and Yerevan and intellectuals who were attracted to Dilijan and the Caucasus region built private villas during this period. The new “Dilijanian” style contains also the Molokan influence on the city’s architecture with gable roofs and wooden carved balconies. 20. At the end of the 19th and at the beginning of the 20th century blacksmith's work, carpet weaving, arts, wood engraving and other folk crafts began to develop in the region. There is a Dilijanian carpet, samples of which are presented at Dilijan museums.In the early 1900’s health sanatoriums for lung patients were built that later became state-run treatment centres. 21. Throughout the Soviet period, Dilijan continued to flourish as a cultural, recreational, and health centre. New libraries, fine arts schools, music schools, museums, cultural centres, medical clinics and upscale resorts were all developed. The agricultural industry flourished, and the government listed Dilijan as a national reserve. 22. Resorts, spas, and cultural events are the most important tourism attractions even today. Regarding its rich heritage, Dilijan continues to be home to a variety of historical, cultural and educational centres. Many enterprises and private entrepreneurs registered in Dilijan operate in various sectors, including agriculture such as a high-quality dairy processing industry that specializes in cheese production and mineral water facilities. 23. In 2008, the town was announced a priority development cluster by the government and several projects were launched

b. Demography

24. Since the dissolution of the Soviet Union, Dilijan in common with other health resorts has had to adjust from a planned to a market economy. As a result of this, and a series of economic crisis that Armenia has undergone, tourist numbers greatly reduced. Like many Armenian towns Dilijan’s population is steadily declining from the 23,700 reported in the 1989 census, to 16,202 in the 2001 census, 25. The comparative data on recent evolution of population in Dilijan is presented in the table below. The only official source available is the Census data of 2011. According to the town Mayor the population of Dilijan, unlike many other communities in Armenia, has increased by 2,000 people since 2008.This may have been because of the recently implemented CBA facilities, the construction of the UWC international school, and some activation in hospitality business, turning overall atmosphere in the city more reliable and prospective and with a considerable increment of job opportunities in the city.

CDP Dilijan 19

Table 1: Population of Dilijan (data of Census 2001 and 2011)

Age groups Census 2001 Total Men Women

1 0-5 y/o 875 450 425 2 6-19 y/o 4191 2133 2058 3 20-64 y/o 9293 4232 5061 4 64 and more 1843 771 1072 Total 16202 7586 8616 Census 2011

Total Men Women Total 17 712 8 259 (46.8%) 9 453 (53.2%)

i. Gender distribution of population

26. Gender distribution shows the same characteristics as national distribution.

Table 2: Gender distribution. 2006-2011

2006 2011 Total present

female, persons Total present male,

persons Total present female,

persons Total present male,

persons Dilijan 7527 6773 7945 7675 Armenia 1665554 1557399 1684000 1590285

ii. Age composition of population by gender and age 27. The age composition of the population of Tavush Province shows the same age distribution as Armenia as a whole. Specifically, in Dilijan the composition of population age groups shows a general decline in both, young and elderly age groups. The share of young people is lower than national average. The elderly people group present a slightly higher share of population in Dilijan (12,9) compared to the national average (10,99%), which may be due to spa attractiveness of the population.

Table 3: Age groups of population (Census 2011 )

Total population Female Male Children (0-5 years) 6.9 6.9 7.0 Children (6-15 years) 10.7 10.7 10.6 Adults (16-64 years) 69.4 69.4 69.3 Elderly (65 years and above) 12.9 12.9 13.2 Source: NSS (2011) 28. General evolution of the age group distribution, shows atypical pattern of aging populations with decreasing young population (64 years). 29. Actually there is no more detailed data available on community level about the distribution of the population by age groups. The general age distribution of Tavush province compared to Armenian population shows a significant similarity (Figure 1).

20 CDP Dilijan

iii. Birth and death rates 30. Even if the general evolution of population is showing an aging process, the birth rate is still higher than death rate, with an increase in births in 2011 as compared to 2006.Nevertheless, a strong increase in the number of deaths can be observed.

Table 4: Birth and death rates. 2006-2011

2006 Num % Number of Births 199 1.39 Number of Deaths 165 1.15 Number of Marriages 111 0.78 Number of divorces 7 0.05 2011 Number of Births 246 1.57 Number of live Births 237 1.52 Number of Deaths 148 0.95 Number of Marriages 43 0.28 Number of divorces 3 0.02 Source: UNDP Community Data Base

iv. Spatial distribution of the population 31. The spatial distribution of Dilijan’s population, basically characterized by historical evolution of the historical districts of Golovino, Kaghni, Khach, Shamakhyan, Papanino), and Takhta. The topographical situation of Dilijan conditions the geographical distribution of the settlements shown on the map below.

Figure 1. Population by age groups (2011)

Tavush Province Armenia

Male female male female

Source: NSS

CDP Dilijan 21

Map 3: Distribution of population

c. Basic and prospective branches of Economy

32. Economic activity, employment, number of enterprises per sectors and the role of household agriculture are analysed below to describe the basic socio economic situation of Dilijan.

v. Operating and registered enterprises (by sectors) 33. Municipality passports3 of the secondary cities contain data about registered and operating enterprises. Reliability of this data seems to be apparently weak due to the fact that no difference can be observed between 2006 and 2011.

Table 5: Enterprises 2011 (registered and operating)

Operating enterprises Registered enterprises Total industry 60 42 Processing industry4 60 42 Mining industry 0 0 Construction 23 19 Commerce 82 65 Utility services 53 41 Source: UNDP community data bases (2006 and 2011)

3 Statistical community breakdown, elaborated by the municipality 4 Processing industry includes basically manufacturing and textile activities

22 CDP Dilijan

34. Dilijan has an elevated ratio of about 10.7 operating companies per 1000 inhabitants and activity of enterprises is well diversified. Commerce activities predominate, but utility services and processing industry are well represented. 35. Spatial distribution of commerce and industry activities is shown below.

Map 4: Commerce and Industry

d. Economy and Employment

vi. Active and occupied population 36. The economic and social breakdown of population is set out in the table below:

Table 6: Social groups of population (Census 2001)

Persons % Economically active 11094 68.5 Employed 8296 51.2 Unemployed 2322 14.3

Source: Municipality of Dilijan 37. Shares of occupied persons of total population (adult’s age group) increased in 2011 as compared to 2006 from about 33,3% to 49%.

CDP Dilijan 23

Table 7. Number of occupied persons

Occupied persons % of total population 2006 4758 (33.3%) 2011 5320 (49.0%) Source: UNDP community data bases (2006 and 2011)

vii. Occupied population by economic sectors 38. The working age population (Adults 16-64) is 10,840 people. There are 8296employed citizens in the city of Dilijan. The number of people currently seeking employment is 2,398. The total number of people who work in the economic sector is shown in the table below: 39. By occupation the city’s population is classified into the following groups: those involved in small and medium retail trade, state and local government employees, unemployed, seasonal employees, employed in the service sector.

Source: Municipality of Dilijan 40. Data collected by UNDP community data base. shows a more detailed breakdown and is shown in Table 8. 41. The population’s occupations by economic sectors show a very heterogeneous picture. Occupation non specified sectors and in commerce (Wholesale and retail trade;

Figure 2: Employment by sectors

Source: Municipality of Dilijan (2013)

24 CDP Dilijan

repair of motor vehicles, motorcycles and personal and household goods) are significant reaching shares of 26.6 and 25.0 %. Occupation in the agricultural sector is surprisingly low, indicating substantial differences in survey criteria. Manufacturing basically textile sector occupies a share of 9.2. Surprisingly, hotels and restaurants only employ about 428 persons (8.0%). This may be due to the behaviour of the tourism labour market: Tourist activity shows a very characteristically temporality with important oscillation between touristic high and low season (High season from September 1st to October 31th, and low season from November 1st to February 28th)

Table 8. Employment by economic sectors

Employed 2011

% of total employed

Agriculture, hunting and forestry 76 1.4 Fishing 8 0.2 Mining and quarrying 0 0.0 Manufacturing/textile 490 9.2 Utilities 48 0.9 Construction 335 6.3 Wholesale and retail trade; repair of motor vehicles, motorcycles and personal and household goods

1328 25.0

Agriculture services 12 0.2 Hotels and restaurants 428 8.0 Transport and communication 91 1.7 Public administration 145 2.7 Education 392 7.4 Health and social work 334 6.3 Other community, social and personal service activities

218 4.1

Population occupied in other section 1415 26.6 5320 Source: UNDP community data bases (2006 and 2011) 42. The town was declared a priority development cluster by the government and several projects were launched. These included construction of the international school, located on the southern Aghstev river embankment (CBA facilities), and some activation in hospitality business, turning around the overall atmosphere in the city. These projects provide a substantial number of jobs and impact the future of the local labour market. 43. The employment situation improved due to the establishment of six banks into the city. These include Arshinivestbank, ACBA-Credit Agricole, Haybusinessbank, Converse Bank, and Ararat Bank. 44. Restoration and lodging activities provided jobs to local population mainly at service level. However, the B&B network strengthened thanks to a USAID project. The USAID project, implemented some years ago, identified new opportunities by creation of multi-room recreation facilities.

viii. Unemployment 45. Unemployment rates, as the number of persons seeking a job, experienced a substantial decrease in Armenian 2011 as compared to 2006.However, this indicator normally underestimates the real picture in Armenia, as not all people looking for job register

CDP Dilijan 25

with the state agency. According to the International Labour Organization the non-official unemployment level is higher than the official rate by 10-15% in Armenia 46. During 2006 unemployment rates were high, ranging from 18,5% to 27,3%, the highest unemployment rate was in Vanadzor. Unemployment rates decreased substantially until 2011, as compared to 2005 to below 20 %. During the same period in Dilijan the unemployment rate experienced a relatively weaker decrease from 18,6% to 12,5%5.

47. Figure 3 shows the evolution of the unemployment rate in Dilijan (2005, 2006, 2010 and 2011) compared to general evolution of the unemployment rate in Armenia from 2005 to 2013. During this period the unemployment in Dilijan has been about 30% lower than national average, 48. Unemployment structure by age shows higher unemployment rates of young people (15-30 years) in Dilijan than Armenian average. Unemployment rate of this group reaches about 30% and is nearly three times the national average for this age group, indicating special needs for measures to reduce youth unemployment.

5Since 2008 the indicators are not comparable with the data of previous years. The number of unemployed has

been calculated by the NSS of RA since 2008 based on the ILO standard definition used by EU countries. The later partially differs from the methodology used in 2001-2007, which is based on the expanded definition of unemployment, recommended by the ILO for using in transition countries.

Figure 3. Unemployment rate (2005-2013)

(%)

Source: UNDP Community data base, NSS 2014

26 CDP Dilijan

49. Persons with secondary education generally share nearly the half of unemployed persons, somewhat higher than national average. Persons with vocational education level share more than a quarter of unemployed persons, reaching a share of 37,6% more than double as high than national average. Low skilled persons show lower unemployment rates than average. In Dilijan the lowest indicators of unemployed persons are observed among the population, with secondary education. The unemployment structure indicates a lack of intermediated skilled job positions. Shares of unemployed persons with university education are very low.

e. Family Income and expenditure

Figure 4. Unemployment structure by age

(%)

Source: Municipality of Dilijan, ILCS 2011

Figure 5. Unemployment structure by education

(%)

Source: Municipality of Dilijan, ILCS 2011

CDP Dilijan 27

ix. Households Income 50. Monetary household income includes the funds received by household members as remuneration for work (excluded income tax and other wage-deductible mandatory social contributions), funds received from self-employment or entrepreneurial activities, social transfers (pensions, monetary social assistance, including unemployment, family, child birth and care benefits and others), private remittances, property rental income, interests, dividends, equity gains, revenues from the sale of shares and other securities, real estate and house utensils, livestock, and own production food, as well as funds received as assistance from relatives and third persons, or other monetary income. 51. Total household income comprises all sources of monetary income, as well as non-monetary income such as own produced food consumed (used) by the household, and non-food products and services received free of charge from relatives or third persons, all expressed in monetary terms. 52. No detailed local information from Dilijan or Tavush province is available. The structure of nominal monetary and non-monetary income per household member and urban or rural community in Armenia is presented in Table 9.

Table 9: Household Nominal Income by Urban/Rural Communities-2011

(AMD)

Urban communities Rural communities

1. Monetary income 38,451 26,384 -Wage employment 23,246 8,717 -Self-employment 2,901 1,264 -Sale of agricultural products and cattle 77 4,778 -Estate (renting, interests, equity gains) 216 3 -Public pensions and benefits 6,650 6,229 -Remittances, of which: 4,422 3,584 -from relatives residing in Armenia 769 159 -from relatives residing outside Armenia 3,650 3,425 Other income 939 1,809 2. Non-monetary income 1,219 5,837 -Consumption of food from private farm 773 5,678 -Free non-foods and services 446 159 Total 39,670 32,221

Source: NSS Social Snapshot of Armenia 53. Urban communities are generally more dependent on the wage income as 58% of the total income comes from wages and 11% from remittances. While in rural communities only 27% of total income comes from wages, 11% from remittances and 18% comes in non monetary form. Self-employment income is very low as 7,5% in urban communities and 4,8% in rural communities comes from self-employment. Therefore, it is critical for the cities to improve the level of employment, both wage employment and self-employment, and to increase job opportunities for self-employment. Currently the only alternative source is considered to be the employment income in foreign countries. The public pensions and benefits remain a significant source of income, particularly in smaller cities and rural communities.

28 CDP Dilijan

54. General distribution of household income is presented in table Figure 7

x. Household Expenditure 55. Consumption expenditures are another indicator of household material welfare. Monetary and non-monetary expenses are considered under household consumption expenditures. Household consumption expenditures include the sum of payments made by households within the reporting period to purchase food and non-food goods and services, expenses on food consumed out of home, expenses on durable goods and services, as well

Figure 6. Household Nominal Income by Urban/Rural Communities-2011

(AMD)

Source: Municipality of Dilijan, ILCS 2011

CDP Dilijan 29

as own produced food consumed (used) by the household and food received free of charge from relatives or third persons, are all expressed in monetary terms6.

56. The share of expenses on food is relatively large in total consumption expenditures of rural households (49.3 percent on urban community vs 60.6 percent in rural communities) but with decreasing tendency. In contrary, the share of services, particularly the payments for communication has an increasing tendency and reaches 30.7% in urban communities (20.7% in rural communities). In 2011, share of expenses on non-food products in consumption expenditures among urban and rural population was quite similar (15.8 and 14.5 percent, respectively). The share of expenses on housing utilities among urban population was higher than in case of rural population (Figure 7).

f. Poverty situation

57. For a detailed description of the actual poverty situation in Armenia the National Statistical Service elaborates a specific analysis published through the Social Snapshot and Poverty in Armenia7. These reports had been drafted through the analytical and technical assistance of the World Bank. A consumption aggregate is used to approximate well-being in Armenia. Based on the international experience, it is assumed that consumption is better declared and is less sensitive to short-term fluctuations than income, especially in transition countries. 6Household consumption expenditures do not include taxes, fund-raising, payment of debts, payment of alimony,

assistance to relatives, penalties, repayment of credits and other expenses that are not related to consumption, accumulations, as well as expenses related to production activity of households (acquisition of seeds, cattle, raw material).

7 NSS: Social Snapshot and Poverty in Armenia (1999, 2004, 2006, 2007, 2008, 2010, 2011,2012)

Figure 7. Structure of Household Consumption Expenditures by Urban/Rural Communities 2011

Average Monthly Expenditures Per Household Member (AMD)

Source: ILCS 2011

30 CDP Dilijan

xi. Poverty indicators 58. The poor are defined in the Social Snapshot of Armenia report as those with consumption per adult equivalent below the upper total poverty line; the very poor are defined as those with consumption per adult equivalent below the lower total poverty line, whereas the extremely poor are defined as those with consumption per adult equivalent below the food poverty line. Poverty line was computed by using the actual minimum food basket. In 2011, the total – both upper and lower – and the extreme poverty lines per adult equivalent per month were estimated to be AMD 36.158 (or USD 97.1), AMD 29.856 (or USD 80.2) and AMD 21.306 (or USD 57.2) respectively8.

Table 10: Poverty Lines and Their Changes, 2008-2011

(per Adult Equivalent, per Month) (AMD)

2008 2009 2010 2011 Food or extreme poverty line 17644 17483 19126 21306 Lower total poverty line 24388 25217 27410 29856 Upper total poverty line 29903 30920 33517 36158 Source: ILCS 2008-2011 59. Poverty is measured by the poverty incidence, gap and severity indicators.9 60. Over 2008-2011, poverty incidence in rural areas increased faster than in the urban areas (7.6 vs. 7.0 percentage points). The capital Yerevan, with the lowest poverty incidence (27.5%) in the country, suffered the least due to the global economic crisis if compared with other urban areas. Inequality indicators measured by the Gini coefficient indicate that polarization of population in Armenia is deeper in terms of income distribution than that in terms of consumption distribution. 61. There is no local poverty data available for Dilijan. The last local data extracted from Lire Ersado poverty study date as of 2008 and is shown below10. 62. Consumption inequality measured by the Gini coefficient increased in Armenia from 0.242 in 2008 to 0.267 in 2011. Income inequality, in turn, increased from 0.339 in 2008 to 0.371 in 2011. Dilijan presented a Gini coefficient of 0,26 in 2008, very similar to the national average. 63. The poverty gap of 7.96% indicates that, once the community were to mobilize for each individual (both poor and non-poor) resources equivalent to the poverty line of 7.96% (7.9% in Armenia) and these resources were allocated to the poor, poverty theoretically would be eliminated, assuming that the assistance aimed for the poor would fully reach them. If calculated as per the poor population only. The severity of poverty (in 2008- 2.57%) indicates inequality among the poor.

8 NNS (2012): Social Snapshot and Poverty in Armenia 9 The headcount index or poverty incidence is the simplest and most frequently used measure of poverty. It

represents the fraction of individuals with consumption per adult equivalent below the poverty line . The poverty gap index indicates how poor the poor people are, i.e. how far their consumption is below the poverty line. The severity of poverty indicator is used to measure the inequality of consumption among the poor (some poor people may have consumption close to the poverty line, while some may be far from it).

10 Lire Ersado (2012): Poverty and Distributional Impact of Gas Price Hike in Armenia

CDP Dilijan 31

Table 11: Poverty indicators (2008)

Community Type Poverty gap Poverty severity Gini coefficient

Dilijan Urban 7.96 2.57 0.2611 Source: Lire Ersado2008 (facilitated by H. Yeritsian)

xii. Evolution of poverty since 1998 64. Poverty situation improved visibly in Armenia since 1999. Economic development and the economic boom in the middle of the decade reduced resulted in a decrease in the share of poverty from 21% as of 1999 to 4% as of 2006. Unfortunately, the world economic crisis of 2008 struck the Armenia’s population heavily producing an increase of poverty. 65. In 1999 the very poor population in Tavush regions was sensibly lower than the national average, a trend that remains although the difference with the national average is decreasing. Over the recent years, the extremely poor population was increasing slightly in Armenia, due to economic crisis.

66. The evolution of the poor population was similar to the evolution of the very poor population, but effects of the economic crisis of 2008 led to a significant higher increase of the share of the poor population than the very poor population. The share of the poor population in Tavush region has approximately a 10% lower share than the national average, with a lower increment after the economic crisis than at the national level. The evolution of the poverty situation in Dilijan seems to be slightly better than the Armenian average.

Figure 8. Evolution of poverty – very poor – Tavush 1998 – 2011

(% of total population)

Source: NSS Social snapshot 1999 - 2011

32 CDP Dilijan

67. There is a similarity of the data obtained on regional level with the local results presented by Lire Ersado.

xiii. Child poverty 68. This chapter assesses child poverty in terms of consumption aggregate, material and housing deprivation. Some 2% of children (under 18) living in the Tavush region (4.7% on national level) live below the extreme poverty line and 31.5 % (41,9% national average) below the poverty line, while extreme poverty and poverty rates in Armenia are 3.7% and 35.0%, respectively (Table 5.1). Thus, children are exposed to a higher risk of poverty than the population as a whole. In spite of the lack of local data, the situation in Dilijan is supposed to be better than national average.

Table 12. Child poverty indicators

Child poverty Child poverty Poverty gap rate (extreme) rate Tavush 2 31.5 6 Armenia 4.7 41.9 10 Source ILS 2011 69. Average poverty rates reflect the substantial dependence of poverty and adverse living conditions on various household characteristics. According to the Social Snapshot and Poverty report child poverty rates significantly vary with the number of children in the household, the age group of the youngest child, the presence of disabled children, as well as the characteristics of the household head such as sex, educational level and employment status. In general terms the report mentioned the following factors: (i) Children in larger families are more likely to be poor, (ii) Younger children are more likely to be poor, (iii) Households with one or more disabled children are imposed to the highest risk of poverty, (iv) Children in female-headed households are substantially more likely to be poor. (v.) Marital status of the house hold head is an important predictor of child poverty, (vi) Living in a household with a more educated head reduces the risk of poverty (vii) Employment status

Figure 9: Evolution of poverty – poor – Tavush 1998 – 2011

(% of total population)

Source: NSS Social snapshot 1999 - 2011

CDP Dilijan 33

of the household head is another crucial predictor of child poverty, and (viii) The number of adult household members in employment also appears to affect child poverty rates.

g. Social transfers for households and Family Benefit system

70. System of Social Transfers in Armenia includes pensions and monetary social assistance. Pensions are an important source of income for the population, especially as far as many pensioners are concerned, for whom they are the only source of income, therefore, general welfare of the population pertaining to this group is conditioned by the amount of pension. 71. The social breakdown of population is set out in the table below: 25.3% of the population are pensioners and 30.1% of the total number of households is actually included to the state social assistance scheme.

Table 13: Social groups of population (Census 2001)

Persons % Pensioners 4100 25.3 Refugees 23 0.1 One-sided orphans 131 0.8 Participants in World War II 21 0.1 Handicaped 964 5.9 Households % Number of households 3436

Households on state social assistance scheme 1034 30.1 Families of victims of war 21 0.6

Source: Municipality of Dilijan 72. As for monetary social assistance, the Family Benefit Program is the largest one in Armenia. It is the largest in terms of population coverage, as well as of the funds allocated from the state budget.

Figure 10. Share of Population Having Reported Social Transfers as a Source of Income (Armenia 2011)

(% of total population)

Source: NSS Social snapshot 1999 - 2011

34 CDP Dilijan

73. Currently about 21% of total Armenian population is receiving family benefits. Local situation of family benefits vary considerably. Share of families receiving family benefits in Dilijan is equivalent to national average.

Table 14: Households included in the family allowance system

Num. Dilijan %

Present Households receiving family allowance 750 16.6% Verified and reported households in family allowance system

964 21.3%

Source: UNDP community data bases (2006 and 2011)

h. Household agriculture

74. Household agriculture is an important contribution to family subsistence. The number of households with agricultural land (including home adjacent gardens) varies from one city to the other. In Dilijan 75,9 % of all households have additional agricultural production for subsistence. Average surface of household agricultural land is very small and corresponds to housegarden agriculture for subsistence and small sale of agricultural products and cattle on the local market.

Table 15: Household agriculture

Households having agricultural (including home-adjacent) land

75.9%

Average surface of households agricultural land 0.077 ha Proportion of irrigated agricultural land 0 % Source: UNDP community data bases (2006 and 2011)

i. Educational level of population

75. The educational level of the Armenian population is traditionally high. Armenia has taken great strides in the past decade toward achieving universal primary school enrolment; however high dropout rates and low secondary school completion rates indicate that the school quality remains a major challenge.

Table 16: Educational level of population

(%) Dilijan Armenia

Elementary education 8.1 3.3 Basic education 9.8 12.0 Middle education 30.3 41.4 Vocational education 23.6 20.4 University education 28.1 22.9 76. Dilijan’s population presents a higher share of population with university education, and at the same time mayor share of population with only elementary education.

CDP Dilijan 35

j. Health care system

77. Primary healthcare clinics and paediatric clinics have 2,500 people registered and employ 32 doctors and other staff. Since the 1970-s “LernayinHayastan” and “Dilijan” health centres have had a capacity of 240 beds and the Republican Children clinic sanatorium has a capacity of 120 beds. 78. A new hospital is commissioned in the city, furnished with modern equipment, tools and trained doctors. This hospital maintains 40 beds. The capabilities of this hospital are limited to providing basic diagnosis, emergency, light surgeries and in-patient treatment for comparatively simple cases. 79. There is also an emergency and disaster alarm system available in the community.

k. Education system

80. According to the legislation of Armenia, a municipality’s jurisdiction in education is limited to pre-school education (i.e. kindergartens and various types of groups and classes for children below school age 6 years old). Vocational training is within the discretionary powers of the local self-government bodies of municipality.

Table 17: Summary table for the education sector

Educational institutions Number Number of students Teaching staff Kindergartens 6 563 111 Secondary and basic schools 5 1761 267 Vocational secondary (colleges) 3 632 174 Musical school 1 264 63 Arts school 2 237 32 Sports school 1 130 16 Total 18 3587 663 81. Pre-school education: 6 non-commercial educational pre-school institutions operate in Dilijan delivering services to 563 kids. Total number of pre-school age kids (Ages 2 to 6 years old) is 1100. Five of the kindergartens have internal heating systems installed and they are operational. All these are municipally funded and located in five buildings. A monthly fee of 5000 drams is paid by the parents, but the vulnerable groups of population are subsidized by the municipalities in respect of the service fee.

Table 18: Information on kindergartens

Location Number of staff Number of children

Funding in 2014 (in ‘000 drams)

Kindergarten 1 Getapnya 70a 27 181 33840,0 Kindergarten 2 Gai 46 26 134 31920,0 Kindergarten 3 Moldovakan 46 21 100 25920,0 Kindergarten 4 Orjonikidze 63/1 16 86 19170,0 Kindergarten 5 Zinavan 8 20 7800,0 Kindergarten 6 Kamo 42 13 42 12270,0 Total 111 563 130920,0 82. There is no private kindergarten in the city besides the one established by the CBA for its staff. It is free for the staff of the CBA, but outsiders may also attend if a fee of 60000

36 CDP Dilijan

drams per month is paid. As of the information of today, there are no outsiders attending this kindergarten. 83. The main problems the kindergartens endure are a lack of methodical, didactic and programmatic items, and – in physical infrastructures – the need to renovate schoolyards and playgrounds. 84. The objectives defined by the municipality in the 4 year development plan include enhancing quality of education, review of curricula in the basic and off-school education and training facilities, as well as identifying the ways to increase efficiency in implementing state programs in the sector of pre-school education. Enhancing the quality and diversification of delivered services in pre-school and school education remain among the highest priorities of the municipality. 85. Secondary schools: Secondary schools and high schools are within the jurisdiction of the regional administration (which essentially means the Ministry of Education and Science). The maintenance of these educational institutions is provided by the state through the ministry quoted previously and Tavushmarzpetaran. 86. There are five secondary schools in Dilijan, including one high school, one secondary and three basic schools. Total number of students within these schools is about 1,750 (or 13% of de facto population of Dilijan) and the total number of staff is 267.

Table 19: Information on secondary schools

Street location Number of teachers

Number of students

Funding in 2014 (in thousand

AMD) High school 60 357 71975.5 School N2 Kalinin 137 80 600 98969,6 School N4 Shahumyan 6 52 356 60000,0 School N6 Kamo 131 31 159 37188,4 School after V. Ananyan Shamakhyan 1 44 289 53194,4 Total 267 1761 321327,9 87. Five vocational schools function in town. They are the Dilijan college of the Ministry of Education and Science with 207 students (120 students are studying crafts), the Dilijan Medical college with 164 students, the State College of Arts (with an emphasis on musical) with 176 pupils and 54 students, Children’s Musical school with 75 pupils and Arts school with 72 students. 88. The musical school plays an important role in the cultural life of the town. Piano, drums, duduk and flute classes are taught in the school. The school has a local heating system. Many of its graduates have got a lot of awards at different significant festivals.

CDP Dilijan 37

Table 20: Vocational educational establishments

Street location Number of teachers

Number of students

Funding in 2014 (in thousand

AMD) Dilijan branch of Yerevan Arts Academy

Emma Tsaturyan 9 14 35 n/a

Musical school Usanoghakan 2/50 63 264 51351,0 Medical college Usanoghakan 41 19 58 16413,5 Shahamberyan Arts school11

Kalinin 62a 18 202 17500,0

Sports gym of Dilijan E. Tsaturyan 19 16 130 16248,0 Total 130 689 101512.5 89. Other type of vocational schools are:

i. Bridge of Hope – for disabled youth ii. Ayb School – private school iii. Athletic School – sport school iv. TUMO - Centre for Creative Technology, a private school for creative youth v. UWC Dilijan College – a international private boarding school to be

commissioned in September 2014

90. Colleges: Dilijan has three secondary colleges employing a total staff of 174 delivering services to a total of 632 students.

Table 21: Information on colleges

Street location Number of teachers

Number of students

Funding in 2014 (in thousand

AMD) State Arts college Kalinin 57 61 250 30000,0 State college of Dilijan Usanoghakan 2/50 63 264 51351,0 Medical college Usanoghakan 74 50 118 189000,0 Total 174 632 270351,0 91. Concerning Universities, there are two branches of higher education establishments in Dilijan. They are Yerevan State Academy of Fine Arts and Yerevan University of Management and Information Technologies.632 Students are studying in the universities. United World Colleges Dilijan (UWC Dilijan), a boarding school, is a network of private secondary schools across the world. UWC Dilijan colleges is expected to boost the local economy and attractiveness of the city increasing visits to Dilijan and putting the city on the map of international education centres. A UWC is being established (custom design and built). UWC will promote the image of the city as a centre for education. More tangible factor currently for the city residents is the job opportunities offered by the School mainly in the construction sector. The commissioning of the school is planned for September 2014. Its full capacity is 650 students with 60 academic staff. It is supposed to be a substantial intervention for the education sector of the entire country and the city itself.

11 The school of arts was established in 1970 and moved to the “new” building in 1985. The school has also an

exhibition hall where children exhibit their works. Capital renovation is underway funded by the municipal budget. The school is fully equipped with heating and delivers training in painting, decorative and applied arts (knitting, carpets, wood craft, etc).

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92. CBA Knowledge for Development Centre: The four-storey building hosts a visitor’s centre where monetary history of Armenia and CBA is exhibited, a public library, a Centre for Creative Technologies(TUMO) and labs and classrooms of the AUA. 93. In September 2014, UWC Dilijan college, is planning to start a private initiative for educational activities of “Dilijan International School of Armenia”, an International co-educational boarding school offering Cambridge IGCSE and IB Diploma Programme (age 13 to 19 years). Main buildings and adjacent installations are actually under construction.

l. Culture-Sports (Museums, Theatre, Cultural organizations, Sport organizations).

94. Dilijan Museum of Local History and Art Gallery: Dilijan has an exceptionally rich history and cultural heritage which is reflected in the Dilijan Museum of Local History and Art Gallery which was founded in 1950 by a local school teacher. The gallery houses a collection of classic and modern Armenian art as well as a fine collection of international paintings and sculpture. In addition, there is a collection of Armenian carpets, jewellery and objects. In the historic collection there are numerous artefacts from the late Bronze Age and early Iron Age recovered from excavations of prehistoric cemeteries at Golovino and Paganini near Dilijan. These include a number of relics, including armour, weapons and jewellery. Many of the finest artefacts recovered from excavations were transferred to the State Hermitage Museum in St. Petersburg where they can still be viewed.

Figure 11: Dilijan Museum

95. There are 2 museums in Dilijan, an Art Museum and a Geology Museum. The Museum and Gallery, which are substantial for a town like Dilijan, are generally in excellent conditions and easily accessible on Myasnikyan Street above the Aghstev River in the town centre. The exhibits are displayed with interpretative materials in Armenian, Russian and English. 96. In the Geological Museum 3,000-year-old archaeological items of national significance and value are preserved in the 8,670 exhibits.

Table 22: Geological museum

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Name Establishment year

Number of employees

Number of exhibit posts

"Geological Museum" CNCO 1950 10 8670 97. Theatre: The theatre in Dilijan dates from the end of the 19th century when amateur dramatic groups were organised. These clubs were supplemented by the construction of the “Rotonda”. This open air theatre became a centre for intellectuals throughout the Caucuses from 1900 until 1936 when it ceased to function. In 1932 the State Theatre was founded in Dilijan and the city still maintains a strong position in the dramatic arts. Although cultural activities have fallen away in recent years the city government has identified the renovation of Dilijan Culture Palace as one of its development priorities. 98. Cultural organizations: Palace of culture has played an important role in the city's cultural life. Designed capacity is 2,280 m2. In 2007 new building for club in Shamakhyan district has been exploited.

Table 23: Palace of Culture “CNCO” Name Establishment

year Number of employees

Classrooms Number of places in hall

"Palace of Culture "CNCO 1972 21 14 551 99. Sport organizations – Infrastructure: The sports complex plays an important role in youth physical education (it has a children and teen-ager sports school and a stadium which seats 2000 ).The sport complex was established on the bases of sport school, playground and football school. Greek-Roman wrestling, soccer, volleyball, basketball and handball sport are the active groups with 130 sportsmen. 100. A park for children has been established in a 7 hectare area. There are 6 amusement carousels installed. A playground and a cafe operate in the park.

Table 24: Characteristics of Children’s Park Name Establishment year Number of employees

"Children's Park" CNCO 1972 2

101. Spatial distribution of educational infrastructure is shown in Map 5:

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Map 5: Spatial distribution of educational infrastructure

3. Urban infrastructure

102. The city of Dilijan is provided with numerous public services. Spatial distribution of public services is shown in the map below.

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Map 6: Public services

a. Roads and streets network,

103. Roads and streets network: The city of Dilijan is connected to the capital city, Yerevan, through a 96 km motorway (M4). . Inside the city, because of the hilly relief, many roads in the community rest on reinforcement walls, which are in need of refurbishment. The total area of the community roads and streets is 461.4 thousand square meters. The inventory of the urban infrastructure is presented below:

Table 25: Inventory of urban infrastructure

Measurement unit

Amount

Road infrastructure, including: Km/m2 125 / 461.4thousand Asphalt-concrete pavement km 113

Other pavements km 12 Reinforcement walls c.m. 89,792 Drainage system, including

Manholes items 133 Main pipelines m 6,825

Bridges 22 104. The city itself has 120 km of roads, out of which 52 are paved with asphalt. The state of conservation is very heterogeneous, some areas are in good condition and others are in need of repair or maintenance (This fact will be addressed below). In the older part of the city, pavements are not present or lacking.

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Map 7: Street network

105. Interstate roads are maintained by the central government. Community street renewal and maintenance is contracted through tender to a licensed company. The government has allocated 250 mln drams for reinforcement of embankments along M4 and M8 highways. Additional funds have been allocated for landslide mitigation activities – such as maintenance of drainage tunnel. Those measures are expected to improve road safety and reduce significantly the costs of maintenance. 106. The existing tunnel to Dilijan, which is under the jurisdiction of Ministry of transport and communications, needs to be evaluated for its engineering integrity. There are 22 bridges in Dilijan, in average conditions. 107. Traffic safety: Traffic safety is an important issue which does not seem to have been holistically addressed. A more effective traffic control and pedestrian system should be considered for the inner city mobility. 108. Most of the roads do not have sidewalks, and part of those which do have them, are in poor conditions. These sidewalks are essential to improve pedestrians’ safety and would facilitate tourism traffic. An overall streetscape upgrade is needed in order to improve the image of the streets, specially the main streets. 109. Vulnerability to Natural Hazards: As indicative data, in 2011, 2.5 km of local community roads and 1.2 km of main roads to Dilijan were obstructed with stone falls, landslides, etc. Landslides are a critical problem for Dilijan’s built infrastructures, walls and tree planting should be carried on to prevent roads and other infrastructures from landslides. Several streets are suffering damage caused by landslides and reinforcement works on several roads and streets should be achieved.

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b. Anti-landslides structures:

110. Anti-landslides structures: The structures built to protect the population and Dilijan infrastructures from landslides are in poor condition. The landslides are due to water presence in the ground, on the surface. Actually there exist three main drainage tunnels in Dilijan, and several rehabilitation projects have been carried out by the state government to improve the existing anti-landslide infrastructure. No additional drainage measures have been taken to avoid water infiltration into the ground.

c. Street lighting,

111. Street lighting: The street lighting infrastructure is correct for primary roads, but secondary roads and streets are scarcely provided with lamps – except the main street close to the town hall. Some foot lamps should be replaced. 112. An energy efficiency project is being carried out; the existing bulbs are being replaced with energy saving ones. The total energy consumption is covered with the community budget. For 2013 the electricity expenditure on lighting was AMD 31,652,564 and Capital Repair of building infrastructure was AMD 4,221,389 and AMD 70,000 on design. A cost centre exists and the costs are recorded separately. An integrative energy efficiency project could include the creation of a specific energy saving department. 113. A correct lighting of the streets will provide higher safety for the pedestrians, who would be seen at night by the cars. This action tends to reinforce the idea of the creation of sidewalks in order to clearly identify the part of the street dedicated to pedestrians at any time of the day. These measures would improve both, gender and children’s safety incrementing at same time attractiveness of Dilijan for tourists.

d. Drinking water supply

114. Drinking water supply is provided by the Armenia Water and Sewerage Company, managed by Saur. The water price is actually 179 Drams per m3. 115. 100 % of households in Dilijan are supplied with drinking water. The water treatment plant is equipped with filters, flocculation if required and disinfection (chlorination).However, the water supply infrastructure is being upgraded now and most of the water supply pipes are being replaced. Water intake is realized directly from the water surface (2 water intakes, distance 2 and 8 km from water treatment plant). Turbidity problems arise during the rainy season. The drinking water treatment plant is not a state of the art. New catchment systems (water in-takes) are being implemented to improve the obsolete take-ins and drinking water treatment plants. 116. The network is multi-zone, regulated by valves with very important differences of pressure. AWSC is implementing several works in order to improve the network, suffering from important deterioration. Ducts and valves are very old. New polyethylene ducts are used instead. The conclusion of collectors and treatment plant construction works is expected in September of 201412.

12 A 320 million dram investment is being devellopped. The project envisages reconstruction of water supply

internal network of “Taghta” district in Dilijan town and “Frolovo” head structure.

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117. Drinking water supply suffers from discontinuous availability. 70% of households are receiving service during 24 hours a day, meanwhile the rest are being supplied during 10 to 14 hours a day. Generally, higher altitudes suffer during winter times as provision cannot be guaranteed during the whole day. Investment Priorities:

i. Replacement and rehabilitation of ducts. ii. Construction of filter drains in order to improve water intake system and to

reduce turbidity problems and costs for flocculation treatment. iii. Renovation of daily regulated reservoirs.

e. Sewage water and waste water treatment,

118. Sewage Water and waste water treatment: Today in Dilijan, 99% of households are connected to the sewerage system. However, the water pipelines of private houses are in poor condition, and the sanitary zones are not preserved in the required manner. The sanitation of the city is an issue for the population, because it could contaminate the ground water. There is also a lack of sewage collectors. Actually important infrastructural works are under construction. Investment priorities:

i. Construction of waste water treatment plant (actually under construction) ii. Construction and rehabilitation of waste water collectors iii. Centralization and connection of collectors to the treatment plant to avoid

dispersed spilling of sewage water. The sewage water treatment plant will be operated by a different department within AWSC.

f. Disaster announcement system,

119. Seismic risk: After the 1988 Spitak earthquake, which affected also Dilijan a disaster announcement system has been set up. In 1999, the Government of Armenia adopted the strategy of seismic risk reduction. Several institutions under the coordination of the National Survey for Seismic Protection (NSSP) developed a uniquely structured program. Building stability should be assessed by the municipalities and since not all buildings will need strengthening, cities should13:

i. Develop a seismic risk map ii. Identify high risk districts and sequence them for seismic risk reduction iii. Classify buildings in high risk districts iv. Assess the maximum possible accelerations and prepare synthesized accelerograms v. Analyze non-elastic earthquake response and estimate potential building damage vi. Prioritize buildings according to retrofit urgency vii. Design retrofit methods for each type of building using conventional and/or new non-

conventional structural concepts viii. Retrofit the most vulnerable buildings, according to the priority list. 120. Fire rescue and emergency system: Currently there is one fire brigade operating in the city.

13 Mikayel Melkumyan: Seismic Risk Assessment and Mitigation Strategy in Armenia

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g. Waste management

121. Solid waste removal: Primary Collection and solid waste removal is a particularly important issue for Dilijan. Waste removal generally is contracted through a tender project to private