17 june 2008

Prime Minister Vladimir Putin visited the main computer center of the Russian Railways (OAO RZhD)

Vladimir Putin

Meeting with RZhD President Vladimir Yakunin

"Railways will open up new regions where they did not exist before. By way of an example, I can say that railways will come to such Siberian regions as Altai, Yakutia and Tyva – this is very important for the development of these territories and for improving people’s lives."

Russian Prime Minister Vladimir Putin talked with RZhD President Vladimir Yakunin and met company veterans and young employees. 

During the talk Mr Yakunin expressed concern over the shortage of rolling stock, as well as over the practice of some metallurgical companies to use growing world prices to justify hiking prices for their goods on the Russian market. Mr Yakunin said he believed, this situation was the result of the emergence in the Russian market of olig-opolic non-government associations, who try to use world prices as a pretext for raising domestic prices while benefiting from local prices for power supplies and railway services that proceed from local conditions.

Vladimir Putin had this comment:

It is partly true that we live according to our domestic conditions. But it is also true that we are increasingly becoming a part of the world economy and in one way or another, depend on the processes that take place in the world markets.

As for monopolistic activities - we discussed it with you when looking at the exhibition you have organized - this is an area of activities that should be regulated by antimonopoly laws and the Russian Government's antimonopoly agency. If slip-ups occur there, as they sometimes do, we should simply react more promptly. On the other hand, Russian Railways is also to some extent a monopoly.

You have mentioned the problem of rolling stock, but if private investments are to come to this sphere of activity, as you would like them to, you as a natural monopoly must ensure equal access to the services rendered by your dispatcher division. So far this has not always been the case. So, in criticizing some monopolies, you should not forget that acting from your end you may yourself exert a similarly negative impact on the development of the market.

As regards the company's own performance, Vladimir Putin praised it, noting in particular the following:

The situation within the company is developing positively. We can see this from the indicators. I would like to thank you for fulfilling the instructions you have received. I am referring not only to the preparation of the strategy for 22 years ahead to 2030, worth nearly 14 trillion roubles, which is very important in itself, but also to your practical work. We have looked not only at the cars but also at the diesel and electric-driven locomotives. That in the four years since we set this task to the manufacturers, they have managed to translate it all into hardware which is already working and functioning - that is a very important element of the whole activity. I very much hope that the goals and tasks we set ourselves under the Strategy for the Development of Railway Transport of the Russian Federation to 2030 will be implemented at an even pace. Only then can we achieve the result we count on: cutting power consumption, increasing the length of railways, creating new stretches where they did not exist before but which are very necessary for the economy, and all the other positive components of the whole strategy.

I think that in a direct dialogue and in contact with the Government, above all with the Transport Ministry and with the corresponding Deputy Prime Minister who is in charge of this sphere of activities, we are well able to and must implement the whole Strategy.

I would like to ask you to convey my thanks to the professional community, to the expert community which has worked to draft this document.

Mr Yakunin for his part, speaking on behalf of all railway men, thanked the Russian Prime Minister for the attention the Government is paying to the development of the company and for the concern shown for its 1.3 million employees.

In conclusion Vladimir Putin made the following remarks:

I am aware that in your sector wages and the rate of their growth, unlike in many other sectors in the country's economy, match the growth of labour productivity, an ideal situation for the economy as a whole. The credit for this, of course, must go to the company's responsible economic policy. I hope that you will find ways to further address the social tasks. I am aware that this constitutes a major part of your activities and that you will effectively develop the company. Railways, rail transport and your company in particular is what creates and ensures the common economic space in Russia. There is no doubt about that.

As for the Strategy for the development of the railway sector to 2030, I will sign it today.

Prime Minister Vladimir Putin's opening remarks at a meeting with veterans and young employees of Russian Railways (OAO RZhD):

Good afternoon, I am very glad to meet you. Especially since this is such an important occasion for the sector. Today I will sign the Strategy for the development of railway transport to 2030.

We talked about the need to develop such a strategy over a year ago. The idea came from the professional community, above all from the people who understand what railways mean for the country and its economy.

Mr Yakunin and I have discussed this topic just now. Indeed, the railway is what really ensures the common economic space of Russia.

It is very important that in the 1990s, which were difficult years for our economy, the railways, above all thanks to the people Mr Yakunin has mentioned - veterans, the competent people who have long worked in this sector - ensured uninterrupted functioning of the economy as a whole. It was a key component of the country's economic life. We do not have many such companies. Russian Railways as a sector in its own right, energy, the gas industry and communications - all this ensured the integrity and even-paced work of the Russian economy, preserved entire segments of the Russian economy, which is very important. For all this I bow my head to you and I say thank you very much.

Now our potential has grown. The situation has changed dramatically. We should of course think about the shape of the railway sector in our country in 22 years' time. I draw your attention to the depth of our plans, we are planning 22 years ahead. This is natural for such a sector as railways because it is the largest sector.

Railways must become 20,000 km longer. You have to bear in mind that in recent years we have hardly built any new railways. In fact, we have lost some of them. So a 20,000 km increase will be very substantial and noticeable.

Railways will open up new regions where they did not exist before. By way of an example, I can say that railways will come to such Siberian regions as Altai, Yakutia and Tyva - this is very important for the development of these territories and for improving people's lives. This will solve the problem of bringing food and goods to the northern areas in winter. Railway energy consumption will go down while energy availability will increase. Passenger service will improve. I very much hope it will be the case.

In future we will switch to building high-speed railways. Initially, perhaps, only on the busiest sections of track. Russian Railways is moving in that direction. Already there are early signs. But we must dramatically improve the quality of passenger service, switch to new technologies, partly in cooperation with our foreign partners.

In general, as regards our foreign partners, Russian Railways plays a special role because the railways have been, as people used to say, a single economic complex throughout the Soviet Union. It remains a single complex in the whole post-Soviet space, which provides a natural link among the republics of the former Soviet Union, brings them closer together, stimulates their interest in each other, in mutual support and development of operational ties. We have just discussed it in detail with the company president.

In fact, I can tell you that this sphere of activity and the interaction with our partners, especially the CIS countries, is nearly always discussed at the presidential and the governmental level. These are topics that are relevant and interesting for everyone. This is natural because, first, the railway has always been a single complex. And second, Russia is a natural transit country for practically all the post-Soviet republics. That, too, is an important component of the activities of Russian Railways.

And finally, the social sphere. Wages are growing, perhaps not as fast as we would like them to. But the important thing is that they are growing in conformity with the growth of labour productivity, something that is not always the case in other sectors, and that is a matter of some concern to us, because it may create macroeconomic problems. Your sector is a lucky exception. But since this problem does not exist in your sector the company must compensate by pursuing a purposeful and effective social policy.

I know that such a social support network exists on various railways. It should be developed further, even if it doesn't look very market-oriented at first glance. However, the wages grow in a market way and meet the perceived standards that should exist in this sphere. But I repeat, this has to be compensated by the company's own social policy, by concentrating resources on the main social problems. One of these - as we have mentioned - is housing for new families. This is what needs to be done not only in this company, but in other sectors - I mean subsidizing the interest rate of mortgage loans for young families.

Of course, we should take care of veterans, too. I know that a good deal is being done in that respect. It is important that your top executives keep it under constant review. If the top executives keep it under control then everything will work. As soon as it recedes into the background, it will gradually peter away.

I hope that the current pace and quality of work that you have achieved will be preserved.

From Vladimir Putin's conversations with veterans and young company employees.

Vladimir Putin:

It is necessary to introduce modern technologies of track repair and inspection. We cannot afford to work in the old way; it is necessary to use modern technologies. We should understand where a critical situation arises in order to know what modern technologies are needed. This can be done, for example, with the help of ground sounding meters bought from Canada.

The country's construction industry is developing at a very high rate, 20% a year. Experts call it a construction boom. It means that a large number of building companies are springing up for which construction is the core activity and not a spin-off. Theoretically it means that they should be the most effective companies.

There are still poorly developed regions in the country. In these regions the railway must be self-sufficient. But in the regions with a well-developed modern social infrastructure, private building organizations offer better quality. In such regions we have only one concern: raising wages.

The railway is a very science-intensive sector. There is room for the application of high technologies. Innovative technologies must drive development, and not only of railway transport.

If we look at the structure of a developed economy we will see that it is saturated with modern technologies. In that sense the railways can only be compared, perhaps, with the defence industry. I think it would be an absolutely relevant comparison in this case."