Housing and Utilities Reform: Get Ready to Economize

The government has adopted a program to demonopolize, and develop competition in the housing and utilities sector in 1998-1999. Its chief objective is to weaken the domination of the local monopolies responsible for water, electricity and gas supplies, and central heating.

Russia has come up with the West in the share of privatized housing in the total volume of the housing stock – 55 percent. As for the rest, Russia will take a long time to catch up with. This is particularly true of measures to economize. In Russia, for example,
35 percent to 45 percent of tap water gets lost in the networks before it reaches homes. To compare, the figure for the United States is
12 percent, and for Japan 11 percent. One water-supply worker in the US serves 1,500 persons; in Japan, 1,700, whereas in Russia only 300 persons.

It’s a different matter that Tokyo’s or Stockholm’s utilities networks are in a better condition than those of Russian cities, and do not need endless repairs. In Europe trenches are not dug out in front of apartment buildings every summer. It is, therefore, not ruled out (исключать) that the authorities will soon face another housing and utilities problem: how, while lowering tariffs, to maintain the water-supply and sewage systems in the cities? If even in Moscow the relaying (замена) of networks can turn into a tragedy, one can imagine the consequences, if this happens in a small town. The authorities were said that all repairs could be done with the help of commercial credits. But this is possible in a big city, not in a provincial town.

The monopolies’ tariffs must be clear and simple, and the monopolies themselves must come under tough (строгий, жесткий) control.

Adjusting the economy “from below” is another matter. Gas and water meters were never installed in Russian homes; houses are built according to obsolete (устаревший) standards.

This problem will soon be solved. For example, builders will be obliged to fix water and gas meters in homes. For example, in St. Petersburg, the installation of these meters cost only $ 350 per apartment, and this will decrease water and gas consumption by a factor of two or three. But this measure will work only in newly-built houses. What about the old ones? Should tenants be obliged (обязанным) to set up their own meters? No one will be willing to pay $ 350 for that. They would rather stop paying than save electricity, gas and water.

The problem with all Russian reforms is that they cannot be carried out stage by stage: changes must be carried out quickly. This also applies to the housing and utilities sector. The government will have to compel the monopolies to cut costs, builders to build better houses, and tenants to put off their lights when light is not needed. And all this has to be done at the same time.

From Moscow News by Svetlana Babayeva

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