VITALY KOROLEV: FAS INITIATIVES IMPROVED MODEL REGULATING SOLID MUNICIPAL WASTE TREATMENT

Krasnoyarsk Economic Forum summed up first results of the reform of solid municipal waste treatment and contemplated the ways to solve current issues

Deputy Head of FAS Vitaly Korolev who moderated the session on a new system of solid municipal waste treatment at Krasnoyarsk Economic Forum said: “It should be pointed out that throughout the entire period federal executive bodies have been undertaking intensive efforts to support the transition of the regions of the Russian Federation to the new model of regulating solid municipal waste treatment”.

He added: “The law is constantly improving to form common enforcement practice, eliminate unregulated aspects, and make the investment climate better simultaneously observing the conditions for consumer access to the service and economic reasonableness of tariff solutions”.

Deputy Head of FAS pointed out that with active FAS involvement the payment rates for adverse impact on the environment were reduced by seven times in 2018 and frozen at that level for the 2019 – 2023 period. It was due to the fact that the compensation payments for negative environmental impact constitute a significant element in the structure of the cap rates for solid municipal waste disposal.

Conditions are created for investors to payback on investments through the tariff source if it was specified in an investment programme. Regions of the Russian Federation are allowed to set rebate tariffs for solid municipal waste treatment.

The Government of the Russian Federation also gave some orders to enable efficient performance of regional operators, optimize their costs and balance tariff decisions. For example, the decision on VAT relief will be formalized legislatively in the near future.

“These and some other measures will help change the “landscape” of work for regional operators and wither adjustment of tariff decisions”, highlightedVitaly Korolev.

The session participants considered controversial issues facing the regions of Russia and regional operators while the reform is advancing, and put forward proposals to solve them and stimulate development of the waste treatment industry.

The main issues include varied enforcement practice of the current legal norms, the need to clarify approaches to the settlement system, lack of correct data about the scope of solid municipal waste accumulation.

Special attention was paid to improving the tariff law. Representatives of the industry reported on the need to account the costs of establishing and operating waste sorting plants in the regulated tariffs, as well as reviewing approaches to exclude to revenue gained by selling secondary material sources from the cap rates.

The session discussed possible ways to implement separate accumulation, the necessary financing sources, as well as forecast effects from this measure while maintaining the current legislative framework, regulating, in particular, the frequency of waste removal.

Deputy Head of FAS emphasized that it is necessary to move forward towards unifying approaches to the new solid municipal waste treatment, particularly, in the part of establishing common requirements to regulate the standards for accumulating solid municipal waste.

Another item touched by Vitaly Korolev concerned reviewing quotas for purchasing waste containers for regional operators.

“Our task is to achieve uninterrupted functioning of the solid municipal waste treatment system, particularly, when changing a regional operator”, explained Deputy Head of FAS. “Therefore, an integrated approach is necessary to resolve the issue – analyze the needs to purchase containers and provide “insurance” in the event of the regional operator losing its status, an expiry of the agreement validity period or other cases when a regional operator can withdraw them from circulation as the owner. Together with the authorities and regional operator FAS should rationalize such legal constructs and come up with solutions that will satisfy both consumers and companies”.

At the final part of the session Vitaly Korolev informed that the session discussion would become the starting point for solving the current issues.

“FAS and the Ministry of the Environment shall form a Working group to come up with the necessary solutions. Then the report, comprising proposals form federal and regional authorities and operators, will be forwarded to the RF Government”, concluded Vitaly Korolev.