14 april 2011

Prime Minister Vladimir Putin chairs a Government Presidium meeting

Vladimir Putin

At a Government Presidium meeting

“The reforms have propelled the coal industry’s structure to a whole new level, and now its core is built around modern and quite prosperous enterprises that implement long-term development projects. In 2010, 56 billion roubles was invested in fixed capital, up 30% from the previous year.”

Transcript of the beginning of the meeting:

Vladimir Putin: Good afternoon.

Let’s start with agricultural issues today. Ms Skrynnik (Minister of Agriculture), we have allocated 25.9 billion roubles, that is almost 26 billion roubles from the budget for spring sowing. But to my knowledge only half of this amount – 12.4 billion roubles – has been transferred to the agricultural producers. What’s the matter? Why haven’t people received the money yet?

Yelena Skrynnik: Yes, Mr Putin. Fulfilling requests from the regions and according to our plan, the Ministry of Agriculture transferred about 30% of the federal programme’s overall funding (amounting to 104 billion roubles) to the producers. We act in line with the signed agreement. But, regrettably, due to poor financial planning and inadequate legislative procedures, the regions have forwarded to agricultural producers on average a mere 56% of the funds transferred by our ministry, although they were supposed to forward 100% of the money. 

Vladimir Putin: Why did they send so little?

Yelena Skrynnik: Mr Putin, first, could I speak about those who are working well…

Vladimir Putin: Could you please answer me in plain Russian: we’ve sent them 26 billion roubles – 25.9 billion – but they only transferred 12.4 billion roubles to the agricultural producers. Can you explain why?

Yelena Skrynnik: Mr Putin, I was going to report to you on this issue. We are constantly monitoring the transfer of funds. I speak with agricultural producers and receive reports from them every week. Regrettably, not all regions have adequately drafted legislation and planned for the use of funds, although we are in touch every week. For instance, Udmurtia transferred a mere 29% of the funds sent by our ministry, Dagestan – 12% and the Kemerovo Region – 20%. The Stavropol Territory, and the Voronezh, Kirov and Rostov Regions have transferred all the funds. We are working with those who have failed to do this, and we are demanding that they urgently forward the full amounts of allocated fund to the farms, but some of them have committed violations. This is why I decided to report to you.

Vladimir Putin: Do you talk with them yourself?

Yelena Skrynnik: Yes, I do. We conduct video conferences with agricultural producers to get feedback and report problems during our meetings with governors in order to resolve them together.

But there is more to it, Mr Putin. Regions must co-finance federal allocations and this is not easy. Some regions that transfer the full amount of budget allocations to agricultural producers also co-finance them, but the regions that are lagging behind also fail to co-finance them from their regional budgets. This is why I’ve decided to address you.

Vladimir Putin: Mr Zubkov, were you involved in this work in any way?

Viktor Zubkov: Sure, we make note of these issues when meeting with governors. But the thing is that some governors obviously treat these issues seriously. First of all, this implies co-financing from regional budgets, which must be amended on time. Therefore, I think that, after today’s discussion, I should probably …

Vladimir Putin: Look, it is now the middle of April, already April 14! We have repeatedly noted that the last two years were extremely difficult for agriculture, and we must mobilise financial and administrative resources in order to ensure that we have a good harvest this year. I’m simply shocked by such an attitude towards this work!

Viktor Zubkov: Mr Putin, the allocations mentioned by the minister do not directly influence harvests. To the best of my knowledge, such funding is stipulated for investment projects and supporting …

Yelena Skrynnik: You see, subsidising interest rates on short-term loans, investment loans and support for  livestock breeding …

Viktor Zubkov: As far as spring sowing is concerned, funding is allocated to the regions for such work in line with the decisions we have adopted, so that they can buy fertilisers, seeds, inexpensive fuel and take out substantial loans from banks. As far as I know, there are no problems in terms of spring sowing. We have already met with 60-70% of the regional governors. As for your statement that it’s mid-April and it’s high time … This  concerns investment loans for financing investment projects. Speaking of interest rate subsidies …

Yelena Skrynnik: Short-term loans.

Viktor Zubkov: Exactly, short-term loans.

Yelena Skrynnik: That’s why mineral fertilisers …

Vladimir Putin: Short-term loans?

Yelena Skrynnik: Sure, and short-term loans, too.

Vladimir Putin: Short-term loans are stipulated precisely for the spring sowing. I’m asking you once again, all regions failing to do this on time must take part in a video conference here in Moscow… People must take full responsibility for this now. Spring has already begun!

Mr Zubkov, how long will it take you to become directly involved in this, to assess the situation and to report on every region in greater detail?

Viktor Zubkov: I think that if the Ministry of Agriculture submits materials, which can be studied and assessed, to the government today, then I will be able to hold a video conference on Monday or Tuesday.

Vladimir Putin: Agreed. It will be Monday or Tuesday then. Please tell me about the situation in the middle of next week.

Viktor Zubkov: Good.

Vladimir Putin: Mr Mutko, we have been chosen as the replacement host for the 2011 World Figure Skating Championships, and we are committed to making it successful. All this must be done as quickly as possible. I would like you to report on preparations. This is the first thing. Second, we have taken on the responsibility of hosting these games from our Japanese friends in connection with the tragedy that occurred there. Thus, I think that it’s appropriate to draw attention to the tragedy confronting Japan and make some symbolic gestures to show our solidarity with our friends and neighbours in Japan. Please think about how this can be done in the context of the 2011 World Figure Skating Championships, which were to have taken place in Japan, but which will now be held in Moscow.

Vitaly Mutko: Good, Mr Putin. As far as the World Figure Skating Championships are concerned, all organisational issues have been resolved, and all the most important objectives have been accomplished. Technically speaking, we have resolved accommodation and transport issues and have rented the Megasport Arena. In principle, we have resolved all the main financial, organisational and broadcasting issues. Channel One and Rossia will broadcast the event. Accreditation for the event is underway, so all the main issues are being addressed. As far as the opening ceremony is concerned, we will take into account everything you have mentioned and we will certainly devote serious attention to this humanitarian issue at the opening ceremony.

Vladimir Putin: Good. Thank you. And now I would like to say a few words about the agenda for our work today.

Let’s start with the state of the national coal industry and its development prospects. It is hardly surprising that we return to this issue on a regular basis. This is an important and complicated sector with many employees working in difficult conditions, to put it straight.

The state has invested about 133 billion roubles in restructuring the sector, solving the social and housing problems of miners and facilitating their professional development. The programme for restructuring the sector is to be implemented completely by late 2015.

Let me bring to your attention the fact that the reforms have propelled the coal industry’s structure to a whole new level, and now its core is built around modern and quite prosperous enterprises that implement long-term development projects. In 2010, 56 billion roubles were invested in fixed capital, up 30% from the previous year. About 40% of these funds were used to buy new machinery and equipment and expand manufacturing capacity. Last year, the coal industry almost reached its pre-crisis output levels: it produced 323 million tonnes of coal. In 2009, this number stood at 302 million tonnes, and before the crisis this number was 329 million tonnes. Basically, with the current level at 323 million tonnes we have practically reached the pre-crisis output level of 329 million tonnes.

We should continue to focus on safe working conditions in the coal industry. In March, we held a meeting dedicated to this issue. Quite a few decisions have been taken. We have established legal requirements for the gas drainage of coal mines, increased the liability of the business owners, expanded the authority of the Federal Service for Supervision of Environment, Technology and Nuclear Management, and changed the wage system for coal miners. The fixed component of their wages has been set at 70%. This decision was taken together with the trade unions. The Tax Code was modified to encourage companies to invest in labour safety; mandatory general liability insurance was introduced to provide coverage to the owners of hazardous facilities against damage caused by accidents. More amendments will be made with an eye toward improving the legislation governing industrial and labour safety in the coal industry. The liability of enterprises, which have previously failed to provide safe labour conditions for coal miners, must be increased.

Let me briefly remind you of the current situation. There are plans to amend the Labour Code in part regulating the work of coal miners. The list of mandatory labour safety precautions to be funded by the employer is also scheduled to be changed. In addition, plans are in place to establish an industrial and labour safety management system at the coal mining enterprises and introduce a requirement to disclose information about the results of actions conducted under such a programme. Other legislative changes include the mandatory disclosure of the following information by policy holders to the insurer: workplace attestations and physical examinations for the purpose of establishing respective remuneration deductions or increases.

Colleagues, the coal industry is facing major challenges. We are aware of the developments in the global energy industry. The metallurgical industry’s need for source materials will increase; therefore, we need to adopt long-term plans and define new goals. The Energy Ministry has drafted a long-term development programme for the coal industry until 2030. We will look into it at today’s Government Presidium meeting.

What are the key points? First, we should tackle the gridlocks in the rail infrastructure; secure transshipment of the Russian coal at seaports and border crossings; and create the additional capacity for boosting coal exports, specifically in the strategic Asia-Pacific area.

Second, we need to encourage investment in the latest technology, design and manufacture of mining equipment and machinery to improve the efficiency and safety of mining operations.

Third, we need to develop new coal mining centres, such as the Elgin deposit in Yakutia, the Mezhegeyskoye and Elegest deposits in Tuva, and the Apsat deposit in the Trans-Baikal Territory. The Elgin deposit should become operative already in 2011. Production in new coal mining areas should be based on a cluster approach right from the beginning: Open pits and coal mines should be tied in with the processing facilities and transportation, which will help to establish coal chemistry and energy complexes. Please include these comments in the final version of the long-term programme. We have discussed the development of such regions, for example, in Tuva, on many occasions. There’s much work to do, and the first thing we need before we can start doing any of that work is transportation infrastructure. We need to go over these issues with our transport organisations and investors.

One more question I’d like to discuss. On March 3, we met with the widows of the Vorkuta miners. We agreed with the shareholders of Vorkutaugol and Intaugol to join in efforts to relocate the family members of the miners who died in the accident. The Regional Development Ministry and the local authorities have already come up with their proposals. Now we need the Finance Ministry to meet its obligations, and do so as soon as possible.

Let me ask you, Mr Sechin, what will you do after the required funds have been transferred? What will the funds be used for and how will the programmes be implemented?

Igor Sechin: Mr Putin, 133 widows need to be relocated from the Far North and the Komi Republic.

Vladimir Putin: I have 136.

Igor Sechin: I’ll make sure the number is correct. We have 133 from the authorities of the Komi Republic, but I’ll check the number again. We need about 304-305 million roubles to finance the relocation.

Vladimir Putin: 328 million roubles.

Igor Sechin: I’ll verify the amount.

Vladimir Putin: Please do. It does matter, because we are talking about human lives here. All right?

Igor Sechin: Yes, by all means.

Vladimir Putin: If there’s not enough money, things might come to a halt.

Igor Sechin: In accordance with your instruction, the relocation will be funded by the budget and by Severstal, which owns these coal mines.

Vladimir Putin: Yes, we agreed to split the costs in half.

Igor Sechin: Yes, in half. We planned to disburse our share, slightly over 150 million roubles, through the Regional Development Ministry soon. The regional authorities and the widows will select the future housing together. We will keep tabs on it until it is completed.

Vladimir Putin: Most importantly, please make sure that the money doesn’t get stuck on its way to the widows. Make sure it’s used to relocate the families, as intended. Keep an eye on it, please.

Igor Sechin: I will.

Viktor Basargin: These funds include the relocation expenses.

Vladimir Putin: Good. We need to come up with slightly more than 168 million roubles.

Viktor Basargin: I’m in charge of the relocation, apartment renovation, etc.

Vladimir Putin: Good, agreed. The Finance Ministry should transfer the money soon. When is it going to happen (addressing Mr Savatyugin)?

Alexei Savatyugin (deputy finance minister): Certainly, we will transfer all the funds in question.

Vladimir Putin: We have taken a specific decision to do so, right?

Igor Sechin: Your instructions are ready, Mr. Putin. These funds will be disbursed to the Regional Development Ministry in the form of subsidies to the regions.

Vladimir Putin: When?

Alexei Savatyugin: Soon.

Igor Sechin: In April.

Alexei Savatyugin: We can transfer the funds next week.

Vladimir Putin: Please do so next week and report the results.

Igor Sechin: We will.

Vladimir Putin: Today we will also approve members of the Organising Committee of the 2014 Olympic and Paralympic Games. The federal and regional authorities along with the sports associations and public organisations should join their efforts in facilitating the training of Russian athletes for the upcoming competitions.  

The Olympic Games will begin in three years. The area around Sochi is changing rapidly.  A lot of work is being done, and a large number of sports, infrastructural and energy facilities are being commissioned. Let me remind you that the total budget of the Olympic Games is estimated at about 195 billion roubles, of which 75 billion will come from the federal budget, and the rest will be supplied by the investors.

Additionally, 6 billion roubles have been allocated for training Russia’s Olympic teams in 2011–2013. Mr Zhukov, please monitor this training personally, since you are the chairman of the Organising Committee. The coaches and athletes must have everything they need. This is the only way they can achieve good results in the Olympic Games, which we need, especially as Russia is hosting these Games.

 * * *

To conclude, I would like to discuss two more very important draft laws. First, we’ll need to amend the law on the minimum wage and increase the minimum amount beginning on June 1 by 6.5% to 4,611 roubles. We have discussed this issue with the unions in detail. Our goal is to gradually bring the minimum wage to the subsistence level. This issue has to be dealt with effectively. Changes in the minimum wage should result in increased salaries for state employees and other workers.

And the second draft law. We discussed it yesterday during the forum of medical workers and agreed to take it to the parliament as soon as possible. I’m talking about the law On the Principles of Public Healthcare. This law should clearly set forth the standards for regulating doctor-patient relations, the procedure governing the provision of medical services and the organisation of medical treatment. We also discussed the need for a broad discussion of this draft law. I ask United Russia deputies to arrange the hearings at the Duma with the participation of representatives of the medical community from across Russia’s regions. I would also like to ask the Health Ministry to join the deputies in organising this discussion.

Now let’s get down to work.

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