BALANCE IN THE IMPLEMENTATION OF NATIONAL PROJECTS IN MUNICIPAL SOLID WASTE MANAGEMENT

In particular, the antimonopoly service strictly monitors changes in the citizens' charges for MSW service

The development of the MSW management infrastructure and sources of investment in the industry were the key subjects of the speech given by Vitaly Korolev, the deputy head of the FAS Russia, at the session entitled "An Economy of unlimited resources" within the framework of the XXIV St. Petersburg International Economic Forum (SPIEF-21).

He noted that the Antimonopoly service has succeeded in establishing a unique model of tariff regulation making the MSW industry attractive to investors:

"As a result, the waste transportation market has become competitive, as well as succeeded in the balance of the interests of organizations providing services and their consumers, including the citizens. Changes in the corresponding tariffs for citizens are limited to the ultimate utility indices. So, at the end of 2020, the amount of citizens' charges for public utility services increased by 3.1% on average for the country and, thus, was even lower than the 4% provided for by the Forecast of Socio-economic Development of the Russian Federation up to 2024."

The deputy head of the FAS Russia also noted that tariffs in the field of MSW management, among other things, are designed to offset the economically justified costs for the implementation of production and investment programs and to provide an economically attractive level of profitability of current activities:

"In 2020, more than 100 investment programs were approved in 38 regions of the country."

Vitaly Korolev drew attention to the fact that the statutory instruments in the field of tariff regulation already allow to establish and update the infrastructure of MSW management by returning the investment through the tariff source:

"In 2021, a number of amendments to the statutory instruments prepared by the FAS Russia came into force, among other things, designed to increase the investment attractiveness of the industry. In particular, the revenue from the sale of secondary material resources obtained from MSW remains at the disposal of the regulated organization to encourage the extraction of secondary material resources from MSW and the achievement of the purposes for the MSW disposal set by the national project "Ecology".

He also noted that the MSW management industry is still in its infancy and requires substantial investments for establishing the necessary infrastructure for the implementation of the indicators set by the national project "Ecology", according to which by 2030 all MSW should become sortable, and the volume of waste sent to landfills will decrease by 50%. In particular, according to the antimonopoly service, both substantial capital investments and additional adjustment and development of existing mechanisms are essential for the return on investment.

"Currently, tariffs in the regions are set only for one year, and therefore companies are not ready to implement long-term investment programs. In this regard, the FAS Russia this year launches an initiative to establish long-term ultimate indices of changes in the amount of citizens' charges for public utility services. At the same time, when setting such indices the financing of investment programs aimed at the implementation of priority national projects and purposes will be taken into account in a mandatory and high priority manner," Vitaly Korolev said.

In conclusion, he also noted that the system of extended producer responsibility (EPR) will help to attract investment in the development of MSW infrastructure.

For reference:

Construction and reconstruction of facilities in the field of MSW management are carried out in accordance with investment programs approved for MSW management operators (investment programs are not approved for regional operators).

Investment programs can be approved for economic entities that do not yet carry out regulated activities in the field of MSW management, but construct (reconstruct) facilities for processing, neutralization or landfilling of MSW. The costs of the activities are offset after the actual implementation of the investment program activities. This approach is currently applied only in the field of MSW management.