31 may 2010

Prime Minister Vladimir Putin meets with South Ossetian President Eduard Kokoity and Prime Minister Vadim Brovtsev

Prime Minister Putin, President Eduard Kokoity and Prime Minister Vadim Brovtsev have discussed joint plans for South Ossetia’s economic reconstruction and social development with Russian support.

Transcript of the beginning of the meeting:

Vladimir Putin: Good afternoon,

We have gathered today not to discuss bilateral relations with the Republic of South Ossetia, but to review the implementation of our joint plans for the republic's economic recovery and social development with Russian support.

We are financing South Ossetia through two channels. First, we are supporting the government budget. To put is simply, we are providing support for salaries, the maintenance of buildings and the construction of new facilities.

Second, Russia is investing its budgetary funds into the restoration of the old facilities and the construction of the new ones.

In 2008 we sent 2.1 billion roubles through the first channel, along with another 2.849 billion in 2009. In 2010 we allocated 2.537 billion.

Right away I'd like to say that the republic's capabilities are growing. This is a very positive sign, and I'd like to draw your attention to it. In 2008, the total revenue of the South Ossetian government was a mere 60 million roubles. This figure rose to 139 million roubles in 2009, and the republic expects to earn 167 million roubles in 2010.

There is also a special account controlled by the president of the republic. It contains charitable donations received by South Ossetia immediately after the hostilities, mostly from the Russian Federation. People and organisations simply sent money for various ongoing and urgent reconstruction projects to support the people of South Ossetia. All in all, there were more than a billion roubles in the account, and I think there are now about 700 million left.

Russia sent about 1.5 billion roubles for reconstruction in South Ossetia through an investment programme in 2008 and another seven billion roubles in 2009. There are plans for another 5.7 billion in 2010. I'll come back to these figures - 1.5 billion, seven billion and 5.7 billion roubles.

As for rebuilding the South Ossetian economy, I think we should focus our efforts primarily on carrying out the agreement providing aid to South Ossetia and implementing the comprehensive assistance plan.

I'm referring to major investment projects in transport infrastructure, housing, and utilities, as well as in the construction and reconstruction of industrial, educational, athletic, healthcare and cultural facilities. This will make it possible to increase the total output of goods and services considerably, increase people's incomes and cut unemployment.

As I've already said, the 2010 Russian federal budget provides for 5.7 billion roubles worth of investment in South Ossetia, 630 million roubles of which will cover last year's debts and a little over five billion roubles will fund the construction of new facilities for gas and electricity supply, as well as road infrastructure, housing and utilities.

The work begun by the State Committee for Restoration Projects, primarily in housing construction, should be completed quickly and on budget

The South Directorate for Programmes and Projects will order new facilities. I hope that the South Ossetian leaders will do everything they can to ensure a strong relationship with this organisation. I also hope that the directorate will foster the necessary ties with the South Ossetian leadership to keep this work running at a steady pace.

Apart from the funds allocated for the republic's economic recovery, the Russian budget provides for another 2.8 billion roubles in financial aid to Ossetia to cover the deficit. I've already mentioned this.

The comprehensive plan is supposed to be carried out primarily from 2008 to 2010, with funds from the federal budget. A total of 385 facilities have already been built. They include 20 educational institutions, two cultural projects, 14 healthcare facilities, 12 gas supply facilities, 48 road infrastructure projects and 32 media and communications facilities, as well as buildings for the national and municipal governments and housing (the day before yesterday they said there were 102 projects, now the number has risen to 110). To sum it up, the work is going on.

As I've already said, 5.7 billion roubles have been allocated from the Russian federal budget for investment projects. Competitions have already been held for the following projects: helipads in Dzhava and Leningori, a road between Tskhinval and Leningori, a fire and rescue unit in Leningori, an aqueduct out of Tskhinval, a transmission line from Severny Portal to Nizhny Ruk and a water supply network in Tskhinval.

There has also been more that 12 billion roubles from extra-budgetary sources, including 10 billion roubles from Gazprom for the construction of the gas pipeline from Dzuarikau to Tskhinval (which is almost completed), and the Moscow municipal government is allocating about two billion roubles for the construction of the Moskovsky suburb.

Since the autumn of 2008, more than 26 billion roubles have been spent on the development of South Ossetia.

There have been some problems with reconstruction of the housing stock, notably, a 483 million-rouble shortfall. This has to do with the number of subcontractors involved, the need to use standard designs and certain changes in the technical specifications. But we should review this in detail.

I hope very much that our colleagues from Russia and South Ossetia will create the right business environment to move forward and resolve those issues the people of South Ossetia are waiting to be addressed.

Eduard Kokoity: Thank you, Mr Putin. First of all, I'd like to thank the Russian Federation, you personally and the Russian government for the unceasing attention they have given to rebuilding the Republic of South Ossetia.

Indeed, two years have passed since the Georgian aggression. A lot of ground has been covered since then, especially at the negotiating table. Many of our foreign guests have made this observation. I'm referring to Americans who visited our republic.

For more than a year, our republic has lived a different, peaceful life, owing to the Russian military deployed in our country in accordance with agreements between our two countries, as well as to the professional performance of the Russian border guards.

Today, our republic is facing different challenges: development and construction. Assistance from the Russian Federation in this respect would certainly be enormous.

I'd like to take this opportunity to express my gratitude to all Russians, all Russian regions and all those who have done so very much for us (the Moskovsky suburb will be commissioned in the near future; the Moscow government is planning to visit South Ossetia soon). Almost two years have passed, but they have unceasingly helped us and given constant attention to our republic, for which we are very grateful.