VITALY KOROLEV: LONG-TERM TARIFFS ARE FAS GOAL AND FOCUS
Representatives of the authorities, experts and prospective investors met in St Petersburg to discuss treatment and regulation of solid municipal waste
On 5 June 2019, Deputy Head of FAS Vitaly Korolev took part in the session on “Income from waste: making the industry attractive to investors” during St Petersburg international Economic Forum.
“The industry is actively developing. The Government of the Russian Federation pays considerable attention to regulating the solid municipal waste sector”, started his speech Vitaly Korolev.
The speaker reported that in 2018 the Government of the Russian Federationpassed substantive changes to increase investment attractiveness of the solid municipal waste treatment sector and create opportunities for infrastructure modernization, subject to return on investments through a tariff source.
For example, there is now a possibility1 to approve investment programmes for economic entities that are not involved in regulated activities in the field of solid municipal waste treatment and building (reconstructing) facilities for treatment, decontamination and disposal of solid municipal waste.
“The costs of such measures will be compensated after these economic entitles begin exercising regulated activities, i.e., after actual implementation of an investment programme”, informed Vitaly Korolev.
Deputy Head of FAS also pointed out that the Government of the Russian Federation continues its efforts to create clear and transparent mechanisms regulating solid municipal waste treatment that help liquidate tariff discrimination by the tariff regulators, and support efficient performance of regional operators and operators of solid municipal waste treatment, optimize their costs and balance tariff decisions.
For instance, a recent order of the Government of the Russian Federation optimizes the costs of solid municipal waste transportation, allowing temporary operation of the existing waste disposal facilities until more modern production capacities are commissioned.
“There is also bid industry demand for transparent tariff regulation and understandable rules. Long-term tariffs are our goal and focus. FAS another goal is implementing benchmark regulation”, continuedVitaly Korolev. “We plan to introduce long-term tariffs when the industry fully understands its needs. FAS as the regulator is already prepared to make the relevant decision but we need feedback from the participants of such relations to understand how the market will perceive this decision”.
Deputy Head of FAS informed about an initiative for concession agreements in the solid municipal waste treatment. To stimulate concessions in this sector and to unify approaches for concluding concession agreements in the housing-and-utilities sphere, amendments should be made to the Federal Law “On concession agreements”, extrapolating the current specifics of concession agreements on heat-and water supply facilities to concession agreements regarding facilities used in solid municipal waste treatment.
These specifics provide for a number of measures aimed at protecting concessioners. It concerns compensating lost income, economically justified expenses of concessioners that are subject to compensation from the budgets of the regions of the Russian Federation, tariff-setting in accord with long-term parameters for regulating concessioners’ operations, maintaining the legal framework of price regulation and some other measures.
The Competition Development Action Plan includes a relevant instruction2.
Finally, Deputy Head of FAS outlined the work carried out by the antimonopoly body with the participants of the solid municipal waste treatment market for analyzing the current industry issues and jointly searching the ways to resolve them.
“FAS is undertaking serous efforts on interacting with the industry community. We discuss controversial issues, for example, the need to adjust the legal framework of waste regulation at Round Tables and similar events and obtain useful feedback. We expect that upon the outcome of the today’s meeting a communiqué will be drawn up outlining the participants’ positions, which federal executive bodies can employ in making regulatory decisions and amending the law”, concluded Vitaly Korolev.
Reference:
1No. 815 order of the Government of the Russian Federation of 12.07.2018
2 No. 1697-r order of the Government of the Russian Federation