Translated material
Maximum permissible concentration of optimism
"Rostroy" expects that most regions will meet the "cost increase coefficient" for housing and communal services
Russian officials sometimes display surprising optimism in trying to portray the industry they are entrusted with in a favorable light, even when serious problems arise in specific areas. The well-known formula about the “average temperature in the hospital” makes it possible not to notice complications in individual “patients” and calmly report to superiors. Yesterday, the head of the Federal Agency for Construction and Housing and Communal Services, Sergei Kruglik, used this formula, declaring that the increase in tariffs for housing and communal services in 2006 will not lead to an increase in the “social temperature” of society. According to Rosstroi, the increase in tariffs for housing and communal services in January, which accounts for the main jump in prices for utilities, is still only 17.5%. However, this is inconclusive information: some regions did not provide data on tariff increases. “Our forecast: tariffs in 2006 should not increase by more than 20-22%. Most subjects will meet the maximum standards,” he said.The advantage of the calculation method chosen by Mr. Kruglik is that it allows, in principle, not to delve into the data obtained from individual regions, and even more so from municipalities. Although it is precisely at this level that reasons for dissatisfaction arise among Russians. As statistics from the Federal Tariff Service show, in some areas of the Nizhny Novgorod region the rise in prices was 46% with a maximum of 23.2%, in the Amur region - 30-40% with a maximum of 20%, in Bryansk - 26% with a maximum of 15%, in Yekaterinburg - 33% with a maximum of 20%, etc. It was precisely this jump in prices for utility bills, which clearly did not fit into the government’s promises to keep tariff growth in 2006 within 20%, that led to protests in a number of areas. For example, in January, about two hundred Ulyanovsk residents, mostly pensioners, blocked one of the city’s central highways for an hour, protesting against the increase in tariffs for housing and communal services. And in Nizhny Novgorod a rally was held under the slogan “Exorbitant rent - payback for silence.” Periodically, similar actions broke out in the Far East.
But Sergei Kruglik, who thinks on a national scale, is confident that individual January actions were “provoked events,” and there will be no all-Russian people’s communal uprisings. After all, his statistics show that the current increase cannot be compared with 2004 and 2005, when the increase in tariffs for housing and communal services amounted to 29.5 and 32%, respectively.
The reason why a number of regions exceeded the ceiling set by the government is called by Rosstroy “the policy of containing prices and non-compliance with federal standards in previous years.” It is the previous mistakes of the regions, Mr. Kruglik believes, that “sometimes lead to a significant increase in the cost of services and payments to citizens in the current period.” “People have had enough time since 1995 to smoothly transition to new tariffs. This waiting period must end. Personally, I don’t see any justified reasons to double the fees for housing and communal services now, except for the explanation that nothing has been done in the region at all,” the head of Rosstroy emphasized.
Sergey Kruglik immediately listed backward regions, according to Rosstroy, that is, those where the average level of payment for housing and communal services by the population does not exceed 80% of economically justified costs. These are Voronezh, Lipetsk, Smolensk, Novgorod, Chita and Kamchatka regions, the republics of Ingushetia, Karachay-Cherkessia, Altai, Sakha (Yakutia), Koryak Autonomous Okrug. According to Mr. Kruglik, Rostroy, in order to prevent the development of a critical situation in these regions by February, has nothing left to do but prepare proposals for sending there financial support from the center and issuing “permissions” to revise the maximum indices of tariff changes . Actually, the second task has already been partially completed. As Interfax reported yesterday, the head of the Federal Tariff Service, Sergei Novikov, told foreign journalists that in 23 regions of the country the maximum growth rate for utility tariffs will be raised (compared to that set on January 10).
At the same time, Rosstroy is still convinced that the authorities of most regions and municipalities will be able to meet the “cost increase coefficients” allotted to them. “Many do not plan to adjust the marginal indices,” Mr. Kruglik assured, suggesting that in some cities where there was a serious jump in prices in January, their reduction may follow. And, as if illustrating these words, the capital authorities announced yesterday a reduction in tariffs for heat and water supply services from March 1 by approximately 4-5% compared to January-February. According to the deputy head of the Regional Energy Commission, Vladimir Mokhov, the recalculation will be made due to the fact that the increase in tariffs for these services turned out to be higher than provided for by the FTS. Last December, the Moscow government decided to increase tariffs for the population by an average of 29%, and two weeks later amendments to the federal law were adopted, which established a 20% limit for the capital.
In the debate about whether actual state regulation of tariffs for housing and communal services will allow the utility industry to develop normally and whether this step will not paralyze the influx of investment in dilapidated infrastructure, Sergei Kruglik seems to clearly share the position of the White House. The head of Rosstroy believes that housing and communal services enterprises have opportunities to develop and modernize even in a situation of strict control by the FTS. “There are mechanisms, for example, the same law “On Concessions,” he says. “The main thing is that there are rules that don’t change.” In order to work out these rules even more thoroughly, soon, as Mr. Kruglik said, a project financed by the World Bank will be launched in five Russian regions. The experiment will demonstrate the housing and communal services reform “in a laboratory form,” including opportunities for competition. According to Mr. Kruglik, only private companies will be involved in the project.
However, to the surprise of even the utility workers themselves, the industry did not let us down in this harsh winter. Most regions, according to Rosstroy, have managed to ensure stable operation of housing and communal services in severe frosts. Accidents and violations were eliminated “practically without introducing an emergency regime,” which Rosstroy considers a great achievement. True, the regular regime required not only good organization of work, but also the attraction of considerable above-plan funds. Additional costs for Russian utility companies in January (elimination of accidents, fuel burnout) amounted to about 2 billion rubles.