4 october 2011

Prime Minister Vladimir Putin meets with Tula Region Governor Vladimir Gruzdev

Participants:
The two officials focused on implementing large investment projects and bringing investment to the region, which the Tula government considers to be one of its top priorities. According to the prime minister, the positive attitude and encouragement of local authorities can make a real difference, and “specific financial benefits” should not be the only motivation for investment.

Transcript of the beginning of the meeting:

Vladimir Putin: Mr Gruzdev, let us begin with investment projects. I've looked through them and have found a few that are quite good in the Novomoskovsk and Aleksin industrial districts. I noticed one good project to work with foreign partners to build a cement plant. How would you assess the progress of this project? Essentially, these projects shape the future of a region by influencing the local tax base and creating jobs. The new facilities should be reasonably advanced and should offer decent salaries. How is this work progressing? What additional efforts is the region making to support these investments?

Vladimir Gruzdev: You are absolutely right, Mr Putin. In Novomoskovsk, we are building an entire cluster of businesses with the federal government’s support. We are preparing the sites for investment projects. Companies are implementing their own projects there, such as the Novomoskovsk chemicals plant, which is being built with foreign investment. In Aleksin, we plan to break ground for a new 6 billion rouble plant that will create 700 highly-qualified and well-paying jobs. We expect wages to be around 28,000-32,000 roubles a month, which amounts to twice the regional average. The important thing is that large facilities such as these will form the basis for larger clusters, including new small businesses that will provide various support services for the plant. This is one of our main areas of work.

On October 20, we are opening a new nitrogen processing facility at Shchekinoazot that will produce nitrogen-450. This is a modern, technologically advanced production line that will create another 550 jobs. Investment in the project totalled 5 billion roubles.

We are drawing up a programme to attract investors to the Tula Region, which is probably the most important goal of the regional government. Without creating new jobs, the region will not be able to develop effectively.

Vladimir Putin: How are you going to support this, by the way? Is there a special programme? Are you making any decisions to improve the region’s tax system?

Vladimir Gruzdev: We have a baseline law in effect that provides additional tax privileges for companies that have made large investments. In 2011, about 17 companies took advantage of these benefits. Their profit tax benefits totalled 400 million roubles. This baseline law applies to the first four years of investment. But there is no law on individual investment. This issue requires further consideration.

Vladimir Putin: Yes, look into it. You are well aware that this is a good incentive to begin working. Sometimes specific financial benefits do not matter as much to potential investors as it does for them to see that the local government has an encouraging attitude toward their projects.

Vladimir Gruzdev: Yes.

Vladimir Putin: What is happening with social programmes in the region? How are modernisation efforts progressing in healthcare and education?

Vladimir Gruzdev: To be honest, we are lagging behind on this project…

Vladimir Putin: Which one?

Vladimir Gruzdev: Healthcare modernisation. We are behind on the 2011 plan. We have made all the necessary appointments in the regional government, and we believe we’ll be able to close this gap soon.

Vladimir Putin: What specific areas are you behind in?

Vladimir Gruzdev: In the purchase of equipment, capital investment and repairs. We have recently revised all of our projects and will catch up as soon as possible.

Vladimir Putin: Have you received the money?

Vladimir Gruzdev: Yes we have.

Vladimir Putin: How much?

Vladimir Gruzdev: Around 2 billion roubles.

Vladimir Putin: Please maintain your focus on the prices and on specific commitments. Indeed, you must try to catch up. What about education?

Vladimir Gruzdev: We raised teachers’ salaries by 30% as of  September 1 as part of the federal programme, and even more in some areas. In Aleksin, we have also raised the salaries of preschool and kindergarten teachers, which made a real difference. We plan to continue this effort in other districts, in the more developed ones.

Vladimir Putin: With this 30% increase, did teachers’ salaries reach the region’s average?

Vladimir Gruzdev: Not yet.

Vladimir Putin: When are you planning to reach that level?

Vladimir Gruzdev: I think we will be able to achieve it in 2012, Mr Putin.

В.В.Путин: Let’s do it. This is only fair, considering how important our teachers are. All right?

Vladimir Gruzdev: Yes.