16 march 2011

Prime Minister Vladimir Putin meets with President of Bashkortostan Rustem Khamitov

The two officials discussed large investment projects currently underway in Bashkortostan, its infrastructure as well as the socio-economic situation of the republic in general. In the opinion of the prime minister, if all such projects are a success, Bashkortostan is poised to reaffirm its reputation as one of Russia's leading industrial centres.

Transcript of the beginning of the meeting:

Vladimir Putin: Mr Khamitov, I suggest that we discuss three issues today. First, I would like to hear about the progress of your large investment projects. I am referring to the Novoil refinery in Ufa. They have two good projects: a 1.7mln ton hydrocracking unit worth 7.5 billion roubles and a delayed coker unit worth 6.5 billion roubles. Next I would like to discuss the construction of a thermal power station worth 12.8 billion roubles and the building of several housing complexes worth 4 billion roubles. Next I would like to hear about projects in construction materials: the 2.8 billion rouble insulation plant being built by the Agidel company and the 8.5 billion rouble integrated steel mill being built by Belstal.

Second, I suggest that we discuss any policies related to these projects and infrastructure projects, such as the Ural and Volga highways or the overhaul of runways and lighting equipment at the Ufa Airport.

And finally, I would like to talk about the current socio-economic situation in Bashkortostan. If all these projects are successfully implemented, which I do not doubt, Bashkortostan will once again reaffirm its reputation as one of Russia’s leading industrial centres.

Rustem Khamitov: This is certainly true Mr Putin. We have indeed embarked on several very large projects.

First of all, I would like to report on the planned steel mill in Beloretsk under the single-industry towns support programme. This is a highly interesting project and involves a local deposit of high-alloyed iron ore. The new plant will generate about 2,000 jobs in the first phase of the project. The project will be financed through Vnesheconombank. The first phase will require [an investment of] 8-8.5 billion roubles. The proposed second stage will require more investment – about 10 billion roubles. It will be a highly sophisticated modern plant for producing cast iron, which is in high demand in industry today.

As for Bashneft’s projects,oil refining, petro-chemistry – this is a truly significant programme planned for a five-year period with total financing amounting to 100 billion roubles, including renovation, updates, and new installations with a refining depth of up to 90%–95%. This is the most advanced and challenging project in the republic today.

I think that both Bashneft and Gazprom, which also implements innovative projects at its Gazprom Neftekhim branch, will be able to honour their obligations. We are monitoring this work, and it is going on quite successfully.

Vladimir Putin: What stage are you at now? How much work has been done?

Rustem Khamitov: You have already cited this year’s figures. About half of what was planned for this year has already been accomplished, and, without a doubt, we will open these facilities this year.

Vladimir Putin: Great.

Rustem Khamitov: In addition, we are building new housing. Last year, the republic built about 2 million square metres – 2,010,000 square metres, to be exact. We are among the five biggest builders. The plans for 2011 are also challenging. We are attracting resources, both on loan and from the budget, and are working to reduce the mortgage lending rate. This year, about 500 million roubles was allocated to reducing the mortgage lending rate and about 1 billion roubles will be added to that over the course of the year, which will allow the rate to settle at 8%–9%, which is good for housing construction. We plan to build at least 2 million square metres of housing.

In addition, RusHydro, Alstom, and the government of the Republic of Bashkortostan are working on a joint project to build a large technology park that will be engaged in energy efficiency and energy conservation, as well as a plant within this technology park that will produce new-generation hydro turbines. These are 15, 20, and 30 megawatt units, which is new for our industry. It is also a very interesting and original project.

The gross regional product in our republic is about 800 billion roubles, and the successful completion of these projects will help increase this figure to 1 trillion roubles. This is our task, and we are going to achieve it.

Vladimir Putin: Great. What about the infrastructure?
Rustem Khamitov: What about the infrastructure? An important highway Moscow-Samara-Chelyabinsk passes through our republic, and this year we will spend…

Vladimir Putin: 1.4 billion roubles…

Rustem Khamitov: 1.4 billion roubles. We will also be given an additional 1.5 billion roubles, and we are extending this highway to four lanes (even six lanes in some sections) within the Republic of Bashkortostan in order to ease traffic on this important transport artery.

Vladimir Putin: What about the Volga highway?

Rustem Khamitov: We are also extending the Volga highway. We are currently expanding a part of the road and will build a bridge across the Belaya River to ease the flow of traffic and provide better conditions for transportation.

Vladimir Putin:  The scale of the work at Ufa International Airport is smaller. Still, road and runway surfaces must be repaired and the lighting facilities updated. What is the overall state of the airport?

Rustem Khamitov: There are two runways at the airport, one of which is unique: it is four kilometres long and can service planes weighing up to 250 tons. This runway is now under reconstruction. About 250 million roubles were invested in it. This year, we will grant this runway second category status, which will permit planes to land on it in any weather conditions.

Vladimir Putin: Good. Now for the social and economic situation in general.

Rustem Khamitov: The republic showed quite good results in 2010. Increases in industrial production amounted to 114%. The first two months of 2011 prove this trend. The work speed is the same, and, properly speaking, all plants, all enterprises, and the whole industry – oil production, oil refining, petro-chemistry, the chemical industry – are working smoothly and without problems. The situation in the oil extraction and refining industry is quite good. Mechanical engineering is also developing quite successfully. Associations that produce engines for various types of planes are very busy. In particular, Kumertau Aircraft Production Enterprise, which produces helicopters,will double its output this year.

The food processing industry is also doing well. We are attracting investors and building new enterprises. As for those industries that are still poorly developed in our republic, such as the forest industry, we also have good projects, good figures, and good investment proposals.

Vladimir Putin: Did you discuss your plans to modernise the regional healthcare system with the Ministry of Healthcare and Social Development?

Rustem Khamitov: Yes, we did. We are among the leaders, and our programme will soon be approved. The ministry has taken no issue with it, and all the problems have been resolved.

Vladimir Putin: Good.