Duma speaker says housing, utilities tariffs can be cut down to inflation

MOSCOW, August 10 (Itar-Tass) —— State Duma Speaker Boris Gryzlov said it would be realistic to reduce housing and utilities tariffs to the rate of inflation not only in Moscow but in the rest of Russia.

He said “both our deputies and party structures of the parliamentary majority” are working on this now.

“And we can see the result. While in 2009, prices of housing and utilities services increased by 19.6 percent, they grew by 13 percent in 2010, i.e., time and a half less,” Gryzlov said on Wednesday, August 10.

“We can see that increased control over tariffs we set produced positive results since the start of the year: housing and utilities tariffs grew slower than a year ago,” Gryzlov said.

He stressed that “there is money in the sector and big money”.

Consolidated budget expenditures on the housing and utilities sector last year exceeded 1 trillion roubles— approximately 2.4 percent of GDP, which is “quite comparable with, for example, defence expenditures”.

The Russian government will provide an additional 20 billion roubles for the Housing and Utilities Reform Fund this autumn, Prime Minister Vladimir Putin said earlier.

“We are thinking about directing a part of additional revenues to the fund’s capitalisation this year. I have talked to the Finance Ministry and we will earmark another 20 billion roubles to the Housing and Utilities Reform Fund this autumn,” Putin said.

The prime minister stressed the need to think about “how to solve the problem of dilapidated housing in 2013 when the Housing and Utilities Reform Fund stops functioning”.

Putin said it would take some 10 trillion roubles to repair housing and upgrade the housing and utilities sector.

“According to preliminary estimates, it will take more than 3.5 trillion roubles to repair existing housing and more than 6 trillion to repair all infrastructure,” he said.

“Everything related to the housing and utilities sector reform aims to create the best possible conditions for this work” and to ensure that “the money, and this is very big money, that is pumped into this sector does not disappear without a trace but works effectively, it is necessary to understand where it has been invested, who spends it and how, and how much a certain service costs”.

Putin stressed that infrastructure should be upgraded within ten years. “It must be put in shape and turned from a permanent headache into an efficient industry,” he said, adding, “The main source [of funding] for modernisation of the housing and utilities sector should be private investments.”

He warned against shifting the cost of reform to the population. “The problem must not be solved by raising tariffs sharply. The set rate of 15 percent should be kept this year and subsequently reduced to the rate of inflation,” the prime minister said.

The Housing and Utility Reform Fund plans to disburse 20 billion roubles to regions to this end in 2011.

Sixty-five regions joined the programme in 2008. The Fund provided 30 billion roubles to them for their housing needs to improve the living conditions of more than 20 million people and provide tends of thousands of families with new flats.

Over two million people in Russia had improved their living conditions in 2008.

In 2009, 81 of Russia’s 83 regions received financing from the fund, which helped almost 11 million people improve their living conditions.

Over 55,000 apartment blocks with a total area of 141 million square metres were repaired in 2009 using financing from the fund.

The fund was created to finance housing repairs and to provide the residents of dilapidated buildings with new housing.

The implementation of projects financed out of the Housing and Utility Reform Fund continued in 2010, with overall financing reaching 65 billion roubles.

Together with the funds provided by regions, overall financing amounted to about 80 billion roubles.

The government will “come much closer to achieving the goal of providing all people living in dilapidated houses with new flats as announced in the main guidelines for the government up to 2012,” Putin said.

“The intensification of the work to provide people living in dilapidated houses with new flats and to repair houses has necessitated the creation of a more than a million new jobs in the construction and related sectors,” he said.

“This is a significant anti-crisis measure aimed at fighting unemployment,” the prime minister said.

The Russian government has mapped out a set of measures aimed at improving the economic situation in the housing and utility sector, Vice Prime Minister Dmitry Kozak said earlier.

“The housing and utility sector makes up one-fourth of the national economy – 26 percent,” the minister said. “This is the biggest sector and the most unreformed one. Its overhauling is extremely important for both the citizens and the economy of our country.”

Several decisions have been made over the past several years in order to introduce new forms of business in this sector. As a result, the number of loss-making enterprises in the housing and utility sector has decreased dramatically.

Kozak said the Housing and Utility Reform Fund’s budget had exceeded 240 billion roubles. This money will go to regions according to their requests within four years.

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