Preferential scheme of capital repairs of apartment buildings to be tested in Novosibirsk

29 april 2015

Konstantin Shishka, an expert of the Analytical Center, speaking at the conference "Functioning of the regional systems capital repairs in the territory of municipalities: Problems and Solutions", presented an analysis of a short-term plan for the implementation of the regional program for capital repairs of apartment buildings in the Novosibirsk region, risks of its realization and the ability to attract extra-budgetary funding.

"The short-term plan includes 203 apartment buildings, owners of the premises in which form the foundations for capital repairs at the special account. The owner of the account is the regional operator of the Novosibirsk region. For the period from 2014 to 2017 the conduction of 476 works is planned in these buildings, the cost of which will amount to about 650 million rubles. Owners of these buildings will collect only 150 million rubles as a minimum contribution. If owners do not collect the remaining 500 million rubles, and do not hold a repair, the local government will decide to change the method of storage, and a regional fund of capital repairs will be responsible for carrying out works on their buildings. In our view, this creates social and financial risks for owners and for the regional fund of capital repairs - it will assume obligations unplanned in the amount of 500 million rubles, which he will seek to carry out capital repairs. And it is possible to postpone the terms of repair to a later period only under the decision of the general meeting of owners. This is a typical situation for the regional program for capital repairs in other regions of Russia," said Mr. Shishka.

To solve this problem, the expert suggested to analyze the possibility of implementation of preferential credit schemes for capital repairs in pilot apartment buildings through managing companies. "As part of the Order of the Prime Minister Dmitry Medvedev, the Ministry of Construction and Housing has developed proposals for preferential loans for capital repairs," he said. "The preferential means a loan, issued for a period not less than 5 years at an interest rate of not more than 12% per annum. As the source of  preferential loans' financing experts offer to use resources and mechanisms of the State Corporation "Bank for Development and Foreign Economic Affairs ("Vnesheconombank")" by separating limit funding for preferential loans no more than 8% per annum with limited profitability of banks to 4% and under guarantees of the Agency of Credit guarantees."

In turn, managing companies are not ready to raise loans massively, as they see risks of termination of the management contract prior to the expiration of the loan agreement, and they are not ready to provide loans in accordance with requirements of the Bank, as well as to decide on the loan at a general meeting of owners.

The Analytical Center announced proposals, which aim at testing the implementation in practice of the pilot project of lending in the Novosibirsk region on the example of the managing organizations "Dzerzhinets" and MKS-Novosibirsk. This will show pros and cons of owning a special account by a managing organization, will allow to test the proposed scheme for lending and establish a mechanism for taking decisions on loans at the general meeting of owners of premises, as well as to implement the entire cycle of works on capital repair under the regional program.