IRINA LAIKOVA had long believed that it was too expensive to live in Moscow. Then she discovered that it was too expensive to die here, too.

When her father passed away in March she called an undertaker to find out how much it would cost for a simple grave in the local cemetery. The answer shocked her.

A plot near the entrance of the Mytino cemetery, on the outskirts of Moscow, would cost 300,000 roubles (£6,200), she was told. The only alternative was one in a ditch on the edge of the cemetery, 1.6km (a mile) from the entrance, for 66,000 roubles — about the same as in London.

Moscow’s new rich might not bat an eye at such prices but for Mrs Laikova, 50, an exhibition organiser, even the cheaper option amounted to her life savings. “I was astonished,” she told The Times. “I thought I could turn up with my father’s death certificate and get a grave. But they told me they could only do a ‘commercial’ burial.”

The extortionate prices are caused partly by a shortage of burial space in the biggest European metropolis, home to 10.5 million people. But Mrs Laikova’s experience also offers a glimpse into one of the darker corners of the local economy — the multimillion-pound death industry. In Soviet times burials, cremations and cemeteries were supervised by the same government department, and all services were free. But in the 1990s the relevant department in Moscow was replaced by a semi-private company called Ritual.

Today the city still owns its 71 cemeteries and three crematoriums but grants Ritual exclusive rights to manage them — effectively creating a private monopoly in the funeral business. And with 130,000 people dying in Moscow every year, it is no small business.

By law the city guarantees every resident the right to a grave site, a coffin, a burial and a funeral ceremony for between 8,500 and 9,000 roubles. Ritual cannot sell the grave site because private ownership of land is still not permitted in Moscow. It can, however, charge a fee for “burial services” if it has created a plot or decorated an existing one with borders and a headstone.

Thus, many cemeteries assert that they are full, apart from the expensive plots. Last year a controversial law formalised this loophole by scrapping state-regulated prices on many utilities and public services, including burials. Mrs Laikova’s undertaker told her: “It would’ve been better for you if your father had died before September.”

Vadim Kiselyev, the deputy director of Ritual, told The Times that his organisation had not raised its prices and that all its cemeteries were open. He declined to say how many free plots were available and acknowledged that cemeteries were run as private businesses. “We invest in them,” he said, “so we need to make a return on our investment.”

Three cemeteries guaranteed burials at the basic price, he said, but two of them were 30 miles from Moscow.

Mrs Laikova’s final bill, including the plot in the ditch, a coffin, pallbearers, grave-diggers, a hearse and other essentials, came to almost 140,000 roubles. She said: “I still don’t know what I bought for 66,000 roubles. I think it was permission to bury my father near my home — that is all.”

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