ANDREY KUZICHKIN ⟩ Utility catastrophe in Russia calls into question the future of the Putin regime

«The middle of summer is the best time to talk about preparing for winter.» The Red Square blanketed in snow. Photo: MAXIM SHIPENKOV / EPA

• Due to disruptions, hundreds of thousands of Russians live without water, gas and electricity
• It is no coincidence that the housing sector in Russia reigns in terms of the extent of corruption
• A major utility problem in Russia is the lack of central sewage for 40 percent of the population

The situation in the field of heat supply is particularly acute. 70 percent of the Russian population lives in regions where winters are long and the temperature drops below -30 degrees Celsius for a long time, columnist and Russian expert Andrey Kuzichkin writes.

The middle of summer is the best time to talk about preparing for winter.

Two years ago, a meme about Europe freezing without Russian gas became famous in the Russian press and social media. Footage of residents of Berlin and London cutting down parks to heat their homes filled the Russian media space. Europe, as we know, did not freeze and quite successfully replaced Russian gas with fuel supplies from other countries. This is one of those cases when one must to follow the advice: «Never mention rope in the house of a man who has been hanged.» Instead of laughing at the freezing of Europe, Russia should pay more attention to its own housing sector, which is close to disaster.

The situation in the field of heat supply is particularly acute. 70 percent of the Russian population lives in regions where winters are long and the temperature drops below -30 degrees Celsius for a long time. Therefore, providing apartments with uninterrupted heat is very important. In conditions of high load of heating networks, their rapid wear also occurs. The updating of the utility infrastructure is financed from the population's payments and public investments. However, for 30 years, the state has not been engaged in the reconstruction of utility networks in Russia. And the residents' weak payment ability does not allow for stable financing of housing modernization.

Both in Siberia and Moscow

By the beginning of 2024, Russian residents and industrial companies owed more than 15 billion euros for communal services, including nine billion in residents’ debts. If there is no money, there is no repair. The total length of all utility networks in Russia is 900,000 kilometers, and their wear rate exceeds 60 percent. It would take 15 years and 200 billion euros to completely update Russia's housing infrastructure. Considering that the revenues of the Russian budget are planned to be around 350 billion euros in 2024 and in next year's budget they will decrease to 330 billion euros, this task is impossible.

Putin's government has repeatedly tried to implement a national housing modernization program. But a satisfactory result has not been achieved. In 2021, there were 2,900 utility outages in Russia, in 2022 there were 3,200 and in 2023 there were more than 4,900. The number of heat network outages increased several times between 2018 and 2024.

Problems with the wear and tear of utility grids are equally relevant both in Siberia and in Moscow. Thus, in January of this year, a major accident took place in Podolsk near Moscow, where more than 20,000 people were left without heating at temperatures of -30 degrees. Residents of apartment buildings had to light fires outside to get warm. In the city of Lipetsk, almost 300 apartment buildings were left without heating in the middle of winter. In January 2024, due to burst pipes in Novosibirsk, school buildings and residents of 500 apartment buildings were left without hot water and heating. Students of 20 frozen schools were switched to distance learning.

Terrible conditions

Due to disruptions, hundreds of thousands of Russians live for days and even weeks without cold water, gas and electricity throughout the year. On July 17, 115,000 residents of Buryatia were left without electricity due to a hole in an electric boiler. Heating systems are usually repaired in Russian cities in the summer months and the supply of hot water is restricted for a month or longer. I have lived in Russia for 55 years and got used to it like snow in winter.

Therefore, after moving to Estonia, my biggest shock was that in Tallinn, the supply of hot water is restricted for one day in order to perform a pressure test on the pipes. And it usually takes place from 9 a.m. to 6 p.m. in order to cause as little inconvenience as possible to the residents. In my home town of Tomsk, planned repairs of heating pipes can last all year. But after restoring the hot water supply, what often happens is that the pipes burst and utility services have to eliminate the consequences of the accident and repeat the repair.

This happens because up to a third of all pipes used in residential repairs are counterfeit – made of low-quality material. Alternately, utility services buy old pipes, which after cosmetic procedures are sold as new ones. According to a foundation for the development of the Russian pipe industry, there are about 200 underground companies operating in Russia that manufacture counterfeit pipes.

Cheap pipes are in demand because utility repair and maintenance organizations pay large bribes to officials to get favorable orders. The size of the bribe is up to 50 percent of the budget for repairs and purchases. As a result, contractors are forced to use the remaining money to buy cheap and low-quality construction materials from the market.

It is no coincidence that the housing sector is in first place in Russia in terms of the extent of corruption. This year, the deputy governors responsible for housing in the Belgorod and Tyumen regions have been arrested for bribes. Every year, several thousand criminal cases related to housing and communal services are initiated in Russia. But often the price of this rotten system is human lives.

A case of death

Thus, in 2022, a person died in the city of Nizhny Novgorod after falling into a hole filled with hot water that had formed above a burst pipe. In the city of Penza, a car fell into a hole filled with boiling water and two people were boiled alive. In Omsk, Novosibirsk and Tyumen, children fell into holes filled with hot water. They survived but suffered burns that covered more than 50 percent of their body surface. Poor quality pipes also cause casualties in case of gas leaks. Dozens of people die every year as a result of gas explosions in residential buildings in Russia.

A major utility problem in Russia is the lack of central sewage for 40 percent of the population. People in rural areas use sewage holes. A few years ago, a family of five died in just such a hole near Voronezh.

To solve the problems in the housing sector, it is necessary to end the war with Ukraine, reduce military spending, fight corruption and reform the utility sector.

The systemic crisis of the housing sector is often discussed at the highest government level in Russia. Vladimir Putin talks about it in every public appearance. But nothing gets better. Of course, the average Russian family does not have to pay much for utilities – about 55 euros per month. But a third of families cannot cope even with such a burden, thus accumulating debts.

After the start of the war

After the start of the war in Ukraine, Putin declared a «payment holiday» for Russian citizens and froze utility tariffs. The purpose of this populist move was clear – to calm public opinion and reduce anxiety. But excessive alcohol consumption leads to hangovers, and populism always leads to financial collapse. Financing of the housing sector from residents' payments has decreased. But money in the budget is also decreasing.

According to the Russian state budget prepared for the years 2024-2026, the financing of the housing sector from the federal budget will be cut by more than half. According to the budget law, there will be a sharp cut in housing sector costs in 2025: they will be reduced by 43 percent to five billion euros. And another 25 percent to 3.8 billion euros in 2026. Thus, the housing sector budget financed from the federal budget will decrease 2.3-fold in three years. And this is happening against the backdrop of a doubling of military spending, which will rise to 120 billion euros, or 6 percent of GDP.

Seeking money for housing, Putin's government canceled the «payment holiday» this year, and from July 1, utility tariffs in Russia rose by 10 percent. But, of course, this cannot solve all the chronic problems of the Russian housing sector.

As of July 1, 14 percent of the plan for repairing heat networks in Russian cities had been completed. This means that heating systems cannot be fully prepared for winter and the number of utility outages in Russia may increase sharply. But this will lead to the destabilization of the political situation, because personal well-being and survival in freezing temperatures are more important for Russian citizens than victory over Ukraine.

Already in the winter of 2024, pickets were held in frozen Russian cities with the slogans «The current outages are the fault of the Russian authorities» and «In Russia, the interests of the ruling class are more important than the interests of millions of people». There were also calls to «replace the power of those who have brought the housing sector and other areas of our life to the current pathetic state».

This is the paradox and vulnerability of the Putin regime: it can instill hatred against Ukraine and the West, produce millions of missiles and destroy Ukrainian cities. But the Putin regime is unable to fix the hot water pipe. Putin's government is discussing two scenarios for solving housing problems: full privatization of Russia's housing sector or restoration of Soviet-style centralized state management. The Kremlin is leaning towards the latter option.

But I am certain that neither of these scenarios will help to modernize the housing economy, because to solve the problems of the housing economy, it is necessary to end the war with Ukraine, reduce military spending, fight corruption and reform the utility sector. But for that, the entire Russian state must be modernized, starting with the Kremlin.