The essential services that the Russian state must provide its citizens with are warm pipes and hot and cold water from the tap. One might think they should be independent of the Kremlin’s geopolitical ambitions. After all, Russia inherited the Soviet system of centralized utilities which, until recently, functioned more efficiently than in many other countries. However, it is precisely these taken-for-granted elements of urban comfort that are becoming increasingly problematic in wartime Russia.
During the previous heating season, there were daily reports of utility outages, with the press highlighting the critical state of water and heating networks. During the winter, the Ministry of Construction officially assessed the deterioration of housing and utility infrastructure across the country. It found that the utility network was on average 40% out of date. Some regions were experiencing deterioration as high as 80%.
Naturally, the loss of basic amenities sparks protests among the population. These are met with predictable repression from the authorities. For example, in January 2024 in Novosibirsk, city authorities did not allow a rally under the slogan “Come together or freeze!”, citing the gathering as an alleged “threat to public security.”
Another pressing social problem exacerbated by the war is the shortage of male Russian labor. Men of draft age have fled Russia in large numbers. This shortage is particularly acute in the housing and utilities sectors. The Russian authorities are focused on quickly regaining control over the occupied Ukrainian territories. As a result, utility workers are being sent to the ‘new regions’ instead of repairing water pipes in their hometowns. The full extent of the damage to Russia’s internationally recognized territory remains difficult to assess.
Meanwhile, Russia’s proposed 2025 budget allocates a record 40% increase, or 13.2 trillion roubles, to military and police spending. This is almost three times the amount needed to repair the country’s entire housing and utilities infrastructure. However, as the war continues, the authorities promise to address the main problems with the communal infrastructure by 2030 at the earliest.
Replacements Needed Badly Some Time Ago
Here are just a few examples of public utility infrastructure problems. More than 140,000 elevators in Russia have reached the 25-year lifespan but cannot be replaced due to war-related sanctions. Last summer, an accident at the Rostov Nuclear Power Plant led to power outages affecting more than 2.5 million Russians, as well as residents of annexed Crimea and occupied parts of the Zaporizhzhia region. In the spring, several regions experienced flooding as dams failed to withstand the rising waters.
Novaya Gazeta Europe cites Rosstat data showing that only 78% of the population is connected to the central water supply, while no more than 65% have access to heating and sewage systems. The state is unlikely to improve these figures any time soon, as the new budget cuts all non-military and non-security spending.
In May 2024, the Ministry of Construction took stock of the heating season: there were 9,000 accidents in housing and utility facilities. About 4,000 of them were related to heating systems. The main cause of these accidents, according to the government, is the severe deterioration of heating networks.
At the beginning of 2024, Vazhniye Istorii published official data on the housing and utility crisis. By the start of the year, 30% of heat supply networks, 44% of water supply systems, and 45% of sewage networks had reached the end of their service life. In some regions, the proportion of communal infrastructure unfit for further use exceeds 85%. These are pipes that were laid 40–60 years ago. The tenure of the pipes’ service has long expired and can rupture at any moment. The quality is also poor with rusty water flowing from many Russians’ taps. According to the Ministry of Construction, about 4.5 trillion rubles needs to be invested in housing and utilities by 2030.
In addition to years of underfunding of housing and utilities, the country has seen chaotic urban development across the country. New high-rise buildings have increased the stress on outdated infrastructure. This is happening even in Moscow, where urban planning is more regulated than in any other Russian city.
In the 2025 budget, spending on housing and utilities will almost double compared to the previous year, reaching 1.8 trillion rubles. However, this does not mean new investments in the replacement of utility infrastructure. More than a trillion rubles are allocated in this section to compensate banks for preferential mortgage lending. Meanwhile, the authorities are trying to solve housing and utilities problems by forcing Russians to pay more. The housing and utilities section of the state budget provides for an 11.9% increase in rates in the summer of 2025.
A remarkable letter by Nina Ostanina, a Communist Party State Duma deputy and head of the Committee for the Protection of the Family, to Prime Minister Mikhail Mishustin suggests rising utility rates are contributing to an increase in divorces. Ostanina argues that people are divorcing to qualify for benefits to cover their utility bills. By halving the family budget, they can claim utilities subsidies for a significant portion of their expenses.
In other words, utility costs are becoming an increasingly significant part of national expenses: officially the utility costs increased by 9.8% in 2024 and will rise by 11.9% in the upcoming year.
More Accidents
The new heating season is now beginning, and there is a good chance that we will again see stories in the news similar to those of last winter.
On the 1st of October, former Moscow City Duma deputy Yevgeniy Stupin, who had to temporarily leave Russia, published the following appeal by utility workers in the Moscow region town of Chekhov.
“We are appealing to the Government of the Russian Federation. We are a small group, with about 30% of us being operators of heating plants and workers in heat networks. We work in terrible conditions. We haven’t been paid for a long time. We are drowning in sewage waste, the heating season is about to fail, and people will be cold. Not to mention that these heating plants will not continue their work if we quit. The personnel of 30 years are about to resign as the salaries are pitiful. The town’s heating plants are in disastrous condition. Due to this, operators are not willing to work there. The sewage system is leaking, and the sewage pumping stations (SPS) are failing. […] The administration is making false statements, saying that the heating plants are operational. No heating plant is operational! Even if they are started, they will break down. It’s highly likely they will explode.”
Last winter, the town of Klimovsk witnessed the biggest utility scandal. An accident at the local heating plant during the New Year holidays left 150,000 people without heating. The heating plant is located on the territory of an ammunition factory. Its management included people accused as alleged members of the Gol’yanovskii crime family. Shortly after the accident, the authorities nationalized both the factory and the heating plant.
“Spending on housing and utilities has decreased, and it’s visually noticeable: the deterioration of the electrical grids, heating systems, and stormwater drainage systems has been ongoing,” Yevgeniy Stupin told Posle. “There is no investment in upgrading the housing and utilities infrastructure. This is one of the reasons why people across the country took to the streets last winter. If the upcoming winter is cold, it will be even worse. The official figure for the deterioration of the housing and utilities infrastructure is 70%. Deputy Prime Minister Marat Khusnullin and General Director of the Dom.RF state corporation Vitaly Mutko have repeatedly stated that it will take trillions of rubles to fix the situation. Instead of spending money on the war, it should be invested in the sector. Otherwise, it might collapse. Unfortunately, there is still no change.”
In October, residents of the Novoye Butovo housing complex and the town of Khimki made collective appeals regarding the lack of heating. The city of Tver also has no heating. In the town of Achinsk, Krasnoyarsk Region, with a population of 100,000, half of the city is without heating. The prosecutor’s office is planning to seize the local heating plant for the benefit of the state, like what happened last winter in Klimovsk and several other cities.
The Klimovsk heating plant was transferred to municipal property. In October, Sergey Voropanov, the Minister of Energy of the Moscow region, reported that over the summer, two boilers were repaired and a new additional one installed, while network pumps and shut-off valves were replaced. According to the regional authorities’ calculations, there should be no problems during this heating season.
On October 16, Minister of Construction Irek Faizullin reported to Vladimir Putin that 98% of residential buildings were operational and that regional authorities had conducted drills and developed instructions for dealing with utility emergencies. The coming cold season will show how accurate these claims are.
Private Monopolies
Oleg Shein, a socialist and a current deputy in the Astrakhan Regional Duma, served five terms in the State Duma. Housing, utilities, and trade unions have been his areas of expertise for several decades. Shein is convinced that the main problem in the sector lies in the management system of the housing and utilities sector established 20–25 years ago.
“Providing services in monopoly areas should be state-owned,” Shein explained to Posle. “For competitive services, there should be competition. In Russia, on the other hand, monopolies have been privatized — except for water systems, and even that’s not universal. Heating and electrical networks have largely been privatized, and many are owned by offshore companies. Water supply systems have been handed over to concessions for 20–50 years, essentially making them private property. State suppresses competition where it is needed, such as monopolizing waste collection.”
Shein argues that government funding for housing and utilities is insufficient. The lifespan of water supply networks is 25 years, so 4% of water and sewage networks should be replaced every year. However, in 2022, only 1.1% of water lines and 0.4% of sewer pipes were replaced. The companies that manage the utilities escape proper oversight, making it difficult to assess how efficiently they are spending money on infrastructure restoration. According to Shein, from 2005 to 2020, utility rates will increase by a factor of twenty — well above the rate of inflation.
“In fact, the population is paying a lot of money,” Shein continues. “The state has insufficiently but increased financial investments in housing and utilities. Where does this money go? There are many complexities. Municipal enterprises have such different reporting standards that it’s difficult to learn anything from them. For example, salary information only shows the total wage expenditure, making individual salaries impossible to determine. I’ve seen cases where a 20-year concession agreement was made and the investor was required to perform certain activities with no annual breakdown of the investment. Therefore, one could not hold them accountable for what they did or didn’t do until two decades later.”
The private utility monopolies described by Shein are sometimes linked to local organized crime groups (OCGs). For example, the recently dismantled Ramenskaya OCG group controlled, among other things, the local utilities in its district. Whether to keep utilities in private hands or return them to the state is a key subject for debate. One argument against state ownership is that the municipal housing and utilities sector have higher accident rates than the private sector. According to Sergey Kondratyev, an energy and finance expert, keeping utilities in private hands will give way to reforms in the sector. According to Forbes, a bill could be proposed in the spring of 2025 to introduce a new system with a five-year schedule for raising utility rates. The authorities believe that the increased predictability will encourage business investment in the housing and utilities sector.
Shein highlights the restructuring of regional debt to the federal center as a necessary step the government could take. Regions would be able to keep the hundreds of billions of rubles owed to Moscow and invest them locally in resettling emergency housing or repairing utility infrastructure. This way, money wouldn’t flow from the regions to Moscow, as they currently do, but would instead be spent on solving local problems.
Prime Minister Mishustin’s deputy, Marat Khusnullin, oversees all matters related to construction and land relations. He previously handled the same issues working for Moscow Mayor Sergey Sobyanin. In February 2024, he expressed hope that this year would see “a turning point” in Russia’s housing and utilities sector, believing that the volume of state investments would be sufficient to gradually resolve the issues without major disruptions.
Khusnullin stated that the state invested 500 billion rubles in public utilities in 2022–2023. This, however, did not reverse downward trends. Further infusions of cash are therefore planned. By 2030, 200,000 kilometers of outdated communications are expected to be replaced. One can assume that the authorities hope these investments will be enough to avoid major disruptions. However, this does not mean that the problems will be resolved in the population’s favor.
The current situation in the housing and utilities sector is one of the consequences of the war that affects everyone. Had it not been for the war, the deterioration of the infrastructure could have been overcome in a year or two. But under the present circumstances, it will take years to replace the deteriorated infrastructure and will undoubtedly lead to an increasing financial burden on the Russian people.
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The creation of the article was supported by Rosa-Luxemburg-Stiftung.
