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. Last Updated: 07/27/2016

Slow Housing Reform Riles Fradkov

Itar-TassBoys playing in the entryway of an apartment building in Kemerov. Apartment repairs are part of the reform plan.
Prime Minister Mikhail Fradkov lashed out at Regional Development Minister Vladimir Yakovlev on Thursday for failing to make enough progress on reforms to improve services in the nation's crumbling housing sector.

"This plan is an illustration of the lack of understanding of what is needed to be done and what the role of the organizer is," Fradkov thundered during a Cabinet meeting following Yakovlev's presentation of his reform plan.

"The subject is not being put forward as forcefully as it should be. This to a large extent is your personal responsibility, Vladimir Yakovlev ... and I'm not saying this for the first time," Fradkov said, Interfax reported.

He said he did not think many of the plans in place could be implemented in time for a 2007 deadline.

His diatribe left Yakovlev having to fend off reporters' questions about whether he would be sacked.

"I don't think that today's conversation will lead to me being fired," Yakovlev told reporters after the meeting. "A lot of work has been done."

Reforms to improve communal housing services have long been stalled amid a tangle of bureaucracy and apparent government fears to start a real shake-up of the sector ahead of a national election cycle. The structural reforms are aimed at handing over to private companies a large section of the services provided to apartment blocks, such as repair work and the provision of light and heat. The shift is aimed at lowering the burden on regional budgets, decreasing the state's role in the economy and improving services by boosting competition.

Yakovlev valued annual turnover of services in the housing sector at 1.2 trillion rubles ($44.63 billion).

According to the reform plan, the population should have the right to choose between the services of private companies and state providers by the beginning of next year. Economists, however, say they expect little progress in making the switch to private companies until after the presidential election in 2008. Growing calls to liberalize gas prices could also be postponed until after elections for fear of upsetting the electorate, Troika Dialog economist Anton Struchenevsky said.

But Yakovlev defended his plan and told reporters businesses were already providing 64 percent of services in the sector. He did not specify, however, whether they were state-owned or private.

Adding to the potential for confusion, however, he also called for an amnesty of nonpayment of housing services bills, saying 80 percent of unpaid bills came from needy households.

Meanwhile, he said, growing energy tariffs were putting off private businesses from entering the sector.