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Vnesheconombank’s Centre of Blockchain Competencies and Digitalisation Launches Two Pilot Blockchain Projects for Municipal Services and Public Utilities

The mayor of Grozny, Ibragim Zakriev, announced today the launch of two pilot projects to automate the management of utility services and municipal property leases. Vnesheconombank’s centre of blockchain competencies and digitalisation helped to create blockchain-based platforms to enhance the transparency of utility billing and payments, document contractual obligations and optimise the performance of sophisticated services for households.

The pilot version of the automated information system for utility billing and municipal property management will make it possible to cut the municipal budget for utility services and facilities management by as much as 20 per cent in the short run. The regional authorities are confident that the transparent and reliable contract management and billing system based on blockchain technology will stimulate the active involvement of small and medium-sized businesses.

“Transparency, improved payment collection and accessible public utility services are in demand,” Vladimir Demin, head of Vnesheconombank’s centre of blockchain competencies and digitalisation, said. “The government programme focuses on building up a federal information system for public utilities to embrace a wide range of basic services. At regional level, there are a number of internal services that demand intense development and need to be adapted for each specific region. It is necessary to connect products available on the market to the platform.” There is a great variety of services: homeowner voting, call centres of management companies, monitoring of how decisions are implemented, monitoring and transparency of pricing, cost control. The platforms minimise the number of intermediaries and eliminate abuses. Since the processes are automated and use blockchain technology, unauthorised external influence and excessive billing are not possible. The platforms also include functionalities for management companies: communication between tenants and landlords is simplified.

“The management solutions designed for both utility services and municipal property leases use blockchains or distributed ledgers. In cooperation with our partners from Vnesheconombank’s centre of blockchain competencies and digitalisation, we are laying the foundations for the region’s digitalisation, which will allow us to develop ecosystems in the future, keeping all payments transparent and simple, controlling the processes, and greatly simplifying data transmission,” Grozny Mayor Ibragim Zakriev said. “This is a step towards economic efficiency in addition to speeding up processes and ensuring reliability. We estimate that administrative costs of public utilities can be reduced by 20 per cent.”

“We visited the Chechen Republic to discuss where our solutions were more in demand,” Miron Mesonzhnik, head of analytics at Vnesheconombank’s centre of blockchain competencies and digitalisation, said. “Our meetings with representatives of the ministries resulted in us using blockchain technology to design a project for municipal property management. The Chairman of the Property and Land Relations Committee of the Grozny Mayor’s Office said that they wanted to cut contract management costs. They had to do huge paper work; they could be late sending notices; they could lose notices; there were mistakes. They needed to control payments and increase payment collection. And they needed what would enable them to do all this automatically, which would eliminate any process failure and human error. An important feature of cooperation was a tight deadline. It was a challenge and a new level of work for us.”

Vnesheconombank’s Deputy Chairman and Member of the Management Board Alexey Ivanchenko, who is in charge of the development bank’s innovation agenda, said: “Vnesheconombank’s strategy gives particular attention to the development of a digital economy. Vnesheconombank participates in the implementation of the related government programme, supports projects of the National Technology Initiative and invests in advanced technology introduced into government authorities. Our digitalisation efforts in some regions are aimed at improving their economic performance and developing the Russian innovation ecosystem. Vnesheconombank also supports blockchain projects in Veliky Novgorod and Kaliningrad.”

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