Prime Minister Vladimir Putin, who chaired a meeting at the Energia Rocket and Space Corporation, spoke about state support for the development of the rocket and space industry. He said that allocations from the federal budget amounted to more than 18 billion roubles in 2009. He added that in 2010 the industry would receive 67 billion roubles for the implementation of the Federal Space Programme and 27.9 billion roubles for the Glonass global navigation system.

He also said that the government would support space projects such as the construction of a large-scale Vostochny space centre, for which the government will allocate 24.7 billion roubles in the next three years.

Vladimir Putin said in his speech that Russia would continue to develop international space cooperation. The next Russian-American crew will depart for the International Space Station in September 2010.

"The deployment of the Russian section of the International Space Station should be completed by 2015. The programme includes the introduction of a multipurpose laboratory, a node and two energy modules," Putin said when speaking about Russia's contribution to the ISS project.

The prime minister emphasised that Russia had always been a trailblazer in space exploration and he expressed hope that the country would remain a leader in that sphere.

"Our goal is to reliably protect national interests in space and to strengthen Russia's position in the global market of space services," he said. "In short, we must become really competitive."

Vladimir Putin's opening remarks at a meeting with space industry leaders:

Good afternoon, ladies and gentlemen.

We have just learned about the process of creating Russian space systems and seen prototypes for today's and even tomorrow's space technologies.

I would like to thank the employees of the Energia corporation. It is important that we uphold the traditions of those who built Earth's first artificial satellite and the first Vostok rocket. But we must also further these traditions in a substantial and serious way, in a way so that they have a promising future.

Director of the Federal Space Agency (Roscosmos) Anatoly Perminov will tell us about the latest achievements in the field of manned launch vehicles. But most importantly, today we must concentrate on future challenges and plans.

The strategy to build up the space rocket industry through 2015 calls for the industry's large-scale technological modernisation. We just heard from Mr Lopota (Vitaly Lopota, president and chief designer at the Energia corporation). He told us the timeframe in which this was accomplished in the previous period.

But it is obvious that only after achieving this technological modernisation can we establish innovative production that meets Russia's strategic interests and ensures the success of long-term programmes in the space sector, including those related to national security.

The space rocket field has been one of the state's priorities since its inception. Space has always occupied a special place for us, and I hope it will continue to do so. And so, despite the difficulties we face because of the downturn, the space sector received all the money originally allocated, in accordance with the approved programmes. Moreover, last year we provided government support for companies in this sector that were in a difficult situation - funds were provided to increase companies' authorised capital, interest rates on favourable loans were subsidised and government guarantees were issued. More than 18 billion roubles were allocated last year from the federal budget for these purposes.

This year, considerable resources will once again be allocated for the space and rocket sector - 67 billion roubles for the federal space programme and 27.9 billion roubles for the Global Navigation System programme.

We expect investments in the domestic space industry will yield considerable benefits, serving as a catalyst for growth in related manufacturing sectors, which will in turn help resolve many socio-economic problems.

Incidentally, Mr Lopota also showed us new housing facilities under construction for young professionals and other Energia professionals.

We need not only modern technology and equipment, but also new space facilities such as the Vostochny cosmodrome. We adopted a resolution to build this facility back in 2007, when a presidential decree was signed. I am counting very much on Vostochny becoming the first national civilian cosmodrome, guaranteeing Russian independence in space operations.

Let me share some good news with you. Late last night, in the dead of night or perhaps early in the morning, the government adopted a resolution to allocate 24.7 billion roubles to start construction on the comprehensive Vostochny space centre for the next three years, which will allow us to lay the necessary foundations for the next stage after this period.

The space centre will involve a significant number of projects. We will build a launch pad, an airfield - an airfield is needed - and a production facility - we all know what it will make. It's a whole complex.

It's important that the new space centre be able to handle practically all promising space projects, including manned launch vehicles, which will launch a new generation of spacecraft and future interplanetary spacecraft. In addition, the construction and operation of Vostochny cosmodrome will help build up industry in the Russian Far East, considerably increasing the region's attractiveness for investment.

Naturally, we will continue to push for the broadest possible international cooperation. Russia was one the pioneers in this field, as it was in the overwhelming majority of space research and exploration projects.

We hope to hold on to this leading position. The joint flight of the Soviet Soyuz spacecraft and American Apollo spacecraft took place exactly 35 years ago, and represented not only a real technological breakthrough (which is indeed the case, because it was necessary to integrate different technical and technological systems), but also one of the greatest symbols of détente and the fundamental changes in relations between our countries.

We acquired a wealth of experience at that time that would later prove useful in designing the integrated systems for our Mir space station and its shuttles, and subsequently the International Space Station. The next Russian-American crew will be sent to the International Space Station in just two months, in September.

By 2015, the Russian segment of the International Space Station should be entirely in place, which includes manufacturing and launching the multipurpose laboratory, another node and two energy modules.

In early 2011, the Russian Soyuz launch vehicle will start operating at the ESA's French Guiana Space Centre in Kourou. Later, the Phobos-Grunt Russian interplanetary spacecraft will put a Chinese space probe in orbit around Mars as part of our programmes to explore deep space.

We welcome transparency and trust in this field. I recently signed an executive order resolving all issues regarding access to the Energia facilities for specialists from NASA, ESA, the Japan Aerospace Exploration Agency, Boeing and Trident Space. These specialists will work with their Russian colleagues to provide operations support for the International Space Station.

We also adopted a similar resolution with regard to our Ukrainian friends representing leading Ukrainian firms and research centres. They will take part in the assembly and testing of the Soyuz and Progress manned spacecraft. Very soon we will meet with Ukrainian leaders to discuss the future of our continued cooperation in this field. This represents further progress in the process of restoring Russian-Ukrainian cooperative ties in high-tech sectors, including the field of space technology.

Let me be clear: there are lots of plans, but in order for them to progress beyond the planning stages we need serious effort. And not only on the part of the government, which is already extremely attentive to the needs of the industry.

Space industry firms and industrial enterprises need to improve the quality of the products they manufacture considerably, and strictly adhere to the deadlines set for fulfilling orders; in short, they need to fix the whole technological process. Everything we say today at Energia convinced us that all of these goals are certainly attainable.

Once again, our objective is to provide our national interests in space and considerably strengthen Russia's place in the global market for space services. In short, we need to be truly competitive. And the situation in global markets in this field is developing in such a way that we have every reason to believe that we will achieve this goal. This applies to both the situation in global markets and our current resources and abilities.

Mr Perminov, if you please.

Eighteen companies have received targeted financial assistance so far this year. Thanks to that assistance, none is now at risk of insolvency, and none has had problems making payroll on time.

Vladimir Putin: What are average wages here at Energia? Thirty thousand? Twenty thousand?

Energia CEO Vitaly Lopota: Thirty-one thousand.

Anatoly Perminov: Production has increased every year recently, and the increase exceeds national figures for both industry as a whole and the defence industry.

As for the development strategy and the implementation of the measures we've discussed today, we've seen qualitative improvement in all indicators.

Moreover, we intend to increase the percentage of the production capacity we use to 70% by the year 2015. Moreover, the percentage of innovative products should reach 55% of total production, and the percentage of products manufactured for industrial use should increase significantly in the 10 years. Our ultimate objective is to carve out a solid niche of up to 15% of the world's space services market, the market Mr Lopota discussed earlier today.

One major objective that you set for us and that we are now implementing is to modernise production. We view modernisation as the basis for increasing the quality and reliability of products, and hence their competitiveness. Today we are spending 20% of the money allocated for this sector for these purposes.

In the upper right-hand corner, you can see a graph showing the increase in fixed capital investment. This investment continues to grow, year after year, which has made it possible for us to manufacture world-class hardware and guarantee production for targeted federal programmes.

Modernisation is especially important for manufacturing hardware for manned missions. It has helped us double the production of manned transport spacecraft within two years' time. And with the termination of the American space shuttle programme, Russia is prepared to take over shuttle services for the International Space Station.

Our increased capacity will allow us to address this issue. One of the objectives you've set before us today is to develop a new generation of piloted spacecraft.

Vladimir Putin: Are you addressing the financial issues that you have with your partners.

Anatoly Perminov: As far as financial issues, the issues that were addressed in the Federal Space Programme... There's one issue that you mentioned today that is yet to be resolved. Everything has been planned out, taking account of the big picture, the best delivery vehicles.

Vladimir Putin: So, what facilities do we need to build at the Vostochny Cosmodrome?

Anatoly Perminov: A launch site. Launch facilities on the left and right, and all the necessary technology.

Vladimir Putin: A runway for the airfield...

Anatoly Perminov: A runway for the airfield, exactly.

Vladimir Putin: A facility to produce nitrox.

Anatoly Perminov: Since we'll be implementing the hydrogen stages there, there should also be a hydrogen production facility.

Sergei Ivanov: Two testing facilities...

Anatoly Perminov: This involved advanced technical solutions. Russia is and will continue to be a leader in this field.

Vladimir Putin: A road, a railway...

Anatoly Perminov: Roads, a railway, a motorway...

Vladimir Putin: How many people will be working there, presumably?

Anatoly Perminov: We have significant work experience in this area in South America and South Korea. This year we will finish construction on our section of the Soyuz 2 launch facilities in French Guiana. And we've finished a project in South Korea. There have already been two launches there.

Thanks to your previous decisions, we'll be able to draw on the expertise we've gained working with the best, world-class technology while developing the new site.

Naturally, this won't be a huge facility like the Baikonur Cosmodrome, which was built in the Soviet era. It will be a compact, less costly, less expensive...

Vladimir Putin: ...yet modern and technology-intensive facility.

Anatoly Perminov: Absolutely. Complete with social infrastructure and a housing compound with all the necessary amenities.

Vladimir Putin: How many jobs will this construction create? And how many people will be employed at the facility itself?

Anatoly Perminov: Based on previous experience, 5,000 to 12,000 people will be directly involved in the construction, which of course will vary depending on what is being done at that time. There will be maximum 30,000 from time to time.

Sergei Ivanov: Mr Putin, the location for the facility was chosen well. There's already a railway, and the stupendous Chita-Khabarovsk motorway will be finished soon and run right by the cosmodrome. We won't need additional capital investment in infrastructure, except in the airport.

To be continued...