OREANDA-NEWS. Vladimir Putin chaired a meeting of the Economic Council Presidium. The discussion focused on ways to enhance the efficiency of the housing and utilities sector.

PRESIDENT OF RUSSIA VLADIMIR PUTIN: Good afternoon, colleagues,

We have gathered today for another meeting of the Economic Council Presidium. I would like to remind you that we have agreed to meet with heads of departments, governors, experts and businesspeople to discuss the most pressing issues in the economy, its present condition and development. We will search for, and hopefully find, effective practical solutions to improve the current state of affairs in a given sphere.

Today we will talk about matters that may be routine but nevertheless extremely important for every family in Russia. This is a difficult and sensitive topic for our citizens, and I am referring to housing and municipal services. We return to this subject regularly since the problems have unfortunately not been resolved properly, as we would like them to be. New challenges also tend to appear. Let us talk about all of this today.

I expect to hear substantial proposals regarding the essence of reforms in this sphere, deadlines and methods of implementation.

One of the most important issues here is the allocation of responsibilities to municipal, regional and federal authorities. Each level should have its own tasks and must know precisely what its responsibilities are.

I would like to reiterate that there are quite a few problems in the housing and utilities sector and people have to deal with them on a daily basis. Today I would like to focus on three main areas.

First, people complain about the quality of services rendered by managing companies; we are well aware of this, and the quality of their management services is often very low indeed. The Government has recently passed a resolution – we discussed it at various venues – on the licensing of managing companies. I believe this is a very balanced, correct and timely decision. Entities that cannot work efficiently should leave the market.

To make the licensing mechanism work, we need a clear understanding of who is to issue the licences and how we can control implementation of licensing agreements. The entire procedure should be transparent and clear to all, though at the same time it should be under strict control, including by public organisations.

Second, along with improving the quality of housing and utilities services we need to sort out the situation with payments. A law has been passed to limit the growth of utilities rates for a long term.  We have to make sure this law starts working and does not remain a mere declaration of intent. Therefore, we must establish clear and comprehensible rules of tariff calculation.   They should not be the same for all regions, and most importantly, they should be based on objective economic figures, such as inflation in the previous year.

Finally, the third point. We are all aware of the fact that the utilities infrastructure has greatly deteriorated; accidents often cause people to suffer. This issue is especially acute now, in winter.

The modernisation of the housing and utilities sector requires huge resources, as we all know. We have to apply break-through technologies and new materials to make the infrastructure reliable, safe and lasting. We need to have more sources of funding, primarily by stimulating private investment and making greater use of public-private partnerships.

Something I would like to focus on in this connection is that honest companies should benefit from participation in the housing and utilities sector. Therefore the implementation of such projects requires long-term guarantees, taking into account their long payback period. This has to do primarily with tariffs. This is the basis, as we see it, of economics in this type of business.

At the same time, the work must be done on schedule and with high quality, and any attempts to channel the money in some other direction should be nipped in the bud. I would like to hear your specific proposals, including those on ways of controlling this sphere of activity.

I also believe that only companies with a transparent ownership structure and with relevant market experience should be able to take part in such modernisation projects. We have already mentioned that even in this sector some managing and other companies are registered in offshore zones, which is absurd.