Government to Allocate Billions of Rubles for Housing and Utilities Sector Modernization

Government to Allocate Billions of Rubles for Housing and Utilities Sector Modernization


The Government of the Russian Federation expects to allocate almost 750 billion rubles ($12.55 bln) for modernization of housing and communal services. Meanwhile, as Izvestia reports, about 4.6 trillion rubles ($76.96 bln) are not enough to upgrade the housing and utilities sector.

The head of the Ministry of Construction Irek Faizullin clarified that the program for modernization of housing and communal services in Russia is currently being formed. At the same time, Faizullin said that the allocation of such a significant amount for the transformation of public utilities has not yet been finally approved, but the “initial materials” are available.

Speaking at the plenary session of the St. Petersburg International Economic Forum, Russian President Vladimir Putin outlined the priority directions of Russia's further development. In particular, he said that the fifth principle of Russia's economic development should be a faster pace in the formation of modern infrastructure. The Russian President said that for this purpose it is necessary to launch a comprehensive program to modernize housing and communal services. Putin drew attention to the fact that it is necessary to fundamentally change the situation in the housing sector and in the sector of overhaul.

According to Irina Bulgakova, head of the Commission on Housing and Communal Services of the Public Council under the Ministry of Construction of Russia, as writes, the reconstruction and modernization of networks requires large funds. 750 billion rubles, which the Russian government promises to allocate over five years, will not be enough to carry out the modernization of the housing and utilities sector in Russia. As Bulgakova emphasized, big capital investments, amounting to trillions of rubles, will be needed. The most acute problem in this sphere, according to her, is wear and tear of sewage, water, heating and other networks which, according to some sources, amounts to 70%. That is why the promised funds can partially cover some of the needs.

Meanwhile, the debts of consumers of public utilities represent a significant problem. So, August 12, the deputy head of the Ministry of Construction, Alexei Eresko, stressed that not all debts, which have accumulated in the housing and communal services, are possible to return. The total amount of debt to the housing and communal services, according to him, is now 1.4 trillion rubles ($23.42 bln.)

Earlier, the media reported that the Association of Real Estate Service Companies (AKON) had sent a letter to the Ministry of Construction proposing to forgive debts for housing and utility services, in particular, for families that were left without a breadwinner, as well as for citizens who had become incapable of work.

In this case, as reported by Izvestia, the State Duma is planning to make significant changes to the legislation on concessions in order to give more opportunities for businesses to enter the market of housing and communal services. According to the Chairman of the State Duma Committee on Construction and Housing and Communal Services Sergey Pakhomov the norms that concern the managers and founders of management companies must be tightened. It is also necessary to provide more tools to residents and law enforcement agencies to influence the careless firms that fail to perform their duties. At the same time, according to Pakhomov, one of the major problems in the field of housing and communal services is the depreciation of networks, in some places still operating water-bearing asbestos pipes, which are 90 years old. Not all homes are provided with, for example, sewage. Thus, according to data for 2020, in the country, more than 10% of the population had housing in such areas where there was no sewage, and 4% of the population used clean water of the right quality. This was mostly true of settlements in rural areas.

The problems, as we can see, are many. And they are being solved. By the beginning of the heating season, according to Pakhomov, 17,000 km of heating, 66,000 km of water and 22,000 km of sewage networks will be replaced.

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