Romanian Capital Mayoralty Mulls Cutting Subsidies For Hot Water

The general mayor of Romania’s capital Bucharest, Sorin Oprescu, said Monday the city hall is considering eliminating subsidies it pays for hot water, saying half the local budget goes to subsidies to the heating company and public transport.

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Oprescu said heating company RADET and public transport company RATB are two black holes that eat up nearly half the city hall's budget in subsidies.

The mayor said Bucharest's local budget for 2010 is of 5.6 billion lei (EUR1=RON4.0939), of which about RON1 billion will be used for investments.

Eliminating hot water subsidies in Bucharest would lead to an average annual extra cost of RON905 per household.

Oprescu explained authorities calculated the average household as a two-room apartment inhabited by 2.5 people. Such an apartment, he said, requires 5 gigacalories of hot water per year and 10 gigacalories of heat. With the subsidy, households pay RON119 per gigacalorie. The price would rise to RON300 per gigacalorie of hot water if the subsidy is cut.

Oprescu said calculations haven't been finalized and the proposition to eliminate hot water subsidies will have to be approved by the city's councilors. He added the city hall doesn't want to cut heating subsidies.

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