Opening remarks by Vladimir Putin:
Good afternoon, colleagues, ladies and gentlemen,
I know that you have already started working: I am told that you've had very heated roundtable discussions.
You represent an economic sector which plays a key role – and this is no exaggeration – and in fact a strategic role in Russia and its economic, social and regional development, and contributes to the comfort and the quality of life in Russia. Where there is a road, there is an opportunity to reach some destination. This means there is life and development in that area. Where there is no road, there is no life. We have just opened a section of a major highway near Novosibirsk. The governor tells me nearly all the land adjacent to the road has been bought up for retail or low-rise construction projects. Without this road, there would have been no life there.
The same is true for nearly all transport-related segments. Popular wisdom tells us that if transport is functioning efficiently and expanding, so does the country. New roads being built and ports expanded give confidence in the country's future. Transport development is certainly an issue that should be handled while looking decades ahead because transport projects have long life cycles. The public should be involved in dealing with it, as well as trade unions, experts, transport workers and, of course, consumers of transport services.
This conference certainly provides a perfect platform for this discussion.
The country's transport sector currently employs 3.3 million people who annually produce up to 6% of GDP. This is a great deal. I am confident that the role and importance of Russia's transport industry will continue to grow. First of all, we need higher living standards and better quality of life, a more comfortable environment in big cities and small towns. That is impossible to achieve without modern transport services, which include – and I would like to emphasise this – affordable public transport.
Second, our task is to provide the required infrastructure for rapid economic growth, development of new industrial centres and for extending economic operations to remote areas. Transport certainly plays a key role here.
Third, it is essential for the integration projects Russia is involved in. Our ultimate vision is to move from the Customs Union and the Common Economic Space to a Eurasian Union. We need a reliable transport framework for this broad supranational association.
Finally, Russia's transport industry is bound to change, mainly through upgraded equipment and improved effectiveness. It should become a successful and competitive sector providing well-paid and prestigious jobs.
Indeed, we are on the verge of a breakthrough in infrastructure and transport. We cannot be content with individual, isolated projects. Over the next ten years, we plan to double the volume of road construction, and moreover, to adopt completely new construction standards. There will be modern junctions, we will achieve a higher traffic capacity and there will be more lanes.
I would like to return once more to what we have just seen. If any of you have not seen it yet, I recommend having a look – the quality of the surfacing is entirely new and different, using a completely different, advanced technology. But there is technology out there that is still more advanced. We have just talked about continuing this work and beginning a bypass around the other part of the city. This is where we can apply the latest technology. We must do this, and we will do it! The adjacent infrastructure must develop simultaneously. Above all, this includes medical aid, communications and services. This is how work is being done on the Chita–Khabarovsk highway. Thanks to the ongoing road construction, dozens of villages have been connected to telecommunications services (that they did not have access to before).
I hope we will see the results here sooner (by which I mean near Novosibirsk). I expect the construction here will be faster, and more cost-effective. I see that there are already private helicopter pads that could also be used for traffic services and to facilitate more effective communications. Residential areas in Russia’s Far East are separated by hundreds of kilometres. This is not the case in this region. Therefore, the construction of motorways and improvement of adjacent areas must be much faster.
We expect that federal and regional road construction funds will accumulate more than eight trillion roubles by 2020. With these resources we can tackle the most challenging tasks.
Within the next five to ten years we must upgrade every federal highway in the country. This goal is realistic enough, and I have no doubt that we can achieve it. Regional, urban and rural roads require particular attention. We must support the municipalities and regions.
For example, there is a special project for road renovation and upgrade and the development of public amenities in the regional centres. In the past two years, we have allotted 50 billion roubles from the federal budget, even though this does not fall under our responsibility. As a result, over 25 million square metres of urban road networks have been upgraded. We are allotting another 20 billion roubles for rural road construction in 2011-2013. This year alone, roads to 230 villages have been built or renovated. And we will continue and increase our efforts.
A new Russian village means a village with a good road network. This is a worthy ambition, although we are well aware that there is still a host of problems there.
We will continue developing the infrastructure of the Russian railways. In the past four years over 50 complicated tunnels and bridges have been built or renovated. Access routes to key sea ports have been expanded, high speed passenger trains have been launched. Dozens of railway stations have undergone a complete renewal. By the way, our high-speed rails are not precisely what the name might suggest based on the standards of our neighbours. They are faster than what we had before, but they are not exactly high-speed. And I think we should develop a state programme on high-speed rail operations. Given the size of our country, this would be a highly popular project, and very important for the development of our economy.
In the past decade, the railway capacity has increased by a third. I am certain that this growth will continue, and already now, we need to think about prospects for the future, improve logistics, and increase the speed of cargo transportation, using effectively our massive transit potential. Our opportunities in this industry are vast, and yet unfulfilled.
In the next three years, Russian Railways will invest around 1.1 trillion roubles into the development of the railway industry. We must significantly increase the capacity of the main railways and, above all, expand the narrow sections of the Baikal-Amur Mainline and the Trans-Siberian Railway. We will begin new projects such as the Kyzyl-Kuragino railway, which will facilitate exploration of the rich natural resources of southern Siberia.
But there is more to this than railways. What we actually need is an efficient and transparent market of railway operations that would be immune to such artificially created problems as a shortage of rail cars. I know that you have discussed this issue today at one of the round table meetings. We need a system that can ensure the coordinated work of the carrier companies and the availability of trains for customers. The transportation fares must be adequate – on the one hand, they should provide operators with enough resources for investment and development, and on the other hand, they should not constrain economic activity in other industries, and across the country.
We need to find the correct balance, and this is the logic that will run through our work. Of course, our efforts should also be geared towards market principles, but this should be an organised operation, not a chaotic one.
Those present will surely recall that after the collapse of the Soviet Union we lost nearly all our main seaports, at least in the northwest. Projects in which the entire country invested a huge amount of funds are now located outside Russia. In the past, the maximum annual turnover at all the Soviet seaports was 403 million tonnes. I’d like to draw your attention to the fact that turnover at Russian seaports reached 526 million tonnes last year. We have in fact built a new infrastructure, accomplishing a great deal in Russia’s northwest and in the Far East, and the Black Sea and Caspian Sea. We plan to increase turnover by another 50% by 2015, to 770 million tonnes.
At the same time, we will build a large fleet, strengthen our ship repair network and restore routes or lay new ones. A few days ago, the Federation Council approved a federal law on providing support to the shipping industry and shipbuilding. It offers considerable tax and other privileges to Russian shipyards and Russian shipping lines. Over the next ten years, we plan to allocate at least 400 billion roubles from federal sources towards the development of the shipping industry.
A few words about the revival of the Northern Sea Route. There is no doubt that this route will rival the traditional trade routes in terms of prices, safety and quality. I have said this before, and professionals are aware of it – the time of year during which the Northern Sea Route can be used will become longer as a result of climate change, which will make it more profitable. Next year we will establish the Northern Sea Route Administration, which will coordinate all aspects of the route’s operation, and launch a programme of building open sea icebreakers.
At the same time, we will also be using internal waters to their full capacity. We are facing a number of problems that have accumulated in that area over the years. To address them, we plan to modernise the White Sea-Baltic Sea and the Volga-Baltic Sea canals, along with the infrastructure of the Volga Waterway, including the Volga-Don Canal, by 2018. Of course, we will also have to overhaul the airport network. A few years ago, in 2002, we allocated 1 billion roubles of budgetary funds towards the development of airport infrastructure, and in 2011 the figure totalled 41 billion roubles.
The other day a new airport with an international terminal was opened in Gorno-Altaisk (the official opening ceremony is scheduled for tomorrow). This signals new possibilities for the region, including in the tourism industry. I believe that the minister is planning to attend the opening ceremony tomorrow. Both large cities and small settlements require airports. Short-range aviation – you know that its problems are as numerous as those of river transport – should primarily be developed in the outlying northern regions, where it serves as the lifeline. We will certainly do this; it is a critical social and economic objective. We will also extend the discount ticket programme for the Far East and Kaliningrad, which has proved worthwhile and helpful for people. We have allocated 2.5 billion roubles for this purpose in 2012.
You are aware that we are setting up state-run companies to manage remote small airports in Yakutia, Chukotka, Kamchatka and other northern and comparable regions. This measure should ultimately make tickets more affordable, and should reconstruct the airport network. Furthermore, we will allocate subsidies to these northern and comparable regions in order to subsidise regional air flights. The development of interregional air transportation should be considered a priority. It's not right that people can reach relatively close regional centres only via Moscow or St Petersburg.
In order to modernise the fleet of regional aircraft, we have cut the import duties on medium-haul aircraft (those seating less than 50) in 2010, and next year we will subsidise the interest rate on payments for the lease of such planes. Budget allocations for this purpose have been approved at 2 billion roubles.
We also expect Russian plants to begin mass production of new-generation aircraft in the near future. Of course, this is based on the notion that all these privileges for importing foreign planes are necessary in order to ensure that the carriers have enough aircraft, but these privileges will be effective only until Russian producers can start manufacturing the necessary planes.
Ladies and gentlemen, the new tasks that stand before the industry involve solving many system-wide problems, introducing new tools to attract investment and approving new technical regulations. We will certainly do this together, and will also facilitate cooperation with our partners. For example, we believe that transportation projects should be given priority attention in the CIS, in Russia’s cooperation with the EU and Asian-Pacific countries and in the operation of the Shanghai Cooperation Organisation.
Yesterday we hosted a meeting of the SCO heads of government. I can tell you that they approved a draft agreement on creating favourable conditions for international road transport. We have also agreed to coordinate our efforts to develop the road network and create border crossings.
As for the Customs Union and the Common Economic Space of Russia, Belarus and Kazakhstan, we are pushing for the creation of equal conditions for transportation companies (this is a logical measure, but I am reminding you of this so that our colleagues who are engaging in this professionally will understand that no other approach is possible) and the drafting of a coordinated transport policy. I’d like to tell you that we must protect the rights of national transportation companies when implementing integration projects and forming a common market. We are aware of this and this represents the most fundamental condition in our talks with partners. This is our position of principle. We believe that conditions must be equal for everyone. Competition will also grow, but we hope that this will help enhance the quality of services. Our countries’ transportation industries should be given a new lease on life, including through decisions such as these.
We are making substantial budget investments in the transport industry, but it is clear that we also need other sources of funding. In this regard, we expect a lot from the instruments of the public-private partnership. This mechanism has been used to modernise Pulkovo Airport in St Petersburg and build the Moscow-St Petersburg road, and we should apply it to other projects as well.
I can tell you that we plan to attract 1.5 trillion roubles of private investment into the building of new roads by 2020. We should use leasing more actively, issue bonds to finance projects and use other investment tools. We will sign concession agreements and life-cycle contracts in road-building, when the contractor is economically interested not only in building a road, but also in doing so at reasonable prices and with a high quality of work so that the road will last for decades.
It is my hope that a law stipulating life-cycle contracts will be approved this year. Work on it is in full swing in the State Duma. I am asking the lower house deputies to speed up the pace of this work and to complete it as soon as possible. I think that these principles and this philosophy should also be applied in all other infrastructure projects, and I hope that this will help us cleanse the market of transient and amateurish companies, and all those who work with kickbacks and easy money, who bid at auctions, win contracts and then resell them because they have neither the personnel nor the financial and technical capabilities to fulfil them. We need good, standard quality, reasonable pricing, modern technology and the necessary results.
We need good, standard quality, reasonable pricing, modern technology and the necessary results – to bring Russia’s transport industry up to the highest global standards. For that, we need qualified personnel, good management teams: professionals should be trained rapidly to meet the industry’s growing demand.
About 170 Russian universities and 350 vocational colleges train transport workers. Allow me to add that we also expect the industry itself and the transport union to help shape a personnel reserve. I have heard of good examples of synergy between companies and schools, which set up training centres to prepare the professionals that they need and develop modern training programmes that incorporate the employer’s needs. I must stress that the level of professional training and work experience in the transport industry are the cornerstones of its reliability and safety. Passenger safety and security, people’s lives and health are certainly the topmost priority.
I will not discuss the recent tragedies involving transport now; it is clear that most of them were brought about by the low professional level of the workers involved. This is especially true of public transport, which is the biggest and the most widely used segment of the national transport system. It includes shuttle minibus service and city buses, not to mention air transport, the metro and commuter trains, where safety requirements should be even tougher.
Last year, the government invested about 100 billion roubles in upgrading Russian public transport. To tell the truth, this is not much, considering Russia’s vast expanses and the host of problems that accumulated over the years. I would like to ask regional governments and municipalities to review their priorities again. Public transport is something that determines the quality of people’s lives and can help relieve them of many problems. This sector should grow faster. We need to put together a multi-layer and interrelated network of transport routes, to organise the work of transport hubs where city and suburban transport link. We also must use the so-called smart transport systems more broadly, because they have proved efficient, fast and reliable.
Big cities must focus on developing the metro and other high-speed systems. I know that regional governors and big city mayors will fire back “Where’s the money?!” the moment they hear me. Let us try to raise the money together. We are willing to help, but they shouldn’t be shifting the financial burden entirely onto the federal budget. They should also do some fundraising and prioritising to decide where to invest first.
It is also important to make the passenger transport system as transparent and competitive as possible, and to maintain stable fares primarily for socially underprivileged groups, such as people with disabilities, pensioners, and young people – university students, who have low incomes or none at all apart from their state college allowance.
We will continue subsidising commuter train services in 2012 as we did this year; we will allocate 25 billion roubles for that. Let me emphasise that the government in fact pays 40% of the effective cost of commuter train service.
Motor transport costs are pegged at petrol and diesel fuel prices. We will continue monitoring the petrochemicals market to prevent price spikes and ensure stable prices. Of course, this is not always possible in a modern market, and the legal framework needs improvement too, but we will keep an eye on this.
There is one more goal that needs to be addressed without delay. The transport industry needs an all-out technological upgrade. Obsolete equipment must be replaced by efficient high-tech vehicles. I am referring to new rail locomotive models, commercial vehicles, buses, trolleybuses, trams and shuttle minibuses, which should meet the modern requirements of safety, comfort and environmental protection. We will need a whole range of new sea class vessels, new airliner and helicopter families for local lines, and river boats. In this respect, national transport modernisation should strongly stimulate related industries, primarily mechanical engineering, aircraft manufacturing, shipbuilding and automobile manufacturing. These industries, in turn, should be ready for this, and ready to offer transport companies modern competitive equipment at reasonable market prices, which is also an important point.
To implement these plans the industry must work smoothly with other businesses and state authorities at all levels – municipal, regional and federal. To consolidate these efforts, discuss problems and people’s concerns, and provide solutions, we have established this conference, which is one of the Popular Front discussion platforms. The Transport Union has given it its full support, too. It is a very useful way to make contacts, discuss problems and work together to find the best solutions.
We expect that your representatives will win seats in the new State Duma, elected through the United Russia and Popular Front mechanism. Once there, they will be able to influence transport-related lawmaking and help write Russia’s development strategy. Only by combining our efforts will we be able to achieve the desired result that will benefit our country. We are certainly able to do that, and we will.
Thank you.
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Vladimir Putin comments on speeches by conference participants
Comment on a speech by Vitaly Yefimov, President of the Russian Transport Workers Union
When we get together in a smaller circle, Mr Yefimov usually tends to uphold his industry’s interests without promoting the Popular Front. He just uses the platform to raise and address problems facing this particular industry.
The Popular Front was conceived and created not just to prepare ourselves for parliamentary elections, but also to propel competent professionals into the legislature. Professionals should not get in through some bureaucratic procedures but through a broad-based discussion of their competencies and their ability to come up with legislative solutions to problems facing specific industries and the national economy as a whole.
I’m glad the platform’s capacities have proved somewhat broader that we imagined initially. Why so? Because we’ve engaged specialists from various fields and they are now beginning to use the platform for discussions, including intersectoral.
Present here are people who have been working throughout their careers in the various areas of the transport sector. Professionals involved in the fuel and energy sector, for instance, could form an equally large gathering. Or specialists in economic and financial strategies. I’d love people from all those sectors to be elected to parliament, where they could start professional discussions, trying to find solutions optimal for the development of each particular industry. It’s important that professionals should listen carefully to what their counterparts say in an effort to understand problems faced by associated industries and develop adequate solutions.
We’ll certainly take up this issue later on. To transport workers, one of the most important issues is petrol prices. There are lots of imbalances here. Of course, we were willing to meet Mr Yefimov halfway, but since our fleet has not yet been upgraded, we’ve had to put off the introduction of the Euro 3 and Euro 4 petrol standards until January 1, 2013.
This will create a problem for mechanical engineers, though, as they’ve already switched over to the manufacture of engines designed precisely to meet the Euro 3 and Euro 4 standards. So now those engineers will have to wait one more year for proper petrol to appear. This may create imbalances in their work.
What I’m trying to say is that there’s a complex chain of interlinked interests. And it would be rather hard for a non-professional bureaucrat to find optimal, coordinated solutions. We need a direct dialogue between professional groups, which has been one of the ideas behind the Popular Front. And I’m glad it’s gaining momentum… This isn’t a forum for making noise, but a platform where professionals could have their voices heard and coordinate their positions, thereby paving the way for final decisions at the federal or regional government level. Constructing our work in this way will be a step in the right direction, and will enable us to achieve success in a whole variety of areas. Thank you very much for your support.
Comment on the speech by Yevgeny Moskvichyov, President of the International Motor Carriers Association (ASMAP):
Mr Moskvichyov, you have raised two issues relating to the mass transit system and long-distance transport. Existing legislation unequivocally places public transport under the responsibility of the regional authorities. In this regard, we support regional authorities in the ways that you just mentioned. First, we have allocated 10 billion roubles intended for the purchase of public transportation vehicles in the regions; we have also allocated funds for road construction. This was primarily a rescue measure to help support automakers, but it also had a social effect, especially for urban mass transit operators. They bought buses, trolleybuses and tramways; in short, it was a rather effective measure. So far, we have not yet developed a system to replace the bus fleet based on the same scrapping method that was used for cars, but we are working on it. There are issues that have to do with reaching certain numbers so as to not impinge upon interests of those who work in this sphere, since not all of them have the financial means to replace transport, even under favourable conditions. I believe the Transport Ministry is about to create a dedicated agency. We are creating an agency that should develop exactly the recommendations and criteria that you mentioned. I would like to ask the minister to say a few words about this. Please, Mr Levitin.
Igor Levitin: We have established the Agency for Motor Transport, which will engage in developing this policy.
Vladimir Putin: Not the policy, but recommendations and standard regulations.
Igor Levitin: Yes, standards, exactly. They have already discussed the programme carried out by the Ministry of Regional Development. These were in the form of subsidies from the federal budget, but there are also lease arrangements. During the crisis, you supported purchasing road vehicles and this is how we managed to replace obsolete vehicles. We could also include regions that are ready to reduce costs using lease arrangements paid for from the budget.
Vladimir Putin: We need to figure out the cost, but this is a good option. Anyway, the agency that I mentioned and that the minister confirmed will develop the standards that you brought up and pass them down to regions in the form of recommendations.
We are certainly in favour of these requirements with regard to transport, and we will draw them up for you. The question has to do with how transport organisations are going to purchase these new vehicles. Of course, we must (this is an absolute priority, as I said earlier in my speech) proceed based on the principle that all vehicles must be reliable and safe. There’s no question about it, but limitations also vary here. We should proceed very cautiously so as not to kill some enterprises altogether. If we come up with unrealistic requirements, many of them will simply go bankrupt, they will be unable to go about their day-to-day business and will fail to secure the proper amount of cargo transportation. So, let’s put our heads together and identify this border…
We need to move forward and raise safety standards. To be sure, we should not make decisions that would economically kill a significant number of carriers.
Comment on the speech by Vladimir Belozyorov, chairman of the Oktyabrskaya Railway trade union organisation
Let’s begin with salaries. It goes without saying that salaries in the public sector must be increased. At the same time I hope that you, Mr Belozyorov, and all those present will agree with the following point. Traffic police inspectors often stop drivers of a Mercedes-600 who earn much higher salaries than they do. The income of traffic police officers will never equal all of those whom they check. But of course, traffic police officers must receive decent salaries and other benefits that compel people to appreciate their service and position. This is a separate issue and we will come back to it more than once.
As for the tragedy you’ve mentioned, the cruise ship Bulgaria was subjected to many inspections, as you said, but to no avail. At the same time you wish to have more inspectors. I’m discussing this with you now not because I’m against such an increase, but because it is necessary to think this over. I’d like to say that we… In general, I’m very glad that representatives of the branch want monitoring organisations to work better. I understand your position. If you head such major companies, you regard all low-profit small firms as a nuisance (I don’t want to offend anyone). As one colleague said here, this amounts to the same thing, in fact, as prequalification.
The Bulgaria tragedy is yet another reminder that transportation involves high risks. And as with all economic liberties, we must take this into account in organising the market. We must not simply increase the number of inspectors, but rather, create an efficient system of state control over transportation.
You have mentioned the Bulgaria. The problem there does not boil down to inspection. The point is that the very system of control had been destroyed. Imagine a ship at a pier in a private port. It turns out that the port authorities are not responsible for checking in what condition this ship sets off. This does not fall under their duties. They have no right to decide whether to let it go or not. The ship received a license and that’s it. Each controlling body later explains that it does not have the right to do this or that – nobody has the right to do anything! And tragedies such as this happen as a result.
All this was done initially to liberalise the market – to encourage more players to take part in it and step up competition. But the road to hell is paved with good intentions. This is the problem, and transportation is a special case.
I have nothing to argue with you about. I agree with you. Let’s think it over together. We must take certain measures, including measures of state control that will not lead to an excessive monopoly in this industry. If you head a major company, you should not feel that there is no room for medium-sized or small companies in your market, but they should by all means be able to guarantee safety both in aviation, water, motor and railway transport.
As in the previous case, I would like to hear your proposals. We are working very intensively on this issue. I could call upon the minister and he would tell you in detail what the plans are. But our current discussion is so broad that this probably does not make sense. You will receive this information anyway. Submit your proposals and we’ll take them into account.
Comment on the speech by Pavel Pospelov, president of the Road Congress interregional non-profit organisation:
We are currently developing a new rule that includes proper qualification prerequisites, such as the availability of skilled labour, equipment, and prior experience. As for the financial situation, we are in the middle of reaching a complex agreement between the Ministry of Economic Development and the Antimonopoly Service, which wants these activities to be as free of red tape as possible and to give prospective contractors an opportunity to participate in these auctions and win contracts.
Unfortunately, what we have seen recently with such auctions are operators who do not have any proper experience, financial resources or equipment. They simply resell contracts that they have been awarded. We are developing regulations that would preclude the participation of these dishonest parties and instead open the doors to professional companies with a proven track record. We will think about providing access to these auctions exclusively to genuine participants. If we manage to put tough qualification prerequisites in place, such unfair participants will be cut off automatically. We haven’t decided yet whether to allow municipal authorities always to appoint participants on a non-competitive basis…
Pavel Pospelov: Rural enterprises are all about local residents who live and work there.
Vladimir Putin: That may be the case. I am not saying no, but I don’t want to say yes immediately, because we still need to think about this. These decisions cannot be made lightly. But in principle, yes. A small volume…
Pavel Pospelov: These are low-grade gravel roads…
Vladimir Putin: A local access road, everything is possible. We need to think this through and put these terms in writing. I'm not ruling it out, but it’s always good to have a choice. However, those who come and claim certain works in an attempt to get their hands on municipal money… Ultimately, it’s better if they just show their credentials, comply with preliminary requirements and take part in the auctions. Let’s give it some thought…
As for the 46,000 towns and villages without access to the existing road network, we haven't cut them off from the roads, have we?
Pavel Pospelov: No, that is our legacy.
Vladimir Putin: This situation has historical roots. They have never had access to these roads, but it’s a good thing that we are discussing this issue here now. You have just said that 5 billion…
Pavel Pospelov: This year.
Vladimir Putin: …was allocated for building internal roads. No, not 5 billion, as much as 50 billion. That’s not quite right either – we need to adopt a different approach. We should make sure that local budgets have their own revenue sources and address these issues using local resources, rather than taking all the money from the federal budget and distributing it evenly across regions. This is the direction we should be heading in. If anyone present here ends up in the State Duma, including people from your major transport corporation, they should start thinking together with the future Cabinet about redistributing responsibility and revenues at different levels of the budget system. Regions should be able to finance work that falls under their areas of responsibility from their budgets. We will be sure to help them as long as they don’t have this system in place.
I have made a note of a very important issue for myself concerning different transportation infrastructure tasks being addressed by different departments, including the Ministry of Regional Development, the Ministry of Transport, regional or municipal authorities or the Ministry of Agriculture. You were wondering if bringing all these authorities together would be a better solution. I'm not sure. If you ask the audience, you will receive different answers.
Pavel Pospelov: They won’t agree.
Vladimir Putin: Can you imagine concentrating all these resources in a single place? Are you sure this will be effective?
Pavel Pospelov: It will be for rural roads.
Vladimir Putin: For rural roads?
Pavel Pospelov: Yes, only for them.
Vladimir Putin: That means we should take the money from the municipal… We are talking about adding financial resources at the municipal level and providing them with revenue sources, and now you are suggesting taking this away from them?
Pavel Pospelov: For management purposes.
Vladimir Putin: I see. You want things to be as good as possible? We all mean well and this is why we are searching for the best solutions. In fact, that is the purpose of today’s meeting. I enjoy having discussions with professionals. We are looking for ways to improve things whenever we find that there’s room for improvement.
Mr Pospelov is right: this has not been working out so far, because there are no results. I suggest the following. We have just restored road funds, and we will concentrate huge resources in that area both on the regional and municipal level. We have never had so much money. Some governors are telling me, “There’s so much money being allocated for road construction over the next few years. We won’t be able to use all of it for road construction, so allow us to use this money for other purposes.” Recently, they were asking for money to build roads. Now they are saying that there’s too much money and that they won’t be able to use it all. I do not believe that we should give them the right to use this money for other purposes, even if they are important. We need to wait and see how this money will be used at the municipal and regional levels within the next few years. By the way, it’s legal to transfer money from regional road funds to municipal ones; the municipalities are now entitled to set up their own municipal road funds. I believe we should wait and see whether this system works out for us. We will keep in touch, see how it works and then make decisions for the future, all right?
The next thing you mentioned was quality. What can I say, Mr Pospelov? We have seen the road, and I have mentioned it three times already. Excellent work. If only all roads were built that way. You are right, they are starting to fill in holes, and so forth. To avoid these adverse effects associated with poor-quality road construction, we are developing a system that I’m sure you are well aware of. The bill on full-cycle road construction was passed by the Duma in the first reading. According to the bill, the road builder is paid for the work by the government in equal instalments over a period of ten years. If the road quality is inferior (the builder performs all the maintenance work during this period), the government is entitled to cease payments. Moreover, the company that was awarded a contract will want to do quality work, because it will cover all repair costs.
There is one more aspect. Road builders might not like this, but public organisations surely will. We have an organisation called “Ruined Roads of Pskov”. It’s part of the Popular Front, and is run by young people who organised themselves over the internet and are now working offline checking the quality of roads. They, or a similar organisation, can be given the opportunity to participate in overseeing the quality of construction and financing right from the beginning of construction. For example, we are about to start building a ringroad highway around Moscow. What is it called?
Pavel Pospelov: The Central Ringroad Highway.
Vladimir Putin: Exactly. That’s a former military road…
Pavel Pospelov: Concrete road.
Vladimir Putin: Right. It will be gradually transferred over for use by civilian vehicles. We can instruct the Ministry of Transport to make all papers involved in this construction available to such an organisation and ask the latter to supervise everything having to do with the construction of this road. I know that there are many complaints about road construction being very expensive and not up to European standards. We have different conditions in Russia, and standards are different as well. So let them take a look at everything and see for themselves.
I believe that road builders should be interested as well in revealing their real costs and the quality of their work. Systematic solutions will come with regulations and the adoption of the law on the full life cycle. Let’s see how this works. I would like to use this opportunity and ask the United Russia deputies present here to pass this bill as soon as possible. Thank you.
Comment on the speech by Alexei Klyavin, President of the Shipping Companies Association of Russia
We’ve got a programme, Mr Levitin (Igor Levitin, Minister of Transport), for transport development – the Transport Development Strategy to 2030. And that includes a section on water transport. I’d like to make some comments on what you said, but I think maybe we should not make a separate programme but simply focus on the section concerned with water transport, both maritime and river, within the existing strategy.
As for maritime and river transport – but river transport faces even more problems than maritime transport, in my view…
Igor Levitin: In this area we have lost those domestic water hauls, up to 500 million tonnes, because of the crisis and all other things. This is an enormous amount of cargo turnover.
Vladimir Putin: Also, because in the past we ordered river vessels mostly in the so called People’s Democracies, in the socialist camp, in Poland, Czechoslovakia, Germany (former GDR), while we produced very few [vessels] if any in this country. And we had to develop domestic production. Therefore we will create a stimulus system for making primarily river vessels, sea-river vessels, and developing shipbuilding in general.
We have a shipbuilding development programme. It includes tax benefits, direct subsidies of interest rates, a whole series of supportive measures. I have a strong hope that these measures will be effective. On the whole, we can now see that the measures taken in this area have a good outlook. At least, we are attracting leading global companies, creating new shipyards, including those with a high degree of localisation of production at Russian enterprises – I mean our European partners. In the Far East, we are working jointly with the South Koreans, with the Japanese – this work has good prospects. We should support this shipbuilding cluster in the northwest and in the south [of Russia]. We will gradually do it all. Not gradually but persistently.
Naturally, it is necessary to take care of domestic river transport from the point of view of maintaining the operation of transport arteries, as well as the sluices. I have already mentioned the Volga-Baltic Waterway, I said that it is necessary to work on up-to-date and modern reconstruction of the link between the Caspian and the Black Sea, between the Caspian, the Black Sea and the Baltic Sea, it is necessary that the Volga-Baltic Waterway operate normally. Part of the work has been completed, part of the work is included in our economic plan to 2018 and further on. We are allocating the necessary budget funds.
On the whole we know about this problem and we have outlined ways to resolve all these issues. We will be in contact with you in the same way as in other areas concerned with motorway or railway transport, we shall do it all. The only point which needs my prompt response right now is for the Ministry of Transport (the minister is listening) to focus on water transport in terms of the Russian Transport Development Strategy to 2030 – I think even more for river transport. It is necessary to improve legal regulation, too; it is necessary to take care of waterways, river transport and water vessels. We will do it, we will take a look. We have it in our programme, and we will do it jointly with you.
Comment on the speech by Sergei Maltsev, Chairman of the Independent Organisation of Rolling Stock Operators
Mr Maltsev, you certainly keep in contact with Russian Railways managers, and you know the grudges they bear against operators. One of their complaints is that shipping companies, especially major ones, deal only with lucrative freights. Other trains are kept on the sidetracks for days on end. In fact, such tracks are not meant to keep trains idle and so delay loading and unloading. We produce twice as many freight cars as in the Soviet years but there is still a shortage. You were quite right that it’s all growing pains. I agree with you on this point.
Where did these growing pains come from? From privatisation and the appearance of private operators. They are large and sufficiently effective companies. However, dispatching lags behind the market situation. That’s why the system doesn’t work well enough. Though we have sufficient rolling stock, forwarders don’t provide a sufficient number of cars where they are wanted. With all that, I cannot but agree with you that these businesses should not be nationalised. We have launched privatisation, and now we should not expropriate but arrange smooth cooperation between transport organisers (Russian Railways in this instance) and freight shippers. This requires that all partners are efficient – forwarders and shippers alike.
As you know, the new rates being formulated will differ from what we have now. The current tariff for Russian Railways with its rolling stock is No. 10-01, while private operators charge for shipment at least 25% more.
Sergei Maltsev: That’s for coal exports. Steel is shipped at a loss.
Vladimir Putin: I mean average figures. Sometimes they charge more and sometimes less. I know my figures: private shippers charge about 25% more, on the average.
Russian Railways assumes that it operates at a loss with the 10-01 tariff. I think the company is merely crying poverty. As things really stand, it does make profits though they are negligible – presently within the 2%-3% range, which isn’t enough for development not only in transport but in any other industries. Russian Railways is a strategic company, and we must guarantee its profits.
The new rates are supposed to differ from 10-01 – from minus 2% to plus 12%. I think they will provide decent profits for private shippers and allow Russian Railways regulate fares in every part of the country depending on the national economic situation. Do you think it worthwhile to pass the levers to Russian Railways?
Sergei Maltsev: Let’s try.
Vladimir Putin: Okay.
Sergei Maltsev: Mr Putin, can I take another two minutes of your time?
Vladimir Putin: Sure.
Sergei Maltsev: I just want to offer an explanation about lucrative freights. The matter is that we bought our cars on our own or borrowed money.
Vladimir Putin: I see.
Sergei Maltsev: So we had to take only highly profitable freights. It was an economic necessity.
Vladimir Putin: That’s clear.
Sergei Maltsev: When the growing pains are over, we can open up other markets.
Vladimir Putin: I see.
Sergei Maltsev: As for cars standing idle on sidetracks, that’s impossible – it leads shippers to bankruptcy.
Vladimir Putin: That’s possible! It’s logical not to take unprofitable freights and wait till you can charge more. Shippers have another problem – car wear and tear. The 1st Freight Company has been sold, if I’m not mistaken. Hasn’t it? So it has. Is the service life of its cars 25 years?
Sergei Maltsev: It’s 18 on the average.
Vladimir Putin: About 20.
Sergei Maltsev: They have prolonged it a bit these two years.
Vladimir Putin: So it’s 20-22 years, while the sold cars are 15-16 years old, and they will have to be replaced soon. It’s all very complicated and I see your concerns. But then, you should see everyone’s point – forwarders’, the Transport Ministry’s, and Russian Railways’. Let us finish the job together and smooth it out.
Sergei Maltsev: Thank you.
Vladimir Putin: And thank you. Mr Ivanov, please go ahead.
Sergei Ivanov: Here’s some information for reference. Along with the problem of railway carriages that has been intensively discussed just now, there is another aspect to which both the Transport Ministry and I have focused our attention: idle freight carriages with unloaded cargo. Some carriages have effectively become storehouses. In this context both the ministry and I have made a proposal – and you have agreed with it – to introduce fines for failing to unload cargo, as this seriously limits carriage turnover. To some extent, this is also linked with the shortage of port capacities for some categories of exports. In some places there are long queues. Sometimes carriages with grain wait for weeks in Novorossiisk…
Vladimir Putin: This is due not only to inadequate capacities. We have announced that after selling a certain amount of grain abroad, we can…
Sergei Ivanov: We can shut down these exports…
Vladimir Putin: We can curtail them. This is why all exporters brought everything to ports and are waiting for their freight to be dispatched. This is clear enough.
Sergei Ivanov: There is one more aspect linked with the tariff corridor. I’d like to clear up this issue. The tariff corridor has not yet been approved. You have just signed a directive regarding this, and in November we must complete this work along with the Federal Tariff Service and our other colleagues. It does not yet exist but we are planning to make it the way you have suggested.
Vladimir Putin: But we heard that operators are switching to this regulatory system of their own free will.
Sergei Ivanov: We are glad to hear this.
Vladimir Putin: There is applause in the hall.
Sergei Ivanov: Indeed there is. And the last point…
Vladimir Putin: They are applauding you.
Sergei Ivanov: Yes. And the last point. You made an important statement regarding carriages in your opening address. You said that we must change the technology of their construction. We must extend wheel set mileage and the pair of wheels must be less destructive on the tracks. The tonnage of carriages must be changed as well. In this context we are now elaborating industrial measures to upgrade the quality of carriages, especially open wagons, which are in short supply. We must openly admit that we have several cases in which carriages, imported carriages, have gone off the track, creating serious danger…
Vladimir Putin: Most of them were produced in…
Sergei Ivanov: In Ukraine, I'll say it straight out. I think we must introduce tougher standards to ensure traffic safety and increase the freight turnover.
Vladimir Putin: Our metallurgists and machine builders offer good equipment, so…
Sergei Ivanov: Yes, you have been to Nizhny Tagil, Mr Putin. They have launched a new modern casting line together with Siemens and will be able to upgrade the quality of carriages substantially. This is also important and this concerns…
Vladimir Putin: It is necessary to draft these rating standards as soon as possible and complete this work.
Vladimir Putin’s remarks on the speech by Robert Suleimanov, General Director of the International Association of Top Managers of Aviation Enterprises of Russia
Thank you very much for your remarks. As for the dialogue, which is a continuation, we will do this, and it is for this purpose as well that we have gathered here. Our United Front events, which grew out of pre-election State Duma events, have evolved into this professional dialogue, and I am very pleased about this, as I have said earlier. We should, and we will, preserve this opportunity and will use it in the future.
As for the comprehensive programme for the development of small-scale aviation included in the strategy -- of course, as with rivers and seas, we can proceed likewise with small-scale aviation. Please think this over, and report back to me on what proposals you have. As you are no doubt aware, we have just made a decision to form a number of state-run enterprises for the development of small-scale aviation, which will be provided with some benefits that are used in other sectors as well in order to make this business profitable, at the very least. The programme for strategy development should be included among these measures. Is there something you wish to add?
Igor Levitin: I’d like to point out that at present, 2.5 billion roubles are allocated each year towards supporting the airfield network of the Far North. We discussed this at a roundtable today as an effective measure to support airfields.
Vladimir Putin: What Mr Suleimanov means, if I understand you correctly, is that this measure should not be a one-time event; rather, we need to include it in our programme. All of us, first and foremost the Russian citizens, need to feel confident that we are not simply throwing around 2.5 billion roubles that we will then forget about tomorrow – all of us need to be aware that the funding will be renewed in 2012, in 2013 and 2014, with the expected results. We should see the results which we are seeking and which we ought to achieve.
Robert Suleimanov: And not only state-run enterprises. They make up the experience of Yukutia, Kamchatka and so forth. These are three state-run enterprises, starting with Yakutia. But this is a broader issue that not only concerns airfields and airports as such. This issue is broader. It includes airlines.
Vladimir Putin: Yes, it is easier to offer the aforementioned benefits to state-run enterprises. It is precisely for this reason why at the first stage we decided to use the formula of a state-run enterprise, and specifically in those locations that you have indicated that can only be reached by plane. And then… Yes, if you have this programme in mind, then consider what should be done next, after these state enterprises have been launched in Yakutia, and so on. All right? And leasing should be employed more widely. It requires funding, but let’s look into it. We have a leasing company in VEB (VEB-Leasing) and also in VTB. Let's work with them, and provide them with our instructions. VEB is essentially a state institution, and the government has a controlling stake in VTB, so I'll work out these instructions for them, and we'll proceed in this manner. These are extremely important things, but most important for us is to launch domestic production of our own machinery, to revive small-scale aviation and the production of these aircraft. I hope this will happen very soon… It takes much time to launch the full production cycle of new planes, perhaps the immediate future is too much to expect, but the process will begin immediately. Our aircraft engineers have unveiled our new aircraft, so the product exists. We will certainly advance in this direction -- we've discussed the railway, haven't we? But railways will not cover everything. With our enormous territory, the largest in the world, without the development of small-scale aviation, we will not be able to ensure the economic development of the regions, of this we can be sure. We will work on this, and I have made a note for myself to implement what you have said.
Comment on the report by Alexei Lanis, director of department for research and development, Siberian State University of Railway Transport
We have spoken about and repeatedly turned to the issue of interaction between business, government and consumers, as they are tax payers and play an important role as well. As far as I remember, we have 24 special economic zones with a whole range of incentives and benefits, and work can be done easily within these zones.
I’m not sure whether I have mentioned this or not, but I know for sure that the ministry plans to unite transport education institutions into a single large education and science centre. This will provide more opportunities for financing the most promising projects. At last, we have developed a system of support in various areas that you probably know about, that is grants for scientists who propose the most interesting projects, including those in the industry. 150 million roubles is a substantial grant. As far as I remember, we have allocated a total of 19 billion roubles for funding grants. We have many areas where the most promising and interesting projects can be supported. I have no doubt that if you directly address the ministry or companies (for instance, we have a representative of a railway vehicle company here) with interesting projects that could help them save substantial resources then they will not hold money back, as these are large companies.
Those involved in transport are involved in other activities as well: there are large manufacturers operating in other industries as well, such as metallurgy and coal. In fact, the activities you perform are at the intersection of various areas of scientific work and types of production. There are many opportunities here, and if you have concrete suggestions, please make them. We have heads of major departments present here at this meeting, and I will gladly listen to you and make proposals. As for industry-specific research, I agree with the ministry that this work has to be optimised. Such institutions make up a vast network that operates well, but it is time to optimise its work. We have more transport education institutions than we had in the Soviet era. How many higher education institutions were there?
Remark: There used to be half as many as we have now. Those were large institutes, there were only a few of them in the Soviet Union. Now, the number has increased, but we have optimised the network. We have developed a proposal to establish a united university.
Vladimir Putin: Still, if those who work in industry-specific research have worthy and interesting proposals, which could be implemented under the system of incentives that is being offered – and there are plenty of incentives – do not hesitate to make your suggestions. We will consider them.
Remark: Thank you.
Commenting on a speech by Serik Zhusupov, Executive Director of the Russian Association of Commercial Sea ports:
Vladimir Putin: The Northern Sea Route is an important transport artery which we will certainly expand at an accelerated pace in the near future having several considerations in mind. I mentioned this earlier in my speech. Thank you for paying attention to this. First, as I have said, this transport artery almost cuts freight-delivery costs from Europe to Asia and back in half including the reduction in navigation time. We have already made several trial runs with freighters filled with hydrocarbons. And, of course, we will continue to expand this alternative. I have also noted that the climate is changing, and that these navigation periods are getting longer. This is the second thing.
Third, we plan to expand the economic activity in this area. We know about the Shtokman gas condensate deposit project, due to be implemented by Gazprom. Although Gazprom and its partners have delayed some deadlines, the project will, nonetheless, be implemented. It is planned to start work there on January 1, 2013, but they are supposed to be working there by now. Our hydrocarbon production and exports are not the only projects here. The Shtokman deposit project also implies the construction of gas pipelines in the Murmansk Region and in some other regions in northern and northwestern Russia.
We will also expand our operations on the Yamal Peninsula. Investors plan to build an airport and a seaport there. It is a very convenient location for transporting raw materials to the West, including Europe and the United States, and to the East. This is an exceptionally convenient location. Multi-billion dollar investment projects are planned there. Both Russian and foreign investors are involved. To the best of my knowledge, we have finalised an agreement with France’s Total, one of our traditional partners in this area.
What do I want to say? I would like to say that the Russian Federation and our partners will certainly implement plans and step up their economic activity in this part of the world. Many countries, including Canada, the United States and the People’s Republic of China, are interested in using the Northern Sea Route. All of them have given this substantial consideration. But the Northern Sea Route passes through Russian territorial waters, so Russia will play the lead there. We intend to establish a chain of outposts along the entire Northern Sea Route. Personnel from the Ministry for Civil Defence, Emergencies and Disaster Relief will be stationed up there in order to react promptly to any possible regional emergency. We will strengthen the regional border infrastructure, and we will also pursue environmental issues. We have drafted an entire programme to clean up our part of the Arctic region, and we started it this year. We have plans to implement some ambitious projects there. The delivery of consignments to the northern territories and other aspects are also linked with this. But these are traditional problems. Apart from traditional issues, we will expand our economic activity in the region.
Commenting on a speech by Arthur Chilingarov, Member of the Russian Academy of Sciences and President of the State Polar Academy:
Technically speaking, polar stations support the safety of this national route. Tomorrow, new naval submarines will arrive at Sevmash after completing factory tests and high-seas trial runs. We will also beef up our military bases there, and we will certainly increase national security in the north.
Commenting on a speech by Alexander Tselko, Head of the Western Siberian Railway:
I have already mentioned the rather low profitability. This is not the fault of Russian Railways. Obviously, Russian Railways bears a substantial load, including their social obligations. And we support the company. Apart from subsidies for commuter traffic (25 billion), an additional 40 billion will be allocated for the development of Russian Railways. Next year, we will limit utility price hikes using the forecast 2012 inflation levels, and we are having them raise tariffs on July 1, rather than January 1. Russian Railways is the only exception to this. The company can start raising prices on January 1 because it must implement important repair projects, railway-safety projects and other projects oriented towards development.
Railway transport is now witnessing major infrastructure changes linked with the organisation of market-style freight traffic. We will also continue to increase market-style passenger service. All of this will motivate the development of Russian Railways. Nevertheless, I understand your question, and I agree that we will not accomplish much in the context of development by solely using corporate resources. Public-private partnership, which has already been mentioned here, is the most promising option. Although this is not your sphere, you already know about one direction, namely, the Eastern Siberian Railway and its Kyzyl-Kuragino section. Two-way traffic must be expanded along the entire Trans-Siberian Railway, rather than just its Kyzyl-Kuragino stretch. Technically, the infrastructure must be upgraded to deliver more coal. You know how we work. The Kuznetsov tunnel must get started. Mr Yakunin, will it begin within two years or a year from now?
Vladimir Yakunin: It will be commissioned in late 2012.
Vladimir Putin: The Kuznetsov tunnel, due to be commissioned in late 2012, will expand the railway’s transit potential considerably as regards freight deliveries to Far Eastern ports. The strategy for the development of the Russian transport network, which has been repeatedly mentioned here today, lists all these issues. We will also consider railway-transport development using state funds. In this respect, we need to prioritise high-speed railway traffic. I mention this, but I’m in no mood to start a discussion. In my opinion, these extremely expensive projects are absolutely essential for this country. We will work on them.
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Vladimir Putin answers questions from conference participants
Vladimir Putin’s response to Valery Ilyenko, Chairman of the Board of the non-commercial carrier partnership, Transport Union of Siberia. The question is about government support and the law on land transport services which, according to the questioner, has been “discussed, approved, passed the Duma reading – and that was all.” Why hasn’t the law been adopted?
Vladimir Putin: Providing support at 30/70 or 40/60 make a big difference in federal budget spending. We did indeed approve that programme as an anti-crisis measure aimed at, (let’s face it) above all, support for the auto industry, to prevent companies from being closed, to preserve jobs and to ensure the level of wages. But naturally we did it in a way that would kill two birds with one stone: to support utilities and municipal services while at the same time developing passenger transport. I am glad that we have succeeded. But the crisis is not yet quite over although on some counts we are already back to pre-crisis levels: for example, unemployment is lower than it was before the crisis. So, there is less motivation now to introduce such programmes. But we will again consider what can be done.
Valery Ilyenko: And as regards the law, in any case.
Vladimir Putin: What do you consider to be the most important thing about the law? Why do we need this law?
Valery Ilyenko: You know, the law I am referring to has been passed by many Russian regions, Novosibirsk Region was one of the first to pass it. But what we need is the federal law. Everyone writes their own laws, but that’s not enough.
Vladimir Putin: You are a practical worker, right?
Valery Ilyenko: Yes, of course.
Vladimir Putin: What are you missing in your work?
Valery Ilyenko: Today we don’t know how to calculate rates. We don’t know what to do about legal carriers, illegal carriers, etc… I could talk about it at length because it is a long overdue measure. But what we need is a federal law, regional laws are not sufficient.
Vladimir Putin: Yes, of course. We will revisit this issue. There are State Duma deputies in this room, and I will certainly talk with Boris Gryzlov. We will come back to it by all means.
Vladimir Putin’s response to the Chairperson of the Coordinating Council of the Russian Popular Front’s Bryansk branch, Yelena Fanayeva, about road safety: opinion polls are necessary, but they are difficult to conduct because of bureaucratic barriers…
Vladimir Putin: To change people’s mentality, laws must be amended gradually because one thing should lead to another.
As regards transparency in the activities of administrative bodies at any level – and I stress, any level – unless this type of activity or this information is classified as “secret” or “for internal use only”, all the rest must be absolutely transparent, posted on websites, on the internet, and if requests come from non-governmental organisations, answers must be given immediately. We have worked out an entire programme of providing public services via computer. One element of it is the provision of all the information to the public concerning the opportunities, plans, development, problems and all the activities of administrations. We will continue working on this and expanding it. The necessary allocations for this so-called electronic government have been made. We will go ahead with this work, we will do it by all means.
Vladimir Putin’s response to a student at Siberian State Railways University about the construction of the Kyzyl-Kuragino Railway: what prospects does the Government see for this project?
Vladimir Putin: I would very much like to see this project implemented. Indeed the federal government is ready to cover its part of the way and contribute the necessary money through the investment fund, about 50% of the cost of this work. I think I mentioned this, but I’ll say it again: this is not just about building that section of railway from Kyzyl to Kuragino, this is about expanding the capacity of the Trans-Siberian Railway so that when the cargo runs through the Kyzyl-Kuragino route to the Trans-Sib it should not encounter a bottleneck there and then Trans-Sib can carry it further to the east or to the west of the country. That requires some money and this is in fact the main problem for potential investors. Some strong investors have moved in, such as Severstal and EurazHolding; they have a big stake in implementing this project, not the transport project, but the extraction of minerals that would then need transportation. We will support that, and we will put up almost 50% of the necessary financial resources. Together with Russian Railways and the Ministry of Transport we will have to see how to extend that railway to the left and to the right, to the east and to the west along the Trans-Siberian Railway. I think this project will be implemented.
Remark: Excellent. And shall we, the students of Russian railway universities, be able to take part in this project, in its implementation?
Vladimir Putin: Yes, of course, especially under the programme of summer student construction teams. Such an initiative would be welcome. The main thing is to get the work going. I hope this will be the case.
Vladimir Putin’s response to Miroslav Boichuk, President of the Russian Air Crews Trade Union about the financing of flying schools and recruitment of Air Force personnel.
Vladimir Putin: We plan to increase the funding of flight crew training, a very significant increase in fact. I think we will provide an amount that is needed to keep flight personnel up to date.
As for retraining, I fully agree, and the minister (who is sitting behind you) hears me and is nodding his head, that the programme must continue. These are people who have extensive experience and we cannot afford to lose them, that goes without saying.
As regards service with the Armed Forces after finishing training institutions, you know that because of demographic problems, recruitment for the Armed Forces is a sensitive issue. We must and we will of course move towards having a professional volunteer army. That is a costly undertaking. We will move in that direction, but we will have to proceed carefully, without undue haste so as to be able to recruit enough personnel for the Armed Forces now that we have cut the time of service to one year. We were forced to reduce even some exemptions from conscription, otherwise we would have been unable to man the Armed Forces. If we continue with the exemptions there will be very many exemptions: the clergy, actors and many-many other categories, including those for whom there is demand in the national economy. But since these people have already been trained I think it makes sense to recruit them mainly into the Air Force. We will pass on this request and discuss it with the Defence Minister, with President Dmitry Medvedev and consider a solution. The idea makes sense.
Vladimir Putin’s response to Lenar Safin, the Minister of Transport and Roads of the Republic of Tatarstan, a question about rural roads.
Vladimir Putin: As regards rural communities, we know very well that this is the responsibility of the regional and municipal governments. The Republic of Tatarstan is doing a lot to develop the infrastructure, and basically we are not doing badly, I would say we are doing rather well. It is one of the regions of Russia where much is really being done in the construction field: in building housing, roads and in addressing social issues. On the whole you have a good team which is professionally competent and effective. We are rendering extensive aid to Tatarstan, including the preparations for the World Student Games in Kazan in 2013. Much of that money goes into the development of the infrastructure, including the transport infrastructure. There are things for which a republic, one that stands firmly on its own two feet, should be responsible, and it should work in these rural communities. Even the programme of developing rural roads is aimed at inducing these regions to independently tackle the issues within their competence. Your proposals concerning the standards for rural roads make sense; we should think about it. I believe you are right: the standards must be such as to ensure quality and safety while at the same time not overrunning the cost of developing the infrastructure. Thank you very much for this proposal.
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Vladimir Putin’s closing remarks:
Thank you very much. Thank you. I would also like to thank the organisers and all the participants here. Our discussion has been gathering momentum little by little. It has been very substantive, interesting and to the point. I have jotted down many things; we will try during our routine work in Moscow to implement these ideas, in many cases together with you. And I would like to apologise to those whose questions I had no time to answer: but our time is up. Thank you very much and all the best to you.