Transcript of the beginning of the meeting:

Vladimir Putin: Good evening.

Alexander Zhilkin: Mr Putin, we’ve just completed the construction of a new music theater.  I’d like to show you a photo of it, taken a week and a half ago. (Shows the photo on a tablet computer. Music is playing.) Because of the current heat, we’ve had to put off planting 450 trees till autumn. But we’ve planted some grass, over a total area of 52,600 square metres. We’d like to have a landscape garden on the grounds.

Vladimir Putin: More than 50,000 square metres?

Alexander Zhilkin:  Yes, 52,600 square metres.

Vladimir Putin: 52,600?

Alexander Zhilkin: Exactly. It is in the Russian neo-classical style; the architecture is quite elaborate, but it looks very nice. For now, tourists are not allowed in.

Vladimir Putin: The music has ended. Will it also come to an end in the theatre?

Alexander Zhilkin: No, it won't be like that with the theatre.

Vladimir Putin: Good. It’s lovely. Congratulations.

Alexander Zhilkin: Thank you very much for your support.

Best of all, there is a small hotel in the theatre with 29 beds, that can accommodate visiting companies. We’ve spoken with the Bolshoi Theatre, and they have added a tour to their schedule for next year.

Vladimir Putin: Fantastic.

Alexander Zhilkin: We've also got a fully-equipped air-conditioned auditorium to host all kinds of theatrical and musical festivals. The acoustics are excellent; we consulted with [Milan’s] La Scala theatre and Paris’ Grande Opéra. Our own, domestic specialists, from the Mariinsky and the Bolshoi, came to have a look as well. Performers have tested the acoustics as well. The company is already formed, and we have invited Mr Voronin, a participant of many Musical Spring festivals, to take the post of Artistic Director. The ballet company will be led by Konstantin Uralsky. He will begin on September 1. He is currently serving as head of the ballet company at the Chelyabinsk Theatre, but they are hoping to create a ballroom dance school there.

This week, we are planning to hold an opening presentation gala, to pay tribute to the construction team, and to let people know that performances are beginning this coming season. Now we have to get all the sets ready. The new stage is three times as big as the old one. Everything is working out, everyone is happy and tourists are beginning to flow in.

Vladimir Putin: How many people are there in the company?

Alexander Zhilkin: It will be a general company and will be formed gradually. There will be 420 people at most, including the orchestra and the ballet. We have already hired 150 very good specialists. We take pride in our work.

Vladimir Putin: The orchestra alone includes 120 musicians.

Alexander Zhilkin: We have 127 people in the orchestra now and we keep hiring. The conservatory is open. They are experiencing a talent shortage, too. I tell them that I will quit building theatres, because we have completed all construction work in Astrakhan… I just wanted to show you that it was the final phase of the cultural programme…

Vladimir Putin: Is that a concert hall?

Alexander Zhilkin: Yes, it is. You’ve actually seen it. This is the first facility that we launched in 2006. That is the Youth Theatre that has been fully renovated and rebuilt. See what it looks like inside? That’s the auditorium. This is the Drama Theatre. It is 200 years old, and it was built 14 years after the Bolshoi Theatre. It was also fully renovated. This is the Puppet Theatre. The work is completed.

Vladimir Putin: The cityscape is slowly improving.

Alexander Zhilkin: Yes. This is the conservatory, its auditorium. We have no problem with spectators; the house is always full. Of course, we now have about 2.5 million tourists in town.

Look, we have rebuilt the circus, and it’s almost a new building with very nice air-conditioned premises. We’ve rebuilt the wooden architecture.  It used to be a decrepit building with weeds growing all around it. Now it’s a “live” museum with re-enactors. These are old buildings under renovation. They are all open for business. This is the regional courthouse that I showed you earlier, also a one-of-a-kind architectural style. This courthouse will open in September, but court officials are already using it. We have completed renovation of all federal cultural facilities in the region. Next year, we will take up the municipal cultural facilities.

Vladimir Putin: What about agriculture?

Alexander Zhilkin: Economically… I was about to show you the techniques that we use. So far, we have been the only Russian region that gets two harvests a year on the same field. We have shipped and sold 100,000 tonnes of early potatoes, 5,000 tonnes of onions, also tomatoes, cucumbers, and so on. Everything is on schedule. How do we do it? Our economy is growing according to the programme approved by you. We have family farms here. The dairy plant will be commissioned on August 20 under the joint programme...

Vladimir Putin: What is the output as compared with the first six months of 2010?

Alexander Zhilkin: The agricultural output is up 7%. The total output is also up 17.8% for the first six months as compared with last year.

Vladimir Putin: That’s not bad at all.

Alexander Zhilkin: Yes, that’s a nice pace. We have built a broiler chicken farm with a capacity of 10,000 tonnes a year.  We are using drip irrigation equipment imported from Israel: we have similar semi-desert conditions. I have a picture that I wanted to show you. Every shrub, every meadow is watered using this system. Of course, this comes at a cost, but on the other hand it cuts water costs 10 times over and the yield increases by 5 to 6 times. Such a treatment system is expensive, but it helps us get two harvests. In other words, we use greenhouses to protect plants from the first cold nights, which also costs money, but the expenses are offset by such watering techniques.  

See how the spacing is tight? We have never grown potatoes in this region. This is our first harvest. The average yield is 65 tonnes per hectare with the average yield across Russia, even in the black soil areas, standing at 25 tonnes. Therefore, all our expenses are covered by high yields.

Our onion yield was as high as 90-100 tonnes, whereas it’s 23 tonnes on average in the rest of Russia. We do not specialise in these cultures, but this year we are looking to harvest anywhere from 350,000 to 400,000 tonnes of potatoes and 300,000 tonnes of onions.

Vladimir Putin: What about construction?

Alexander Zhilkin: We have construction in progress.  The commissioning rates were below schedule during the first 4-5 months, but that’s not a problem, since the number for urban construction will be 106%. We will commission most of the new construction during the third and the fourth quarters. We are also implementing the programme for demolishing decrepit and uninhabitable housing. We are fanning out across the city and across the entire region. There was a problematic housing community – we are completing work there this year. We invested about 2 billion roubles in a matter of two and a half years. All the money came for the regional and municipal budgets. Relocating 1,026 households was a real challenge. The gross regional product is back to its pre-crisis levels. The manufacturing output is also back to normal. We haven’t managed so far to reach the pre-crisis level of local taxes, but we are getting there. As usual, there’s never enough money.

Vladimir Putin: Mr Zhilkin, have you completed the programme for upgrading healthcare facilities and schools?

Alexander Zhilkin: We have held the auctions. All the programmes have been developed and are being implemented in full, primarily the ones that cover regional clinical centres. Others are waiting for their turn, including a cancer treatment centre, a children’s centre and a federal centre supported cardiovascular centre which is very good at surgery, and people are waiting in line to get there… If things go the way they are going now, I will ask you to expand it, because we are getting patients from neighbouring countries, such as Kazakhstan and Turkmenistan. You can’t turn down a patient, but surgical teams are working really hard, performing up to 40 surgeries a day.

Vladimir Putin: You are talking about the high-tech centre that I saw?

Alexander Zhilkin: Yes, right. They are doing a really good job.

Vladimir Putin: How much additional money under the modernisation programme?

Alexander Zhilkin: We have 3.6 billion roubles from the federal budget. The rest comes from the municipal budget, as agreed.

Vladimir Putin: How much in all?

Alexander Zhilkin: Overall, 4.2 billion.

Vladimir Putin: For two years?

Alexander Zhilkin: For two years.

Vladimir Putin: How much would you use this year?

Alexander Zhilkin: This year we plan to use about 1.98 billion mostly for construction after we complete the auctions. The equipment purchases will be postponed to the first quarter 2012. It doesn’t make any sense to buy it now so that it just sits around somewhere… I am overseeing this work myself on an on-going basis. I have people reporting to me every Monday. I visit the construction sites, because I know what happens when you don’t show up on the construction site…

Vladimir Putin: What about healthcare in rural areas?

Alexander Zhilkin: We keep tabs on rural healthcare. The rural medical centres are doing great under the programme launched by the Agricultural Ministry. They are very popular with patients. In addition, we have set up mobile teams, which I dubbed “on-call outpatient clinics,” which involve 6 to 7 specialist doctors making daily trips to rural communities, providing consultations and helping local healthcare facilities do their job. Plus, the equipment under the healthcare programme… Today, a patient doesn’t need to go to town to have an EKG. It can be done on site, then sent over to the cardiovascular diagnostics centre via cell phone. The specialist then provides the results and the doctor knows what to do with the patient: take him to the regional cardiovascular centre or just prescribe medications.

Vladimir Putin: What is the average salary in your economy?

Alexander Zhilkin: It’s 16,500 roubles today. It was 15,500 roubles at the end of 2010, now it’s 16,500 roubles. We have the highest salary in all of the Southern Federal District. Of course, it affected the implementation of your decision to raise the salary fund by 30%. But it has been implemented: the teachers’ salary fund will be increased by 30% from September 1, as stipulated by the budget.

Vladimir Putin: You are impossible to speak with!

Alexander Zhilkin:  Frankly, I regretted pushing the salaries so high, although it’s even higher on average in Russia – 22,500 roubles. However, I believe it will be 18,000 by year-end.

Vladimir Putin: By year-end, the average salary in Russia will be 23,000 – 24,000 roubles.

Alexander Zhilkin: That’s quite a heavy load for me, because my farmers lack discipline in this area. No matter what I do or say, they show me average legal wages of 7,500 roubles…

Vladimir Putin: Let’s get back to teachers. So, your average salary is 16,500 roubles across the economy?

Alexander Zhilkin: Correct, 16,500 roubles.

Vladimir Putin: Shall we raise the salary fund by 30%?

Alexander Zhilkin: By 30%.

Vladimir Putin: How much do we get?

Alexander Zhilkin: I also want to implement massive outsourcing schemes throughout the system. I will outsource all irrelevant functions and technical services that account for 50% of all expenses that are covered using my funds.

Vladimir Putin: How much will the teachers be paid?

Alexander Zhilkin: After we raise the fund by 30%, their average salary will be 15,000 roubles.

Vladimir Putin: Average?

Alexander Zhilkin: The average salary will be 15,000 roubles. If I go ahead with the outsourcing, then they will have the highest average salary across the region from January 1.

Vladimir Putin: The outsourcing will cost you additional money from the budget.

Alexander Zhilkin: I will discuss this with the municipal authorities. My plan is to outsource all technical services, but keep the funds allocated to the educational system.

Vladimir Putin: So you will raise their salaries by September 1?

Alexander Zhilkin: I will increase the fund on September 1, but I won’t be able to outsource all technical and auxiliary services. Beginning January 1, 2012, I will outsource them but keep the money that was used to pay their salaries within the system.

Vladimir Putin: I understand. But will you raise the teachers’ salaries on September 1?

Alexander Zhilkin: Yes, of course. Their average salary is 12,000 roubles now, but it will be 15,000 on September 1.

Vladimir Putin: Good.