KSP: concession weakly attracts money to housing and communal services

      Despite the fact that concession agreements in the field of housing and communal services have been in force for more than 10 years, they still have not become an effective tool for attracting investment in the housing and communal services sector. This was stated in the Accounts Chamber of the Russian Federation following a joint audit with the control and accounting authorities of 53 regions.

      As noted by the auditor of the Accounts Chamber Natalia Trunova, as of the end of 2023, 85% of all realized or completed concessions are in the housing and communal services sector. However, only 12.4% of housing and communal services facilities were actually conceded, and more than half of the agreements were concluded for less than 10 million rubles.

      "This indicates that concessions have not become a significant mechanism for attracting extra—budgetary funds," Trunova stressed.

      In the Kirov region, according to Evgeny Suntsov, the auditor of the Control and Accounting Chamber, the average depreciation rate of the municipal infrastructure transferred to the concession exceeds 62% and continues to grow. A critical level of wear and tear requires not only investments, but also additional maintenance and repair costs, which are difficult to cover through operation or tariffs, he notes.

      The situation is most tense in the field of heat supply. Large companies are not interested in managing small facilities, and small ones do not have the funds to modernize without budget support. As a result, concessions in the region are more often used for operation rather than for reconstruction or construction, the Control and Accounting Chamber added.

      According to the Accounts Chamber, the problem can be solved only with direct or indirect state participation, for example, through budget investments or the involvement of state—owned enterprises. Earlier, we wrote that in the Kirov region, every fourth kilometer of heating systems needs to be replaced. Read more here.