FAS ISSUED A WARNING TO KIROV AUTHORITY

In FAS view, the local self-government body deliberately prevents an offer on a concession agreement regarding housing-and-utility facilities

The Antimonopoly Service established that “Kirov Utility Systems” JSC (“KKS” JSC) had an initiative to enter into a concession agreement for water supply and drainage facilities in Kirov. The law provides for a private initiative mechanism.

The company approached Kirov Authority and enquired information about the property assets of the entire Kirov complex of water supply and drainage facilities and other information to draft a concession agreement.

In response of the enquiry from “KKS” JSC, the local self-government body informed that the list of facilities for which such agreements were planned for 2019 was already compiled. Water supply and drainage facilities were assigned to “Vodocanal” Municipal Unitary Enterprise and not included in the list.

Kirov Authority also stated that it does not plan concession agreements for water supply and drainage facilities in 2019-2020. Based on it, the local self-government body refused to provide the information requested by “KKS” JSC.

FAS points out that under the Law on concession agreements, if facilities of intended concession agreement are not on the list, it is not an obstacle for an agreement if a private investors puts forward such an initiative.

After receiving the reply from Kirov Authority, “KKS” JSC drafted a concession agreement on the basis of information available to the company. Kirov Authority rejected the concession proposal, however, stating in particular that the offer did not match the area water supply and drainage scheme.

Deputy Head of FAS Vitaly Korolev said: “The Antimonopoly Service sees that Kirov Authority deliberately prevented an offer for a concession agreement with regard to housing-and-utility facilities and competitive procedures aimed at transferring municipal property. As a result of the actions of thelocal self-government body the private investor was denied an opportunity to draft the offer”.

“FAS issued a warning to Kirov Authority since the actions undertaken by the municipality had elements of violating the antimonopoly law. The deadline for execution –30 days after the date of receiving it”, added Vitaly Korolev.

Head of FAS Department for Regulating the Housing-and-Utility Sector, Alexei Matuykhin emphasized: “Concession is a mechanism, for attracting private investments, which helps modernize the infrastructure of  the housing-and-utility Sector, decrease the fault rate and depreciation of fixed assets in municipal economy”.