LONG-TERM TARIFFS INCREASE VOLUME OF ATTRACTED INVESTMENTS IN MUNICIPAL INFRASTRUCTURE OF THE FAR EAST

We are talking about the approval of the maximum indices of citizens' payments for utilities for the term of the concession agreement and investment program

Addressing  the Eastern Economic Forum, Vitaly Korolev, Deputy Head of the FAS Russia noted that for the industrial and social development of the region, it is necessary to provide the population and industry with high-quality housing and communal services: "For today, there are more than 400 concessions in the housing and utilities sector in the territory of the Far Eastern Federal District. But in most cases, investment programs have not been approved within the framework of these agreements, which prevents attracting investment in the industry."

He stressed that the FAS Russia is actively working on reforming legislation in the housing and utilities sector and stands for a balance of interests between consumers and utilities organizations: "Due to the fact that all cases of exceeding the limit indices are justified in detail and coordinated with the FAS, the annual increase in housing and utilities tariffs does not exceed 4% on average in the country and often turns out to be even lower than this indicator. For example, in 2021, the actual indexation rate averaged 3.2% across the country. In addition, the FAS Russia has prepared a draft decree of the Government of the Russian Federation, which is supposed to give the regions the opportunity to determine the limit indices for several years instead of agreeing on them for each subsequent year. This is necessary so that investors contribute in the modernization and reconstruction of the municipal complex, and consumers receive high-quality utilities, but at the same time they are protected from an unjustified increase in tariffs for them. "

He explained that earlier, within the framework of the strategic goals of the Russian Government to improve tariff regulation, measures were discussed to introduce long-term tariff regulation (up to 15 years) with a guarantee of capital return, to preserve savings from operating and investment activities, including the introduction of a mechanism for "long-term" (for the duration of the concession agreement and (or) investment program) approval by the FAS Russia of marginal indices of citizens' fees for utilities.

"These methods of regulation can be used and implemented in the territory of the Far East, which will increase the volume of attracted investments," Vitaly Korolev stressed.

The Deputy Head of the FAS Russia said that the Authority supports the further development of the concession mechanism, since they allow for long-term planning of infrastructure renovation and protect the interests of private investors.

"The Service has repeatedly sent proposals to finalize the procedure for concluding concessions on the initiative of a potential investor. This is a reduction in the number of administrative barriers, a reduction in the time of the procedure itself, a legislative consolidation of the obligation of the property owner to hold a competition if a large number of participants apply for objects," the speaker explained.

The FAS Russia also considers the possibility of preparing a private concession initiative for several municipalities at the same time by analogy with a joint tender to be promising.

In conclusion, Vitaly Korolev spoke about the position of the FAS Russia regarding amendments to the Law on Concession Agreements aimed at improving the mechanism of concessions in the territory of the Far Eastern Federal District for objects valued at over 1 billion rubles:

"The FAS Russia supports the need to include in the law features that take into account the regional specifics of economic relations and provide additional guarantees of the rights of the investor and the public legal party."