Water utilities

With over 20% of the world’s water reserves, Russia is one of the richest countries in terms of its water resources with almost 30 thousand m³ per capita produced annually. This amount significantly exceeds the minimum level of 1.7 thousand m³ per capita set by the United Nations (UN) organisation.

One of the historical issues for the Russian water sector was the high water intensity in the economy and relatively high losses in water supply. Annual water losses amount to 7.5 km³, mainly driven by housing, public utilities and agriculture. A low technological level and outdated infrastructure are among the main reasons for such losses. For instance, according to Rosvodokanal, the wear ratio in the water-supply network is over 65% for water supply pipelines, approximately 63% for drainage networks, around 65% for water pumping stations, around 60% for sewer pumping stations, 64% for waste water facilities and 56% for sewage treatment facilities.

A main source of capital expenditure for the municipal utilities companies has been tariffs which have been growing at a higher rate than the average inflation level.

The water component of tariffs grew to approximately 10% in 2013, while GDP growth was 1.3%. Aside from the tariffs, the government approved several federal programmes for the purposes of the development of this sector. Under the “Clean Water” federal programme, around Rub 276 billion is scheduled to be invested over the period from 2013 to 2017. In addition, Rub 290.6 billion will be invested under the federal state program “Development of the water utilities in Russia in 2013- 2017”.

There are also a number of ongoing regional projects financed from all three levels of the state budget — federal, regional and municipal. At the regional level, Kalinigrad, Far East, Transbaikal, Kurily Island, and the Chechen Republic are expected to invest more than Rub 50 billion focusing on the development of the water utilities sector.

Back on top