14 june 2010

Prime Minister Vladimir Putin holds a working meeting with Regional Development Minister Viktor Basargin and Energy Minister Sergei Shmatko

The prime minister and ministers assessed the previous heating season and discussed preparations for the upcoming autumn-winter period.

Transcript of the beginning of the meeting:

Vladimir Putin: Colleagues, we put lot of work into addressing energy issues both on a general and unfortunately even on a municipal level last autumn and winter. This was related to the Sayano-Shushenskaya Hydroelectric Power Plant disaster and the abnormally low temperatures experienced across a number of regions in the country.

In general the period passed satisfactorily. Today, I would like to hear your assessments of it. We also need to start talking about preparations for this year's heating season. Please proceed.

Viktor Basargin: Mr Putin, you have said that this year's heating season proved satisfactory. In comparison with the previous year, we indeed did not see any serious disasters. The situation remained virtually the same as last year: 36 emergency situations. The number of technical faults increased somewhat. I have already reported back on this issue: we saw 18,900 technical faults. This is, unfortunately, a growth of 15%. One distinctive feature of preparations for this heating season is that we underfunded our pre-winter preparations, cutting over 36 billion roubles in funding.

But let me repeat that the entire system was fully prepared for the heating season: 100% of the housing stock, 100% of the boiler plants and main heating systems. Everything related to communal infrastructure, utilities, was ready. The abnormally low temperatures strained our budgets for additional coal and heating resources. We spent an additional 32 billion roubles. Unfortunately, this has had an impact today on the functioning of major power systems: we have debts in this sector of up to 90 billion roubles. Today, we are working on restructuring this debt. This is problem number one.

Regarding preparations for the new heating season, we already have plans in place for 70% of the Russian Federation's constituent entities. Work is underway across the board. Municipalities have also prepared everything for the start of the new season. We are trying to carry out the work in a way that is more convenient for the community, which means cutting the time taken to complete it. Some of the particular features we saw last year resulted from a situation I have already reported back to you about at the Steppe plant in the Trans-Baikal Territory, serving closed military towns. We would like the Defence Ministry to be included in the overall compliance measures and for it to be subordinate to us in terms of future certificates of readiness for the heating season. We are working on that.

As for windfall profits on additional fuel purchases, we are now working with the Federal Agency for State Reserves on the issue of delivering over a million tonnes of fuel oil. We think that this delivery will enable constituent entities of the Russian Federation to save more than two billion roubles. This will be a considerable support ahead of the new heating season.

We will work with our power and heating companies on including the main heating systems in their investment programmes. Last year we saw failures in the main heating systems and this generally means that entire neighbourhoods go without heating. So this work is ongoing. The first inspection date is set for July 1. In mid-July we will hold an all-Russia teleconference on the preliminary results of the preparations and will further report on the situation.

Vladimir Putin: That is a sizeable debt. We need to focus our attention this. That's the first thing. The second is that we need both the municipalities and the regions to understand their responsibility for preparations for next year's heating season. After this teleconference, be sure to report back to me on how work is proceeding in the regions.

Sergei Shmatko: Mr Putin, as you said, last winter turned out to be a difficult one, the coldest in the last 30 years. We saw prolonged periods of low temperatures, well below the average.

The main event of the winter was the reduced capacity at the Sayano-Shushenskaya Hydroelectric Power Plant. What did we do? We prepared all the necessary power and fuel reserves for the country's entire power grid, every territory, every power plant, every month. Sufficient fuel reserves were assembled based on the scenario of a colder-than-average winter.

We had only one serious problem, in Vladivostok, where because of the cold winter, around 1,500 railway carriages loaded with coal froze together, all but blocking the approach to the railway station. Fuel levels were normal, but the situation caused great concern. The Energy Ministry and regional staff conducted a number of serious operations, and the community felt no impact from this. It should be noted that the power engineers worked very efficiently and the plant personnel took the initiative in informing us in a timely manner. Those managing the power grid management behaved rather erratically, and the necessary personnel decisions were taken.

Vladimir Putin: It is vital we turn our attention to our reserves for this autumn-winter period in a timely manner and, of course, that we keep track of pricing, because we all know that as soon as the sowing or harvesting seasons come around, as soon as the heating season starts, there is the temptation of seeking to make money out of it. I ask that the ministry monitor the situation most attentively and respond in a timely manner.