ts by public entities are often ignored, with the result that the utilities cannot cover operating costs and have to defer still further maintenance and upgrading work (NIC, 2000). In more recent years the situation has begun to improve with support from the international finance community and the emergence of Russian- owned companies, set up by "oligarch" groups that create joint ventures with municipalities to provide water services (Hall and Popov, 2005). In part this might be the result of legal changes that placed responsibility on local governments for the organisation and development of water services as well as tariff-setting. By mid-2004 private Russian operators controlled 50 large utilities and other municipalities were in the process of negotiating leases or concessions for periods of up to 50 years. Such contracts are subject to minimal controls, which increase the risks to all parties - and most especially consumers - considerably. Increasingly, finances such as loans are being provided by international organisations such as the World Bank, EBRD, EU and the International Finance Corporation. An example of such initiatives is the EBRD support for the St. Petersburg sewage plant to treat effluent from 77 000 people; as a result only 15% of the city's wastewater is now untreated, contributing to tackling the environmental pollution of the Baltic Sea. The EUR 138 million project was supported by a loan of EUR 35 million from the EBRD and EUR 50 million donor funding from the EU. Most of the international agencies' efforts are focused on promoting the introduction of the private sector or corporatisation and thus include sectoral reform as well as infrastructure upgrading as part of the project finance (Hall and Popov, 2005). Major water MNCs have generally not entered the Russian market for a variety INFRASTRUCTURE TO 2030: TELECOM, LAND TRANSPORT, WATER AND ELECTRICITY - ISBN 92-64-02398-4 © OECD 2006 5. THE IMPACTS OF CHANGE ON THE LONG-TERM FUTURE DEMAND FOR WATER SECTOR INFRASTRUCTURE of reasons, th