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Development of public-private partnership on the basis of concessions in the sphere of housing heat supply for consumer


Svistunov A.V., Kurkina A.D.
(about the authors)

Svistunov Andrey Valerevich – (Vladimir State University named after A.G. and N.G. Stoletovs” (VLSU))

Kurkina Anna Dmitrievna – (Vladimir State University named after A.G. and N.G. Stoletovs” (VLSU))

Published in:
Russian Journal of Housing Research
– Volume 5, Number 1 (January-March 2018)

JEL classification: H41, H54, L32, L98, M21

Keywords: concession, heat supply, municipal control over the quality and availability of housing maintenance services, public-private partnership, quality targets, utilities


Citation:
Svistunov A.V., Kurkina A.D. (2018). Development of public-private partnership on the basis of concessions in the sphere of housing heat supply for consumer. Russian Journal of Housing Research, 5(1), 79-94. doi: 10.18334/zhs.5.1.39023


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Abstract:

The article reveals the urgency of increasing the efficiency of public services for housing facilities on the basis of concession agreements in the context of public-private partnership (PPP). The analysis reveals the current state and trends in the development of concessions in the area of heat supply in Vladimir region, and in particular in Melenki district, where the boiler houses on peat fuels are being built and modernized. To collect and process the initial data we used statistical methods, grouping methods, comparative analysis and expert assessments. We identify the main problems of using concessions in the heat supply of housing facilities, which involve the transformation of a public utility service with a socially-significant orientation into a commercial one with all negative consequences for the consumer. To shift business priorities from maximizing profits from the concession agreement towards improving the quality of housing maintenance and creating a fair tariff system we suggest to strengthen the permanent municipal control over the quality and availability of public services. At the same time, the population should be recognized as the main customer and investor in PPP projects. Municipalities need to carefully analyze the conditions for the competitive conclusion of concession agreements, to establish and control the implementation of specific quality objectives for the benefit of the population, and to regulate tariffs in accordance with the target level of reducing their cost component as the project progresses. In order to attract private investments, concessions should be given priority at the stages of construction, reconstruction and modernization of certain communal infrastructure facilities with the condition of introducing modern technologies. State and regional co-financing of municipal infrastructure modernization projects should be implemented directly through the budget system. The authority to manage housing and communal services from the local level to the regional level should not be transferred through concession agreements with the regional operator. The article is useful for representatives of state and local authorities, heads of resource-supplying enterprises, and everyone interested in the issue of housing and communal services.


Highlights:

The state strategy for the development of housing and communal services is aimed at attracting private investment in this area by transferring communal facilities to concessions.
In this regard, the actual scientific and practical importance has the task to identify and generalize the main problems of using concessions in the sphere of heat supply and to formulate priority directions for the development of public-private partnership (PPP) in order to improve the quality of housing maintenance.
The analysis of the practice of concession agreements in the field of heat supply has revealed a tendency for the weakening of the control function of local self-government bodies, designed to protect the interest of the local population. The population is not officially recognized by the investor, but returns all investments of the concessionaire and pays for its profitability from the social project due to the constantly increasing investment component of the tariff.
In order to effectively modernize the public infrastructure facilities in public interest, the main targets in PPP projects should not be the investor's profit and saving of budgetary funds, but to increase the control of local government over the quality and availability of public services.








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