https://joom.ag/X5je policy brief-psia-uzbekistan-eng_3 | Seite 30

Addressing Urban Poverty in Uzbekistan in the Context of the Economic Crisis
should not exceed 70% of household monthly income. While this certainly
extends the possibility of mortgages to a greater number of households, it
also vastly increases the risks of insolvency and is thus clearly not an ideal
solution to the stubborn problem of housing affordability.
During their fact-finding mission for this Policy Brief, researchers
examined a typical case in which a young family is offered a 64 sq.
meter subsidised apartment for $28,000 at a mortgage interest rate
of 14%, with a three-year interest-only payment period and a required
25% down payment.
The interest-only payment for the first year (after the down payment)
would be $2,940, or about 40% of the total wage income of an average
household of two earners (assuming that an average monthly per capita
wage in 2009 is $300). The annual total for a regular mortgage payment
schedule, with both interest and principal, would be $4,025, or 56% of
an average household’s wage income. This is unrealistically high.
If, as recommended above, housing policy in Uzbekistan were
consolidated into one field with a governing strategic vision, the
problem of housing affordability could be better addressed
Housing policy
still needs to be
consolidated as
a unified field
and governed
by a coherent
strategic vision
C. The State of Public Utilities
Public utilities have undergone major reforms in Uzbekistan. The
government coordinating body is the State Agency for Housing and
Utilities, which develops national policy for utilities and supervises its
implementation. Utilities are provided by municipal companies (which
is a state form of ownership). According to the program adopted by the
president in 2007, these utilities should be privatised by 2011. Already,
the suppliers of utilities are expected to be financially self-sufficient.
New water and sewerage pipelines are funded from several sources,
mainly foreign investments and the state. In 2009, the overall investment
in new water and sewerage networks was 150 billion Sums (about 103
million USD). At the start of 2008, modern water meters were installed
in about 38% of the apartments that had access to drinking water.
Access to gas was provided to almost 82% of the apartments in urban
areas and 77% of the apartments in rural areas. Moreover, gas meters
were installed in over 97% of the apartments that had access to gas.
Metering will presumably provide more effective monitoring of costs
and hopefully minimize those costs.
Though aggregate statistics show that the rural population has
good access to social and public services, disruptions of water, heat,
and gas supply are apparently frequent, the result of decrepit utility
networks.
Based on the need to achieve full cost recovery, the State Agency for
Housing and Utilities calculates utility tariffs and seeks approval from
the Ministry of Finance. Overall, tariff increases have been regulated; the
increase in rates in 2009 was 6%, for example. Interviews with authorities
There are still
unresolved
issues on the
balance between
the desire of
utility providers
to recover full
costs and the
state’s social
concerns, such
as maintaining
affordability
of utilities for
low-income
households.
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