Network connections and resource supply: regulatory changes

30.01.2013

Legal Update No. 405, 30 January 2012

Goltsblat BLP advises of legislative amendments affecting connection of capital structures to utilities and supply of resources thereto.

1. Changes have been introduced by Federal Law of 30 December 2012 No. 318-ФЗ “On Amendment of the Civil Code of the Russian Federation and Certain Legislative Acts of the Russian Federation”. Accordingly, the term of validity of technical conditions and the timeline for paying for connection (technological connection) cannot be less than three years or less than five years in the event of comprehensive development of land plots for residential construction, unless the legislation stipulates otherwise. The previous term of validity of technical conditions was at least two years.

Yet, at the same time, within a year (or three years for comprehensive development of a land plot for residential construction) following provision of the technical conditions and information about payment for connection, the holder of the rights to a land plot must determine its requisite loading within the limits set by the technical conditions and submit an application for connection. Otherwise, the obligations of the organisation furnishing the technical conditions terminate. This requirement was secured legislatively before (in Resolution of the Russian Federation of 13 February 2006 No. 83 regarding the procedure for issuing technical conditions and connecting to networks), and has now been secured additionally in the Town-planning Code of the Russian Federation. Please note in particular that failure to submit an application for connection within the one-year set term (or three-year term for comprehensive development of a land plot) may provide grounds for refusing connection (hooking up) to networks, even if the technical conditions are still valid.

In addition, Federal Law No. 318-ФЗ specifies that the requirements of the Town-planning Code of the Russian Federation regarding the procedure for issuing technical conditions (parts 7-10, article 48) do not apply to the procedure for connecting facilities to electricity grids covered by specialised regulation.

Federal Law No. 318-ФЗ came into effect on 31 December 2012.

2. Another Federal Law adopted is that of 30 December 2012 No. 291-ФЗ “On Amendment of Certain Legislative Acts of the Russian Federation in Relation to Improving Tariff Regulation for Electricity, Heat, Gas and Water Supply and Sewerage”. The Law provides for a stage-by-stage (up to 1 January 2016) transition to regulation of tariffs for goods/services in the sphere of heat and water supply and sewerage on the basis of long-term regulation parameters. The Law, apart from certain of its provisions, came into effect on 1 January 2013.

3. Let us also recall that 1 January 2013 was the effective date of Federal Law of 07 December 2011 No. 416-ФЗ “On Water Supply and Sewerage”. The rules of the given Law are largely reference rules requiring specification in subjudicial regulatory acts to be adopted in development of the Law.

4. In addition, Federal Law of 30 December 2012 No. 289-ФЗ “On Amendment of the Civil Code of the Russian Federation and Certain Legislative Acts of the Russian Federation” has been passed. The purpose of the given amendments is to establish a procedure for local government bodies to establish and approve programmes for comprehensive development of utility infrastructure systems for population centres (urban areas). The relevant amendments come into effect on 1 April 2013.

If you have any question or would like more detailed information, please contact: Ekaterina Verle, Senior Associate, Real Estate & Construction, Goltsblat BLP, by phone +7 495 287 44 44, or by e-mail Ekaterina.Verle@gblplaw.com, or Vitaly Mozharowski, Partner, Real Estate & Construction, Goltsblat BLP, by phone +7 495 287 44 44, or by e-mail Vitaly.Mozharowski@gblplaw.com; or Yuri Chernobrivtsev, Partner, Real Estate & Construction, Goltsblat BLP, by phone +7 495 287 44 44, or by e-mail Yuri.Chernobrivtsev@gblplaw.com.

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