Vladimir Putin's opening remarks:
Good afternoon, colleagues.
As planned, today's meeting of the Regional Development Commission will focus on the situation in the construction industry, and especially on what we must do together in order to implement our housing programmes.
The economic crisis was bound to affect the industry: last year construction of new housing fell by 6.5%. Even so, I think we have managed to avoid a negative outcome, and we have definitely avoided the worst-case scenario. The government has provided serious assistance to the sector. We did not have to impose a large-scale freeze in construction, and we have not allowed excessive extensions of construction time.
Last year and in the first half of this year the government allocated a huge amount, about 1 trillion roubles, to support home mortgages and the entire construction industry.
The current trends in the mortgage market are highly indicative of the overall situation. During the first five months of 2010, home loans exceeded 105 billion roubles, more than double the amount last year.
Experts are predicting that banks will issue a total of 300 billion roubles in new mortgages this year. By comparison, they loaned 152 billion roubles last year.
What this shows is that market demand is recovering rather quickly. The state also remains a major buyer of housing. We will continue our progammes to provide housing for war veterans, above all those who joined the waiting list after March 2005, and servicemen. Starting next year, we will launch a programme to provide service housing for active servicemen, retired servicemen, including those on municipal waiting lists, and for other groups as well.
Clearly, the emerging situation is favourable for a resumption of sustained growth in construction, a recovery in investment activity and for launching new construction projects. We cannot allow this process to be blocked by endless bureaucratic approvals, the stone wall of monopoly and the elaborate, burdensome and at times excessively complicated procedures.
Our task is to minimize bureaucratic costs and other costs at every point in the process - from the business idea to the project phase to finished housing - and to remove everything that stands in the way of fast, quality and inexpensive construction.
As you know, key decisions have been taken at the federal level to remove administrative barriers to construction, and a corresponding action plan in key areas has been developed and approved.
First, we will greatly simplify the requirements on territorial planning documents and the process by which they are adopted: the relevant amendments to the Urban Development Code have already passed the first reading in the State Duma.
The list of information required to approve and validate territorial planning documents has been shortened. Moreover, rural communities can now focus exclusively on adopting rules on land use and development. They do not need to prepare general plans unless major construction projects are being considered. It used to cost many rural communities more to develop a general plan than to build a public bath or a shop.
I can tell you that Russia has about 20,000 rural communities and 85% of them are not engaged in any major construction projects, yet we demand these documents from all of them.
We are also simplifying the procedure for preparing the documents required to develop areas that are already built up. It will no longer be necessary to prepare a development plan for a plot of land when laying service lines, building roads, power transmission or communication lines.
I think these are real steps towards accommodating the regions and municipalities, which have rightly complained about the confusing and costly territorial planning procedures.
That being said, these decisions come with a clear message. It is time to stop looking for excuses and to stop treating territorial planning as an unnecessary extra. Heads of regions should take personal responsibility for overseeing this issue.
We also need to be in close cooperation with municipalities, which must be given all the necessary methodological help.
Under the Urban Development Code, of course, all territorial planning documents must be in order by January 1, 2012. I urge you to stick to this deadline. It is final.
Coherent territorial planning will allow us to stop dividing land into categories. This is very important, as you know. Manipulating the land categories is one of the most common corrupt practices. Urban development documentation must be put in order, otherwise investors will still be buying a pig in a poke instead of a fully prepared construction site.
This brings me to the second round of our innovations - simplifying the procedure for forming and allocating plots of land. We will prepare the necessary package of legislative amendments before the year is out. Plots of land will be awarded only by tender, with clearly stated exceptions, such as land for schools, hospitals and other public facilities, as well as major investment projects in industry. And we will reduce the number of required approvals for these investment projects, which currently runs into the dozens.
Regions should also use a single-window arrangement in their work with investors. Please do not wait for new legislation to come into effect; there are already opportunities for transitioning to modern, simplified procedures. And, of course, all documents and procedures related to the formation and allocation of land plots should be as transparent as possible. Information on the documents required, processing deadlines and paid services should be accessible to the public on the Internet.
A third important initiative is to simplify procedures for the issuance of construction permits and obtaining official approval from an authorised government agency for paperwork submitted on a project. First of all, the processing time should be reduced to 60 days, down from 90. But this is not all.
Currently, many regions formally meet existing deadlines, but in reality they also repeatedly return the documents to businessmen, requesting additional certificates and permits, which takes applicants extra time and money. Moreover, each additional document resets the clock on the deadline.
Now developers will be able to have their documents fully processed, with all necessary additions and revisions, within 60 day. Officials who fail to meet the deadlines and make applicants return again and again will be disciplined and may even face disqualification.
From now on projects could also be approved by private expert organisations authorised by the government. We will have to set up a system of licensing such organisations. A licensed organisation would have to give its approval before a construction permit can be obtained. These organisations would clearly have to accept more responsibility.
And now my fourth, and final, point. The construction business is currently subjected to all manner of illegal burdens and obligations. These are related above all to connections to power grids and utilities. During recent inspections by prosecutor offices in the Stavropol and Kransnodar Territories, as well as in the city of St Petersburg, it was discovered that many local developers had been forced to finance the renovation of gas distribution networks. This is just one example. There are others.
I can say that it will be prohibited to charge developers fees for any services other than connecting to utility grids, and only at rates stipulated in a contract. It will also be prohibited to impose any other requirements and burdens.
As for joining electricity grids, this service should be provided to developers free of charge. There are relevant procedures and opportunities for that. The terms and conditions for connecting to public utilities should be made known to all bidders on land plots, and these terms may not be subsequently modified. We will introduce tougher disciplinary measures for violations of these rules.
So, as you can see, the proposed reforms are extensive, and we expect them to give the construction industry a considerable boost. However, there are also risks involved. The decisions we have taken could prove ineffective if they are not combined with well-organized work at the level of regions and municipalities. This is why I expect all regional leaders to work tenaciously and responsibly.
As I've already said, even under current laws, many regions have been able to put into action some efficient, easy procedures for working with investors and introduce single-window arrangements. Many have developed territorial planning documents and are holding successful tenders.
What about tenders held here in Volgograd? Nineteen tenders took place here last year. You know how much land was sold? A total of just 1.4 hectares over the whole year! What kind of results are these? Another two tenders have been held so far this year. How much land has been sold? The same amount, 1.4 hectares. At this rate, you'll never be able to get any new housing built here.
Take Astrakhan Governor Zhilkin, for instance - he builds as much housing in Astrakhan, but his city has a population of 500,000, compared to Volgograd's one million.
Yet, as I said, there are regions that have been working quite effectively. The Tyumen and the Belgorod regions, Tatarstan, Chuvashia - these regions are often mentioned among the leaders. It would be great to see this list expanded.
At the same time, the situation in most regions is changing very slowly. Getting official permits and approvals may take years. Let me repeat this, ladies and gentlemen - it takes years...
According to objective findings made by international surveying institutes, construction licenses in Russia cost, on average, forty times as much as in OECD countries. Look, if we carry on this way, we'll end up having no housing construction sector. Forty times!
I believe that before the end of this year, every region of the Russian Federation should prepare and launch a programme to reduce administrative barriers in the construction sector. A realistic programme, not a declaration of intentions, mind you.
We need to carry out a full review of licensing and oversight functions and to get rid of all redundant procedures that put an unnecessary extra burden on businesses. The Ministry of Regional Development must constantly monitor these regional programmes, and we will review results when we assess the performance of government bodies in the Federation's regions.
So let's get down to business. I would like to hear from our host, the governor of Volgograd, first. Please, go ahead.
Anatoly Brovko: Mr Prime Minister, esteemed colleagues, you are quite right. As for housing construction, we commissioned 348,000 square metres in Volgograd last year, and 337,000 square metres in Astrakhan - roughly similar figures though Astrakhan's population is about half that of Volgograd. Or take Krasnodar, where the total area of new housing is 819,000 square metres for a population of 784,000. At present we are actively attracting investments in the modernisation of the construction industry. Last month we endorsed a programme to develop competition in the Volgograd Region from 2010 to 2012, which highlights the problems on the construction market: delays to land allotment and construction licensing; the absence of the necessary engineering infrastructure; lengthy paperwork for connection to the grid and, last but not least, the lack of accessible long-term funding.
It is true that virtually all these problems can be solved by improving oversight and regulation in addition to optimising the provision of state services in town-planning activities, something we have gathered here to discuss at this high level today. There are matters that demand pooled federal and regional efforts.
There are four aspects to this. First comes the preparation and agreement of planning documents at the municipal level. To streamline this, I think the Ministry of Regional Development and the Ministry of Economic Development should introduce a unified approach to drawing up and agreeing documentation, which should include listing relevant documents and specifying their content and costs to regional and local authorities. Regions and cities must receive updated topographic maps with altitudes and infrastructure projects marked.
Second. Information communication systems must be established for urban planning, and the procedures by which land is allotted and construction licensed must be streamlined. The responsibility for maintaining these systems should fall to local governments. To this end they require not only targeted funding support but also help with equipment and in finding a qualified workforce.
The Volgograd regional government is itself actively involved in the formation of an urban information system under this programme. It provides targeted budget allocations and supplies the systems with hardware, software and educational resource materials.
Besides information provision, the speed with which land is allotted for construction, and the licensing of it, are also influenced by the quality of the land legislation and related procedures. Not all town halls are working smoothly on these land issues. Authorisation processes are unjustifiably cumbersome as local governments play it safe, demanding every approval they can think of. This is why it is so hard to draw up a land contract. In order to avoid superfluous agreements, we propose that all the necessary procedures are specified in detail in the law.
Paperwork takes too long to be drawn up - twice the official standard length of time, or even longer. We see the establishment of a network of multi-functional public service centres as the best way forward in this field. This work is actively underway in other regions. Centres like this with a unified information system have opened in the towns of Volzhsky and Mikhailovka. We intend to gather 32 centres based in twenty neighbourhoods and municipal districts into a network in 2012.
Legal acts on the leasing and purchasing of land are already being drawn up online in multi-functional public service centres. They are simultaneously distributed to all administrative bodies for coordination.
Now the interested party receives his paperwork within a week. Software is being developed to draw up construction and commissioning permits and urban planning documents automatically with due account taken for the parameters stipulated by the regulations on land use and construction. We only regret that such regulations for Volgograd were submitted to the State Duma over a year ago, and it has still not passed them, for whatever reason, although these regulations would significantly simplify and speed up construction services. Several problems at once could be settled by pushing a single button.
Third. The issue of developing systems for the independent, non-governmental, expert evaluation of design blueprints. At present, government expertise cannot ensure compliance with urban planning norms and the latest quality and safety standards in certain instances due to the use of outdated construction standards and also because such expert evaluations do not include project checks for compliance with the standards.
It is vital we develop this system of independent expert evaluation. However, we do not expect any improvement in the speed with which such evaluations are carried out unless the civil design code is updated and new technical regulations for this expert evaluation are drawn up.
Fourth. Removing redundant administrative obstacles to connecting new buildings to municipal infrastructure networks. A majority of towns have no set tariffs for this, which is a formidable barrier to construction, especially housing construction.
We propose the setting of clear deadlines for the mandatory adoption of these tariffs and the explicit liability of local government and municipal services for non-compliance with them.
What else hinders town planning and urban construction?
There are several hundred hectares of vacant land belonging to the Defence Ministry and the Russian Academy of Agricultural Sciences in the Volgograd Region. This matter should be noted in the transcript of the meeting, and the relevant federal agencies should take this matter up.
We also propose an extra incentive for housing construction - to legally authorise investment in construction on government lands under an investment contract with the government developer.
Some problems in urban planning and construction are due to imperfections in current legislation. There are major discrepancies between the land and urban planning codes, the law on geodesy and cartography and the new regulations covering topographical surveys.
Problems have arisen with obtaining permits for companies to replace licensing by self-regulation as the Federal Registration Service demands licenses in addition to permits.
The procedure for prolonging construction permits needs to be streamlined, and there are no deadlines for decision making on such permits.
The Volgograd Region actively advances initiatives on amending federal legislation, and has forwarded proposals to the Ministry of Regional Development and the Ministry of Economic Development. Now, too, we are making detailed proposals for the improvement of urban construction laws.
Thank you.
Vladimir Putin: Mr Brovko, why are land auctions so few in your region?
Anatoly Brovko: You are right, there was only one last year. It was a tender for high-rise construction. We have also issued only 12 permits for a total of 209,000 square metres. Two tenders were held this year for a total area slightly less than 1.4 hectares, and seven permits for 60,000 square metres have been issued. If we add all this together, then it doesn't look that great.
I think we should undoubtedly improve our work in Volgograd. I will personally take responsibility for all procedures to ensure they are transparent and clear to the developer. Volgograd townspeople are taking part in this meeting. We can hear firsthand information from them.
Vladimir Putin: Mr Brovko, we have just visited the construction site of houses for military servicemen together. This site is in the geographic centre of Volgograd as you and the construction company CEO told me. Is that right?
Anatoly Brovko: Yes.
Vladimir Putin: So they have recently obtained a construction plot in the city centre. How are such plots allotted? What is the system? Do they start with parking lots? And how does it all come together later?
Anatoly Brovko: As I mentioned, as of today there are no land use and construction regulations, so land is allotted without tenders - just between friends. A businessman who has won a tender and invested 30 million roubles per hectare knows that time is money and rushes to draw up their designs and start building, to be sure he gets a return on his investment. When, on the contrary, he gets the land from an obliging friend, he feels he can leave the land idle waiting for prices to go up and then resell it.
The plot we saw was acquired at an auction for 48 million roubles, which the developer paid for the right to rent it, following which he spent two years on improving the plot and putting the necessary engineering infrastructure in place. He paid land rent for three years and designed the ground plans at his own expense, even though layout design, to say nothing of infrastructure building, is the municipal authorities' duty. So he has only just started construction.
I think the municipal authorities have a duty not to dump these responsibilities onto the developers. They should prepare construction plots themselves at municipal expense. When municipal budget money is spent improving municipal land, city authorities will take a greater interest in monitoring construction work.
Vladimir Putin: The situation with this plot is clear. It was auctioned off, thank god.
The general prosecutor is here and will now take the floor. Tell us how you see this issue. Many plots of land in the Volgograd Region and elsewhere are allotted through shady dealing instead of transparent tenders. People grease each other's palms before the deal and land prices are understated, so the developer gets it at 10% of the standard price. We must put an end to all this.
Or how they have to run hither and thither drawing up the necessary paperwork. The tender is over yet it takes two years to draw up all the paperwork. This is the case in the Vologda Region, for instance. Where is its governor? Mr Pozgalev, this is how things are in your region! Paperwork takes 27 months in the Vologda Region against the national average of six months! How can you put up with this? You're a man of experience, after all.
Vyacheslav Pozgalyov (Vologda regional governor): Mr Putin, there was an error in our last year's report. The figure for today is six and a half months - 190 days, to be precise.
Vladimir Putin: So things are improving?
Vyacheslav Pozgalyov: They are.
Vladimir Putin: Okay, let us get back to Volgograd. Is the mayor here? Tell us about the state of affairs in your region, Mr Grebennikov?
Roman Grebennikov: Mr Putin, I don't think all relevant figures have been mentioned. The figure quoted here concerns successful tenders that have given developers long-term lease rights, and they are implementing these rights. In fact, the total number of auctions is at least ten times greater.
Many builders who had initially intended to take part in tenders withdrew their applications last year with the downturn because they could not afford even to finish previously started projects. That's why the number of auctions was so modest. Regrettably, I heard about this meeting just fifteen minutes ago and rushed here from the construction site ...
Vladimir Putin: It was I who invited you, just as I did your adversary, the chairman of the Business Russia Volgograd regional branch. I would like to hear from him, too.
Roman Grebennikov: Our actions are quite explicit and transparent from this point of view as well. Surely, an overwhelming majority of municipal economies cannot afford to build up the entire engineering infrastructure and fully prepare the land. We have made pivotal decisions in this field to help builders. We have exempted all companies engaged in housing construction from rent. This incentive is valid from the start of construction to when people move in. We have decided to extend all construction permits that expired last year, we extended 54 such permits, plus the 17 permits due to expire in the first half of 2010. There are about a million square metres of housing to finish on longer-term contracts. I stress once again that it is not that important now to hold as many tenders as possible, though it is also important. The critical problem is that our Volgograd builders do not have the resources needed to complete current full-scale construction.
Vladimir Putin: So you link this problem, including the problem of poor housing quality and slow construction rates, to related problems, such as the diminished potential of the construction industry. Am I right?
Roman Grebennikov: They really have no money for long term projects at all. That's really how it is.
Vladimir Putin: I see.
Roman Grebennikov: One businessman who won a tender for a land plot back in 2007, got entangled in red tape and now still cannot afford to start construction. This is a pivotal problem.
Vladimir Putin: Mr Grebennikov, how is construction going?
Roman Grebennikov: Mr Putin, I did not expect any such discussion today but, in any case, thank you for the trust you put in me. I would like to phrase the matter a little differently. As you know, the Volgograd Region has a developed construction industry, much as do our neighbouring regions. The situation is ...
Vladimir Putin: You understand that I don't want to interrupt Mr Grebennikov but I have to. Is the construction capacity in Volgograd at the root of the problem?
Roman Grebennikov: Certainly not.
Vladimir Putin: Offer good terms, and people will cover great distances to work with you - from Moscow, St Petersburg and Astrakhan, where construction is okay! They will come from anywhere if the conditions are favourable, there is no red tape and if they are sure you are positively minded towards investors.
Roman Sozarukov (head of the Volgograd branch of the Business Russia organisation): You are absolutely right, Mr Putin. I am in complete agreement with you. If only Volgograd could offer proper terms... But today, as you have said, the allotment of land for private housing and other construction is so corrupt in this city that the most lucrative plots always attract schemers. The people who should have got them from the start only get them after they have been resold three or four times. Municipal land is overtly, unashamedly trafficked. I detailed all this corruption in our appeal, which was signed by over 20 public organisations. I can give you several examples. Entrepreneurial and other public organisations were represented in the so-called land and architecture commissions three years ago, before the change of municipal government. Four months later, we were all dismissed as soon as we expressed our indignation (and this is no overstatement) at the corrupt methods applied by city hall. We appealed to the prosecutor general and to the regional prosecutor: the prosecutor's offices made 257 representations concerning the city hall on our appeals alone.
The situation really is quite paradoxical: it takes a minimum of two years to formalise the land purchase. But when a transaction involves people close to a company, this term falls to six to eight months. In blatant breech of the regulations the city has itself made. There are no tenders. Why? Because it is not profitable to sell it at auction, it could end up as anyone's. And why doesn't anyone buy those plots that are put up for auction?
They are real blank slates, completely lacking in infrastructure but which come complete with encumbrances. The initial price is 40 million roubles for a plot whose market price is 10 million, at most. You can put it up for auction 10 times in a row and still no one will buy it. Infrastructure development requires an investment of 1.2 billion roubles as it is but city hall says you first have to carry out a land survey and design the layout, and then come grovel before us and grease our palms. That's why there is no auction system here: it is utterly ruinous.
Private businesses have been ousted from the municipal economy of Volgograd over the past year or 18 months. It is impossible to get connected to heating, water supply and sewage disposal since they became municipal concerns. You have to pay tariffs and offer no end of bribes to the relevant offices before your enterprise can be connected.
The site you have visited is the one that made it after two or three tough years of negotiating all kinds of obstacles. We discussed this problem with Igor Artemyev (head of the Federal Antimonopoly Service) at the public council meeting today. I laid bare all these details, and other public activists, including those in construction, supported me.
You know what is the most frightening thing in Volgograd now? Construction and other entrepreneurs who "have the cheek", as our adversaries put it, to oppose city hall suffer arson attacks on their cars. There is no end of threats, some directed at me. It will be no surprise if my Volgograd-based contracts are severed after my speech here today.
Land and municipal property leases are terminated unilaterally. This is what things are like. We have submitted our appeals to Mr Brovko to circulate them if he can. Many public organisations have signed these appeals.
We have documentary proof of every word we utter and every initiative we advance. I am sorry I have gone on for so long. Putting it in a nutshell, what's going on is blatant lawlessness.
Thank you.
Vladimir Putin: I have invited the prosecutor general to this meeting on purpose. He is across everything that is said. His office has carried out thorough investigations countrywide and delved deep. I am very grateful to them.
However, some regions require further investigation. We will keep an eye on your rental and other contracts, should anyone sever them on whatever grounds.
Go ahead please.
Roman Sozarukov: Please, Mr Putin, I have an earnest request to you. The city really looked forward to your visit - entrepreneurs as well as ordinary people. Several thousand were ready to rally...
Vladimir Putin: No more public rallies, please! Enough is enough. There are many other ways to settle these issues, and they work. Let us go forward in this direction.
Roman Sozarukov: Mr Putin, Mr Grebennikov is in charge of your regional liaison office on the United Russia party's behalf. Whenever we appeal to the leaders of this federal political party, we receive only non-committal replies. Please send an auditing commission from the party and federal auditing bodies to Volgograd. Thank you very much.
Vladimir Putin: This is possible. During our investigation we found some quite remarkable things among applications for construction plots. According to the prosecutor general's office, one town hall in Adygea has failed to consider 958 such applications, believe it or not!
Go ahead, please.
Aslan Tkhakushinov (president of the Republic of Adygea): Mr Prime Minister, ladies and gentlemen,
The Republic of Adygea regards the removal of administrative obstacles in the construction industry as the backbone of social and economic development across the region and the entire country.
The government of the Russian Federation approved an action plan a month ago for the improvement of regulatory activities, licensing and public services in urban construction. I consider this plan timely and necessary. It will help to take the edge off the problem this meeting is discussing, and will provide a firm basis for the further development of the construction industry.
The construction industry in my republic has seen positive changes over these past three years. Last year 7.8 billion roubles was spent on building 125,700 square metres of housing - 50% more than in 2008. The industry retains rapid development rates this year. The republic's executive focuses its attention on compliance with the law in this sphere, and responds to every practical instance.
An investigation by the federal prosecutor general's office revealed many transgressions by Adygean local governments. I will say the following about the non-observance of time schedules by the Yablonovskoye municipal authorities in the consideration of over a hundred applications for project commissioning: the mayor has been dismissed for numerous transgressions. A new mayor was elected in October 2009, and all these failures were remedied.
Regarding disclosed transgressions. There were 958 instances of the delayed consideration of citizens' applications for land plots in the Takhtamukai District. I should explain that the applications are analysed because they do not all concern the construction of private housing. The district borders on the Krasnodar Territory, so there are more people out to secure plots to sell when prices rise than there are people who honestly intend to build homes.
However, with regard to applications for land in the Takhtamukai District, I feel obliged to note that federal legislation does not currently stipulate the constituent entities' right of control over local governments in matters concerning land. This does not allow due influence in the removal of administrative obstacles. That is why we consider it expedient to delegate the corresponding rights to the constituent entities of the Russian Federation.
The final question from the federal prosecutor general's office concerned the non-fulfilment by local governments in the Republic of Adygea of their duties to introduce the information system for urban construction. All failures have now been remedied, and all information available on paper has now been computerised.
Thank you.
Vladimir Putin: Good. Thank you. I mentioned the Astrakhan Region. The construction industry there is doing rather well. However, Mr Zhilkin, you do nonetheless have quite a few problems. It takes from one to four years from the date an application is registered for it to be considered and a permit issued.
Alexander Zhilkin (Astrakhan Region governor): Regrettably, Mr Putin, this is the case. However, the prosecutor's office drew these incidents from our own investigations because we cannot punish, let us say, a mayor. We have to submit his file to the prosecutor. We have carried out about a thousand investigations this year alone. We drew up our own regulations which have been endorsed today. We will have it all online by the end of the year. The municipal authorities are resisting of course, because the management of non-distributed land belongs to them alone. We regional authorities do not control even a tiny patch of land.
You have advanced several proposals in your address. If they are approved quickly, we really make rapid progress. You have mentioned an instance from four years ago. It is true. The Privolzhsky district governor was dismissed, naturally, and criminal proceedings have been launched against him. But then, he has sufficient proof that his transgressions were unintentional and that he was the victim of circumstances. There is a subtle nuance here, which I think I should address to Mr Basargin (Viktor Basargin, Minister of Regional Development). In addition to auctions, the Land Code contains a procedure governing the choice of a plot of land. This is a loophole for corruption, there is no doubt about it. Suppose I go to the municipal head with a letter: please give me a plot of land to build a sauna on. They will then take 30 days to decide whether or not to issue me with a document on which I will then have to collect 12 signatures. Previously 29 signatures were needed. Last year we changed all that, but we could not get any lower than 12 signatures. The chap goes away and there is no available information as to how long this process of getting approvals should take. This leaves a gap during which anything can happen. The municipality serves no reminders on that person and, at the discretion of that municipality, the plot of land may be given to somebody else in a month, two or three months. Meanwhile the guy could still be collecting signatures. And when he returns with the signatures a year or a year and a half later, the head of the municipality tells him: you've missed the boat, I've given this land to somebody else. And there is no way a municipal official who behaves like this can be held to account. I think corresponding articles should be introduced into the Civil Code and even, I think, in the Criminal Code so punishment can be administered.
You know that for three years now we have had a "one-stop" system called the Multifunctional Centre. It brings together 30 organisations from the federal, regional and municipal levels. Municipalities were the fiercest opponents to the introduction of this service because 99% of approvals are at the level of municipal services, while the regions are responsible for only one, the environmental service. We provide environmental approvals, and even then not for all sites. At the federal level we have only the Emergencies Ministry and the Federal Service for Environmental, Technological and Nuclear Supervision, that's all; the rest is in the ambit of the municipalities.
Because I conduct monthly meetings on construction in the Astrakhan Region, I must tell you honestly I have to subject everyone to administrative pressure to ensure they do not find a way of wriggling out. That centre is now working normally. We had problems because as the pilot region we had to include electronic - online - services in the construction sector. That also caused delays. So I would like to see all your proposals as soon as possible as government decisions and, where necessary, as State Duma decisions. Otherwise ... I can give you an example because we continue to work on old and dilapidated housing stock - as I have shown you - 44 hectares of such housing is to be demolished. I told City Hall three years ago, hands off, this is slated for demolition and comprehensive redevelopment. I worked out the programme, communications, all to be financed from the budget. And when I gave the go-ahead this year for demolition to start and put the land up for auction, everybody was clear that what we have here is an urban development plan. They said everything was fine and the land was not under any encumbrance and then I suddenly learn that half the land has already been allocated. How come? Who did it? When? Retroactively? I took them to task and said I would put them behind bars (yes, I made so bold as to threaten to put them behind bars, although of course that is outside my jurisdiction), then there was a lot of backtracking.
So, I admit that for the time being we are merely rectifying this situation, but it is already not quite as it is described in the information we submitted to the Prosecutor's Office. Because we do not have this kind of leverage, which is maybe for the better. For if we did have it, who knows we could have more incidents.
Vladimir Putin: What do you mean "maybe for the better"? You should either have it or not if it is unnecessary.
Alexander Zhilkin: I would like to say that such leverage obviously should exist, because when you are responsible for the whole region, and this is only right, the governor has to be responsible. But when all I can do is wag my finger and watch as he just smiles, and maybe he follows or maybe he chooses not to follow my directions. Because in general it is the mayor, including the mayor of Volgograd, who disposes of federal land. The governor does not come into it. But when I tried to take over several large plots in Astrakhan, I was surprised that even those who opposed the Mayor of Astrakhan, the communists, voted against it.
Vladimir Putin: Mr Zhilkin, you have said you have no levers of influence, nevertheless you have mentioned this municipality where shortcomings have been exposed. You told me the person in question has been fired.
Alexander Zhilkin: He has.
Vladimir Putin: So there are some levers?
Alexander Zhilkin: Yes, there are.
Vladimir Putin: You should use them, you see? I agree that this is the purpose of our meeting today, to discuss this.
We have gathered to discuss what we need to do together to reduce bureaucracy and red tape in this important area of our work. This is one of the key areas of our work, providing people with homes, the building sector. So many people are engaged in this sector, and the economy depends heavily on it. And we... look, this man came here from Africa and he works more efficiently than some of our own officials. I deliberately invited him to attend this meeting in order to put you to shame. He built a road quite independently. Meanwhile in Adygea they sold a plot of land that costs 300 million for 8 million - and nothing happened. Well, Mr Chaika (Yury Chaika, Prosecutor General of the Russian Federation) has opened a case against the man concerned, but the outcome remains uncertain: I am afraid that he will get away, and this is the problem.
Vyacheslav Pozgalyov: As a follow-up to what Alexander said, if you consider the information contained in the audits that they have distributed to us, the bulk of the irregularities (90%) exposed by the Prosecutor's Office and the Ministry of Regional Development are at local government level.
You said in your introductory remarks that corresponding materials will be prepared. We have one request for you. When it comes to the anti-corruption clauses in our regulatory acts, one of the conditions is to minimise "wriggle room". So we ask you to introduce amendments to the Urban Development and Land Codes to include a clear list of procedures that fall under the competence of local government and indicate the deadlines. Then it will be possible for valid claims to be presented.
Otherwise we will see all kinds of shenanigans starting up that will be very difficult to control. At the start of the meeting you reproached the Volgograd Region for being too slow. Indeed, we have spent a year sorting this out and now we meet the Russian nationwide parameters of 6.5 months. We can make it even shorter and indeed we will. But all this is only achieved, as Alexander Zhilkin said, exclusively by force and by intimidation. There are no official levers of influence. If the amendments we are discussing become law, then there will be no ambiguity and we won't have to intimidate anyone. Everyone will be playing by the same rules.
Vladimir Putin: I agree. I repeat, that is why we have gathered here. I told you about what is currently planned. As for the innovations proposed by Alexander Zhilkin, these issues are already on the State Duma's agenda for its autumn session. We will move forward on that. But there are some things that you can do independently even now.
Mr Kara-Ool (addressing Sholban Kara-Ool, the Prime Minister of the Republic of Tuva), why is nothing happening in my beloved Tuva, in terms of organising the "one-stop" process? When will this work begin?
Sholban Kara-Ool: Mr Putin, that is indeed true. Construction is one of the most neglected industries in my republic. According to available statistics, the Republic of Tuva ranks somewhere in the middle as regards all these problem sectors. What is positive today is that we have managed to make a start on housing construction, especially the building of individual homes. We have taken certain measures. For example, in rural areas we allowed certain categories of people to receive 150 cubic metres of timber as building material practically for free, for 3,000 roubles.
Or take territorial issues. The main problems connected with getting a permit for construction involve issues that hinge on our financial resources. For example, territorial planning. The Urban Studies Institute won the competitive bidding and we paid them 16 million roubles to carry out this important work. But frankly, the first hearings with the government were incredibly superficial, they just wanted to foist this document on us so that it would be put into effect. Eventually we turned it down and the Institute vanished. That is also a problem that we see in the building industry.
Or take another problem, self-regulating organisations. This is probably a very sound idea. But on the other hand, we understand that at least 100 businesses need to be registered in order to create one of these organisations. In Tuva there are only 68 business entities. Of course it's a shame that there are so few, but at this stage we are not in a position to set up a self-regulating organisation. So on all the issues connected with regulating these activities we have to turn to the Republic of Khakassia, which is 400 km away from us. And there too we encounter problems with one of these self-regulating organisations which may or may not give its approval.
So I would like to thank you, Mr Putin, for including me in this government commission. I understand that we face many problems in the construction industry in our republic. For example, Mr Shishkin (Andrei Shishkin, Deputy Energy Minister of the Russian Federation) knows all the problems we have connected with energy.
While this may be a bit of an exaggeration, but even building a simple kiosk in our capital, Kyzyl, requires my personal endorsement. I hold a conference where I call on people in the energy sector to create reasonable conditions for developers, not to mention housing construction and large houses.
With your permission, Mr Putin, I will write a memorandum on the problems that we face in Tuva. Of course, much should be ascribed to our own sloppiness. I am aware of this and we will try to make amends. But many of our problems are connected with a shortage of resources.
Vladimir Putin: Yes, prepare a memorandum and I will take a close look at it. But it would not be bad if you prepared at least one document on territorial planning. The Republic of Tuva has not passed a single document on territorial planning.
Sholban Kara-Ool: Understood.
Vladimir Putin: Please do, this is not simple, but not all that difficult either, you simply have to put a little work into it. Then it will become one of the main conditions underpinning development in the construction sector, in the broadest sense of the word in Tuva.
In addition to unregulated procedures, we complicate matters for ourselves by our own actions. Mr Morozov, from the Ulyanovsk Region. Why are they imposing additional services in your region?
Sergei Morozov (Governor and Prime Minister of the Ulyanovsk Region): Like my colleagues, I can cite certain problems connected with some officials. Yes, we are aware of wrongful practice when, while state audits are underway, they suddenly start suggesting they could speed up their analysis of project documentation in exchange for extra remuneration for so-called "additional services".
As soon as this became known, including as part of the audit, the strictest measures were taken: we dismissed not only the head of the housing and utilities construction complex, the minister, but also the deputy prime minister. Today I can confirm that such things no longer take place. Of course, it is a disgrace, but I hope that we will not see any repeat of it.
We are keeping a very strict eye on this. Today, all the time periods of state audits are reported to me every week and there has already been an improvement: the results of the state audit for non-residential premises are available within 39 days on average and for residential buildings within 23 days. But there will be no more such occurrences, Mr Putin.
Vladimir Putin: I very much hope not. I understand the situation emerging in other regions in terms of the relations with major municipalities, but still it is outrageous that 446 irregularities have been noted in the Ulyanovsk Region in one year. The Mayor's Office of Ulyanovsk took almost eight months to issue a construction permit to a businessman.
Sergei Morozov: Mr Putin, we had one city mayor who was something of a remnant from the Soviet times. He liked to say that he had been the city head in the Soviet times, then came a period of turmoil but in the early 2000s he was reelected, however he kept some of his old habits. You have to arrive at his office at 5 a.m. (he likes to start the day early) and fawn on him in order to persuade him to visit the construction site. Otherwise no progress is possible. We decided to do everything to make sure that in the regional elections that took place in March no such mayors were elected, and he is no longer mayor.
Vladimir Putin: We need to take this issue very seriously. Otherwise, I repeat, the construction sector will not develop and there will be no solution of the housing problem for the people of Russia, unless we organise work along normal lines here.
Mr Crima (addressing Joachim Ritu Cabi Crima), do you prefer working in Africa or in the Volgograd Region?
Joachim Ritu Cabi Crima: Thank you very much for the honour you have bestowed on me. I think it is not the question of whether it is better to work in Africa or in Russia. Everything depends on the person. If a person really wants to live better he has to strive constantly for something.
Vladimir Putin: Excellent! Thank you very much. What Mr Crima said makes a lot of sense. If we want to live better we must work better. That is the bottom line. But in order to work better we must understand what is happening. I urge Yury Chaika to carry out additional investigations and look into all the complaints that have been voiced.