Policy and Legal Framework

The implementation of the project in its current form does not require any significant change in policy or new legislation at the city level. The city has been already some experience in implementing policy that supports private sector participation and energy savings. The legal framework for the formation of ACSeP is there and does not require extensive legal procedures. It's however the attitude of residents towards a new form of organization which makes the actual formation of the ACSeP difficult, since it should be formed and supported by the residents.

Another policy issue is the need for complete reorganization of current system of payments and contracts in order for the most efficient approach to provide energy services. Implementation of "Payment collection and maintenance" approach will require a serious change in city policy towards private sector participation. It will include redirecting utility payments from the Billing Center to private companies.

During the implementation of the project, it became apparent that changes in housing policy and subsidies policy at the government level seriously affect the outcome of the project. This year, the government of Russian Federation proposed elimination of privileges in payments for utility services and replacing them with direct subsidies. This announcement has halted the creation of ACSeP's. Residents were not sure how this policy will affect them and decided that it is better to wait until the results of this policy will become clear. In fact, nothing will change much, as previously unfunded privileges will be replaced with real cash on households' bank accounts, which they will use to pay for utility services. However, no analysis of impacts of reform on the project was made and nothing was done to ease the worries of residents.

The implementation of the project has shown that there is a possibility to adapt current legal framework to the needs of PPP and community. Creation of ACSeP is an innovation that serves as a step in creation of a full-time condominium that will manage all aspects of housing maintenance and utility services supply. While in its current form ACSeP's have their pro's and con's, it is an important step in increasing community participation in provision of housing and utility services.