About Russian Utilities Systems


Russian Utilities Systems is the only multi-product private federal company that operates successfully in the Russian housing and utilities sector; it is the country’s largest water and sewerage system operator.

The Group's operations in the regions of operation are based on the multi-product business model that comprises heat supply, water supply and sewerage systems and are carried out under lease agreements for the communal utility assets and under concession agreements. The Company's long-term development strategy provides for the further expansion of its business, the development of the communal infrastructure in Russian cities and towns and the rendering of high-quality services to our consumers. Russian Utilities Systems is implementing a far-reaching investment program designed to modernize the housing and utilities systems in the regions of its operation.

Russian Utilities Systems BY NUMBERS

Organization Chart

In order to minimize the risks, the Group's corporate structure is based on the separation of the functions of assets holding (Russian Utilities Systems) and assets management (Russian Utilities Systems Management JSC).

Corporate Chart

Mission and Values

The mission of Russian Utilities Systems is to take care of health and welfare of residents of Russian regions in which the Group carries out its business and to ensure comfort and convenience in their houses and buildings.

Business Model and Value Creation

Business Model
Value delivery to the Company Value delivery to stakeholders
Finance – ensuring economic efficiency and sustainability of the business

106.64% revenue increase

60% EBITDA increase

Natural capital – environment protection

> 120 million rubles in aggregate was spent on the environment protection in 2017

943 million rubles in aggregate was spent on the implementation of environmental investment projects in 2017

Human Capital – talent pool development

15% increase in employee involvement (according to the survey in early 2018)

40% increase in investments in personnel training and education

13% average salary rise

10% headcount growth

Social capital – contribution to the development of the regions of the Group's operation

> 4,250 million rubles of taxes was paid in all regions of our operation in 2017

Group's contractual obligations in the regions of its operation:

  • 256 million rubles under leases (772,340 rubles in 2016);
  • 14,119 million rubles under concession agreements through to 2054 (6,887,986 rubles in 2016).
Infrastructure – increased performance

1,750 million rubles invested in the infrastructure in 2017

121 km of new water supply lines

The number of faults in the water supply networks decreased by 230 incidents

5% decrease in the number of faults per 100 km of the sewerage networks

Intellectual capital – competitive services and technological leadership

Over 300 research articles and papers were published.

Contribution to sustainable development – achievement of THE UN sustainable development goals

Position in the Industry

Russian Utilities Systems is one of the largest private companies in the water supply and sewerage sector and the only multi-product operator in that market.

Potential WSS Market


Russian Utilities Systems is already the largest private federal company in the housing and utilities sector. We are guided by the principle of sustainable value creation for the key groups of our stakeholders – members and investors, clients and local communities, employees and partners — in the long-run. We seek to strengthen and expand our leadership by developing the communal infrastructure in Russian cities and towns and providing high-quality services to our consumers.

Strategic Development Areas
Сore areas for the Group's efficiency growth

Here are some interesting figures: in the regions where concessions are applied (there are 35 such constituents of the Russian Federation now), the rate of accidents has reduced by 47% in heat supply networks and by 21% in water supply network.

Mikhail Men, Minister of Construction, Housing and Utilities of the Russian Federation
Business development in new territories
Core strategic objectives and contribution to their achievement in the reporting period
To improve the existing asset performance
5% profitability from operating tariffing activity The positive dynamics of operating activity profitability has been achieved
Actions to improve operating efficiency
  • Development of unregulated core types of business;
  • Improvement of management systems

Pilots were launched under the Model Water and Sewer Enterprise project, including:

  • arrangement of a four-tier organizational structure;
  • outsourcing of secondary functions;
  • study of additional sources of the company's profitability.
Centralization of functions The accounting and treasury functions were transferred to the common service center.
Search for and use of the most efficient and advanced technologies The following actions were taken:
  • reconstruction of blowing houses with controlled oxygen supply (in Samara, Petrozavodsk, Dimitrovgrad), aerotanks with designated nitri-denitrification zones (Samara);
  • automation of Level 1 and Level 2 pumping stations, head-end stations with data transmission to the operator's automated workstation at some facilities of the Group;
  • construction of stations to treat filter rinse water and slime water using mechanical sludge dewatering and ensuring that no such substances are discharged in water bodies (Kirov, Petrozavodsk).
To develop the business in new territories
Acquisition of rights to water supply and sewerage assets in the Russian Federation in accordance with the applicable laws; conclusion of high-priority concession agreements
  • First priority regions: tender applications have been submitted or the project has entered the stage of asset evaluation.
  • Second priority regions: negotiations with the local authorities on the regional market entry are being held.
  • Third priority regions: contacts with local authorities are being established to facilitate the negotiations on the market entry terms.
  • In February 2017, the Group acquired the concession rights to the water and sewer system in Berezniki under the concession (the concession agreement on the town's entire water supply and sewerage complex)
  • In December 2017, the Group acquired the concession rights to the water and sewer system in Dimitrovgrad under the concession (the concession agreement on the town's entire water supply and sewerage complex)
  • In November 2017, Russian Utilities Systems entered into the agreement on acquisition of Investresurs LLC and Water and Sewer Enterprise LLC that own a 51% interest in Urban Water and Sewer Enterprise LLC (Penza's water and sewer system) with the deferred transfer of the title and closed the acquisition transaction in April 2018.
To change the institutional environment
Active lobbying of legislative initiatives in order to:
  • ensure tariff regulation that would guarantee return on investment and profitability;
  • shift to direct contractual relations with residents;
  • improve the procedure of concession agreement conclusion, to transform leases into concession agreements;
  • transit to setting wastewater discharge rates in line with the European rating system
The Group contributed to introducing some changes in the legislation that allow:
  • establishing a "secured" cost item in setting tariffs – profit of the guaranteeing organization in the amount of 5% of the current expenditure and including loan servicing costs in the tariffs;
  • making "regulatory" agreements with the governments of the constituents of the Russian Federation and local authorities in order to include their obligations related to tariff setting and compensation payments in such agreements. Russian Utilities Systems was one of the first market players to sign such "regulatory" contract in Russia (in Samara Region);
  • transforming the existing leases into concession agreements without participating in tenders;
  • balancing the interests of water and sewer enterprises and businesses in setting and collecting charges for adverse impact on the environment
  • The Group contributes to the efforts to amend the housing legislation to the end that it would allow establishing direct contractual relations with consumers without any intermediaries (managing companies, homeowners' associations, housing societies), which, in its turn, would improve the collection of utility charges (up to 98%).