26 june 2012

Prime Minister Dmitry Medvedev chairs meeting on issues of transferring unused Defence Ministry installations to regions and municipalities, and on preparing military townships for the heating season

"Cases in which social facilities are at risk of closure as a result of property transfers, are completely unacceptable for us."

Transcript of the meeting:

Dmitry Medvedev: Good afternoon. Today, we will discuss a rather difficult issue. I would like to talk about the transfer of unused Defence Ministry facilities to the regions and municipalities with a frank and to-the-point approach. And the second issue derives from the first. The second issue, specifically preparing military towns for the heating season, is equally important today. Although it’s now summer, the cold season will, nonetheless, arrive soon, all the more so as Russia is a large country. Winter will begin quite soon in northern Russia where there are also many such townships.

Problems have mounted for a long time. Over the past 20 years, the strength of the Russian Armed Forces has been reduced consistently, by about three times. The Armed Forces’ deployment system has also changed significantly. As for military townships and their infrastructure, both things have remained virtually unchanged. You can clearly see this, even just walking around this township.

The procedure for transferring real property from one category to another has been rather difficult. This process required endless discussions to reach a consensus accompanied by a large volume of documents. As a result, the military townships which are no longer used for their intended purpose were financed solely with “left-over” budgetary allocations. The Defence Ministry reports, and I believe that the Defence Minister will raise this issue again, that the approved maximum budgetary allocations for the maintenance of military townships real estate totals 61 billion roubles. At the same time, the demand for such allocations is 130 billion roubles. Given the inadequate allocation, the Defence Ministry naturally spends funding on high-priority objectives, rather than proportionately on all available installations.

On May 24 I conducted a teleconference and on May 31 I chaired a government meeting. People at both events raised issues regarding the financing of the facilities being transferred and concerning the preparation of military towns’ energy infrastructure for the winter season. Many governors took the floor. I remember that the Governor of the Trans-Baikal Territory spoke about the lack of funding. At that time, I instructed the Ministry of Regional Development and the Defence Ministry to assess the situation in every detail. Today, I would like to hear a clear assessment of the current situation and the latest developments. I would like to know where the budgetary allocations have been transferred, how they will be spent, and what exactly will be transferred to the regions.

We have just visited a partially renovated kindergarten, which now looks exactly like it did when it was completed in the 1950s. Of course, all this is rather sad. We consider it absolutely unacceptable when socially important facilities find themselves on the verge of being shut down as the result of a property transfer. I’m talking about schools and kindergartens.

All the instructions have been issued. The concerned agencies were instructed to draft a method to calculate the required funding for each specific facility. As I understand it, this should have been done by June 15. Has the method been drafted? (Addressing Dmitry Kozak).

Dmitry Kozak: No, it isn’t finished yet.

Dmitry Medvedev: Meaning that an appropriate methodology failed to be submitted to the cabinet on schedule, right? And who was supposed to develop it?

Dmitry Kozak: The Defence Ministry in cooperation with the Finance Ministry and the Regional Development Ministry. The Finance Ministry yesterday took the lead, sending in an adequate draft methodology, which provides for the required transparency in the allocation of transfers. But despite the many reminders, no agreed upon document is here yet, with the excuse that no money is available anyway. But some money is available, actually – as much as 61 billion roubles.

Dmitry Medvedev: This is no petty sum as a matter of fact. Now let’s talk about assignment discipline.

During the past 18 months, a draft package was adopted, aimed at facilitating the procedure of non-profit transfer by the Defence Ministry of its unused property, including land plots, to regional or municipal ownership. A law to that effect was adopted in 2011, as well as an appropriate government resolution. Now that the procedure has been simplified, a Defence Ministry decision on transferring property to regional or municipal ownership will provide the grounds for the new right holder to be granted the right of ownership of the property. Meaning that there are fewer formalities to slow us down. Thanks to the central and regional authorities’ efforts, the deadlock was broken eventually, and the regions and the municipalities placed on their balance sheets as many as 36,000 former Defence Ministry apartments last year and another 20,000 in the first five months of this year.

At the same time, as practice shows, there are still some inconsistencies hindering the process of property transfers that prevent a coordinated and structured procedure. Also, there’s a range of long-standing problems related to the registration of land plots, and those problems need an urgent solution. This must be put in order. The Defence Ministry should address the problem together with the other agencies concerned. It could submit legislation amendment proposals to the government if necessary. And there are proposals to make, as far as I understand. They’ll be set forth, hopefully.

Now on to the preparation of military towns for the winter. I was just shown photos of the dilapidated condition of the sewage system and other areas. The last heating season made it clear there are a great many problems here. Unfortunately, every now and then, we see incidents similar to the one in the Murmansk Region’s village of Alakurtti, where a boiler house went out of order in the middle of the winter and thousands of people had to be evacuated from their frozen homes. Let me remind you that starting July 1, energy generating and utility facilities should be transferred to the regional and local authorities along with certificates confirming that they are properly prepared for the forthcoming heating season, as well as with operating licenses from environmental, technological and other monitoring agencies.

For the sake of objectiveness, let me point out that the Defence Ministry isn’t the only one to blame here. The problem also lies in municipalities and regions failing to adequately assess their needs in terms of acquiring a property. No one should be forced to accept unnecessary property – except some essential public services sites, of course, such as schools and kindergartens. The transfer of all other types of facilities should be governed by the principle of reasonable sufficiency.

Ok, let’s get down to work now. Mr Serdyukov, please, you have the floor.

Anatoly Serdyukov: Thank you. Mr Medvedev, ladies and gentlemen. The Defence Ministry is in charge of about 7,500 military towns, of which 1,644 are not used as designated. In other words, today our ministry has 5,856 military towns at their disposal. We are short of about 70 billion roubles, as you’ve just said.

We have signed contracts for the service and upkeep of military towns. The contracts are worth 130 billion roubles but we have only 61 billion in budget allocations. So, we are short of 70 billion. It was a lack of money for the upkeep of these facilities that prompted us to make a decision to transfer them to municipalities and regions whenever appropriate. I just want to emphasise that we made this initiative because of our lack of funds.

We have raised this issue at each government meeting on budget projections in the last four years. We have had this same shortage of 70 billion roubles each year.

What is a military town? It consists of a residential district, social, administrative and commercial facilities, including housing and public utilities. There are also special facilities, such as car and tank parks and depots, to name a few. The military town we are now in is not a typical one, but if you came to a big military town you’d see that the housing is decrepit (this is also true here – I'm referring to special facilities – but there are not so many of them here) and that it’s time to write them off completely. They are morally and physically unfit for use.

What is the Defence Ministry doing about this? You have mentioned several figures and I’d like to repeat some, if I may. The figures for the properties that have been transfered to municipal ownership in the last two years are as follows: 36,760 flats, 177 kindergartens and 102 army clubs.

We expect to sell property worth 15 billion roubles. We have already sold 5,850 billion roubles worth of property and plan to sell the rest before the end of the year, thereby completing its removal from our balance sheets.

As of July 1, 2012 we have registered 494,279 properties, including 15,352 land plots, 157,103 buildings and facilities and 321,824 apartments. In the period under review (from 2010 to 2012), we have processed 13,953 cadastral certificates on infrastructure facilities, 17,374 certificates on state registration of the right of property of the Russian Federation and the right of operative administration of infrastructure facilities and 629 certificates of state registration of land plots and the right to their permanent use.

We suggest that 2,792 military towns should be transferred before the end of the year; 1,470 of them should become municipal property. Out of the total, 880 military towns should be transferred by September and another 590 by the end of the year, if, of course, municipalities would like to take them over. Last year we handed over through our plenipotentiary representatives the lists of all military towns that we had planned to be transferred, after which I signed and sent lists of specific facilities and military towns that we were ready to transfer to every governor.

Residential buildings are the biggest problem and they must be dealt with as soon as possible. All in all, we plan to transfer about 180,000 apartments before the end of the year. As for the transmission of funds that Mr Kozak has just mentioned, I don’t quite understand how one can transfer a deficit. If we part with some of the funds allocated to us by the Ministry of Finance, our deficit will become even bigger, in which case the divestment of non-core assets will become pointless. We cannot transfer funds that we are lacking unless we want to create more trouble.

As for the certificates of readiness, we have just inspected kindergartens. For example, the boiler rooms that are on the Defence Ministry’s balance were built in 1935 and later. Therefore, issuing full operability certificates for them is not realistic without first giving them a full overhaul or building new ones next to them. How can we make such a certificate available and transfer these boiler rooms to the municipal balance? I am not even talking about a lack of funds. We are simply not in a position to transfer these boiler rooms to municipalities. The bulk of these boiler rooms were built during 1956-1971, which means that they are completely worn out and cannot be transferred to someone else’s balance.

We suggest that the municipal authorities tell us what they are interested in from the lists that we made available to them. We believe that facilities of prime importance for them include social ones, such as kindergartens, schools, medical centres, hospitals, sanatoriums, officers’ clubs and so on. We are prepared to transfer them. The facilities that we will keep include the ones that are 100% worn out and cannot be used by municipalities. We will write them off and scrap them. Next, we will clean underlying areas and bring them in order. In other words, we propose transferring only the facilities that the municipalities can use. Certainly, they will be transferred as is, since the ministry is experiencing a shortage of funds.

As far as winterisation goes, we have 8,000 boiler rooms, of which I don’t know how many may go out of order at any time, especially since many of them are in bad shape. The situation is becoming critical. We have bought (I reported it a year ago) about 128,000 mobile boiler rooms that can be used in emergencies. There are certain material and financial reserves that can be used to take care of emergencies. In short, we are prepared. With regard to fuel supplies, they are on schedule, including supplies to northern Russia. We will use funds provided from the federal budget to maintain the facilities that we will keep on our balance. Thank you.

Dmitry Medvedev: Frankly, I don’t quite understand some things, although we discussed some of them with Mr Serdyukov yesterday. It is my understanding that the Defence Ministry believes that there’s no need for a method, is that correct? If so, how do we make the calculations?

The same goes for full operability certificates. I hear what you are saying. It’s really difficult to come up with such certificates for facilities built in the 1950s. However, it is also clear that they are in a more or less operational condition. I am not saying that they should be brought into compliance with the latest technical requirements. Still, they should be in a workable condition.

Anatoly Serdyukov: We are on top of these things. Last year, we issued a number of certificates to the effect that some equipment is usable. In general, with the exception of Alakurtti, we had a fairly uneventful winter without any delays in supplies. We want to use this time to repair about 460 boiler rooms. We will even replace boilers at some locations. As a matter of fact, we will issue a certain number of certificates. What I am trying to say is that they will not be in ideal shape and will not conform in full to the standards that both municipal authorities and we would want them to. But still, we will proceed with the winterisation and we will bear responsibility for their maintenance.

With regard to the method, I want to repeat that these 130 billion roubles… This amount doesn’t include funds needed for repairing boiler rooms. That’s why we believe that we cannot transfer some of these boiler rooms. When we go ahead and transfer some of these boiler rooms and funds, we are simply exacerbating our own deficit. Earlier in my remarks I said that we are now at a point where we need to get rid of non-core facilities in order to minimise the deficit. If we keep giving money, then we’ll never get out of this hole. We will permanently be underfinanced. Mr Kozak’s proposal is unrealistic. The idea is not bad, but it will not resolve our problem. We’ve been dealing with it for five years now, but we have found only this solution. If we go ahead and minimise military town expenses, then we will be able to remain afloat with the kind of money allocated to us from the federal budget.

Dmitry Medvedev: Or, you should go ahead and push to have the amount of these funds increased.

Anatoly Serdyukov: That’s what we are trying to do, but it isn’t working out well for us.

Dmitry Medvedev: What do you think about it, Mr Siluanov?

Anton Siluanov: Mr Medvedev, we make funding available to ministries and departments in full as soon as the Finance Ministry gets the final financing figures for the next year. It’s then up to ministries and departments to distribute these funds across specific areas. Therefore, spending is prioritised by each particular department based on their needs.

Now, with regard to figures. The initial amount of spending for maintenance, operation and repairs of the Defence Ministry’s infrastructure facilities, which include military towns, warehouses and military buildings, stood at 50 billion roubles in 2011. In the process, the Defence Ministry redistributed a portion of its funds and allocated an additional 33 billion roubles for these purposes to a total of 83 billion roubles in 2011. This amount covers maintenance, operation and repairs of all infrastructure facilities, including military towns, to be sure.  

With regard to this year, the situation is as follows: 61.9 billion roubles have been budgeted, which is 21 billion less than in 2011. To reiterate, 50 billion were allocated as planned in 2011, plus the Defence Ministry added another 33 billion for a total of 83 billion. This year’s plan includes 61.9 billion, and the Defence Ministry let us know that it will need an additional 35 billion roubles to cover its fuel needs. The upshot? We can go ahead and do as we did last year, since like any other ministry the Defence Ministry has certain savings and additional revenue generated during the course of the budget execution. We can find funds using the same sources as in 2011. This is my first point.

My second point is that the Defence Ministry has been in the process of transferring military towns and social infrastructure to municipal authorities and entities since 1997. We haven’t cut financing by a kopeck. In other words, the Defence Ministry keeps the entire amount of funding it used to have, which has been adjusted for inflation as well. Therefore, we believe that all those funds will remain at the Ministry of Defence, with the account the indexation. We believe that additional resources should also be raised for the purpose, and the ministry’s priorities and opportunities for transferring military townships should be considered as well.

Speaking of the procedure, it has been developed by the Ministry of Finance and submitted to the Ministry of Defence and the Ministry of Regional Development. The procedure involves a simple formula based upon the area of the transferred housing facilities, social sector, the cost of federal standard for maintaining one square metre of the transferred housing and social facilities, and capital repairs, and based on the number of months a municipality or a region will additionally maintain them following the handover.

Mr Medvedev, this is what we proposed: with budget allocations of the Ministry of Defence envisaged for the year and certain facilities to be transferred starting from July, until the end of the year the ministry will continue to allot money and will transfer corresponding allocations with these facilities to the regions and municipalities. As for the next year, we are not planning to withdraw these funds from the Defence Ministry, and starting from 2013 they could go to the purposes that Mr Serdyukov specified, while regions and municipalities, which have not incurred any expenses for maintaining newly transferred facilities this year, could provide the corresponding funding in their next-year budgets to maintain these facilities, or make decisions to partially close them and partially attract investments for the repairs or construction of housing and social infrastructure facilities. We were speaking of a simple solution.     

Funding for this year is available, and facilities are being maintained. Facilities are being transferred to the Moscow Region – and allocations made for them until the end of the year should be transferred as well. It’s as simple as that.

Dmitry Medvedev: As regards the procedure – has it been developed by the Ministry of Finance or not? Does it apply to this situation?

Anton Siluanov: We believe it applies. The proposals on the procedure have been introduced and officially submitted. This is a simple procedure based upon the finances spent for maintaining the area of the transferred property complex, and how much is required for maintenance and capital repairs. Actually, it is as simple as that.

Dmitry Kozak: …and based on the period left until the end of the current fiscal year necessary for maintenance. The municipalities and regions do not have funding planned for the purpose, but as regards the deficit that Mr Serdyukov has mentioned, it will be eliminated only next year. Mr Serdyukov, this position has been considered three times at meetings attended by three deputy ministers of defence, and we have agreed everything.   

Anatoly Serdyukov: Two of them are present here.

Dmitry Kozak: Yes, two of them are present, the third is not here.

Dmitry Medvedev: Well, let’s ask them.

Dmitry Kozak: The situation is simple, with simple calculations. Although with the deficit, as you say, only 40% of what is actually required, these allocations, in proportion to the remaining months of the current financial year, should be given to municipalities to allow them to maintain the facilities being transferred to their ownership, just like you are doing. Then, they will either add their own funding, or use these modest allocations – and next year, they will provide funding in their own budgets for this purpose, and they will be fully responsible for this property starting from the moment of the transfer. The deficit of the Ministry of Defence will be eliminated, and the regions and municipalities’ demand satisfied at least at the minimum level. I believe this is very logical and clear. This has nothing to do with any political message, this is just simple arithmetic.     

Anatoly Serdyukov: If we use simple arithmetic, it is June now, six months have passed, we have precisely half of the funding. We have spent this money, there is nothing to hand over. There is nothing to hand over because we have spent it, only the deficit remains. Do you propose that I hand over the deficit? I’m prepared to hand over the deficit!

Next. In the very beginning I said that of 7,500 military townships 5,800 are being used. And these 1,500, we have no funds for them at all, and we do not support them either. What do you want us to hand over? There are no funds for them indeed. Six months have passed, and I said at the yesterday’s meeting: I have a 70 billion rouble deficit. We have no funds for the second half of the year. I ask you to extend the required funds. If we are to hand over from these 5,800 townships, then I am ready to either transfer a portion of these funds or keep them until the end of the year and from January to transfer the maintenance of these facilities to a municipal level. But what can I hand over now? This is the first time that I am hearing about the methodology and the formula that the finance minister has just outlined. Nobody said that it is necessary to keep all that until the end of the year. Then extend 70 billion roubles and I will keep them until the end of the year, and beginning in January, I will hand them over for municipal servicing. No questions asked. 

Now, regarding how we funded this property maintenance last year at the expense of other budget items. In fact, we spent some 100 billion roubles. But all the same, the Ministry of Finance has again allocated 61 billion this year for us, while they understand that in practical terms… We did our utmost: we used money intended for salaries, even abolished some bonuses in order to pay utilities bills and so on. Meanwhile the Ministry of Finance fights against cross funding and pushes us to do precisely that, to use funds from other budget items, so that we fail to keep our commitments in order to cover the cost of utilities. What is the sense in this?

Anton Siluanov: May I speak?

Dmitry Medvedev: Go ahead please.

Anton Siluanov: Where can we take the money, indeed? Last year, I repeat, colleagues, 50 billion was planned, this year practically 62, right? The Ministry of Defence asked us for another 35 billion for fuel supply. The question… 

Anatoly Serdyukov: And servicing these townships, don’t forget about that.

Anton Siluanov: We are working on the issue of servicing with your colleagues… Some of the positions were lifted, such as cleaning services, and so on. In fact, Mr Medvedev, we faced high costs from outsourcing infrastructure maintenance. Formerly, of course – perhaps it was the wrong thing to do – the Ministry of Defence itself conducted the maintenance.      

Dmitry Medvedev: That is understandable.

Anton Siluanov: This outsourcing has produced additional expenses – expenses for maintaining the relevant structures, profits for these organisations, wages and so on. However the Ministry of Defence kept what it saved. And the question is: where does 130 billion come from? According to the available data and the calculations submitted by the Ministry of Defence, this does not add up to 130 billion. In this case, a year contract (2012–2013) for infrastructure maintenance for 111 billion roubles was concluded. The contract is for six months of this year and six months of the next year (that is the contract period), on the one hand. On the other hand, when we speak of the total cost of maintenance, use, and repairs of infrastructure, this means the entire infrastructure, including military townships. Let’s have precise figures: what is the area of these military townships that are being handed over, what is the price of it? Unfortunately, neither we, nor the Ministry of Regional Development, nor the Ministry of Defence have made such calculations. So in order to determine the level of funding needed for the transfer of property to the regions of the Russian Federation, it is necessary to understand precisely what area is being transferred, what is the price of utilities, maintenance and repairs; only in this case will it be possible to discuss specific details on the level of funding that the Ministry of Defence can transfer to the constituent territories of the Russian Federation before the end of this year. That is all.    

Dmitry Medvedev: Now I want to hear from the Minister of Regional Development. Please, Mr Govorun, go ahead. I think certain points mentioned here coincide with your position, but please report briefly.

Oleg Govorun: Thank you very much. I’ll focus on the problems raised by the heads of the regions of the Russian Federation, which you know all about; but I want to speak about major points for the simple reason that without them the heads of the regions are in a very complex and difficult situation.  

The first obvious problem that has just been discussed is the lack of funds in regional budgets that would make it possible for them to largely implement the measures concerned with the handover of this property. Last week we held a meeting on this in the Ministry of Regional Development. One of these problems (which has also been mentioned by regional heads) is the transfer of social facilities. Since provincial budgets have no funds for maintaining these facilities, these measures seem extremely difficult for them without additional sources of funding. 

The next problem, which is well known and was partially mentioned today, is that much of transferred property in army camps has no supporting technical or title documentation. So the process is greatly hampered.

The third problem concerns the transfer of the Defence Ministry’s real estate without the land plots on which it is sited. This creates difficulties for new property owners.

The fourth problem highlighted by regional leaders is that there are no agreed upon schedules for property handover and no exact list of the facilities to be handed over.

The fifth problem is that about one-third of the transferred facilities – and this is an established fact – are structurally unsafe, and the regions are worried about current preparations for the heating season.

The sixth problem – and regional leaders speak about this as well – is the unpaid bills of army units for the supply of electricity and heat. The regions are insisting that the facilities being handed over to them should be freed of these debts.

The seventh problem is the possibility of a gap appearing between tariffs used by the Defence Ministry and those set by regional regulators after utilities pass into municipal ownership.

Remark: They increase.

Oleg Govorun: Yes, they increase and I can cite an instance of this from the Murmansk Region. In Pechenga, for example, tariffs have shot up by 470%.

Dmitry Medvedev: Right after the transfer?

Oleg Govorun: Precisely.

Anatoly Serdyukov: The Defence Ministry merely subsidised service housing because officers received low allowances. We tried to subsidise them. But now that we are adopting a market philosophy, the rates established by energy distribution companies have soared accordingly.

Oleg Govorun: Yes, they have. This is not the case everywhere, of course, but some of the regions are facing this problem.

We also believe that a procedure must be adopted (in consultation with the regions) for conudcting inter-budget transfers. We have tentatively agreed on this but it seems that further discussion is needed. From what has been said today it follows we should make a decision. That's all I have to say. 

Dmitry Medvedev: I will make this decision.

Anatoly Serdyukov: A word about outsourcing if I may…

Dmitry Medvedev: Go ahead.

Anatoly Serdyukov: The Finance Minister spoke about the sharp increase. But a staff of 143,000, with 20,000 of them officers, were employed to maintain our property. If we remember how much it cost to run this outfit, then 130 billion roubles seems like a paltry amount, because we cut back a good deal to eliminate cross funding and arrived at totally transparent contracts to serve army camps, contracts that can be checked for tariffs, volumes and so on. At that time it was an amount beyond calculation. When we reduced the armed forces from its then size of 1,134,000 people to 1 million, we relieved 20,000 officers (more precisely 19,600). We made that cut. If we calculate now, we see that by switching to outsourcing we made some good savings and, moreover, we made them absolutely transparent. And that, I repeat, happened when we had carry-over debts every year amounting to something like 70 billion roubles, which had been chasing us since 2008. I'm not even mentioning the outstanding bills to, say, RAO UES. We owed several billion, and that sum was hanging over our heads. They did not press for its payment, nor did we offer to pay it. We have repaid our debts because we made the scheme absolutely transparent, went over to outsourcing and now clearly see that the federal budget is short on funds. We have decided to cut back on military towns to make these costs as low as possible. So I consider that in cash terms we obtained no increase for the maintenance of military towns.

Dmitry Medvedev: Alright, you've made your positions clear. Does anybody have anything else to say?

Sergei Shoigu: May I?

Dmitry Medvedev: Yes, of course, Mr Shoigu.

Sergei Shoigu: Colleagues. Military towns are one of important if not basic issues in the Moscow Region today. They number 274, of which 102 are housing estates with a population of 220,000. I repeat 220,000 people! You saw the conditions in which they live, Mr Medvedev. The process of their transfer to municipal ownership has been underway for several years now, and it is just middling. Out of 2,939 properties slated for transfer, only six have changed ownership during these years. It will take us a long time to transfer them at this pace.

Today, another 61 military towns have received an open status on our territory in addition to the 101 we have. After the adoption of the federal laws we received an absolutely clear, updated list – we know how many properties we have and how much we will spend on their upkeep in case of transfer. In this context we suggest a simple solution – let the Ministry of Regional Development or the Ministry of Finance allocate the money for these properties. We are ready to fight for this solution to save the Defence Ministry from footing the bill. This is the first point.

Second. We have a very important request. We must upgrade as soon as possible a group that we agreed to establish with Mr Serdyukov on June 7. It has started working, but I’d like the group for the Moscow Region to be increased and have additional responsibilities. Forty nine properties are ready… I agree that we must think about the land because it would be wrong to transfer some property without transferring the land. By separating the funding from the transfer of properties we will reach a clear objective – without asking the Ministry of Defence any questions about funding, we will be ready to accept them starting today, or tomorrow, to be exact, and won’t have any demands like “repair, paint or move.” We are ready to accept properties, but together with land and other things, because a failure to receive the land entails other commitments, such as debts on utility payments.

I think this is the best solution. Subsequently, we’ll be ready to deal with the Ministry of Finance and the Ministry of Regional Development on what we need – 28.5 billion roubles for everything (including basic repairs and recovery of boilers).

Now I’d like to say a few words about winter preparations. Naturally, we are already preparing for winter, as we did last year and the year before. Our municipalities have established headquarters in each military town as in past years. I don’t see anything funny about this. I’d like to ask the Defence Ministry to send their representatives to these headquarters. Regrettably, we haven’t yet seen them. This is an uphill road. I don’t think you’ll deny that municipalities have to shoulder the main burden for a simple reason – these are their constituencies and their voters.

The third problem we must resolve is to suspend or stop the relocation of more families to military towns. Even in this town, the number of arriving families is increasing with every month. The hospital is full with the exception of the medical unit; other premises are occupied by families of officers or those who have long been out of contact with the Defence Ministry. People live in the fire station and other facilities. Families occupy most premises in the barracks in this town. All these commitments will be transferred to municipalities along with all other problems. If we don’t stop this trend, more problems will pile up.

I’d like to make one more point. I’ve already talked about the funding. We are ready to accept everything as soon as possible. We are running out of time for winter preparations, and we need to have methods for the transfer so that we can carry it out and make all settlements… It is easier for us to do one thing after another.

Mr Medvedev, I’d like to ask the Ministry of Regional Development and the Defence Ministry to give instructions to the relevant departments to draft simplified procedures for the registration of municipal property rights for the transferred properties because we won’t make it if we follow the conventional road.

In accordance with Federal Law No.432, the cadastral registration of land plots used for the needs of the Defence Ministry… We must speed up the implementation of this law and I think this can be done by the group we have set up with Mr Serdyukov. I hope we’ll upgrade it and it will deal in detail with each property. The speed and quality of transfer is vital for us and we are fully prepared for it. As for this town, we are ready to take it over without any compensation tomorrow and we’ll find the funds for its restoration and for everything it needs. Incidentally, more than 2,000 people live in it.

I’d like to draw your attention to the transfer of land again. I have to speak about newly-built towns for service personnel. Yesterday I held a major meeting in Podolsk. Despite excellent construction work and many other achievements there, we still have a number of obvious problems that the authorised executives can resolve in a matter of days. Once again, the main problem is the transfer of land. Built housing is transferred but not the land and we cannot register such facilities. We cannot accept them in a proper way, along with water pumping stations, sewage systems and the like. Meanwhile people settle down in these buildings and use all the utilities. The municipality’s debt exceeds 170 million roubles and these properties are hanging in the air for lack of proper transfer and registration. This is the first issue.

Now the second issue. I’m asking for all military towns… Not military towns but towns for service personnel that are under construction in the Moscow Region should have a clear procedure for the transfer of ground floors to municipalities for free and within certain deadlines. We have built almost 14,700 flats in Podolsk. Ground-floor premises are not transferred and we don’t even have a police unit there… Don’t we need the police?

Anatoly Serdyukov: We do, and you are welcome to…

Sergei Shoigu: Otherwise the military personnel must protect all these properties.

Anatoly Serdyukov: If the Department of Internal Affairs wants to have a plot of land for construction, it is welcome to…

Sergei Shoigu: Mr Serdyukov…

Anatoly Serdyukov: And why should we build it for the police? They have their own budget, so let them go ahead.

Dmitry Medvedev: Colleagues, please don’t interrupt each other.

Sergei Shoigu: You are not going to build outpatient clinics or kindergartens either?

Anatoly Serdyukov: We won’t build outpatient clinics.

Dmitry Medvedev: Just a second. One of you will speak first and then I’ll let the other be as aggressive as he likes in his comments.

Sergei Shoigu: These are too many problems and questions there. We cannot settle for such answers because instead of being transferred as public premises, these properties are simply sold. If they are sold, this must be used somewhere… As municipalities we are offered to buy them as launderettes, cleaner’s or hair salons. Why don’t you do everything yourselves? And there will appear a new command post. If you don’t want to, just give these premises over to us at the municipal level and stop saying, “We’ll do this but we won’t do that...”

And the last issue. The Defence Ministry is in charge of almost 170,000 hectares of land in the Moscow Region. Far from all of it is being used for its needs. Mr Medvedev, I have a very important request for you – please issue instructions to the relevant departments to review this issue and transfer this land to the Moscow Region because 170,000 hectares is almost 30,000 hectares more than Moscow received. Thank you.

Dmitry Medvedev: Thank you. Would you like to comment on anything? You are welcome.

Anatoly Serdyukov: As for in-built premises, of course, we sell them and spend these revenues on housing construction. If the Department of Internal Affairs or the Federal Migration Service wants them, we are ready to sell them at prime cost – no problem at all. We are ready to sell them for what we paid for them. The Ministry of the Interior has a budget for the purchase and construction of buildings. As for kindergartens and outpatient clinics, we plan to transfer many… The problem is that we have to demarcate specific land plots, enter them in the land cadastre and formalise them accordingly. It will be possible to transfer specific facilities only after this process has been completed. It is impossible to transfer an installation, which does not formally exist. A year ago, at a meeting chaired by the Administration head, we said that we were ready to empower any municipality, including the head of a constituent entity, to draw up the required documents regarding specific facilities. If they believe that it will be faster this way, then we are ready to provide this opportunity. But, regarding outpatient clinics, kindergartens and social institutions, which are located on those territories, we will certainly transfer them. The thing is that we have to formalise specific transfers in line with the pertinent procedure. We will transfer everything, after formalising it. Regarding Podolsk and Balashikha, this will happen already in July. A department from the Defence Ministry reports that they will be ready. They estimate that we have made all the required payments. The Russian State Centre for Real Estate Inventory and Registration (Rostekhinventarizatsiya) is tackling this issue, and we hope that they will honour their obligations in July, and that we will transfer everything. As for transferring main-floor premises free of charge …

Dmitry Medvedev: I see. Who else would like to speak? Please, be brief.

Bato-Zhargal Zhambalnimbuyev (Federation Council Member): Thank you, Mr Medvedev, colleagues. It seems pointless to say or to repeat what has already been mentioned. Oleg Govorun has clearly outlined the problems of the Russian Federation regions, including the problems of regional budgets. Unlike the Moscow Region, the Trans-Baikal Territory, which I represent, faces somewhat different problems. Even if they offer land plots in our region, there will be no one to acquire them, with the exception of Chita or probably two or three other communities. Consequently, the emphasis is somewhat different.

Colleagues, I would like to draw attention to the following point. According to Federal Law No 423, the Defence Minister issues an order containing the following two main aspects. First, the order lists specific facilities being transferred to municipal entities. And, second, it states expressly that municipal entities shall be the owners of such facilities after the signing of the order. What does this mean in practical terms? In the overwhelming majority of cases, municipal entities must, first of all, draw up legal documents at their own expense. In effect, virtually all facilities are lacking a complete set of legal documents. Second, state registration must be conducted. They neither wish to nor are they able to do this. Consequently, the future of an overwhelming majority of facilities is rather vague. As for May 31… I have seen the transcript. Dmitry Kozak and Anatoly Serdyukov have discussed this issue. Indeed, the future of these facilities is vague. In effect, municipal entities don’t want to formalise this property today. It requires money to draw up the necessary documents, and they don’t want this, because all these facilities have… The Defence Minister has noted extremely high rates of wear and tear. I have spoken with officials at our territorial development ministry, and they have said that such wear and tear rates total 90%. But they say that I should not mention this figure, that I should say that these rates are over 80%. That’s why I’m saying that wear and tear rates exceed 80%. This is a politically correct figure, although the actual wear and tear rates total about 100%. If we act in line with a statesmanlike approach, we ought to demolish everything that was built 50 to 100 years ago, and to build new facilities instead.

As for funding, Mr Kozak has said that we should transfer some facilities to the regional and municipal entities in 2012. It may seem the correct decision, but it only solves half the problem. In effect, we often see the regions being given something for good but the corresponding funds only allocated for one year. Please excuse me, Mr Medvedev… Participants in a meeting of the Federation Council’s Budget Committee, including specialists from the Ministry of Finance, tried to estimate specific nationwide proportions for the distribution of budgetary proceeds. Virtually all analysts now say that 34% of the proceeds are channeled to regional budgets, and that 66% are transferred to the federal budget. We support the Federation, and I have voted for all the budgets because I work at the Federation Council. I realise that this is a government objective, but we should not forget about the regions either. So that is why this decision only solves half the problem.

I know for definite about one facility, namely, military town No 24 in the Trans-Baikal Territory. Mr Medvedev knows it well. That military town comprises 295 facilities and amenities. This year, we will have to allocate 243 million roubles for fuel alone in order to maintain this town. The funding should be allocated by the municipal entity, by the territory or by the district. The district budget does not exceed 300 million roubles. The Trans-Baikal Territory’s budget deficit is about two billion roubles. Of course, this funding does not exist. We should spend 1.78 billion roubles on these facilities that have been transferred in order to make them appear acceptable, as Mr Medvedev has said, although they will not meet absolutely modern standards. This total sum can be debated, depending on how it is counted. Nevertheless, this amounts to hundreds of millions of roubles, as opposed to one or two million.

Mr Serdyukov has discussed specific prospects, and he has noted that 800 military towns will be transferred.

Anatoly Serdyukov: This is a proposal.

Bato-Zhargal Zhambalnimbuyev: Yes, it is proposed that this number of military towns be transferred in 2012. There are plans to transfer 191 housing/municipal facilities and amenities to the Trans-Baikal Territory and to municipal entities. I will not bother you with statistics, including the length of utility pipes in kilometers and the number of buildings. There are also 24 boiler rooms using fuel oil in our territory. It may be a paradox, but our municipal entities and territory have never operated any boiler rooms using fuel oil, and they will never operate them. This is too expensive and wasteful for us. We use coal from a local coal deposit, and now we have to deal with these boiler rooms... It takes about 300 million to re-equip one boiler room at the military town No 24. We can debate this sum, but re-equipment costs amount to no less than 200 million.

Anatoly Serdyukov: You should only replace the injector, and the very same boilers will remain.

Bato-Zhargal Zhambalnimbuyev: Mr Serdyukov, you probably know better than I do. I’m simply discussing these reports. I will not argue with you. By the way, Mr Medvedev, I have mentioned these aspects. I would like to say that the region and the governor are trying to cooperate with the Defence Ministry rather constructively. Mr Serdyukov will confirm this. You have talked about empowering the concerned parties. Trans-Baikal Territory Governor Ravil Geniatullin was the first to receive power of attorney, thus enabling him to expedite the registration of facilities that we obtained unconditionally, including kindergartens, the House of Officers and some others. We have acquired them. We need them.

In conclusion, I would, nonetheless, like to… Of course, Mr Medvedev, you have said that you will make a decision. We will probably hope that somehow… We don’t want to argue with the Defence Ministry, the Ministry of Finance and the Ministry of Regional Development. As I see it, Sergei Shoigu has suggested a very reasonable solution – to divide, because each time one comes to the Defence Ministry... I visited Deputy Defence Minister Tatiana Shevtsova not so long ago… We realise that they also face certain problems, and we don’t want to bother them with this issue. What for? We have many problems of our own. Let’s divide the federal budget, not the Defence Ministry budget, and property transfers. As Mr Shoigu has said, the Trans-Baikal Territory is also ready to work constructively in this direction, but we need the funding today. We cannot procrastinate when it comes to these facilities, and there is no alternative but to operate these 24 boiler rooms. July 1 is the final deadline when something can still be done in the Trans-Baikal Territory.

Dmitry Medvedev: That's enough, colleagues. Thank you. I asked you to speak concisely. Please do so. Ms Orlova (Svetlana Orlova, Deputy Speaker of the Federation Council), go ahead please.

Svetlana Orlova: Colleagues, this is a federal meeting and so we should speak about the problems which require our joint efforts in order to be solved.

First, I’d like to thank Prime Minister Medvedev. We have been discussing these issues at the Federation Council since last August, and Ms Matviyenko (Valentina Matviyenko, Speaker of the Federation Council) addressed them in detail.

Second, we have discussed these issues at a meeting chaired by Dmitry Kozak. We have the necessary methodology, without which we cannot expect to make any progress, because some regions will request 14 billion roubles, others 15 billion or 16 billion roubles, and we need to determine by the end of this year what issues we can resolve. As Mr Shoigu has said, each issue concerns people. Besides, we need to address the issue of the people who remain [in military towns]. The regions should also contribute, because it’s a two-way street. We should also keep in mind socioeconomic development plans and jobs.

The next issue has to do with money: 60 billion roubles. Let’s track its movement geographically, that is, let's look at which regions will receive the money, without forgetting about the second issue that Mr Medvedev mentioned: preparation for the winter season. This mostly concerns boiler rooms, preschools and socio-cultural facilities, which are the top priority. As for next year’s funding, we will work on the budget and sources of funding for next year.

As for tariffs, the regional energy commissions should also consider this issue, because they know in advance which facilities will be turned over [to civilian administration]. As of now, they often sit on their hands, they don’t care if the tariffs are raised or not. So, local energy commissions should contribute to these efforts.

A few words about land plots. Mr Serdyukov, I completely agree that this issue needs to be addressed, because many regions, especially in the central parts of the country, could use the land plots to resolve their problems. So, Mr Medvedev, we are tackling this issue seriously, jointly and out in the open through the Open Government and the working group. If amendments are needed, we will make them. Let’s work according to a simplified scheme: a building’s depreciation is assessed at 100% and a boiler room is at 70%. Mr Serdyukov will tell you that the building is not 100% depreciated. But you remember that in accordance with the construction norms and specifications, which we studied when we discussed the housing issue… So I believe that our meeting today is very fruitful, but it should be followed by practical action, as you said. Thank you.

Dmitry Medvedev: Thank you, Ms Orlova. I believe that all of us have similar views on this issue. But I’d like the finance minister and the deputy prime minister to say what they think about it. Please.

Anton Siluanov: Thank you, Mr Medvedev. I'll speak briefly.

First, regarding financing. I believe that we should work according to the budget, meaning that the funds approved for the Defence Ministry should be transferred there by the end of the year. If a project is planned to be completed this year, it should be turned over [to the customer] by the yearend, because if we don’t turn it over, the Defence Ministry will have to continue financing it, spending money on it, and next year these funds would remain in the ministry’s budget and would be spent for the ministry’s purposes.

Second, we should take into account the result of this within the framework of inter-budget transfers, and we have reserve funds for supporting Russian regions. We could use the approved allocations to help the regions, those regions which have been assigned additional expense obligations this year, but the funds which the Defence Ministry will turn over to them could prove insufficient for meeting these obligations. We could help them, so as to resolve this funding issue as part of this year’s budget and the budgets of the next few years.

Dmitry Kozak: First of all, I would like to note that the Defence Ministry should follow a clear, transparent and predictable procedure for transferring its assets to the regions. First of all, a clear list of these assets and their characteristics needs to be compiled. The regions are primarily interested in the plots of land that are to be reassigned. After all, it is essential to abide by the very law that gives enormous authority to the Defence Ministry to reassign its facilities, even to transfer ownership unilaterally. However, this also entails responsibilities. It should retain the land and facilities which are crucial for the country’s security and defence. Regional executive agencies have sent a lot of requests via the federal government to hand over facilities. The law requires that their requests be considered and well-grounded responses given within two months. Again, these requests can only be rejected if they involve assets that are crucial to national security and defence. I am referring, for the most part, to the Moscow Region, and the Leningrad Region, where the Defence Ministry owns some land plots that offer attractive investment opportunities, but are not being used for any security or defence purposes. The regions could use these properties, including the one we are visiting now.

Secondly, while preparing for next winter, we need to draft a schedule for handing over the specified facilities. This schedule needs to take into account the need to prepare the housing and utilities infrastructure for next winter, and of the government cash flows planned for this period. The regions, cities, towns or districts need to know well in advance, by 1 September at the latest, when exactly (this year or next) each specific facility will be transferred to their jurisdiction, as it involves the additional responsibility of allocating financing for their upkeep.

Thirdly, we have agreed with the Defence Ministry that if facilities are handed over after 1 July, they need to have completed certificates of their readiness for the heating season, so as to avoid a gap in ownership. These certificates do not have to confirm the installation of ultra-high-tech equipment. They just need to certify that some basic maintenance has been carried out, so that the Federal Service for Supervision of Environment, Technology and Nuclear Management can approve a boiler room built in the 1930s or even in the 1900s for use this year. This is a practice generally applied to all existing facilities, including those managed by the Defence Ministry. The deadline for obtaining the certificates is November 15. That is why these decisions need to be implemented.

As for the money, it definitely needs to be divided up. The problem is that regional and municipal authorities… Well, we agreed when we were discussing this with the Defence Ministry, the Federation Council, the Finance Ministry and the Regional Development Ministry, that the amount should be specified in the order which unilaterally defines which facilities are to be handed over and when. If it is scheduled for the second half of the year, the amount should be equal to half of 40% of the annual allocations for the facility in question. This is what we agreed on. So the regional authorities will know exactly how much money they will receive for the upkeep of the facility, and be ready to contribute more, given the facility’s state of repair (assuming that there was definitely no double funding from the budget, and the money has been completely spent, there’s nothing left).

I would like to suggest an alternative way of resolving the funding issue. If the money has definitely all been spent, let’s approve the methodology we discussed, involving allocations to the Defence Ministry. Handing assets over does not lead to having more money. So let us source the funding from the money allocated to balance the budgets – the amount specified in the methodology that the Defence Ministry and the Finance Ministry are required to apply. The budget law is also a problem. The Finance Ministry writes in the budget law that the only source of funding the upkeep of the facilities in question is the Defence Ministry’s money. The Defence Ministry says it has none left. So we go and play games with regional and municipal authorities and haggle between ourselves. This issue needs to be resolved. Using the funds allocated for balancing the budget is a viable option. Only this needs to be decided quickly because these funds will be distributed soon on the basis of the first-half results. There is enough money there. If we prove that this is not double funding, that we are not paying for the same facilities twice, let us bear this in mind while distributing the balancing funds.

Svetlana Orlova: We could adopt this at the trilateral commission.

Dmitry Kozak: But using the methodology approved by the Defence Ministry and coordinated with the Finance Ministry and the Regional Development Ministry. We could do this and, to my mind, this will help more or less resolve the problems we discussed. Most of the regions are not only concerned about money, Mr Serdyukov. They are concerned about people – the residents of these military towns – who long ago lost touch with the Defence Ministry. Take this town, where 1,700 out of the 2,200 residents have lost touch with the Defence Ministry. So they ask their regional and municipal authorities – mayors and governors – why the temperature in their homes drops to 12° Celsius in winter. They ask other questions too. And they are ready to help in any way they can, even without money. This is why the residential buildings, as well as the vital utilities and public facilities, need to be handed over to regional authorities as soon as possible, all the more so if the Defence Ministry does not have the money to maintain them and get them ready for the winter. Thank you.

Dmitry Medvedev: Thank you. Is that all?

Anatoly Serdyukov: I have a few questions.

My first question concerns the transfer (of unused facilities) itself. The Council of Federation proposed such decisions be taken unilaterally. But we cannot do this solely at our own discretion if there is no agreement with the other party. Here is the list that I sent to all the regions via my representatives a year ago. Later, I sent them again myself. As you can see, the regions have had this list of facilities marked for transfer to municipalities for at least a year.

Dmitry Medvedev: Only the list of facilities?

Anatoly Serdyukov: Facilities, yes. We made this list long ago.

The second question. As I said, I don’t have the authority to give such orders and we can’t transfer the facilities without the consent of the accepting party. We cannot force anything on anyone. I will stress again that we are only transferring the facilities that are needed by the municipal authorities at this very moment. They agree to take charge of them without any funding and be bound by the legal obligations from January 1, if necessary. I think we’ll get funding by January 1 either through a redistribution of the funds or the Finance Ministry will provide the extra money. I can support them until January but starting in January, the regions will have to adjust their balances between themselves. The Ministry of Regional Development will take care of this in order to avoid any lack of motivation from any of the parties. We are ready for the transfer now but we can wait until the end of the year. The situation with this particular town is clear. I would like to remind you that the governor himself initiated the transfer of all facilities. I suggested that only the residential properties be transferred but he said he would take charge of everything. I said go ahead. Now you say you have no money. You should have considered this when you were assuming ownership of these facilities. We did not force you to do it. We offered only as much as was needed to resettle people from the steppe. I remember it very clearly. We took care of it all, the transfer and the resettling. You said alright, give us some housing in a neighbouring village or town and we will finish it. Now it turns out you need money. You should have considered this when we were making the agreement. This would have spared us this trouble. Now I suggest we do the following. We will transfer only the facilities that are essential. We will support them until the end of the year and prepare them for the winter season. But starting in January, the municipal officials will take over and continue with the maintenance and funding. Thank you.

Sergei Shoigu: I totally disagree with Mr Kozak, except for one thing which is true. Whether the funds were spent in full or not is for the Finance Ministry and the Defence Ministry to figure out. As far as we are concerned, we would do with some money to balance the budget and fill gaps so that we can finally take over these facilities. Thank you.

Dmitry Medvedev: I see. I understand the subject we are discussing is unavoidable for the directors of federal agencies, the Council of Federation members and other officials. We will have to resolve this issue, but the constant arguing between the agencies, with the regional authorities taking a tough stance, is unconstructive. We must tackle this sooner or later; we must find the money and cover the deficit of the Defence Ministry if there is any. The Finance Ministry will have to take care of this, too. The minister has just mentioned that we will have to provide extra funds if required. In any case, we need to move on with the decisions that have been taken earlier. Mr Kozak, please report to me in person on whoever is responsible for not approving the methodology (to calculate the required funding for each specific facility) and what disciplinary action we can initiate. If we have to fire someone so be it.

Anatoly Serdyukov: I am responsible then. I didn’t approve it because I didn’t see how we could transfer the deficit.

Dmitry Medvedev: Mr Serdyukov, you should have called me and said that you would not approve the methodology and state the reasons.

Anatoly Serdyukov: But we sent an official response explaining our problem.

Dmitry Medvedev: Incorrect answer. Whenever previously taken decisions are impeded you must report to me. You must either report to me on your own or together with the deputy prime minister. This is how I prefer to work. Moreover, we are aware of the state of these facilities. They look miserable even at first glance. The methodology must be approved but not in its draft version. It must be approved by July 15th. Or are we going to continue procrastinating?

Dmitry Kozak: The deadline was June 15.

Dmitry Medvedev: Right. Has the Finance Ministry registered the methodology? Have you prepared it? You should quickly coordinate it with the Ministry of Defence taking into account what we have been talking about today, and it must be approved by the Defence Ministry along with the Finance Ministry and the Ministry of Regional Development within five days. No further arguments will be accepted.

Let me reiterate my position on maturity certificates: I don’t think that maturity certificates should be super-sterile. This would be impossible to achieve, because the facilities are problematic. But there must be documents of some kind, as we all understand. The issues involved have to do with standardisation, physical regulation and basic security. We should pay attention to that, too, and we should do something.

Now let us discuss how we should proceed with the work. We will not find a universal formula, because the state of affairs is different everywhere. Mr Serdyukov and I have discussed this subject repeatedly. The situation in Murmansk, for example, is not the same as in the Moscow Region, or Arkhangelsk, or the Trans-Baikal Territory. You are right in saying that land is a highly sensitive issue in Moscow… Why has the governor been so insistent? Because this is an issue of money, and you can obtain additional resources. Unfortunately, it is very difficult to sell your land even though there is a lot of it. So there is no uniform formula. A methodology should be available, but there is no uniform formula.

Now, where land is concerned: as I see it, handing over land is possible but not mandatory. This should be a decision! Parties ought to come to terms, colleagues, because there are investment-attractive facilities that the Ministry of Defence or a region can sell on its own… (They have aims of their own, too, and in fact, this is the reason why we have changed the legislation; I insisted on that, although, of course, there were many different points of view.) But we will never achieve complete uniformity in this regard. The Defence Ministry should sit down at the negotiating table and come to terms with all principal constituent entities of the Russian Federation. If you take this (and you should indeed accept a responsible decision and refrain from taking the whole lot), then, let's say, here we will hand over the land so that some additional resource will appear. Why not, if someone is interested? If not, if for some reason the land there has no value, as, for example, in the Moscow Region, then we should plan additional allocations, including in order to give support and maintain the balance, as Mr Kozak has said. Mr Serdyukov, how many constituent entities have the main mass of military towns? How many of them are there?

Anatoly Serdyukov: Practically 80%. I don’t know what the “main mass” refers to, or how to count them.

Dmitry Medvedev: I mean how many military towns do we have overall?

Anatoly Serdyukov: 7.5 thousand.

Dmitry Medvedev: And these 7.5 thousand military towns are located in 83 constituent entities…

Anatoly Serdyukov: They are everywhere.

Anatoly Serdyukov: They are everywhere but not more than…

Anatoly Serdyukov: Fifty percent.

Dmitry Medvedev: Yes, 50 percent. Then you should make a plan and discuss it with each governor. This must be done.

Anatoly Serdyukov: Yes, of course.

Dmitry Medvedev: I would like the deputy ministers to become involved as well. This is concrete work: we give something to you, and if you accept it, you assume certain obligations. We are prepared to give you funds; if funds are in short supply, we’ll ask the Finance Ministry for allocations. We also give you this, this, and this plot of land, thereby resolving this or that problem. This work should be absolutely concrete. Please, appoint a working group. Mr Kozak, I’ll ask you to keep an eye on it.

Dmitry Kozak: I will.

Dmitry Medvedev: This work should be conducted precisely in this way so as to preclude evasion by both the Defence Ministry and the governors. Otherwise this “football” back and forth will go on forever. Unless the necessary decisions are approved, people will suffer.

There is no doubt that we must start preparing for the new heating season. Winter is certain to come in any event. It will come soon enough in some parts of this country, for which reason the necessary decisions should be approved right now. Prior to the time of transfer, this is the Defence Ministry’s responsibility, of course.

I will sign the instruction. It includes a lot: where to send data, how to optimise the number of civilian personnel overseeing housing and amenities, and much more.

Please finalise it, Mr Serdyukov. You must be sure that your ministry can carry it out. Then send it to me to be signed.

Anatoly Serdyukov: I will.

Dmitry Medvedev: Please have the methodology ready within five days. That’s all, thank you.


* * *

After the meeting, Dmitry Medvedev talked with residents of the Petrovskoye military township

The prime minister thanked the audience for their patience and announced that the meeting had focused on transferring military townships such as Petrovskoye under the management of municipal officials and on improving living conditions.

One woman was concerned about the situation at the MOSMEK aluminium plant in the town of Vidnoye, where a change of ownership had resulted in redundancies. Dmitry Medvedev said he was unaware of the situation but promised to look into it. At the same time, he noted the situation was something for the new owner to resolve. “The management and the owners need to be changed if it is affecting the smooth operation of the plant,” the prime minister noted.

The residents of Petrovskoye also asked the prime minister to assign a person to take responsibility for transferring the military township into the ownership of municipal officials and promised this person would be able to rely on a group of citizens to support him in this.

“You have a new governor. He will appoint his representative,” Dmitry Medvedev replied, referring to Sergei Shoigu.

* * *

After the meeting with the residents of Petrovskoye, Dmitry Medvedev visited the Gorki Leninskiye Museum. During the tour, the prime minister called Communist Party leader Gennady Zyuganov, who turned 68 that day, to wish him a happy birthday and good health.

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