Elevators follow with all stops – Newspaper Kommersant No. 48 (7493) dated 03/22/2023

The budget deficit is forcing the regional authorities to purchase new elevators as part of a housing overhaul program in installments, which was practically non-existent before. As a result, since the beginning of this year, the volume of public procurement of such equipment in the country as a whole has more than tripled. But even this became possible at the expense of only a few regions, while most of the constituent entities of the Russian Federation do not have enough funds for these purposes.

From January to mid-March 2023, the regional authorities, as part of the overhaul program for residential buildings, purchased 4.8 thousand elevators to replace obsolete equipment for a total of 17.1 billion rubles, which is 3.6 times more year-on-year, follows from calculations Association “Russian Elevator Association” (RLO). Elevators whose service life has exceeded 25 years are subject to replacement. At the same time, the current figure has not yet reached the values ​​of January-March 2021, when 5.5 thousand elevators were purchased for 13.4 billion rubles.

However, in the context of regions, the purchase of new elevators is uneven. So, since the beginning of this year, the share of the Nizhny Novgorod region accounted for almost half of the total volume of purchases, or 2.3 thousand elevators, while a year ago the regional authorities did not purchase a single elevator, said the general director of the RLO Petr Kharlamov. According to his calculations, the share of Tatarstan was 17%, or 824 pieces of equipment, which is 3.7 times more year on year.

Purchases of other regions remain insignificant. The reason is the reduction in funding by regional and municipal authorities for housing overhaul programs in general and the purchase of new elevators in particular, market participants interviewed by Kommersant believe. Added to this was the problem with rising prices for new elevators. Since the beginning of 2022, due to difficulties with the supply of components from abroad, the cost of production of elevator equipment has increased by an average of 30–40%, explains Ruslan Rodikov, general director of the Moscow Electrical Equipment and Elevators plant (MEL; part of PIK Group). The overhaul fund of the Nizhny Novgorod region confirms that the replacement of elevators is the most capital-intensive part, therefore these works are financed by the regional budget.

Meanwhile, the regions that increased purchases of new elevators managed to do this by deferred payment for them. The same Nizhny Novgorod region at the beginning of this year agreed on this with the Shcherbinsky Elevator Plant (ShLZ; part of Dom.RF), says Mr. Kharlamov. Before the crisis, he clarifies, such a settlement mechanism was almost never used in the elevator market. Now installment plans are also actively used in other industries, for example, in the production of railway transport, which helps manufacturers to load capacity, says Mikhail Burmistrov, CEO of Infoline-Analytics.

Today, MEL capacities are fully loaded, confirms Ruslan Rodikov, but at the same time, 40% of the equipment produced is supplied by PIK Group, the rest is supplied to other developers. ShchLZ told Kommersant that in the first quarter of 2023, the volume of supply contracts grew precisely due to overhaul programs. METEOR Lift (former Otis) CEO Igor Mayorov says that the company is gradually restoring production volumes, but already now he predicts a 20% increase in the share of government orders.

Petr Kharlamov believes that this year, through the use of installments, the volume of purchases of elevator equipment by regional authorities will recover to the level of 2021. The ShchLZ reported that Dom.RF is negotiating with the constituent entities of the Russian Federation on further installment payments for the purchase of equipment as part of the housing overhaul program.

However, this is unlikely to replace all obsolete elevators. Today, every fifth elevator in Russia has exceeded the allowable service life of 25 years and must be replaced, says Igor Mayorov. According to the State Duma Committee on Construction and Housing and Public Utilities, about 100,000 elevators need to be updated throughout the country by 2025.

Due to a lack of funds, the regional authorities have so far planned to purchase only half of this volume, recalls Sergei Netsvetaev, expert at NEO Center. According to him, the issue of additional financial support from the federal treasury to replace obsolete equipment has not received due attention in the Russian budget for 2023–2025, so the possibility of achieving this goal by 2025 “looks ambiguous.”

Daria Andrianova