Transcript of the meeting between Mr Putin and Mr Khristenko:

Viktor Khristenko: Mr Putin, after you chaired the meeting in St Petersburg in August of the previous year on gas turbine engine-building development in Russia, we have worked out a plan of action and have begun to realise it. So, today I would like to render a brief account on the stage of its operation.

Primary consumers related to gas turbine engine-building are aircraft manufacturers, the helicopter industry and, of course, the country's energy structures: the energy infrastructure and electric power industry. The work that is being prepared helps us to predetermine our possibilities both in the modernisation of existing engine lines and in the first stage of new engines development.

This year a full-scale modernisation of the PS-90 engine is taking place. Next year it will be finished and such aircraft as the Il-96, Tu-204, Il-76 will be equipped with PS-90 A2 engines. We assume that by the end of the year 2015 aircraft with those engines will be able to meet competition.

The first flight of the Sukhoi Superjet-100 has recently been performed. I can say that by now nine flights have taken place already. The aircraft passed 25 hours in the air. Flight tests are going successfully. In August the aircraft will take a flight to Moscow and will pass station testing there.

A new engine, the SaM-146, is installed on this aircraft, which was developed in conjunction with our French colleagues. Presently it is in production.

We are also beginning to redesign engines for the helicopter industry and to create new engines for helicopters. As you know, some of them were produced and are still being produced in Ukraine, but new engines are produced by Russian companies.

To assure complex coordination and preparation of the new engines, first of all for the promising MS-21 (a new civil aircraft), we have worked out a medium-term triennial programme on engine-building and have coordinated that programme with our colleagues in the Ministry of Economic Development. It was essential to manage to start the work on the new engine for the MS-21.

In addition to actions connected with redesigning and beginning serial production, we also face the problem of organisational transformation of the branch. And such transformation is going at full speed.

I will remind you that there are only four engine-building structures in the world, and we are the fifth one. We are to become one of the five, not the file closers. To uphold that status and that level we are to concentrate our efforts even more.

Today we are speaking about two structures being created according to presidential decrees. The second structure is a United Engine Building Corporation created on the basis of Oboronprom that is absorbing capital assets on production of engines for helicopters, PS-90 engines for aircraft and a large variety of other engines.

Thereby, one of these days you will get a draft Government Resolution in pursuance of the Decree on this structure. So, this chain of actions gives us understanding of the way we will fit into our aircraft industry and power industry with the most complicated device - a gas turbine engine. We will finish work on the development strategy for the gas turbine complex in Russia before the end of this year.

Vladimir Putin: Thank you.

Reference information:

Development of new aircraft

The state gives special attention to the development of the Russian aircraft industry. Long-term goals are defined, and a single integrator of the branch potential has been created, the United Aircraft Corporation.

The realisation of a series of breakthrough projects, backed by the consolidated potential of Russian design bureaus and companies, will help Russia occupy its deserved position in the world market. We already have a new medium-range airliner (the Sukhoi Superjet). The project of its creation has been implemented successfully. The niche for freight aircraft may be occupied by the project yet to be realised, MS-21.

The success of the project depends directly on the creation of a completely new engine meeting the most stringent requirements in terms of noise level, emission and fuel efficiency.

The necessary result (creation of a new aircraft able to meet competition) can only be achieved when the procedures of engine and glider creation are synchronised. That is why it is now urgent to go into the question of special-purpose state support. It will help not only to concentrate the available technologies and to recreate the failing ones, but also concentrate the necessary capacities for the creation of a new engine.

This decision has already proved to be effective. As a result of the timely co-financing of the Sam-146 engine the new regional Russian aircraft SSJ has recently got off the ground.

Russian companies build up capacity in the high-technology sector

Currently Russia almost entirely depends on foreign helicopter engine manufacturers. To conserve such a situation is not only to endanger national security (the military helicopter industry), but also to sustain direct economic losses (in the civilian high-technology sector). We have already started to solve this problem. Priority activities include the creation of an engineering reserve necessary to launch a period of innovations in the development of the branch.

An effective structure of administration of the industry is being formed. It will help to integrate the potential and technological compensations for the creation of new helicopter engines. In many projects aimed to do away with the lag we will cooperate with foreign partners. It will be done under the stipulation that such cooperation is economically efficient and reasonable from the point of view of security.

Meeting the growing demands of the power industry

Gas turbine engine-building companies make a considerable contribution to the development of Russia's energy infrastructure, electric power industry, transport, shipbuilding and other branches, where such products are used. This underlines the necessity of adopting a long-term comprehensive strategy of the branch development.

Development of the energy infrastructure is generating demand for new generation turbines. We possess good starting positions in this segment. We have the necessary technological and industrial potential.

Our advanced development is focused on the most marketable segment, where demand is tied to the long-term needs of power engineering. The main activity in this area will include increasing fuel efficiency and the durability of turbines.