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Utility tariffs to be tied to indicators of quality, reliability and efficiency of work of monopolists — Ministry of National Economy

20 December 2018, 12:25
Photo: primeminister.kz

December 20 at the briefing in the press center of the Government, the Vice Minister of National Economy Serik Zhumangarin spoke about the work being done to increase the transparency of tariff setting and reduce tariffs for the population.

Since 2015, on behalf of the Head of State, Kazakhstan has introduced a new policy of limiting long-term tariffs with a validity of five years or more. As a result, 1.02 trillion tenge of investments were attracted to the sphere, including 684 billion tenge in the housing and utilities sector, which are almost entirely (98%) financed from extrabudgetary sources.

By 2021, according to Zhumangarin, about 2.2 trillion tenge is expected to be attracted to natural monopolies, including about 1.3 trillion tenge in the housing and utilities sector. According to the Ministry of Economic Development, previously no program has attracted a similar amount of funds.

The measures taken made it possible for the first time not only to stop the deterioration of the communal infrastructure, but also to reduce it. Wear from 66% fell to 64.9%. Regulatory and technical losses were reduced.

“This policy has fully justified itself. Naturally, we, as the authorized body, are responsible for the further implementation of this policy and we must not allow the subjects to lose this tempo. Therefore, this work (reduction of tariffs for utilities), which we have carried out during these months, will in no way lead to losses of natural monopolies,” Vice Minister Zhumangarin assured.

According to the information sounded by the vice minister, as a result of unscheduled inspections, public reception rooms and other work organized to fulfill the instructions of the Head of State at the Security Council Nov. 7, 2018, internal reserves were found. In addition, Zhumangarin noted that some natural monopolies have shown their social responsibility. For example, KazTransGas Aimak JSC voluntarily reduced prices in most of its branches for gas transmission to consumers. Coupled with the fact that the Ministry of Energy has reduced wholesale gas prices, the final price for gas supply has decreased by 40%.

At the same time, the vice minister stressed that the most important thing in this matter is the quality of the services provided.

“In the new Law ‘On Natural Monopolies,’ we are introducing the concept of ‘incentive pricing method’ for the first time. That is, the tariff and the disposable profit will be tied to the indicators of quality, reliability and efficiency. The subject will himself declare at the beginning of the application period what indicators of quality and reliability he plans to achieve in percentage terms. It will be tied to a certain profit in millions of tenge. In case of failure, the tariff will decrease, and it will decrease further, taking into account the refinancing rate of the National Bank. That is, the monopoly will lose,” said the vice minister.

Zhumangarin reminded that in case of violation by the natural monopoly entities of their obligations, consumers can apply to the authorized bodies with a corresponding statement.

 



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