Utility tariffs: Moscow is not Yerevan, but still…

logo russianconstruction.com
Utility tariffs: Moscow is not Yerevan, but still…
Tags: Photo source:

Since the 1st of July Muscovites will get an unpleasant surprise: the price of utilities will grow on average by 10%. The tariffs marathon is continuing. Will it ever end?

Utilities payments will increase by 10% on average in Moscow from July 1st. Thus for 8 months utility tariffs growth in the capital has reached 17%. And nobody promised that it was the last increase. Is it worth trying the people’s patience? Isn’t it better to enhance effort and make order in the utilities sector?

Vertical racing

The dispersion of the current raise is very significant. Thus, the hot water tariff will grow by 11.5%, heating tariff – by 13%. The use of gas will become 7.5% more expensive. Electric energy cost, depending on the type of meters, will grow by 7.5% and 13.7%. Up-keep and repairs to the property of prevailing specified norms and to other property will grow by 4%, and within social norms – by 15%!

The capital authorities assure that on the whole utilities cost increases will be lower than inflation. But if we take into consideration that it will be over 11% this year, the difference is very little.

The previous cost increase on utilities in Moscow was on November 1st, 2014. And then it was 7%. Thus, during quite a short period of time utilities tariffs added 17%. And it is very significant.

Additionally, as German Lomtev, president of “Russian Dwelling Federacy” Ltd. remarks, for the last decade utilities prices have grown 2.8 times as quick as the rate of inflation. This is understandable knowing that 81% of all payments is spent on resource payments and only 19% for dwelling upkeep.

The system works only increasing

Why do tariffs grow without restraint? It seems to be clear: the crisis in the country. Everything is growing more expensive and utility expenses as well. But it is not so simple. One of the main reasons of endless price-rise is that the state hasn’t managed to make elementary order in the sector of utilities, to create sound economies in this sector, and to overcome the dictate of resource-delivering organizations.

One of the most complex and pressing issues is how to calculate resource consumption and, correspondingly, their payment. The introduction of communal norms will be harmful to everybody: residents, managing companies, - and of course, the relations between them will become worse. This is the point of view of Deputy Chair of the Committee on housing and utilities of the RF State Duma Elena Nikolaeva. In our country communal norms for the houses of the same type may differ dozens of times – up to 80! Somewhere the norms are too high, in other places – too low. The tariff must be defined by the competition between managing companies.

The introduction of direct agreements may be a way out. On Elena Nikolaeva’s opinion, they will make the life of resource organizations easier, but residents may suffer. It is very problematic for a common resident to prosecute not only “Gazprom” but even a local monopolist – the starting conditions are not equal.

And if such agreements appear, it is necessary to very carefully formulate all the responsibilities of the parties.

Each in his own way

There’s a question: who defines the volume of a consumed resource by a household? For our country the question is important because there are a lot of mismatches between different structures – sometimes the difference in figures is up to 30%.

All data must be registered by devices and checked remotely non-stop. Technically such a costing system is organized in the Leningrad and Nizhny Novgorod regions. Independent operators must deal with it – thus additions in favour of this or that company can be avoided.

Managing companies have to work according to existing rates, stated by local authorities. And they are different all over the country. Thus, on Kamchatka servicing 1 square meter of living area costs 58 rubles, in Kursk, 14 rubles, and in Kabardino-Balkaria, 7 rubles. It is clear that it is far from being economically calculated. There is no unified approach in Russia on how to calculate utilities payment. There are lots of documents, but no uniform methodology.

Attack of the Clones

The utilities sector is the most criminalized, there is large money there, and they do not work for the sake of residents. The activity of managing companies is poorly controlled. Even if they do not steal directly, they often disrupt regulations, make mistakes in tariff calculations, and take money for service they do not render or render partly.

For example, to count the price for hot water they take the cold water tariff and add the cost of its heating. The resulting sum is more than the hot water tariff. And there are lots of such tricks…

Another variant — when a managing company organizes a clone with the same name. Having stored up debts, it leaves the market and its place is taken by a new company with the same personnel.

It is nothing but holding-out, Svetlana Razvorotneva, Executive Director of NP “National Center of Public control in the Utilities Sphere “Utilities control,” is sure. But licensing does not prevent them from doing it.

Convenient background

Every house is individual, and the utilities economy should take this fact into consideration. It is not like this currently.

If it goes on, we’ll never stop tariffs from growing, and the whole utilities system will be destroyed, assures Alexander Verbitsky, Deputy Chair of the Committee of the RF Chamber of Commerce and Trade on business in utilities. But we change nothing substantially: 68 amendments were proposed to the Law on Utilities, but none is adopted!

And the authorities have no idea how to reform the utilities industry. At best, the Utilities Development Strategy, developed by Ministry of Construction, Housing and Utilities, - is only a combined version of Ministry’s positions on different items, as Nikolai Nikolaev, Head of the Center of independent public monitoring for President’s Decrees at All-Russia People’s Front, said.

Total inflation – is the most convenient background for rising tariffs. It is much more difficult to make order in the industry with great reserves. By making order we could have avoided raising prices for a long time.

Do we want the Yerevan result?

The issue is not only economical, but also political. In Armenia the tariffs were raised by 16%, and the people went into the streets. The situation is close to revolution – coloured or colourless.

Of course, it is not by chance, and Armenians have a lot of grievances with the authorities. Electricity price increase became sort of a trigger for an overall grudge. It is quite understandable: utilities are the thing a person deals with every day, and nothing raids the purse as much as constant growth of their cost.

In Russia tariffs have grown by 17% since November 1st, 2014. Our people won’t go protesting. They will think badly of those who did it, and pay. But it is worth considering that dissatisfaction is storing… Russians also can protest, though they are not as hot as Armenians, and they have proved this more than once…

Why take the responsibility for the protest instead of making order in the industry?