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Kazakhstan plans to reform heating industry

27 october 2014, 17:44
Photo courtesy of tgc1.ru
Photo courtesy of tgc1.ru

Kazakhstan is going to develop a concept of reforms for the heating industry, Tengrinews correspondent reports citing Vice Minister of the National Economy of Kazakhstan Kairbek Uskenbayev as saying at last week's extended meeting of the Council for Regional Policy of the faction of Nur Otan political party in the Majilis, the lower chamber of the Kazakh Parliament.

"It was decided to initiate development of a draft Concept of reforms for heating industries of cities and towns. The Concept will determine the main lines of state policies in the field of heat supply (from the heat source to the consumer) and mechanisms for their implementation. It should be noted that most of the heating facilities that are currently in use have gone past their operating lives. 60 percent of the heating networks are excessively worn out, and in some regions heat losses reach 36 percent," Uskenbayev said.

According to the Vice-Minister, more than half of the boiler heat sources in Kazakhstan have low efficiency, averaging to 41 percent. This increases the costs of maintenance of boiler houses.

"All this results in an increasing number of accidents, malfunctioning of vital infrastructure and annual disruptions during the heating season," he said.

In addition, Uskenbaev said that the existing tariff system did not provide a break-even and effective performance of Kazakhstan's heating sector. "The lack of a market pricing mechanism, justified presence of natural monopolies at the market, periodic aggravation of the situation because of a high (financial) pressure on the population and insufficient level of services (provided by the heating companies) dooms the authorities to a constant search for a compromise when approving tariffs,” he said.

“The heat tariffs constitute a large percentage of the overall inflation rate, which is one of the major problems that we face when approving the tariffs. To reduce the burden on the state budget we will look for optimal levels and and mechanisms of funding from the central and local budgets, attract private investments and use private-public partnerships mechanisms," the Kazakh Vice-Minister said .

He also added that there were plans to increase the efficiency of the heating sector in general by raising the efficiency of heat sources to 85%, upgrading up to 6000 heat sources and up to 7000 km of heat supply networks.

Reporting by Altynai Zhumzhumina, writing by Dinara Urazova, editing by Tatyana Kuzmina

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