Russia falling behind on maintaining its utilities infrastructure
February 3, 2022
Years of neglect and failed modernization have left Russia’s infrastructure in a woeful state. But the issue looks set to worsen as state capacity weakens and budgets get squeezed due to war and sanctions.
Problems with infrastructure are nothing new to Russia, where gas explosions in apartment buildings frequently appear in news headlines and people are wont to joke – often with a twist of irony – about the poor quality of roads. However, a recently published deep dive by the investigative outlet IStories sheds new light on the human toll of Russia’s fragile and failing utilities infrastructure.

As the journalists reveal, over the past decade, 104 people have died and 310 have been seriously injured due to bursting pipes of boiling-hot war. Rotten heating pipes are prone to breakage during cold spells, a problem which just this winter alone left residents of numerous cities across Russia without heat in sub-zero temperatures. IStories also notes an extreme case that happened in Volgograd last October, when dilapidated sewer pipes spewed rivers of human feces onto streets and residents were without water and heating for a week.

The frequency of utility infrastructure-related accidents is a palpable indicator of the poor state of housing and communal services systems in Russia. According to data from the Ministry of Construction and Regional Development, 6,000 such accidents occur each month. IStories found that when these cases are spread evenly over a period of one year, utility accidents occur every seven minutes in Russia. Likewise, water and heating outages last on average for eight hours.

Most of Russia’s utility networks were built in the Soviet Union and have not been replaced since. According to data from the state statistical service, Rosstat, 30 percent of heating, 44 percent of water supply, and 46 percent of sewer networks are in need of replacement.

An expert on public-private partnerships (PPP) in housing and communal services told IStories that, in reality, the deterioration of utility infrastructure exceeds 90 percent. Russia’s Deputy Prime Minister for Construction and Regional Development, Marat Khusnullin, has previously said that around 60 to 70 percent of the country’s utility infrastructure needs to be repaired. According to that ministry, each year around 2 percent of badly deteriorated heating and water networks are replaced. However, as IStories writes, in order to simply avoid further deterioration of these networks, at least 4 percent of pipes needs replacement annually.

Andras Toth-Czifra, a political analyst who looks at state capacity in illiberal regimes, told Russia.Post that these figures are unsurprising given the general poor quality of public policy processes in the country.

“Successive Russian governments have tried to modernize utility networks and reform the sector at least once a decade since the fall of the USSR. In particular, as in so many other development plans made over the past decade, the government tried to attract private money into the sector via PPP projects and changing laws,” said Toth-Czifra.

As he notes, in 2018 legislation was amended so that renters and homeowners could bypass intermediaries and pay utility fees directly to providers. “But it does not seem to have changed the picture,” said Toth-Czifra, adding that “repair works still progress slower than networks break down, and PPP seems to have sucked public money out of the sector rather than the other way around, all while tariffs went up. In this sense, it is very similar to other failed reforms, such as the 2019 waste management reform.”

In 2020, Russian regional authorities estimated that at least four trillion rubles was needed to replace all of the country’s utility networks. In theory, the government could afford modernizing this infrastructure, but instead state funds have gone toward other endeavors. As IStories writes, in the first 9 months of the war in Ukraine, Russia spent USD 82 billion – or RUB 5.7 trillion – on military hardware and equipment, ammunition, and compensation to the families of killed or wounded soldiers. Forbes Ukraine estimates that this amounts to a quarter of the annual state budget for Russia.

A government report published last year acknowledged that there is a significant gap in the financing needed to modernize utility networks and that opportunities for attracting private investment are limited. The mounting economic costs of the war are straining regional budgets, and in effect, overstretching Russia’s system of governance, which means less capacity for addressing the country’s slow-motion infrastructure crisis.

Meanwhile, utility tariffs are on the rise. In 2022 alone they went up twice: first by 4 percent in July, and then by 9 percent in December. These increases are hitting ordinary Russians hard. On average, Russians spend about 10 percent of their incomes on housing and communal services, a significant figure considering incomes have gradually declined over the past several years of economic stagnation, and now against the backdrop of Western sanctions. By the end of the third quarter in 2022, real incomes in Russia fell by 3.4 percent year-on-year.

In some regions, local authorities moved to increase utility tariffs by even more than what was federally mandated. Back in December 2022, Novosibirsk governor, Andrey Travnikov, raised the tariff for wastewater disposal by 17 percent, and for heating and cold water by 12 percent. The price hikes sparked calls for protest among local residents. And on January 28, the mayor’s office in the region’s capital city, Novosibirsk, approved an application submitted by the independent Novosibirsk City Council deputy, Anton Kartavin, to hold a 1,000-person protest against the tariff increases, which is to take place in early February. Similar protests occurred in the city six years ago when then-governor, Vladimir Gorodetsky, attempted to raise utility tariffs by 15 percent, but was later forced to reverse the decision.

Could growing issues surrounding housing and communal infrastructure prompt Russians to take to the streets en masse? Toth-Czifra said that sudden, unpleasant changes in people's living standards can lead to unrest, especially in cases where placing blame on someone for these changes is relatively easy. However, he is not talking about quietly rotting pipes, but “something like the Zimnaya Vishnya fire in 2018, which triggered outrage over a tragedy that was clearly the result of official neglect. I'm not saying that these protests will topple the system, but if they happen they can become a headache locally,” he said.

Digest by Mack Tubridy for the Russia.Post editorial team.
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