In early July, a video surfaced on social media of a woman falling into a hole full of boiling water that suddenly burst open in the sidewalk in Kyiv.
For several years in a row, giant sinkholes have regularly been opening up outside of Kyiv’s Ocean Plaza Mall as pipes under the road exploded.
In January 2020, a hot water pipe burst outside the mall, flooding the basement with boiling water.
During the same incident, a minibus partially fell into a sinkhole outside. Nine people were injured, seven of whom had to be hospitalized.
Over the past several years, central Kyiv’s streets have become a hotspot for erupting water pipes, injuring people, damaging vehicles and tearing up asphalt.
Kyiv’s water supply is run by two municipally-owned entities: Kyivvodokanal, that delivers cold water, and Kyivteploenergo, that is responsible for hot water and central heating.
Both enterprises are chronically underfunded due to low service tariffs that they are not allowed to raise.
The city relies on money from international financial institutions to fix the most urgent infrastructural emergencies.
But this is not a sustainable long-term solution to a problem that will surely get much worse as Kyiv’s population grows.
Worn-out network
Kyivteploenergo controls over 2,700 kilometers of water pipes, of which only 130 kilometers were repaired in 2019 and 140 kilometers in 2020. The company says that 80% of its pipes are beyond their planned lifespan. There were over 9,000 recorded emergency incidents on their pipe network in 2020.
Things are just as bad at Kyivvodokanal. The municipality controls 4,318 kilometers of pipes, of which only 7 kilometers were replaced in 2020. And 46.8% of their network is “fully exhausted,” the company told the Kyiv Post. In 2020 they repaired 7,940 leaks, of which 1,881 required pipes to be dug up.
Added together, this means that there are roughly 4,200 kilometers of cold and hot water pipes in critical condition across the capital.
Oleh Harnyk of the Association of Ukrainian Cities told the Kyiv Post that such a frequency of incidents on the water pipe network is caused by a chronic lack of funds for repairs, a recurring bugbear of Ukrainian infrastructure.
According to Harnyk, the fees charged for water consumption are too low for service providers to reinvest into new pipes.
“If the tariff only just covers the cost of service provision and has a small profit of approximately 3 or 4%, then the operator cannot develop and renew supply networks.”
Harnyk says that the norm in European cities is that approximately 40% of income from service tariffs is reinvested by providers into the water network.
In Ukrainian cities, this number is either low single digits or zero.
The tariffs are set by the National Energy and Utilities Regulatory Commission (NEURC), which keeps prices low to appease consumers.
Until 2018, the hot water network was operated by Kyivenergo, which is owned by Ukraine’s richest man, Rinat Akhmetov.
Kyiv City Council officials have previously blamed Kyivenergo for the dilapidated state of the pipe network which the city inherited in 2018, a claim which the company has rejected.
According to Harnyk, utilities across the entire country are chronically underfunded.
The problem is simply more noticeable in Kyiv because of the pressure exerted on networks by the city’s vast population.
Quick fixes
A shortage of cash means that when repairs are forced by the rupture of a pipe, they take the form of temporary, Band-Aid solutions rather than meaningful efforts at largescale reconstruction.
Harnyk highlights the example of the perennially problematic section of pipes near Ocean Plaza shopping mall at Lybidska metro station.
Harnyk says problems keep occurring at hotspots like Lybidska because pipes are only replaced in emergencies, rather than when they reach the end of their lifespan.
“They pick the most dilapidated section and repair a small part of it, because they have limited resources.”
Workers conduct repairs in January 2020 after a hot water pipe burst underneath Antonovycha street in Kyiv, injuring nine people and flooding the basement level of the Ocean Plaza shopping mall.
This is backed by the statistics given by Kyivvodokanal: Every time a pipe is dug up for repairs, an average of only 3.7 meters of new pipes are laid.
Harnyk said that one good example of network upgrading happened ten years ago, during preparations for the Euro 2012 football tournament in Lviv, a city of 730,000 people more than 500 kilometers west of Kyiv.
Long sections of the city’s 100-year-old pipes were dug up and fully replaced with new ones. The local authorities had the rare opportunity to spend serious money on infrastructure upgrades thanks to the upcoming tournament.
Limited funding sources
Despite the cause of the problem being obvious, a comprehensive solution is not yet forthcoming. In Kyiv, most of the money for system repairs currently comes from international institutions.
On July 21, the European Bank of Reconstruction and Development (EBRD) approved a 140-million-euro loan to Kyivteploenergo.
However, most of this will be spent on improvements at the enterprise’s power stations and boiler-houses rather than the pipes themselves.
In 2015, the Japan International Cooperation Agency loaned $870 million to the Ukrainian government for the redevelopment of the Bortnychi Sewage Treatment Plant, which serves all of Kyiv.
Despite the loans from international financial institutions, pipe replacement is largely funded by domestic sources of cash, and utilities providers simply aren’t getting enough.
Low tariffs are not the only problem: non-payment is also rife.
“Our citizens want high-quality water, but at the same time, they want it to be cheap. Some don’t feel the need to pay for this service at all,” Harnyk says.
High consumer debts are a significant problem for the capital’s water suppliers: As of April 2021 Kyivvodokanal was owed Hr 700 million ($26 million), while this January Kyivteploenergo was owed Hr. 4.6 billion ($171 million).
Kyivenergo’s own figures state that they spent a total of Hr 3 billion ($112 million) on network repairs in the 17 years they ran Kyiv’s hot water and central heating delivery.
Harnyk’s proposed solution to the funding problem is a liberalization of the rules around tariff-setting so that providers can charge more, coupled with more powers to crack down on debtors.
“If the government does not liberalize tariffs, the situation won’t get any better.”
