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. Last Updated: 07/27/2016

Moscow's Winter Heating Bill $63M

Despite having successfully heated Moscow through the winter, city officials are now worried that they won't be able to do the same next year.

"We had fewer cutoffs than last year even though it was a scramble to find financing," said Mikhail Lapir, head of the city energy department, at a City Hall round table Tuesday. "And we don't have the money right now to adequately prepare for next year."

The amount of money the city thought it had at its disposal for 2001 took a hit last year, when President Vladimir Putin signed several chapters of the Tax Code into law. The majority of tax receipts were also channeled to the federal government, leaving many regions in the lurch.

"We could very easily slip into the situation that Primorye ended up in this year," said City Duma Deputy Igor Antonov, referring to the Far East region that spent much of the season in the dark and cold due to a lack of fuel.

Moscow spent 1.8 billion rubles ($62.8 million) on heating during the 2000-01 winter season.

Most of the accidents along Moscow's deteriorating heating network, which includes gas and hot-water pipes, happen after a winter of intense usage, he said.

During the meeting, city officials begged for more money to go toward capital repairs and pipe replacements. In reply, Moscow Mayor Yury Luzhkov said they needed to work more efficiently before more budget money would be allocated, and no services would be outsourced.

"All this talk of privatization is nonsense," Luzhkov said, underscoring the fundamental struggle between privately held providers and public services. "Any investors in our utility system are going to want some kind of return on their investment. And they will get that return by raising tariffs.

"Having us provide these services is the more righteous path and will be cheaper for the public."

Tariffs on electricity and heat have already increased 1 1/2 times in the past several months, and this trend will continue until utility revenues start to approach actual operating costs and until residents are subsidized according to income level, not social echelon, said Nikolai Pavlov, head of the department for buildings and utilities maintenance.

In the past, Alexander Remezov, chief of power utility Mosenergo, has described his company's financial position as "difficult and complex." The recent tariff increases have alleviated a financial crisis within the company, but overall increases in power usage have widened the gap between what is owed and what is paid to Mosenergo.

In 1998, the difference between the cost of communal services (water, gas, basic phone hookup, etc.) and their price was 6 rubles per square meter. In 2001, this increased more than twofold to 13 rubles per square meter.