As­sid­u­ous Sec­tor

The hous­ing and pub­lic util­i­ties sec­tor of Be­larus is ex­pected to save at least 173,000 tonnes of fuel equiv­a­lent in 2013

Economy of Belarus - - FRONT PAGE - Yeka­te­rina MARKOVICH

As is known, en­ergy re­sources, in par­tic­u­lar, nat­u­ral gas, ac­count for the lion’s share of the coun­try’s spend­ing. There­fore, it is im­per­a­tive that all eco­nomic sec­tors of Be­larus should dra­mat­i­cally re­duce the con­sump­tion of heat and elec­tric en­ergy. The prob­lem is par­tic­u­larly rel­e­vant for hous­ing and pub­lic util­i­ties, as they con­sume about 35% of the heat en­ergy gen­er­ated in the coun­try. The re­duc­tion of en­ergy con­sump­tion in this sec­tor will re­sult in lower en­ergy in­ten­sity of GDP and con­sid­er­able en­ergy sav­ing for the coun­try. How­ever, this is not the only way to save re­sources. For ex­am­ple, hous­ing and pub­lic util­i­ties are ac­tively work­ing to ex­pand the use of re­cov­er­able re­sources, re­duce ex­penses as­so­ci­ated with ser­vice pro­vi­sion, and en­cour­age peo­ple to op­ti­mize the use of en­ergy re­sources.

Re­duc­ing the Prime Cost

Con­sis­tent work on sav­ing re­sources and op­ti­miz­ing their use is cou­pled with a tough con­trol over the ful­fill­ment of the en­ergy con­ser­va­tion tar­gets. Af­ter all, hous­ing and pub­lic util­ity ser­vices are pro­vided at fixed rates and this sec­tor is sub­si­dized by the govern­ment. There­fore, con­trol and su­per­vi­sion are es­sen­tial here.

In 2013 the hous­ing and pub­lic util­i­ties sec­tor was tasked with re­duc­ing spend­ing on ser­vice pro­vi­sion to in­di­vid­u­als by 10% in com­pa­ra­ble con­di­tions. In H1 all the re­gions and the city of Minsk over­achieved this tar­get. The sav­ing was es­ti­mated at 10.5% or nearly Br500 bil­lion. With a view to bring­ing down the cost of hous­ing and pub­lic util­ity ser­vices, ad­min­is­tra­tive con­trol was im­posed on the for­ma­tion of prices for heat (wa­ter heat­ing), wa­ter sup­ply, wa­ter dis­posal and hous­ing main­te­nance. This means that ev­ery hous­ing and pub­lic util- ity or­ga­ni­za­tion was in­structed to act within spec­i­fied price caps.

In fact, it is quite a chal­lenge to stay within th­ese price bands; how­ever the sec­tor is do­ing pretty well. In H1 2013 only five out of 136 or­ga­ni­za­tions went be­yond the price cap for wa­ter sup­ply, three out of 136 com­pa­nies failed to meet the wa­ter dis­posal tar­get, four out of 135 com­pa­nies did not ful­fill the heat sup­ply tar­get, and 19 out of 136 com­pa­nies fell short of the hous­ing main­te­nance tar­get. In each and ev­ery case rep­re­sen­ta­tives of the Min­istry of Hous­ing and Pub­lic Util­i­ties look into the rea­sons for the fail­ure to meet th­ese im­por­tant in­di­ca­tors. Such a strin­gent con­trol is needed be­cause by 2016 the hous­ing and pub­lic util­i­ties sec­tor is ex­pected to cut down costs as­so­ci­ated with ser­vice pro­vi­sion by at least 25% as against 2010.

A new eco­nomic in­stru­ment will be de­vel­oped to meet this tar­get. The Coun­cil of Min­is­ters’ Res­o­lu­tion No. 593 dated 5 July 2013 en­vis­ages a to­tally new ap­proach to sub­si­diz­ing hous­ing and pub­lic util­ity ser­vices. At present fi­nanc­ing is pro­por­tional to the amount of ex­penses on ser­vice pro­vi­sion. How­ever, very soon fi­nanc­ing will be pegged to spe­cific prices es­tab­lished for the sec­tor and ef­fec­tive for the en­tire year. This will of­fer eco­nomic in­cen­tives for cut­ting costs, en­hanc­ing fi­nan­cial dis­ci­pline, re­spon­si­bil­ity and the role of dis­trict and town ex­ec­u­tive coun­cils that dis­trib­ute pub­lic funds. This eco­nomic in­stru­ment pro­vides that a well-per­form­ing com­pany will be able to use the spare funds in a way it deems nec­es­sary. How­ever, it will have to in­vest at least 70% of th­ese funds into up­grade and up to 30% into bonuses for per­son­nel. At the same time, poorly per­form­ing com­pa­nies will have to com­pen­sate for ex­tra costs on their own.

“Re­duc­ing the cost of pub­lic ser­vices and cut­ting en­ergy con­sump­tion are im­pos­si­ble with­out up­grad­ing the en­tire in­dus­try. Like all the other eco­nomic sec­tors, the hous­ing and pub­lic util­i­ties sec­tor has an up­grade plan,” said Deputy Min­is­ter of Hous­ing and Pub­lic Util­i­ties of Be­larus Ana­toly Sh­a­gun.

Mod­ern­iza­tion is pri­mar­ily aimed at re­duc­ing fuel and en­ergy con­sump­tion be­cause en­ergy ac­counts for the lion’s share of the cost of pub­lic ser­vices. For ex­am­ple, it ac­counts for over 50% of the cost of heat sup­ply and about 20% of wa­ter sup­ply and sewage. This year the pub­lic util­i­ties in­dus­try has de­vel­oped a sec­toral en­ergy sav­ing pro­gram, with the to­tal en­ergy

sav­ing be­ing es­ti­mated at not less than 173 tonnes of fuel equiv­a­lent. From Jan­uary to June, en­ergy con­sump­tion has been re­duced by more than 50%.

Work is un­der­way to re­place the worn-out heat sup­ply net­works with new ones to re­duce heat loss. More than 776.3km of heat sup­ply net­works were re­placed with mod­ern pre-in­su­lated pipes last year. This year at least 769km will be up­graded.

“Th­ese ac­tiv­i­ties al­low de­creas­ing heat loss by ap­prox­i­mately 1.52% an­nu­ally. This year we seek to en­sure that not more than 16.3% of heat en­ergy is lost as it is trans­ported to con­sumers. In ad­di­tion, the mod­ern pipes we use to re­place the old heat­ing sys­tems are highly re­li­able and durable,” said Ana­toly Sh­a­gun.

It should also be noted that work is in progress to in­crease the use of lo­cal fu­els and to up­grade the ther­mal in­su­la­tion of the hous­ing stock with an ul­ti­mate goal of re­duc­ing en­ergy con­sump­tion and the cost of hous­ing and pub­lic util­i­ties.

Per­sonal In­cen­tives

Aus­ter­ity mea­sures in the hous­ing and pub­lic util­i­ties sec­tor will pro­duce lit­tle ef­fect un­less ev­ery­one be­comes en­ergy con­scious. To­day, not ev­ery­one is ready to live by aus­ter­ity rules.

As is known, on 1 Oc­to­ber 2011 Be­larus en­forced dif­fer­en­ti­ated tar­iffs for wa­ter sup­ply and wa­ter dis­posal de­pend­ing on con­sump­tion lev­els. The eco­nomic ef­fect was not long in com­ing. For ex­am­ple, in H1 2013 wa­ter con­sump­tion went down by 2.8% as com­pared to the same pe­riod last year. When cal­cu­lated in cu­bic me­ters, this equals the wa­ter sup­ply of such cities as Bo­bruisk and Bara­novichi.

On 1 Fe­bru­ary this year, the coun­try en­acted dif­fer­en­ti­ated tar­iffs for elec­tric­ity and gas ser­vices de­pend­ing on con­sump­tion lev­els. “Dif­fer­en­ti­ated tar­iffs are im­posed for those ser­vices which con­sump­tion can be ad­justed by con­sumers on their own. This en­ables a re­spon­si­ble ap­proach to­wards the use of re­sources and en­cour­ages con­sumers to look for the ways to save more,” said Ana­toly Sh­a­gun.

The dif­fer­en­ti­a­tion of tar­iffs for hous­ing and pub­lic util­i­ties, ac­cord­ing to the Deputy Min­is­ter, com­plies with the prin­ci­ples of so­cial jus­tice. Af­ter all, the state sub­si­dizes the ser­vices to all equally, and if a per­son con­sumes more than the es­tab­lished norm, the share of state sup­port will be re­duced while the pay­ment will in­crease re­spec­tively.

One of the main goals of dif­fer­en­ti­a­tion is to en­cour­age peo­ple to take a more so­lic­i­tous at­ti­tude to­wards re­source con­ser­va­tion. For this rea­son the Be­laru­sian pub­lic util­i­ties de­vel­op­ment pro­gram en­vis­ages fur­ther ex­pan­sion of dif­fer­en­ti­ated pay­ment by 2015, for in­stance, for heat sup­ply de­pend­ing on the to­tal area of liv­ing space. The in­tro­duc­tion of the tar­iffs for heat­ing en­ergy sim­i­lar to wa­ter sup­ply and elec­tric­ity is a more dis­tant prospect. The heat sub­me­ter­ing pro­gram in the hous­ing stock was launched in the 2000s. Ear­lier-con­structed houses can­not be in­di­vid­u­ally me­tered as the in­stall­ment of new con­nec­tion net­works is eco­nom­i­cally in­ad­vis­able. Dif­fer­en­ti­ated rates will en­able tran­si­tion to un­sub­si­dized op­er­a­tion of the hous­ing and pub­lic util­i­ties sec­tor, with house­holds pay­ing the full cost of th­ese ser­vices. The first steps have al­ready been made. Thus, for in­stance, main­te­nance fees for apart­ments, which are not reg­is­tered as a res­i­dence of the owner or the owner’s fam­ily mem­bers, are much higher than fees for in­hab­ited apart­ments. The same is true for cap­i­tal re­pairs and heat con­sump­tion.

It can be said that rates for al­most all pub­lic util­i­ties have been dif­fer­en­ti­ated, ex­cept for the use of el­e­va­tors. Care­ful up­keep of share­duse fa­cil­i­ties in multi-dwelling units re­mains a pri­or­ity. To­day over 85% of hous­ing in Be­larus is pri­va­tized. But still many own­ers do not see shared-use fa­cil­i­ties as their own prop­erty. With the at­ti­tude changed, it would be pos­si­ble to cut on both main­te­nance and re­pair costs.

As for hous­ing cap­i­tal re­pairs, a num­ber of amend­ments have been re­cently in­tro­duced here. Now, only a part of works will be funded by the state bud­get and dwellers’ monthly con­tri­bu­tions. The other ser­vices like the in­stall­ment of wa­ter sup­ply and sew­er­age con­nec­tions, win­dow re­place­ment, etc., will be paid solely by dwellers. State bud­get funds are used to re­pair and win­ter­ize out­side walls, roofs, en­gi­neer­ing wa­ter sup­ply, sew­er­age and heat­ing sys­tems.

The pub­lic util­i­ties sec­tor has been tasked with re­pair­ing 2 mil­lion square me­ters of hous­ing in 2013. This fig­ure should reach 3 mil­lion square me­ters in 2015. The tasks are quite tough to ac­com­plish: last year as much as 1.3 mil­lion square me­ters of houses was re­paired. In the 1990s the con­struc­tion of new houses con­sid­er­ably sur­passed the amount of cap­i­tal re­pairs, re­sult­ing in, let us say, a whole layer of houses in need of ren­o­va­tion. So to­day it is of great im­por­tance to in­crease the vol­ume of cap­i­tal re­pairs and find the money for it.

Sec­ondary Use

An in­creas­ing use of sec­ondary re­sources is an­other way of sav­ing with ben­e­fits. This way has been cho­sen by many coun­tries that un­der­stand that the use of sec­ondary re­sources is not just en­vi­ron­men­tally im­por­tant but makes eco­nomic sense, too. Be­larus is still lag­ging be­hind its Western-Euro­pean neigh­bors on this front.

It should be noted that our peo­ple turned out to be very re­spon­sive to the sep­a­rate waste col­lec­tion pro­gram. A decade ago, when the ini­tia­tive was given a start in the coun­try, there were quite a few skep­tics who said Be­laru­sians would never get used to sep­a­rate waste col­lec­tion. To­day the pic­ture is absolutely dif­fer­ent: in 2003 only 2-3% of

house­holds had sep­a­rate waste bins; to­day this fig­ure ex­ceeds 80%.

It should be men­tioned that now the amount of sec­ondary re­sources col­lected sep­a­rately ex­ceeds the amount of un­sorted waste de­liv­ered to re­cep­tion points for a price. A cou­ple of years ago it took al­most a week for house­holds to fill in their sep­a­rate waste bins. To­day, some ar­eas have such waste bins full in less than a day. On the whole, there are an es­ti­mated 100,000 un­sorted gen­eral rub­bish col­lec­tors and about 50,000 sep­a­rate re­cy­cling bins in Be­larus. Th­ese fig­ures sug­gest that Be­laru­sians have a much bet­ter un­der­stand­ing of en­vi­ron­men­tal prob­lems to­day.

The national pro­gram to col­lect and process re­cy­clable ma­te­ri­als for 2009-2015 is in progress in Be­larus. In line with the pro­gram, the per capita amount of re­cy­clable ma­te­ri­als col­lected in the coun­try should ap­prox­i­mate the Euro­pean level. Last year De­cree No. 313 in­tro­duced ex­tended re­spon­si­bil­ity of man­u­fac­tur­ers and sup­pli­ers of cer­tain goods for their col­lec­tion, dis­posal and uti­liza­tion af­ter th­ese goods are no longer used. By the way, the doc­u­ment pro­vided for two op­tions: to use in-house schemes of garbage col­lec­tion or to make fi­nan­cial con­tri­bu­tions to the com­mon waste col­lec­tion net­work, i.e. to con­clude an agree­ment with a spe­cial­ized or­ga­ni­za­tion, the Ma­te­rial Re­cy­cling Op­er­a­tor.

The in­no­va­tion has al­ready pro­duced tan­gi­ble re­sults. About 5,500 le­gal en­ti­ties in Be­larus signed agree­ments with the Op­er­a­tor. In Jan­uary-June 2013 the or­ga­ni­za­tion col­lected 146,600 tonnes of waste pa­per and card­board, up 10% over the same pe­riod of 2012. The col­lec­tion of glass went up al­most 1.5 times, scrap tires – 42%, poly­mer wastes – 32%.

The pro­ceeds and the pay­ments which the Op­er­a­tor gets from man­u­fac­tur­ers for waste dis­posal are fun­neled into the national pro­gram. Th­ese funds are also used to pay com­pen­sa­tions to le­gal en­ti­ties and self-em­ployed busi­ness­men re­gard­less of the form of own­er­ship and sub­or­di­na­tion for each tonne of re­cy­clable ma­te­ri­als col­lected from house­holds and shipped to waste re­cy­cling plants. Since the de­cree was passed such com­pen­sa­tions have ex­ceeded Br30 bil­lion. An­nual com­pen­sa­tions are ex­pected to reach Br80 bil­lion. This stim­u­lates waste col­lec­tors and re­cy­cling com­pa­nies to in­crease pur­chase prices for re­cy­clable ma­te­ri­als col­lected from house­holds.

Be­larus has also launched the pro­ject to re­cy­cle com­plex house­hold equip­ment. For in­stance, OAO BelVTI is pre­pared not only to col­lect equip­ment from house­holds for free but also to ar­range trans­porta­tion. At present many Be­laru­sian or­ga­ni­za­tions im­port­ing house­hold equip­ment are con­sid­er­ing set­ting up their own fa­cil­i­ties to col­lect re­cy­clable ma­te­ri­als. How­ever, it is nec­es­sary to join ef­forts with the Fi­nance Min­istry and pol­ish cer­tain doc­u­ments re­gard­ing the li­cens­ing be­cause house­hold equip­ment con­tains pre­cious met­als.

The pro­ject to re­cy­cle com­plex house­hold equip­ment has been launched by the Minsk Oblast Technopark. The or­ga­ni­za­tion will soon fin­ish the con­struc­tion of a fa­cil­ity for the au­to­mated re­cy­cling of re­frig­er­a­tors which is now done man­u­ally. There are plans to re­cy­cle up to 45 old re­frig­er­a­tors and 3 tonnes of other house­hold equip­ment per hour. The above­men­tioned com­pany has also launched a big fa­cil­ity to re­cy­cle scrap tires. In the past this raw ma­te­rial was used as a fuel by lo­cal ce­ment plants or was pro­cessed by pri­vate com­pa­nies. Now the tires are used to man­u­fac­ture high-qual­ity rub­ber crumb which can be sold on the do­mes­tic mar­ket or ex­ported. As for the re­cy­cling of lu­mi­nes­cent mer­cury-bear­ing lamps, the fa­cil­ity is al­ready op­er­a­tional at Brest Elec­tric Lamp Plant.

In late 2012 a new fa­cil­ity to sort mixed glass cul­let was opened in Minsk. The max­i­mum ca­pac­ity of the plant is 120,000 tonnes per year if it op­er­ates on a three-shift ba­sis. The com­pany not only sat­is­fies the de­mand of the lo­cal glass in­dus­try but also ex­ports ser­vices, i.e. sorts glass cul­let upon or­ders of for­eign com­pa­nies. At present com­pa­nies in Minsk and other Be­laru­sian cities are mulling over in­vest­ment projects to build waste re­cy­cling and sort­ing plants.

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