The garbage - removal services of Russia are on the verge of bankruptcy

The regional services, involved in the household garbage collection work, have been sounding the alarm for a long time - the reason for this was the lack of funds. In the conditions of the pandemic and restrictions, according to the representatives of REO (Russian environmental operator), the enterprises began to massively refuse from the garbage collection. This drop can put an end to the results of the country's garbage reform, as well as lead a significant part of the garbage - removal services to bankruptcy in the nearest future.

It was difficult to collect payments for the garbage collection before. In 2019, for the first half of the year, the volume of payments to the regional services averaged slightly less than 60%. In some cases, the garbage collection was extremely low, reaching up to 20%, but in some of the regions, it was reaching 90%. But the amount of collection has never been complete. This was the reason for the cash gap in most companies (almost 90%). To take the bank loans in such a situation was extremely unprofitable.

The second reason for the financial hole, in which the enterprises, involved in the removal and disposal of the household garbage found themselves were the tariffs and work plans.

The National Association of Concessionaires and Long-Term Infrastructure Investors conducted a study of the activities of more than 220 garbage services and found out that the forced reconsideration of the tariffs could be one of the main factors, affecting the efficient operation of the services. According to the experts, within a half of the year, the work patterns of many services (32 out of 85) were changed. As a result, data on the volume of household garbage began to grow, while the revenue side was constantly decreasing.

Now, according to the REO, the gap between the increase in the volume of garbage (by 20% from the previous one) and the decrease in the collection of payments for its disposal (by 20% or more), can lead to the fact that in 20 regions of the country, the garbage - removal services will completely terminate their activities by the summer season.

The list of the regions, for which the situation with garbage is getting critical, includes the territories of both the European (Pskov, Smolensk, Oryol, Kostroma regions, etc.) and the Asian parts of Russia (Novosibirsk, Kemerovo regions, Altai Territory, Yakutia, etc.).

The government of Russia promises to help the regional services by compensating for the part of the revenue (20%). This will probably allow the companies to avoid bankruptcy. What is more, a project has been previously developed, under which the interest rate of the loans might be subsidized. We are talking about the loans that the enterprises took from January last year to March this year. It was assumed that the compensation will be received in the amount of 100% of the key rate of the Central Bank of the Russian Federation.

At the moment, the project is being approved, but the decision on it has not been made yet. At the same time, as it was noted by the CEO of REO, the situation is so critical that the number of the regions, the garbage services of which are at risk of going bankrupt, can grow to 35. This problem was voiced by Ilya Gudkov during a video conference, held with the Federation Council.