The Tribuna program’s guest is Victor Rogotsky, a member of the Federation Council Committee on Economic Policy, a senator from the Yaroslavl Region. He discusses with Vladimir Nesterov the situation in the Russian energetic sphere.
- One of the most essential issues of the Russian energy sector are debts. How much do people have to pay out?
- Yes, debts have a very negative impact on the development of the energy sector, as well as of the entire economy. Energy is a basis of the economic development of the country and well-being of the population. It is a socially important factor. Energy is a social barometer of society. If changes take place in the energy sector, we always react acutely. Especially in respect of the pricing policy: tariffs for electricity and thermal energy, gas, water, etc.
So its development is a constant concern of the state, including the Federation Council. We thought that we couldn’t go back to the 90s, when non-payments were a common situation. Moreover, there were no operating accounts, only barter credits. It was a mess. After that, we set up an economic mechanism in order to improve discipline, including payments.
Unfortunately, this situation keeps on worsening. The debts of all kinds of resources are about 1 trillion rubles. Electric power is 250, heat is 400, gas is 200, and so on. Enormous sums of money! This money wasn't received by resource-supplying organizations for their development in order to provide the safe work of the enterprises, as well as people's lives.
- Who mainly consumes, but does not pay off debts?
- 80% is the public sector’s enterprises. And 20% is the population. Certainly, the population pays as a rule. Different regions have different results: from 97% down to 70%. We have problems with payments in the republics of the North Caucasus. According to statistics, 6% of the population doesn’t pay for utilities, as they consider that it isn’t worth paying for services of a low quality. 17% just forget about it. 51% are medium and high-paying residents.
- It turns out that people of low and below-average income pay for communal facilities, doesn’t it?
- Absolutely. Apparently, they are the most conscientious people. We need to improve our discipline. It is necessary to proceed from the simple notion: if we don’t pay, the situation will get worse. Our state, and municipal bodies, and non-governmental organizations, and the laws of creative initiatives at the level of the State Duma, as well as at the level of the Federation Council, are responsible for it. The population should be forced to pay any possible way.
- You said that the non-payments of the population are about 20%, and 80% belong to enterprises and the public sector. How can companies avoid paying for electricity?
- Fines are summed up for non-payment of electricity at the rate of one three-hundredth of the refinancing rate of the Central Bank. In other words it is about 7.5% per annum. What company can take a 7.5% loan from a bank? There are no such conditions now. Enterprises find it easier to pay for anything except energy, because they have to take out credit with a high percentage. There are low fines in respect of enterprises. Therefore, they will better use the power supply companies or resource supply organizations to receive a loan rather than banks. The payment discipline is very low in this regard.
- Is it true that the law regarding an increase in liability for non-payment is being prepared now? When will it be adopted?
- One of the ways is certainly the method of coercion, punishment, or strengthening of sanctions for non-payment. A bill to strengthen liability was considered by the State Duma during the spring session for non-payments from one three-hundredth to a one hundred and eightieth until 31 days and after 31 days it will be one hundred and thirtieth of the refinancing rate of the Central Bank. And that is 21% per annum. This is comparable to the interest rates of banks and financial institutions of the country. It would undoubtedly push especially legal entities to make timely payments, as well as physical ones.
- Maybe this should be encouraged. What do you think?
- Energy supply and resource-supply organizations offer paying debts without fines. It is proposed to make debt restructuring. Resource-supply organizations are ready if the main debt is paid off.
- There is the federal program 'Reliable Partner’. At the moment, not all regions are involved in it, how many regions are participating in it?
- We developed this program together with 'RusHydro, and the Federation Council. We are grateful to our developers, and the Federation Council supported this initiative. The program 'Reliable Partner' has been operating since 2013. We started with 14 regions, now there are 30 regions, next year we plan to include about 43-44 regions, and in 2-3 years we plan to include all regions of the country in this program.
The 'Reliable Partner' program is not only an incentive program, where the normal payers, who do not have any debts, will pay to resource providers in time, carrying out their duties. It is a discussion platform where professionals of supplying, producing and distributing organizations and consumers communicate and develop solutions. For us, as legislators, it is very important, because we can use the suggestions which will be developed in these forums for legislative initiatives.
At first we did not believe in it actively, you know, how many of such events were already carried out, but there are problems, at which we must constantly work. And there are results already. Discipline is increased, although debts are still quite serious in the participating regions.
- Are Northern Caucasus regions participating in the 'Reliable Partner' program?
- No. But I really want them to support the program. It is a slow and gradual process out of this serious situation in which the North Caucasus is right now. But there is another problem, when resource supplying organizations do not receive money for the delivered resources. They appeal, in accordance with normative acts. North Ossetia, 80% of suits, thanks to the work of the executive office of the republic, were settled. And if you take, for example, Ingushetia, it is 17% of suits. Touching on the theme of non-payments, it is currently the most topical for energy. Of the 50 billion of debts on the wholesale market, 28 billion are debts of the North Caucasus. Almost a half. We have to work and work on this issue, including the authorities of the North Caucasus republics. They really work; but we checked in Dagestan – more than a hundred houses are connected illegally. How can we not make claims? If the resource-supplying organization is suing – how can bailiffs find the defaulter, if he is not officially registered and is not documented, and so on?
- Doesn’t he have metering devices?
- Of course. There is a specificity, family ties and so on. Nonetheless, the experience of the Republic of North Ossetia-Alania shows that if we work seriously, we can achieve good results. The Chechen Republic also achieved good results. Well, it is necessary to catch up with those that I have mentioned.
- And in general, what is the picture of energy power in the North Caucasus?
- There is no special deficit of power in the North Caucasus, because there are quite powerful networking organizations, there we have hydro resources, stations.
- Are there ideas to freeze rates for citizens with a low income?
- More than two years ago, I spoke at the Federation Council, when the population’s debt was 42 billion rubles. I divided people into groups, those who live near or below the poverty line. These are 25% of people. All others are able to pay debts. 25% of people mean about 8 billion rubles. They are not able to pay their debts without significant help. I suggested writing their debts off, giving people a chance to start a new life, so that they wouldn’t collect new debts and could pay for rates normally.
- However, debts are growing month by month. You suggest elimination of them. But new debts will appear instead of the old ones, as prices are regularly growing for well-known reasons.
- It all depends on what a person gets, when he finally pays debts off, whether he gets a rod or a fish. We say that at first we should give him fish – to eliminate his debts, but then we should give him an opportunity to avoid an accumulation of debts. To be honest, I don’t really understand what it means economically. Why should we freeze rates? Is it to show a decrease of inflation?
- It is a kind of a subsidiary for people with low incomes. All people will pay market prices, but a category of people will have frozen prices.
- We have a state standard, according to which no more than 22% of the general income of the population can be paid, the rest is subsidy. The state has already protected the most vulnerable groups of the population – 22% is the limit. As far as I understand, freezing will cover the whole sector. We can freeze prices for a year or two. Why don’t we freeze prices for food? Why don’t we freeze prices for railway tickets?
- These are rather populist ideas, and they can be heard.
- Let’s create the State Plan, the State Supply Service, let’s create a normative distributive economy. Do you understand where we will arrive? We will arrive at a deadlock, at the place from which we escaped. We have to develop within the market economy, normally solving the difficult problems which we have. The market economy doesn’t have the notion of “freezing.” In a year or two, there will be no such a product or service, they will simply disappear from the market. They cannot exist under conditions which are lower than their first cost.
Energy is a social barometer of the society, and the society should strictly control the rates of natural monopolies – energy, transport, and so on. If businessmen in the energy sphere want to get surplus and super surplus, businessmen in the railway sphere, in the gas sphere, and so on, it will stimulate growth of inflation.
The society should control this through public structures, the Public Chamber, through parties, and the executive power.
Rates are appropriate, and they give an opportunity for businessmen to survive and develop in the volumes which are required by our programs. The energy sphere cannot be stopped. It should develop. All other branches will develop on its basis. There is a very delicate regulating mechanism. President decided to unite the Federal Service for Rates with the Federal Antimonopoly Service to provide a stricter control over rates.
To be continued
