russia Cannot Afford Drinking Water

russia’s water supply and wastewater management sector is in a state of irreversible decline. The sector’s share of GDP has fallen to 0.24%, while net losses from regulated activities have reached 36 billion rubles – yet the system offers no mechanisms for escaping this abyss.

Formally, the market is growing: the volume of regulated services has amounted to 588 billion rubles, with nominal growth of 8–11% per year. In practice, this growth lags behind inflation and does not resolve any structural problems. The cost of services is outpacing tariffs by an ever-widening margin: since 2018, costs for cold water supply have risen by 85%, for wastewater disposal – by 92%, while tariffs have risen by only 45% and 58%, respectively. The cumulative lag of the marginal payment index behind actual inflation for 2014–2025 stands at 39.1%. Only 17% of water supply organizations and 18% of wastewater disposal organizations reported profitable operations in 2024. The sector’s gross losses reached 136 billion rubles.

Physical infrastructure is deteriorating faster than it is being restored. Each year, approximately 3% of utility networks become obsolete, yet only 0.9–1.1% of water mains and 0.35–0.38% of sewer lines are replaced. The length of water supply networks in need of replacement has remained stagnant at 250–251 thousand km – new pipes wear out just as quickly as the old ones are replaced. The share of worn-out sewer networks reached 46.1% in 2024 and continues to grow. In the Jewish autonomous region, 78.1% of water supply and 80.8% of sewerage networks are worn out; the situation is comparable in tuva and ingushetia – and all these regions are at the bottom of the socio-economic development ranking, meaning they are unable to finance modernization on their own.

Every ninth resident of russia still lacks access to high-quality drinking water from centralized systems – and given the rate at which the networks are deteriorating, this figure will only worsen in the coming years.