Transcript of the beginning of the meeting:
Vladimir Putin: Mr Nelidov, I have looked through the information about your republic’s performance last year. On the whole, it looks very good. I noticed that you have substantially increased housing construction, by more than 50% compared to the year before. We will speak about the measures that have helped you achieve this result. How do you assess your republic’s overall performance last year?
Andrei Nelidov: I will begin by answering your question. We have not only increased housing construction, but also for the first time in years we have been building and selling flats with interior decoration for slightly under 35,000 roubles not under specific programmes, but simply…
Vladimir Putin: 35,000 per square metre?
Andrei Nelidov: Yes, per square metre… we are building this housing not as part of any programme. We also offer good mortgage packages, which we have developed jointly with Sberbank. We have a 10-10-10 package, under which we sell flats with a 10% deposit at an interest rate of 10%, to be repaid over a period of 10 years. We co-finance mortgage payments for those who qualify. This has helped revive the market. It is worth noting that when we launched the programme, housing in Petrozavodsk cost at least 45,000 roubles [per square metre]. We started building quasi-public housing. In other words, the Property Fund was issued with land plots and started building housing there, and announced that it was for sale. The fund did not even complete its first house when house prices in Petrozavodsk became comparable to the prices of the property fund’s flats. I believe that this allowed us to achieve our goal, which was not to build public housing using state organisations, but to create an environment in which the market would regain competitiveness. The sceptics who expected us to fail ended up becoming developers. This is all I want to say regarding our housing projects.
We also have other achievements we can be proud of and some projects where we failed. One of our achievements was on macroeconomic indicators, which have (improved) rapidly, within a year… For example, tax collection has gone up by 20%. The republic’s Finance Ministry ranks third according to the Russian Ministry of Finance. Our Healthcare Ministry officials have recently talked with Tatyana Golikova (Russia’s Minister of Healthcare and Social Development), who said that we are doing well, coming out top in 15 elements of the healthcare modernisation programme.
I believe that one of our greatest achievements, for which we should be grateful for your contribution, was the launch of a large-scale programme for connecting consumers to the gas supply network. You kindly signed a letter during our previous meeting, after which, I have to mention this, the contribution of Mr Miller (Gazprom CEO Alexei Miller) became specific and clear. We have signed an agreement under which we will start building a pipeline in 2012, while Gazprom companies are now working – less than 6 months have passed – as heat suppliers. The scheme is simple: Gazprom builds the pipeline while simultaneously working at heat supply stations using fuel oil to build gas-fired boiler stations.
Vladimir Putin: They are already preparing the necessary equipment.
Andrei Nelidov: Exactly, and when the pipeline reaches the said facility, they will simply flick the switch. If they connect consumers in Ladoga Karelia (the area north of Lake Ladoga) to the gas supply network under our plan, more than half of the gas connection plan – together with Petrozavodsk where consumers have already been connected to the supply network – will have been fulfilled. This is not enough, but considering that gas supply systems did not exist there before and progress is impossible without gas (it provides heat and electricity, without which nothing can be built) I believe that this project is very important to the republic. You may not see its importance now, the importance of the pipeline, but it has been clear from the start that nothing can be done without it.
We have launched air links between Moscow and Petrozavodsk, although not without problems. The problem I am referring to is last year’s plane crash, which has had a serious impact on us, because people were only just getting used to air travel and the planes were always nearly full. It is important to know that you can fly somewhere, as this gives you a feeling of involvement in what’s going on. It is also important to business people, who don’t have to spend half a day going somewhere and another half a day to return home by train.
When we discussed economic development, we knew that we had to have an airport. We are grateful to the Transport Ministry and personally to Mr Okulov (Valery Okulov, Deputy Minister of Transport), who has taken to heart the problem of Petrozavodsk, and Karelia as a whole, which had no flights to anywhere before. And now we have daily flights to Moscow and a flight to Helsinki three times a week, which has given us a European dimension. People have become used to this. People from Karelia, from Petrozavodsk, now go to Finland for the weekend. Do you want to know what for? For curd cheese, of all things, although the distance is longer than to St Petersburg. But people here and there have common roots, and so they say: “Why do I go there? To buy detergent.” But you can buy the same detergent here. “No, theirs is better.” It’s a custom.
Vladimir Putin: Milk here is definitely better.
Andrei Nelidov: Yes, our milk is better. We have a dairy plant in Medvezhyegorsk where people from Moscow come for milk. These are people who cannot buy it here. Milk from Medvezhyegorsk is delivered here – I only ever buy this kind of milk.
Vladimir Putin: What kinds of problems are holding back your development?
Andrei Nelidov: Mr Putin, we considered our problems when preparing for this meeting, and I can assure you that there aren’t any major ones. We have a clear development strategy. As for the projects we would like to discuss, the subject of this meeting has been defined as the priority projects capable of changing the situation in the republic in one way or another.
We believe that, strategically, the republic should develop in two directions. The first direction concerns purely economic projects, the economy, larger incomes and higher profits. Our modern plants are tackling these issues, but they cannot resolve the problem of employment. Take our berry plant, the only one of its kind in Europe, but it employs only 100 people. That is why we are developing in two directions. The first of them concerns the economy.
The second concerns employment. We consider it very important to develop the tourism industry in Karelia. We have spent a lot of time on this project and have held many meetings, and this is what we have achieved. With the assistance of Patriarch Kirill, we have developed a project called The Spiritual Transformation of the North. We believe that spirituality in Russia has plummeted to such a level that it needs to be revived. We have decided that the revival of spirituality in Russia should begin precisely with its northern regions, and not some other place. This is logical. We have three Transfiguration Churches in Karelia, although the third one is officially located in the area that is now part of the Arkhangelsk Region. The change was formalised 50 years ago – I am referring to Solovki – but before that it was part of Karelia. So our republic is the only area in the world with three Transfiguration Churches. This could be used not only for developing pilgrimage tourism, but also historical tourism, which is a very striking kind of tourism…
Vladimir Putin: What do you plan to do?
Andrei Nelidov: You issued instructions five years ago, funds have been allocated and road construction has begun. We are using these allocations, but unfortunately, the Ministry of Culture has not included us in the programme. We have not received any money after the first allotment, although we will be celebrating the 300th anniversary of the Kizhi Museum (of wooden architecture) in 2014… In fact, we needed the money to build a road to Kizhi and extend electricity lines, which would make Kizhi more easily accessible, and so on. But if we are not included in the programme next year, we will not complete the project on time.
Vladimir Putin: All right. So, you are developing tourism. Anything else?
Andrei Nelidov: Our second focus is even more global. Last year we launched a berry processing plant and a pig farm for 12,000 pigs, as many as were bred in all Karelia before. Taken all together, our farms are now breeding 24,000 pigs. The Russian Sea Group is implementing a major project – their ambition is to produce as much trout as Norway does. It’s true, I am not trying to mislead you – they are planning to invest 5 billion roubles in this project, and their goal is achievable.
There is also a large project we are considering launching, which could really make a difference. It is the Pudozh Riviera project, which we are planning to implement in an outlying region of Karelia. There is no power there or economic enterprises, or any employment, yet people somehow manage to live there, in that forest. A group of prominent experts has taken an interest in it and proposed a modular design, which could subsequently be used anywhere. It boils down to…
Vladimir Putin: Just tell me in broad outlines about your plans there.
Andrei Nelidov: In broad outlines, we intend to build two timber plants, one for broadleaf plants and the other for evergreens. The core of these plants will be a power generating facility which uses wood waste to produce electricity and heat. Heat will be supplied to the town while electricity offers the opportunity to develop other types of business.
Vladimir Putin: That’s fine, but what do you want from us, from the Russian government in this respect?
Andrei Nelidov: The thing is that this project was considered within the Single-Industry City programme, according to which the applicant, the single-industry city, had to have a principal company which is the mainstay of the town. The company that featured in the project five years ago has been declared bankrupt, but we now have the Pudozh Riviera project. We discussed the possibility of adding Pudozh to the list of cities claiming the single-industry city status with the Ministry of Regional Development. Ministry experts visited Karelia and confirmed that the project is indeed interesting, saying that if we receive government support – Mr Putin, you have asked what we want from the government – they will offer a 100% guarantee that the project will develop rapidly and to a high quality. This project is very important to us.
Vladimir Putin: All right, let’s take a look at it.