Big moment for housing and utilities infrastructure

29.11.2013 — Analysis

The Sverdlovsk Region started upgrading the communal infrastructure

In summer 2011, the Housing and Utilities Infrastructure Development Program was approved for 2013-2015, in October the regional government expanded the planning time-frame up to 2020. Multi-billion infrastructure investments which began a year ago, for the first time in years not only allowed to patch holes in the utilities branch, but began to reduce the energy intensity of the regional economy as well.

According to the information given to RusBusinessNews in the information administration and media service of the regional government, total volume of financing under the program will be 126 billion rubles for the next seven years and over 68 billion of this amount will come from private funds. The budget of the Sverdlovsk Region will allocate 31 billion and municipalities will give 25 billion rubles. The federal government's contribution will constitute 1.6 billion.

The money under the program will be spent in accordance with the priorities set by the Social and Economic Development Strategy of the Sverdlovsk Region. Regional authorities believe that in the nearest future it is necessary to solve six critical problems related to the power generation sector and housing-utilities infrastructure, which includes: upgrading heat and water supply systems, gas supply to a significantly greater number of houses, resettlement of people living in unfit and failing flats to suitable and adequate accommodations, capital repairs of 30-40-year-old multi-storey buildings, substantial improvement of the energy efficiency of the regional economy and provision of amenities to populated areas.

According to statistical data, almost half of existing utility networks require replacement in the Sverdlovsk Region or, in terms of figures, this means 2,700 kilometers of heating mains, 5,500 kilometers of water pipelines and 2,700 kilometers of sewerage network. Since most of pipelines were built in the 50-80s of the XX century, losses during transportation are really significant: for example, in 2013 leakages and undocumented water discharge amounted to 129.8 million cubic meters (25.3% of the total volume of water supplied into the network).

The program allowed for 830 million rubles to rectify the situation. The authorities expect that transmission losses in water pipelines will decrease down to 24.9% by 2020, whereas on the other hand, the number of populated areas provided with high quality water will increase by 0.8%. Achievement of these objectives will let 97.5% of the population consume water which meets established quality standards.

The municipalities will additionally lay 67 kilometers of water supply and 20 kilometers of sewerage pipes by 2015 to reach targets. The construction of networks is already in full swing, and every year scopes of work rapidly continue to increase, thus, in 2012 the length of introduced additional facilities didn’t exceed 12 kilometers, whereas in 2014 it will be 47 kilometers.

New heat supply networks are built and energy facilities are upgraded. The dynamics in these terms is impressive as well: in 2012 municipal boiler houses with total capacity of 66 megawatts were upgraded whereas in 2013 this figure has already achieved 107 megawatts. It is assumed that the relative ratio of heat energy waste in the process of power generation and transportation to consumers will amount to 11.45% by 2015 and it will continue to decrease progressively as private households will be supplied with natural gas.

Level of the gas supply distribution to the rural population of the Sverdlovsk Region was not higher than 16% in early 2013, (this index is 45% on the average across Russia). Gas supply to urban citizens is much better, but nevertheless experts still note that there is a lack in gas distribution networks. Their construction is one of the priorities of the State Housing and Utilities Infrastructure Development Program: in 2012 gas pipelines became 12 kilometers longer, 330 kilometers will be added in 2013, and in 2015 1,225 kilometers of pipes will be laid. This will let gas provision to 30,000 apartments of urban residents and increase the ratio of rural settlements connected to the gas network by 2%.

A three-year program on resettlement of people from unsafe and failing accommodation will be extended. Since 2008 over 60 apartment buildings have been built, which eventually allowed improving living conditions of 6,000 people. From 2013 to 2015, 20,000 more citizens of Sverdlovsk will be relocated and it will lead to 1.32% of relative ratio of unfit and worn-out accommodations (whereas in January 2013 it was equal to 1.9%).

Department of Energy, Housing and Communal Services of the region hopes that the rehousing figure will drop from 253 to 79 by 2020. However, Minister Nikolay Smirnov argues that there are still 112 million square meters of housing accommodations in the region which are not recognized as being in critical condition merely because the municipalities have no money for resettlement. The situation of housing stock depreciation and dilapidation will obviously continue getting worse, but this problem will be gradually solved as soon as untenable accommodations will be eliminated.

Statistical data shows that 60% of apartment buildings in the Sverdlovsk Region are over 40 years old and over a half of multi-storey buildings require capital repairs. In 2014 390,000 square meters will be repaired and by 2020 this figure will grow up to 661,000. This will cost the regional budget 1.6 billion rubles, 922 million more will be added by the federal government.

The program provides for the funds on replacement of elevators as well. So far Housing and Utilities infrastructure Reform Assistance Fund has financed this expenditure. It was possible to replace more than 1500 lifting facilities over the last five years during capital repairs of houses. 3 480 elevators used for over 25 years (22% of the total amount) are yet to be upgraded by 2020.

But the main pain in the neck of the authorities of the Sverdlovsk Region is not elevators and bad roofs at all – it is high energy intensity of gross regional product which is 1.3 times higher than the national index across Russia. Bad competitive ability of products, high inflation rates, rising budget expenditures on payment of communal and utilities services are the result of wasteful consumption of energy resources.

According to the authorities, implementation of measures worth 2.1 billion rubles aimed at energy saving and energy efficiency improvement in the Sverdlovsk Region will allow 13% reduction in the energy intensity by 2015 as well as saving fuel which is imported into the region from other regions, including Kazakhstan.

According to the developers of the program, the reduction of the load on the economy will have a positive impact on the gross regional product’s growth and will bring additional budget revenues, which is quite important during the stagnation seen on world markets. The investments in replacement of parts in worn-out networks as well as in heat and water supply facilities proved to be cheaper than patching the holes, as practice shows.

In 2012 the Sverdlovsk Region managed to take a next stage from maintaining the communal infrastructure to its upgrading and development due to a number of established programs on housing and utilities infrastructure development, as the Middle Ural government information administration and media service notes.

Vladimir Stepanov