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Russia prepares to modernize water treatment plants

February 1, 2019
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Why this is important to Wisconsin businesses: An estimated 80% of the plants are in need of modernization.

One of Russia’s main environmental problems is the low degree of purification of wastewater discharged by businesses, residences and public utilities, which are responsible for 90% of the total discharge of polluted water. The quality of treatment plants in most of Russia’s cities and towns also leaves much to be desired. According to Russia’s Ministry of Natural Resources, more than 70% of the approximately 9,000 treatment plants in operation today (in centralized water supply systems) were built 30 to 50 years ago and 80% are in need of modernization. Furthermore, some cannot be restored, but rather must be completely rebuilt.

A treatment facility’s effectiveness can be measured by the ratio of effluent treated to standard quality as a percentage of the total volume of water treated. For Russia as a whole, this figure is only 13% due to congestion or lack of treatment plants in several federal districts (particularly in the south and east of the country), and in most constituent entities of the Russian Federation due to low efficiency and deteriorating conditions of treatment facilities.

According to the Ministry of Natural Resources, reconstructing and modernizing water treatment plants will require about $20 billion (₽1.3 trillion). According to the Ministry of Construction, the annual investment required for each of the next five years for “bringing the water supply and sanitation systems into conformity with standards” is estimated at $1.5 billion (₽100 billion) .

The pace of modernization of regional and municipal wastewater treatment plants is extremely slow. The Ministry of Natural Resources and the Ministry of Construction offer to attract private investment for the construction and reconstruction of sewage treatment plants, since public funds are not sufficient. Such investments are made on the basis of either public-private partnership or concession. In many regions, investors receive special benefits. According to the Russian government, the 2015 investment liability volume set a new record, increasing tenfold from the 2014 amount to nearly $1.1 billion (₽71 billion). In the first nine months of 2016, the volume of investment commitments made by concessionaires in the sector amounted to about $670 million (₽43.5 billion). As a result of the work of private operators, the accident rate in cold water supply decreased by 21% and the loss rate decreased by 14%.

In the last decade, some large projects in modernization and construction of water treatment plants were implemented in Moscow by private European investors. A program to improve the quality of drinking water has been launched in the capital. Already today, 64% of drinking water in Moscow—more than 1.8 million cubic meters, out of the 3 million that enter the city each day—is cleaned using the most advanced technologies for ozonation, ozone absorption and membrane filtration.

In addition, there is a market for private sewage treatment plants for domestic wastewater in Russia for cottage construction and for mini-hotels. The customers in this case are private construction companies. This business direction is also quite promising given the active development of cottage villages.

Due to the need for modernization and reconstruction of most water treatment plants in Russia, and introduction of stricter ecological standards for water treatment quality, there is demand for a variety of equipment for wastewater treatment systems, including but not limited to:

  • Water screens
  • Filtration systems
  • Pumping stations
  • Effluent neutralization and treatment systems
  • Membrane units
  • Laboratory and measuring equipment

To gain a better understanding of Russia’s wastewater treatment sector, current market trends and market entry strategy, conducting market research and a partner search is recommended. We also advise visiting industry exhibitions, such as Wasma 2019 in Moscow Oct. 22-24.

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