Moscow Metro is Going up in Price Because of the Garbage Problem

Moscow Metro is Going up in Price Because of the Garbage Problem


The garbage problem in the Russia in general and in the Moscow region in particular is getting increasingly acute but the authorities have not found a solution to it yet. Thus, Moscow City expects a new increase of the metro fare. For the time being, the price differential is expected to be minuscule. Besides, it will be linked to the construction of waste incineration plants in the Moscow region.

Among other things, the construction of incineration plants in Moscow and Kazan will bring about quite unusual effects for the capital city of Russia. Andrey Shipelov, the head of the RT-Invest company, which is in charge of drafting these plants, told RBC that an increase … of the metro fare is in the cards. The fare per passenger will change very slightly -- just 3 kopecks ($ 0,0016.) However, in total, it should help the authorities to find funds to back up the construction of factories.

Earlier, the so-called "green tariff" was introduced in the Moscow region and in Kazan, the capital of the constituent region of Tatarstan. It concerns renewable energy sources and a power supply agreement to the wholesale electricity market. "This is 67% of the revenue of thermal processing plants which leads to increasing prices up to 0.1% in the first price zone of the wholesale electricity market --- it covers the European part of Russia and part of Western Siberia – and concerns production only," said Shipelov.

"For whom will electricity get more expensive because of that?” asked Shipelov. “For the Russian Railways (RZD) state railway corporation and for the underground in Moscow. However, the price of one ticket in metro will increase by 3 kopecks ($ 0,0047)." At present, the cost of one trip in the metro is 40 rubles ($ 0,62) for holders of the Troika cards, the contactless reusable cards designed to pay for public transport in Moscow. Therefore, the tariffs will grow only by 0.01% due to the subsidies for the incineration plants.

Andrey Shipelov indicated that, taking into account the infrastructure of recycling and separate waste collection, the project for construction of five waste incineration plants in the Moscow region and Kazan, is estimated at 200 billion rubles ($3,121,727,000.) The company provides 20% (40 billion rubles or $ 624,345,400) of the total sum from its own funds, and the remaining 80% (160 billion rubles or $2,497,381,600) are given by the syndicate of Gazprombank and the VEB.RF Russian state development corporation.

"The RT-Invest chain is much wider than that of our competitors. It includes separate collection, separate transportation to recycling facilities, allocation of secondary material resources and processing of the remaining waste into electricity. In the final run, not a single kilogram of waste remains -- this is a zero waste disposal," Shipelov said. He added that the thermal waste processing unit is "the most expensive" one.

Although it is obvious that from the point of view of RT-Invest, the price increase is expected to be just a couple of kopecks, but with account of tariff administration, the desire of different participants of the chain to make profits and inflation as a whole, it can be much higher. In addition, there is one more thing to remember: in Russia, if the price for a product goes up, it will never go down. Believably, the construction of waste incineration plants should lead to higher standards of living of Russians and at least reduce the public utility rates. It is still impractical to draw a parallel with Europe where the issue of technological and commercial servicing is resolved almost everywhere and tariffs are stable.

However, it would still be unfair to blame the authorities for all the problems.

As explained by independent analyst Dmitry Adamidov, it is important to understand that, in fact, a waste incineration plant is a thermal power plant operating on low quality fuel. Therefore, it cannot pay off. And it is better than nothing if the generated energy (which is still let into main power grids very reluctantly) will cover the operating costs. Therefore, the payback of the incineration plants is usually achieved through increased tariffs. Accordingly, the more plants are built, the higher is the tariff for solid domestic waste utilization. For example, in Germany, there are almost 90 operating incinerators, and it is at least 5-7 times higher than in Russia, depending on the region.

Rostec’s idea of adding 3 kopecks to the metro ticket price is quite original and aimed at refraining from drastic hikes in tariffs. Besides, it helps avoiding additional negative chatting, which there is not shortage of (for instance, the notorious failures of the plants construction projects.)

Adamidov refers to the information that examination of construction of factories has shown their inefficiency and a vast amount of problems that emerge back at the documentation stage. For example, Regnum news agency cites Zoya Pluzhnikova, public inspector on ecology of Moscow region’s Naro-Fominsk district. According to her, there is a huge number of violations. The most graphic of them is that the plant projects for the Moscow region have nothing to do with either the latest Hitachi Zasen Inova AG plants in Switzerland or the Hitachi plants in Japan – the latter do not use the outdated stoker-type incineration technology.

However, even without taking foreign experience into account, issues of this kind in Russia are tending to be fixed with the utmost reluctance. "The situation wouldn't be so bad but in order to start solving the recycling problem, it is necessary to build at least 25 to 30 plants here in the great scheme of things. Not everywhere there is the metro with the turnovers like in Moscow, so that you can add another 10 kopecks, or even a ruble, unnoticed. However, no one thinks ahead that far," says Adamidov.

Dmitry Zharsky, director of the Veta expert group, agrees with Adamidov. In his opinion, currently, the news about the growing metro tariffs in Moscow and Kazan is quite exaggerated. According to Zharsky, it is about the rise in electricity rates for consumers from the first price zone of the wholesale market through the introduction of the so-called "green tariff." However, after conversion into subsidies it will not exceed 0.01%, that is, as stated by Andrey Shipelov, the fare will rise by 3 kopecks at the most. Therefore, it will not hit in the pocket of the users of railway transport.

As an instance, Zharsky cites the fact that since February 1 this year, in connection with the usual indexation of tariffs, a single trip on the Moscow metro has increased by 2 rubles ($ 0,031), and now it costs 57 rubles ($ 0,87.) At the same time, this measure does not apply to the owners of the Troika card – for them one trip on any form of public transit still costs 40 rubles ($ 0,61.) In general, if the price keeps going up, the best solution is likely to set the electricity expenses in the price of a single ride which is bought mainly by people who do not use the metro on a regular basis. Therefore, the mass consumer should be less affected.

Zharsky told that it is important to note that the transport and electricity supply systems in Europe are arranged somewhat differently than in Russia. Moreover, in the European Union and other developed countries, solution of the problem of recycling and garbage disposal began decades ago -- all stages of subsidizing possible costs have already been passed there. At present, it does not affect the fare which, by the way, is much higher there than in Russia. Single trips by public transport in Europe always cost much more than in Russia. Moreover, in order to buy a transit pass giving 40% economy, a passenger must be a resident of the European Union while in Russia a transit pass can be purchased by anyone.

In general, the garbage collection system reform in Russia has just started, Zharsky states. Construction of garbage incineration plants is one of its stages. In addition, the projects on waste disposal and its recycling are implementing. In fact, the main problem of the state is how to stimulate people towards separate waste collection. At present, the concepts of "mixed" and "recycled" waste are gradually being implemented in our country, and special containers to collect different types of garbage are being installed at waste collection sites. However, in keeping with the tradition, the Russians do not understand the need for separate collection and continue to mix different types of waste. Certainly, it complicates the situation and thwarts the reform.

So far, nothing serious threatens the subway operation -- at least from the side of incineration plants. "I think this hysteria is unnecessary," Mikhail Zamarin, a member of the general council of Business Russia, an all-Russia public association that unites more than 3,000 entrepreneurs, mainly from medium-sized companies, and CEO of the Business Story Energo group of companies, told “It is much more important to focus on awareness-raising among people about conscious consumption and waste sorting. To tell that plastic is bad, and that it should not be thrown away together with organics. At the same time, we need to work on infrastructure solutions for automatic recycling and create a recycling market.”

Along with it, Zamarin is confident that today, both people and business need eco-activists. For example, the Russian Ecology Society might be of a great help in resolving this issue. The organization is aimed at promoting interaction between the state, business and people, as well as providing assistance and doing awareness-raising work focused on ecology, new environmental standards and values.

One way or another, until the Russian waste-recycling industry begins to work properly and becomes comfortable for the residents, there will be a lot of reforms, alterations and readjustments.

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