Housing and utilities services account for 40% of all concessionary agreements in Russia

logo russianconstruction.com
Housing and utilities services account for 40% of all concessionary agreements in Russia
Tags: Photo source:

Russia's utilities are the most stable sector for investments, said the Deputy Head of the Ministry of Construction, Housing and Utilities and the country's chief housing inspector, Andrei Chibis, speaking at a session entitled “Investments in The Country's Infrastructure – An Impulse for Territorial Development”. The session was held within the framework of the “Russian Week of Public and Private Partnership” congress.


The key task of the congress this year is to reveal the most acute problems in the realization of the public-private partnership projects in the fields of transportation, housing and utility services, energy and the social area.

According to the Center for the Public-Private Partnership Development, the majority of the concessionary projects, having passed the stage of commercial closure, are in the field of housing and utility services – they account for about 40% of the total amount of agreements in all sectors.

This is the result of a steady implementation of a housing and utility services' strategy, one of the priorities of which is to attract private investment into the modernization of the industry, as well as to increase private business interest in the management of housing and utility enterprises.

“We have analysed the situation in each region and have noted those mistakes that our colleagues made in the Russian Federation. It's necessary to dramatically enhance the competence of civil servants at a local level, and that is why the Ministry has launched a training seminar program for municipal and regional functionaries. Moreover, the decision has been made to hold quarterly meetings with representatives from the business community. The Construction Ministry is open for a dialogue. The rate of the industry's development is swift - economic indicators demonstrate that breakthroughs have been made over the past few years. The housing and utility service system is changing for the better and even under these conditions of economic turbulence there is no more stable industry for investment than utilities”, stressed Andrei Chibis.

The Russian Construction Ministry has been implementing a number of initiatives, the first of which is regarding systematic assistance to potential investors. In 2016, one could single out the main measures designed to make the market more transparent and attractive for investments.

First of all, the housing commissioning procedure will be simplified: an RF subject will become the third party of the contract. The possibility of transferring indebted unitary enterprises will be available, as well as for enterprises with half of their assets unregistered.

“It's not enough to change the legislation; it's also crucial to learn to work efficiently in a new legal environment. At all levels of regional self-regulation the priority task is to make concessions, and to transfer inefficient enterprises to business. The Construction Ministry has created a clear algorithm and a road map on the basis of the approved standard concession documentation. We are answering all questions addressed to the specially established center of the Ministry's private and public partnership”, pointed out the Deputy Minister.


As of year-end 2015, the number of concessions increased 2.5 times, whereas the volume of the investment commitments increased 10 times. At present, 300 tenders for concessions are open.

Within the course of 2014, 112 concession agreements have been concluded at a price of 7.2 bln roubles.