| The Federation Council voted for the governments'
draft law on housing and utilities sector reform. It can be summed
up as follows: subsidies to enterprises in the housing and utilities
sector should be liquidated and replaced with subsidies to households
with small incomes from budgets at all levels. In 2005 the federal
budget will stop providing assistance to a significant proportion
of the present categories of citizens entitled to benefits - their
fate should be decided by the regions. It is easy to understand
that most low and medium-incomes regions will have to abolish these
benefits.
The fate of subsidies is the same. Federal budget aid to the
regions is calculated proceeding from the federal standards of
the population's share in payment for utilities. At present it
amounts to 90%. The law establishes when this standard becomes
a single standard for the country. In accordance with government
plans, the regions will simultaneously transfer to 100% payment
and will stop receiving federal aid for subsides either next year
or in 2005. However, poor regions cannot maintain subsidies from
their own funds.
In examination of the draft law in the State Duma the YABLOKO
faction proposed the introduction of regional standards instead
of a [single] federal standard for population's payment for services,
in order to differentiate the transfer to targeted subsidies,
depending on economic and climate conditions in the regions. As
the transitional period should be longer than average in the country
for the Far North and Far East, for example, the volume of subsidies
should be much higher. However, this amendment was rejected by
the government.
So what do we end up with? In the regions with a low levels of
solvency, 70-90% of families will be entitled to such a benefit
additional subsidies]. According to the government's calculations
no more than 20% of families will ask for subsidies, and the rest
will pay the full price. However, people will have to pay in accordance
with rising tariffs and the level of payments today is already
50% for Kamchatka and 40% for Magadan Region. The housing and
utilities sector will have less money for repairs of engineering
networks. And this will lead to an unpredictable chain of disasters
at utilities.
So who benefits from this law? The answer is clear – Anatoli
Chubais has announced the establishment of a management company
to operate in the housing and utilities sector: the monopolies
will grasp the whole housing and communal services sector for
its debts provoked by their ability to independently dictate tariffs.
Given a 100% payment requirement and the right to evict bad debtors
from their housing, the housing and utilities services business
will become very profitable.
See also:
Housing
and Communal Reform
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