Installments for three years or freeze until 2028

Three-year installments or freeze until 2028: business is waiting for a decision on rent

    The government supported the timber industry by instructing it to develop measures to curb lease payments and impose a moratorium on bankruptcy. Enterprises of the timber industry can receive part of the requested state support. Key measures were discussed on May 27 at a meeting with representatives of business, the Ministry of Industry and Trade and the Ministry of Natural Resources. Although the protocol has not yet been signed, its parameters are already being discussed in industry circles. The business is waiting for a decision: either a "freeze" of rates until 2028, or an increase with a three-year installment plan.

Context: Why has the issue of rent become critical?

    Starting from January 1, 2024, the procedure for calculating rent for forest plots has changed. A number of reduction factors that had previously mitigated the burden on tenants were abolished. As a result, additional fees were charged to forest users for 2024-2025. For many enterprises, this has become an unbearable burden amid falling export prices, rising logistics costs and reduced government support.

    According to Alexander Dyatlov, head of the Arkhangelsk Legislative Assembly Committee, the depth of the crisis is as follows:

"The figures are scary, and any increase in the fiscal burden on the industry makes these statistics even sadder" — Alexander Dyatlov, Head of the Arkhangelsk Legislative Assembly Committee

    In his opinion, an increase in rental payments will push even more enterprises to the "financial cliff".

What was discussed at the meeting on May 27?

    Deputy Prime Minister Dmitry Patrushev instructed the relevant departments (Ministry of Industry and Trade, Ministry of Natural Resources, Ministry of Finance) consider the mechanisms of industry stabilization. Key measures:

1. - Curbing the growth of rents for forest plots.
2. - The introduction of an industry moratorium on bankruptcy.

    According to Kommersant's sources, "there will be no direct additional payment of rent." This means that the government is aware of the scale of the problem and is ready to make concessions, but the final mechanism has not yet been chosen.

Two scenarios: freeze or installment plan?

    According to the publication, two main options are being discussed.:

Scenario 1: Rent freeze until 2028

•     - The rent is fixed at the current level.
•     - There is no increase in 2026-2027.
•     - The business gets a break for 2-3 years to recover.

Scenario 2: Promotion with a three-year installment plan

•     - The increase in rent payments (possibly related to additional charges for 2024-2025) is not collected in a lump sum.
•     - Companies are provided with installments for three years.
•     - Payments are distributed over time, reducing peak load.

Business position: entrepreneurs consider installments to be an insufficient measure. They insist on freezing (or even reducing) rental rates in order to maintain liquidity in a crisis.

The reaction of departments and the status of orders

- The Ministry of Natural Resources is considering the possibility of providing installments for recalculated rent (according to the agency's response to the request of the Ministry of Industry and Trade).

- The Ministry of Finance notes that the mechanisms for deferring tax payments have already been implemented at the federal level. In other words, taxes can be transferred, but the situation with rent is more complicated — this is the income of regional budgets, and the regions do not want to lose revenue.

- The Ministry of Industry and Trade considers the existing support measures (subsidies for logistics) sufficient: the share of subsidizing the supply of LPC products in 2026 has been maintained at 25% of all allocated funds, which is 2.2 billion rubles. Export support through the ports of the Northwest is not provided; it is available for shipments from the Baltic and Azov-Black Sea basins (up to 50% of freight costs).

Nikolai Ivanov, Vice President of Segezha Group, said that the business proposals were generally supported.:

"Directive instructions have been given on almost every point"

    He noted the importance of solving such problems as the revision of additional charges and the abolition of the monopoly on forest management.

Dmitry Patrushev's office did not provide any comments. The Ministry of Natural Resources and Environment did not respond to Kommersant's request.

What else did the business ask for?

    Earlier, industry companies applied to the government with a request to strengthen support in several areas:

1. - Logistics: subsidizing export shipments (especially through the ports of the Northwest, which are currently not subsidized).
2. - Rent: revision of additional charges for 2024-2025 and freezing of rates.
3. - Bankruptcy: an industry-wide moratorium on bankruptcy (currently under consideration).
4. - Forest management: the abolition of the monopoly on forest management (to reduce costs).

    So far, not everyone has been satisfied: subsidies for logistics have been retained, but not for the North-West. The lease is under discussion. The moratorium on bankruptcy has been instructed to consider.

Key indicators of the crisis and support measures:

Importance for the timber industry

1. - In the short term (2-3 months), a decision will be made on the fate of the lease payments. If they choose a "freeze until 2028", business will get a break. If you pay in installments, the load will remain, but it will stretch over time.
2. - A moratorium on bankruptcy is critically important for 45% of unprofitable logging enterprises. If it is introduced, companies will be able to restructure their debts and continue working. If not, a wave of bankruptcies is inevitable.
3. - Regional budgets are interested in maintaining rental income. Therefore, it will be more difficult to lobby for a "freeze" than an installment plan.
4. - The final decision will be a compromise: the state cannot completely reset the rent (money is needed in the budgets), but it also does not want to bring the industry to collapse (loss of jobs and taxes).
5.  

Forecast

    The most likely scenario is a three—year installment plan for additional payments (without write-off) and a refusal to raise rates for 2026-2027 (actually freezing). A moratorium on bankruptcy is likely to be introduced, but with restrictions (for example, only for backbone enterprises, as requested by the business).

    The final decision will be formalized by the minutes of the meeting with Patrushev. The timber industry is holding its breath: it depends on whether they will survive in 2026 or many will go under the knife.

Tags: #rent_paid #forest industry #state support #moratory_bankreferences #forest sites #Ministry of Industry and Trade #Ministry of Natural Resources #Dmitry_Patrushev