Prime Minister Dmitry Medvedev chairs a conference call on preparing power installations and the housing and amenities sector for the 2012-2013 autumn and winter season



Dmitry Medvedev: Good afternoon, colleagues. We are here to discuss the process of preparing our power installations and the housing and amenities sector for the upcoming autumn and winter season. We have here with us the heads of the relevant federal agencies, and we can speak with the heads of the regions of the Russian Federation over a video linkup. You are aware of how the heating season usually starts in this country. In the first place, it is a very long period. In the majority of regions it lasts almost six months and is often accompanied by problems, regrettably. This is why the quality of life of practically the entire population – millions of people – depends on how well-coordinated and prompt the actions of the utilities services and infrastructure companies are. Naturally, the Government and the heads of regions have been focusing on these issues. Let me remind you that I chaired a similar teleconference in May and in June of this year, where we discussed the situation in military compounds and, accordingly, how services related to the housing and utilities sphere reach residents of those compounds.

Now let me briefly describe the situation as a whole. As of September 10, there are ample stocks of coal at power facilities, where these stocks are regulated by the Ministry of Energy. They even exceed the established norms by almost 70%. Furnace-oil reserves exceed the norm by one-third. The Ministry of Energy believes, therefore (I will soon give the floor to the Minister), that serious problems or risks are unlikely.

Upon the completion of scheduled maintenance on the power generating equipment, there are no serious deviations from the norm either, with the exception of one experimental heating plant in the Rostov Region. I would like our colleagues to inform us on the situation there. I will later switch on the Rostov Region, and, of course, the Minister will brief us on measures that will be taken.

Organisations forming the electric grid complex (I mean the Federal Power Grid Company and the Interregional Power Grid Company) generally keep to the approved work plans. I would like Mr Novak (Alexander Novak, Head of the Ministry of Energy) to report on how power transmission lines are being prepared for winter. He will also tell us how so-called mobile reserves are being created and how self-sustained reserve power sources are provided to those who need them.

Now let me review how matters stand in the housing and utilities sphere as a whole. As of September 1, 90% of housing, 87% of boiler plants, and 91% of heating networks and water pipelines are ready for winter. Budgets at all levels – the federal budget and the regional budgets – have earmarked 219 billion roubles for this purpose. About 150 billion, or 70%, has actually arrived. But the thing that is generating some apprehension is that the housing utilities companies’ fuel and energy debt has grown by almost 17%, or about 100 billion roubles. This is not good. The regions, jointly with local governments and law enforcers, should put things in order and eliminate the debt. Relevant information should be sent to the Ministry of Energy and the Ministry of Regional Development before December 5. But action must be taken much earlier. This is only a collection of data.

The final document on the certification of facilities in the power industry and the housing and utilities sector should be submitted to the Government (I mean the Ministry of Energy, the Ministry of Regional Development, and the Federal Service for Supervision of Environment, Technology and Nuclear Management) by November 15. The Ministry of Defence should prepare the facilities that are under its jurisdiction and report to the Government within the same timeframe.

And now we can begin our discussion. To start, I will give the floor for a brief report – I mean it, colleagues, your reports should be brief – to the Ministry of Energy and the Ministry of Regional Development. Mr Novak, you have five minutes. Please.

Alexander Novak (Minister of Energy of the Russian Federation): Thank you. Mr Medvedev, colleagues, our preparations for the autumn and winter period have indeed reached the final stage. The heating season has come under way in the Extreme North and similar territories, and will do so shortly in the Far East, Siberia and European Russia.

This year, the Ministry has drafted and modified the regulatory framework. I will not discuss this issue in great detail, all I would like to say is that federal laws, the Administrative Code of Offences, as well as various rules and orders, have been amended. As per your instruction, we stipulate tougher penalties for failing to meet deadlines for fuel-supply contracts and for failing to stockpile fuel in accordance with the preset volumes.

The Ministry of Energy has established the relevant commissions and has approved a timeframe for inspecting various enterprises. In all, there are plans to inspect 74 power industry companies, or 536 enterprises, throughout 2012. As you have said, November 15 is the deadline. As of September 26, we have assessed the preparedness of the Norilsk-Taimyr Energy Company for the autumn-winter season. The company’s certificate of readiness contains no negative comments. At present, we are inspecting the ChukotEnergo Company. Heat-supply companies of municipal entities will be inspected until November 1.

I would like to note that, this year, we have conducted eight specialised group meetings in federal districts. The meetings involved every Russian region. Their participants exposed problems, monitored the situation and set tasks, making it possible to resolve various issues that arose during the discussion of preparations.

I would like to brief you on the current situation. As you have already noted, the situation with coal and boiler oil is quite stable. Their volumes exceed standard consumption levels. I would like to show the next slide, which highlights a separate problem. We face greater heat-supply risks with regard to consumers, now that boiler rooms consume more gas. We have agreed that high-risk regions in this area should submit timeframes on limiting gas-supply volumes to the Ministry of Energy. These timeframes should be coordinated with Gazprom. The above-mentioned regions should also approve the required range of comprehensive measures. Russian regions and top executives of power-industry facilities have received these instructions.

We are focusing on the issue of fuel supplies for thermal power stations. Acting in line with a separate presidential instruction, we oversee the approval of boiler rooms’ fuel reserves with Russian regions. Unfortunately, only 44 regions have stockpiled and approved standard fuel reserves to date. And only 39 regions have submitted reports on actual fuel reserves, as of September 1, 2012. Next slide. As you have also noted, repair programmes are proceeding on schedule. There is a certain lag regarding turbine-generator units and boiler units. These delays fall short of the previously approved timeframe. But I would like to note right away that the lag can be primarily explained by delayed equipment shipments, and that all scheduled repairs were put off and coordinated with the network operator. On the whole, 99-100% of power-transmission lines are being repaired on time. In addition, 84% of heat-supply networks and 95% of transformers are being repaired on time. We are monitoring the situation. In our estimate, any postponement that has been coordinated with the network operator does not influence the overall performance during the autumn-winter season. In most cases, all drawbacks will be eliminated before the year is out.

As for investment programmes, I have told you earlier that there are plans to commission six gigawatts of power-generating facilities throughout 2012. Of this amount, 1.8 gigawatts have already been put on stream, and we have also commissioned over 7,000 kilometres of power-transmission lines. We are on schedule for the most part.

In addition, the Ministry of Energy has completed work to select regions with the highest risks of disrupted energy supplies for consumers. This year, we selected six such regions where temporary power shut-offs are stipulated if one power-supply network element is switched off. And I have drafted and signed an order regarding specific measures to reduce power-supply risks in the above-mentioned regions. Naturally, we are keeping the situation in these six regions under control. I will not list them because everyone can see them on this slide.

As I have already said, specialised group meetings were organised, and the next slide shows all the main results. I will not dwell on them either. Next slide please. As regards autonomous reserve power supply sources, I would like to draw your attention to the fact that we now have 28,926 diesel generators, including permanent and reserve generators. Additional demand stands at 14,620 generators or almost 50% of their current total number.

Dmitry Medvedev: And what do we plan to do about these 14,000 generators?

Alexander Novak: Mr Medvedev, I have instructed participants in regional meetings to meet such regional demand over the next three years in line with this three-year programme.

Dmitry Medvedev: In effect, you have drafted regional programmes to obtain reserve sources?

Alexander Novak: Certainly. And we have prioritised this issue because this would enable us to make a maneuver and promptly restore the power supply in the event of any emergency.  

Dmitry Medvedev: Is there any way that we can help the regions implement these programmes?

Alexander Novak: Technically speaking, I believe that such allocations are not so huge, as far as the regions are concerned. In our estimate, it amounts to about ten billion for three years for all Russian regions…

Dmitry Medvedev: Ten billion?

Alexander Novak:… That means three billion a year for 83 regions…

Dmitry Medvedev: Well, yes.

Alexander Novak: We have discussed this at meetings, and the leaders are ready to resolve this issue.

Dmitry Medvedev: So, the leaders are mostly ready to address this issue? If that's the case, then good. All right.

Alexander Novak:… In the next slide… I just want to say that our power grid companies are on schedule for clearing forest roads and for establishing mobile units. The number of pieces of equipment is 3-5% higher than last year. According to evaluations made by our companies, we have enough mobile units, equipment and manpower to promptly response to emergencies.

Let’s continue. This chart… I would like to ask you, Mr Medvedev, to issue these instructions following the meeting with the Russian regional leaders: to secure the full implementation of all approved plans for the preparation of electric power facilities, and report on the results until November 10; and to secure the development of heat supply schemes for the heating of villages and city districts in accordance with the law On Heating. Unfortunately, this is still a problem. The law was passed in 2010, yet not all regions have approved these heat supply schemes. We are asking you to reiterate this instruction, and we will control its implementation. The Russian regions also must officially establish the rate of fuel consumption and the required volume of fuel in stock. As I said earlier, almost half of Russian regions have not done this. We are also asking the Ministry of Transport and Russian Railways, together with other related organisations, to organise steady transportation of fuel during the autumn and winter period, and we are also asking you to add this to the protocol. That concludes my report, thank you.

Dmitry Medvedev: We will take your comments into account. At the end of the meeting I will issue the necessary instructions.

Let's have the Ministry of Regional Development speak now, and later we will proceed to the regions. Mr Kogan, go ahead please.

Vladimir Kogan (Deputy Minister of Regional Development, Head of the Federal Agency for Construction, Housing and Utilities): Good afternoon, Mr Medvedev and participants in this meeting. I will be brief… Mr Medvedev, you emphasised that our plan of preparation for the winter is being implemented on time, but almost all of its directives have not yet been fully completed. I will briefly address each of them.

Preparation of housing stock. The Republic of Sakha (Yakutia), Kabardino-Balkaria, Chuvashia, the Kamchatka Territory and the Volgograd Region are lagging behind.

Preparation of boiler rooms. The Volgograd, Kaliningrad and Samara Regions are lagging behind. Ten thousand kilometres of worn-out utility networks have been renovated and repaired, but still the Kaluga, Oryol and Tomsk regions and Bashkortostan are lagging behind.

Preparation of water pipelines. In general, 90% of these pipelines have already been prepared for the winter. But again, the Volgograd, Vologda, Kaluga and Magadan regions are lagging behind.

Regarding fuel reserves, we have almost 91% from the scheduled volume, and that’s why we hope that providers will promptly supply the remaining fuel volumes. I held a conference call with them on September 12.

Public utilities organisations’s arrears for the fuel and energy they used earlier represent the most pressing problem. The debt of the Ulyanovsk Region has reached almost 7 billion, that of the Sverdlovsk Region reached 6.5 billion, the Tver Region owes 4.5 billion, the Moscow Region – 4.5 billion, the Volgograd Region – 4.2 billion. Following Mr Kozak’s instruction, we have prepared…

Dmitry Medvedev: Any other regions? The Sverdlovsk Region?

Vladimir Kogan: The debt of the Sverdlovsk Region stands at 6.5 billion, 4.57 billion in the Tver Region, 4.52 billion in the Moscow Region and in the Volgograd Region the debt stands at 4.12 billion. In other regions the debt is lower than 3 billion. The main problem there is that organisations that use rented equipment often go bankrupt. These organisations don’t pay utility bills, they don’t have property, as everything is rented. Later it leases property to another organisation, which in turn also accumulates debts and go bankrupt. We drew up a list including 1,800 such organisations, whose debts surpass the accounts receivable by more than 10%. On August 30, we transferred information about them to the Interior Ministry and to the Federal Financial Monitoring Service. We are asking you to instruct these two agencies to look into the cases of these 1,800 companies and open criminal cases if necessary. In addition, we have developed some resolutions improving the transparency of electricity and heating contracts signed by management companies and homeowners’partnerships; these resolutions also improve the transparency of separate payments for power, heating and hot water supply. That concludes my report. 

Dmitry Medvedev: Thank you, Mr Kogan. Let us hear about the situation in various regions, especially those facing problems. Let’s start with the Far East; that would be fair. Bring in the Primorye Territory.

Vladimir Miklushevsky (Primorye Territory Governor): Good afternoon, Mr Medvedev.

Dmitry Medvedev: Good afternoon, or good evening, Mr Miklushevsky. How are things over there?

Vladimir Miklushevsky: Mr Medvedev, on the whole we are prepared for the heating season. I’ll describe the situation briefly. We have been working on heating for a long time, since the beginning of the year. We began preparations even before the end of the last heating season. The utilities are nearly 100% ready; the boiler-houses are 98.5% ready; the heating systems are 99% ready; the central heating stations are 100% ready and the water supply networks are 99% ready. So on the whole we are ready considering that the heating season starts on October 15. However we want to be completely prepared in our area of responsibility by October 1.

The situation at the fuel and energy enterprises is normal on the whole. We are in regular contact with the Ministry of Energy, and the situation there is no cause for alarm. Ninety-eight percent of blocs of flats are ready; over 99% of educational, healthcare and social institutions are ready. So we have no problems in this area. Special commissions including representatives of the Far Eastern Directorate of the Federal Service for Environmental, Technological, and Nuclear Supervision, as well as housing supervision experts are inspecting the readiness of municipal entities, fuel and energy enterprises and utilities. And these inspections have provided the aforementioned figures.   

According to the order mentioned by the Minister of Energy, our region is included in the list of six regions with high risks of power supply failures. This is due to two causes — insufficient power generation, that is, we need cross-flow of electric energy especially to the southern part of the Primorye Territory; and the second cause is the lacking loop flow. Therefore, the Minister of Energy Alexander Novak has approved a plan of measures. Following this plan, the 500 kW Chuguyevka-Lozovaya-Vladivostok high voltage power line was built; the 220 kW high voltage Primorskaya State District Power Plant – NPS-38, and the Lesozavodsk – NPS-38 station were commissioned. The construction of local links is completed; I will not go into detail, Mr Medvedev; anyway we are working. In late September, the seventh and the eight boiler units fuelled by natural gas at the Vladivostok Thermal Power Plant 2 will be commissioned. It has a total of 14 boilers, of these, eight boilers will be fuelled by gas and six boilers will still be fuelled by coal. We plan to transfer four boilers to gas next year and maintain two boilers fuelled by coal as emergency fuel. And we will use oil-fuel as reserve fuel too.

As I reported earlier, we had problems with hydrate blocks in the gas pipeline in the last heating season. The gas companies are working on this, we are in regular contact with them. In principle, we are ready to operate in the coming heating season with fewer risks.

Next I’d like to say a few words about the reserve power supply mentioned by Mr Novak. We have 398 diesel generating sets with a total capacity of over 22 megawatts. We need some 25 megawatts, so we will have to additionally purchase 3 megawatts within three years, we are ready for this.

Now on available fuel: the utilities have 103% of fuel-oil, 100% of coal, and 101% of diesel-fuel. The fuel and energy sector has 89% of fuel-oil, but that is not a cause for concern, everything will be supplied on schedule; and the sector has a large reserve of coal, or 164%. In addition, 1,712 people have been trained; 567 emergency brigades including 3,412 people have been formed and they have 943 units of special equipment. We have formed a financial reserve of 364 million roubles. The total expenses for the 2012-2013 heating season will amount to 13.9 billion roubles, including 1.7 billion roubles for fuel and energy, 12.2 billion roubles for utilities – of these, the budget funds amount to 3.9 billion roubles, the rest are the funds of organisations.

Dmitry Medvedev: Mr Miklushevsky, how do you assess the situation on the whole? Because the figures are quite optimistic. Are you prepared?

Vladimir Miklushevsky: Mr Medvedev, all our civilian facilities are ready. We are only concerned over the military compounds that we must certify. Currently the commission is in the process of certifying them. We are due to certify a total of 371 military compounds. To date, 38 commissions including representatives of the Fifth Army and the Pacific Fleet have been formed. We have inspected 215 military compounds, but we will conclude this work by October 1. There are serious shortages in the readiness of housing. To date, we have a total of 716 apartment blocks in these military compounds that I have mentioned. They are 74% ready. 

Now the coal reserves: as of September 26, they account for only 19% of the planned reserves for the beginning of the heating season. Of course, this is a cause for concern.

Dmitry Medvedev: Where is it? In the military compounds?

Vladimir Miklushevsky: Yes, in the military compounds. Well, 121 boiler houses are serving these military compounds; they are 44% ready so far. These are the figures. But we do not make a distinction between civilians and the servicemen… 

Dmitry Medvedev: And you ought not to make such a distinction.

Vladimir Miklushevsky: Right, absolutely right, therefore this is a cause for concern. To be honest, Mr Medvedev, I believe this is a problematic issue because it is out of our control before certification. The Slavyanka company and the Primorsky maintenance and repair department are working on preparations, they are controlled by the Defence Ministry. That concludes my report.

Dmitry Medvedev: Thank you. This is my conclusion: everything concerning the facilities is more or less normal, and I’ll make a note of the information on military compounds. The minister is here, he will comment on this later. Thank you. Now the Republic of Sakha (Yakutia).

Yegor Borisov (President of the Republic of Sakha): Good afternoon, Mr Medvedev. Borisov here. You can see the heads of all divisions of utilities. The Republic of Sakha (Yakutia) has taken all organising measures. Winter has already come to the republic, our heating season began on August 8, and currently all boiler-houses and all energy facilities are ready in principle. We have spent 21 billion roubles for winter preparations, including 8 billion roubles for supply of solid and liquid fuels. The ships have basically delivered the needed fuel during this year’s navigation. We have spent 12.3 billion roubles on updating, reconstructing and repairing utilities and for power engineering. We have spent 657 million roubles for major maintenance work on 293 blocks of flats, which we will complete by late October. This task is currently being resolved in principle. For us, this is a very responsible and traditional campaign. It would be very difficult to live without major maintenance and preparatory work. So we realise our responsibility and conduct organisational work at a higher level. We are not sparing anything for this: this year’s spending grew by 3.5 billion roubles as compared with last year.

Currently we are mostly updating utilities; we have built 74 new boiler houses. This requires some increase of spending. Power facilities have been completely prepared. 125 local diesel power plants, hydroelectric power plants and thermal plants, the state district power plant in Yakutsk have conducted a repair and maintenance work, so the Republic of Sakha (Yakutia) is now ready for winter. I hope to God that we do not see any excesses or force majeure situations within eight months. Unfortunately, we have had such cases. To tackle such situations, we have created some reserves and 164 mobile emergency brigades that will take adequate measures taking into consideration the experience of years past.  

But we want to turn the attention of the Government of the Russian Federation to some issues.

Dmitry Medvedev: Do turn.

Yegor Borisov: The first issue concerns the method for determining the start of the heating season. It is determined by the outside temperature; but this year we violated this requirement and started the heating season considering inside temperatures, because in a way they do not depend on outside temperatures. Thus we started the heating season a bit earlier than in the past years. The local population and our social facilities were pleased with this. We want the Government to review the method for determining the start of the heating season. This is the authority of the Ministry of Regional Development.

The second issue: we have additional expenses of 1.7 billion roubles due to higher oil prices. We have included it in the budget according to requirements of the Ministry of Economic Development and the Ministry of Finance, but unfortunately we failed to fall within the limits of these deflators. Oil and diesel fuel prices have grown up by 28%-30% instead of a 2% price growth. So we wish that the Ministry of Finance cover some of these additional expenses – we have informed the Ministry of Finance. 

The next issue. We ask the Defence Ministry to pay attention to Tiksi-3. The servicemen have left and there remains a village with 400 residents. The authorities are working on this. Yesterday we discussed this with the military along with Mr Ishayev (Viktor Ishayev – Minister for Development of the Far East and Presidential Envoy to the Far Eastern Federal District), but we are worried about it. The problem of winter supplies to this village has not been completely solved so far.Every day we are getting messages saying a boiler house is being shut down there, and a power plant is being shut down, and of course, this is a very important issue for us.

We also want to raise the issue concerning the law On the Fund for Reforming Utilities. It includes Article 14 saying that every municipal entity should create certain market organisations servicing the utilities. Unfortunately, in the Republic of Sakha (Yakutia) and other Arctic regions (and we have 18 of them) it is impossible to create a market and we have to maintain a state-run enterprise of housing and utilities there – the only one that repairs housing. By law, we are supposed to create the conditions for market competition but, regrettably, we cannot do this and have to scrap this programme. We are not entitled to support from the foundation because we do not comply with the requirements of the law, but it is simply impossible to create a market in the North. We’d like to ask you to consider the peculiarities of the Arctic regions and make amendments to the provisions on the housing and utilities reform assistance foundations.

And the last point I’d like to make. We have a request for the Energy Ministry. Mr Medvedev, we had a very good programme and we started working on it – I’m referring to the construction of power transmission lines under the relevant federal programme, in particular a very long line – Mirny-Suntar-Nyurba – that we completed last year. The Mirny-Suntar-Olyokminsk line has been built, but, regrettably, it does not supply the local villages and townships with electricity. In other words, we are repeating the sad Soviet experience when gas mains or big power transmission lines passed through them without being connected. This is the problem we are facing now and we’d like to ask the Energy Ministry take care of it.

We have one more problem and we are discussing it with the Energy Ministry as well, but, unfortunately, we haven’t yet reached a final solution. The construction of the GRES-2 power station will guarantee stable energy supplies for Central Yakutia because the Yakutskaya hydro-electric power station will soon cease to operate – in 2015 all of its 40 year-old gas turbines will start putting out of operation. We’d like to ask the Energy Ministry to support us in resolving this problem. These are our requests. We’d like the ministry to pay attention to the new power station. As for all other tasks, we’ll cope with them on our own.

Dmitry Medvedev: All right, Thank you, Mr Borisov. You have a very big region and very complicated one, I must admit. Winter has essentially started in Yakutia already, and we must consider all these circumstances. Mr Kogan, how do you determine the start of the winter season? What proposals does the Ministry of Regional Development have? What temperature is more important – outside or inside?

Vladimir Kogan: Mr Medvedev, we think we should rely on the temperature outside. Maybe this is a kind of transitional period and we are ready to look at it again, but you have set energy efficiency as our goal. The wind gets inside some buildings because they don’t have energy-saving frames and it gets cold inside. Needless to say, we cannot proceed based on the temperature inside.

Dmitry Medvedev: But people are not to blame for living in such buildings, especially if they were built 50 or 70 years ago and the wind takes the warmth away.

Vladimir Kogan: We’ll pay attention to this and make our proposals.

Dmitry Medvedev: Yes, please do. I have an idea. I understand, of course, what you are talking about because we should also encourage energy efficiency. This is only fair. But our regions are different and in the bulk of regions in the European part the heating season starts somewhat later than, say, in Eastern Siberia and the Far East, for instance in Sakha-Yakutia. Perhaps it makes sense to consider some regional differential for calculating temperatures (I’m not formulating a decision now)? Because in some cases seasons change very quickly, adversely impacting many people living there.

I’d like to ask profile ministers to analyse the problems mentioned by the head of Sakha-Yakutia. I have already given instructions on Tiksi-3, and I understand you are working on this subject, is that right?

Anatoly Serdyukov: We have prepared everything there. We have brought in 5,000 tonnes of fuel, restored the boilers and fully isolated all heating mains. Everything is ready.

Dmitry Medvedev: All right. Let’s now hear from the Governor of the Sverdlovsk Region, all the more so since it has debt problems. Mr Kuivashev, please go ahead.

Yevgeny Kuivyshev (Governor of the Sverdlovsk Region): Good afternoon, Mr Medvedev. I will start with the debt issue. The total debt is 6.5 billion roubles, out of which 6.1 billion are owed by people and 400 million by legal entities. We have consistently tried to reduce these debts, and now legal entities owe us only 400 million as compared to a billion in the beginning of the year, almost a billion.

As for the Defence Ministry’s townships, we are finishing preparations for the autumn-winter heating season according to plan, and there are no special complaints about them, as was the case in the past. But still the debts amount to almost 230 million roubles and this sum could help enterprises invest in major repairs and preparation of the heating network.

Courts have already ruled that it is impossible to recover more than three billion roubles worth of debts from individuals. It makes no sense to try and get the remaining three billion and pay the duties because the courts may render the same judgements.

Dmitry Medvedev: And why do they make such decisions? What are these debts all about? Where do they come from and why are they so desperate?

Yevgeny Kuivashev: These debts have been incurred by people with low incomes, as a rule. The debt of 6.1 billion roubles was accumulated over 12 years.

Now I’d like to speak about the preparations of the Sverdlovsk Region for the 2012-2013 autumn-winter heating season. We have carried them out in line with the regulatory documents of the regional government. Municipalities drafted plans of action to prepare housing and utilities for the heating season and schedules for making standard stocks of basic and reserve fuel. The regional budget has allocated about six billion roubles for this purpose.

Mr Medvedev, I’d like to note that the Sverdlovsk Region has adopted regulatory documents on mandatory payments of expenses for major repairs of blocks of flats by their residents. The rates of these payments are different in every municipality. They are between 1.7 and 8.2 roubles for one square metre.

This decision has allowed us to perform repairs in more than 400 buildings. Costs reached nearly three billion roubles. We have therefore upgraded the preparations of this housing for the autumn-winter heating season. The government commission follows the preparations for the heating season every week. It listens to the reports of the heads of municipalities and responds to even minor mishaps.

Today, the housing and utilities sector of the Sverdlovsk Region is 99% ready for work in autumn and winter conditions: 74 municipalities are fully prepared for the heating season and another 17 are ready by 99% or more. Compared to the past, we have reduced the period of preparations and conducted them better than before… I won’t quote many figures, but on the whole we have conducted these preparations by 2%-3% faster than before. At present, 96.8% of all residential buildings subject to certification have received certificates confirming that they are properly prepared for the forthcoming heating season.

We have excess material and technical reserves for emergency response in the housing and utilities sector. As of September 26, our municipalities have received 80,000 tonnes of coal (with a reserve for 77 days and the norm of 47,000) and 8,000 tonnes of liquid fuel (for 57 days with the norm of four thousand tonnes).

Now I’d like to say a few words about connecting centralised sources of heat in our municipalities. The majority of them have already started supplying social facilities and housing with heat. As of September 26, heat has begun to be supplied to 92 out of 94 municipalities. Half of residential buildings and 70% of social facilities are currently being heated. All connections are being made according to plan, without any delays. We hear reports of the heads of municipalities every day and sum up the results of preparations for the heating season every week.

I hope that through joint efforts we’ll be able to pass the 2012-2013 heating season without any problems, in an organised way.

Dmitry Medvedev: Thank you. As for the debts, this problem always has different aspects because the situations are different. Let courts make individual decisions on every payer, every family. That said, we realise that it is unfair that some people pay and others don’t. This is simply unfair, all the more so since these payments are fairly modest compared to some other countries. We cannot allow part of our people not to pay for housing and utilities and to run up debts. We should deal with this and talk to the people.

Yevgeny Kuivashev: Mr Medvedev, we established a commission to identify the reasons and charge expenses in each municipal entity. There are examples where people work many hours in managing companies to pay off their debts. We have an individual approach in each case.

On average, the amount collected payments for housing and utilities services is 89% in the Sverdlovsk Region, and 94% in Yekaterinburg.

Dmitry Medvedev: Good.

Yevgeny Kuivashev: We are working on that. This is a priority…

Dmitry Medvedev: Keep working. Good.

Yevgeny Kuivashev: Thanks.

Dmitry Medvedev: So, let’s discuss northern territories. Ms Komarova, could you briefly discuss the situation in the Khanty-Mansi Autonomous Area?

Natalya Komarova (Governor of the Khanty-Mansi Autonomous Area): Good afternoon, Mr Medvedev, colleagues. As of September 24, 2012, winter preparations are 100% financed and complete.

Municipal entities with early delivery and decentralised power supplies have received their fuel and heating oil, and combustibles and lubricants. They are in place at the designated sites in the necessary amounts.

To promptly remedy disrepair and accidents at housing and utilities facilities in municipalities and the district, we have provided the proper material and technical resources in the necessary amount, which remains and hopefully will be not used. Accident and restoration squads have been formed in all the municipal companies. We have planned to conduct over 2,000 checks of their readiness by the end of 2012. To date, 75% of checks have been completed. On November 15, we will receive 42 back-up power units for emergency use. We plan to purchase an additional 86 units of such equipment but for other spheres, not power supply.

As of September 1, all social facilities had begun to receive heating. As of September 24, 100% of the Housing Fund was supplied with heat. Of the 71 heat distribution companies, 63 have been certified. To respond to emergencies we have developed a scheme of emergency warning and cooperation between the services. A total of 21 agreements and 11 regulations on cooperation have been signed with the relevant bodies. So far, no complaints have been filed by citizens with regard to readiness of essential services for the autumn-winter period. Current issues are being resolved on schedule. That is all from me on this subject, Mr Medvedev.

Dmitry Medvedev: Good, thanks.

Natalya Komarova: I can speak about…

Dmitry Medvedev: If there is something else, please do.

Natalya Komarova: Yes. First of all I would like to speak about the subject raised by my colleague from Sakha (Yakutia). I would like to speak about the bill that was passed in the first reading. I wonder about its prospects, as it would provide an opportunity to create institutions that would help Russian regions conduct major repairs of residential buildings together with the Russian Government. This is where the need lies.

And another issue, which is more complicated. I will make a proposal which I think should be considered. Honestly speaking, I have doubts about its efficacy, so I’d suggest a pilot version. Well, we have figured out that to resolve all the acute housing and utilities problems our region alone, with its 1.5 million people, needs to spend at least 12.5 billion roubles annually for five years. If we apply this to the entire country, this would total over 1 trillion roubles annually over five years.

Obviously, this is impossible either with budget funding or using the money the economy has for that purpose. There is a government directive on the plan to attract private investment in the housing and utilities sector. Lists of pilot projects have been approved that provide for raising private investment for individual local projects.

I think – and, moreover, believe it is absolutely clear – that integrated solutions are required in this case, providing answers to many questions. In this regard, I think it is right that such pilot projects be developed in an integrated way as well as in each municipal entity based on all aspects of the utilities sector. That way we will create a project that will later be used as an example in all municipalities. And we will understand how to resolve the task at a minimum cost. Currently we invest a lot of money, but we are still as far away from a solution as before, although we try our best.

Dmitry Medvedev: Understood.

Natalya Komarova: We are ready to suggest a region for such pilot projects.  

Dmitry Medvedev: Your region, I hope?

Natalya Komarova: Yes.

Dmitry Medvedev: You could suggest a region like Kuban, which would not be quite right. If you suggest yours, we will discuss that. Thank you, Mrs Komarova.

Mr Kozak, please. If you want to comment on the bill, the floor is yours.

Dmitry Kozak (Deputy Prime Minister): Regarding the bill, everyone is looking forward to its adoption. On September 20, amendments were submitted to the Government that reflect the results of the summer meeting. There were discrepancies. A coordination meeting was held and it was ordered to draft the bill by the evening. When this is done, the bill will be approved. It has not been done yet, as reported yesterday evening. 

A new law always arouses debate. Of course there are many different “recipes” as it affects the interests of each citizen. But I hope we will settle all the arguments by October 1, and we will have to take a decision that may not be very popular.

Dmitry Medvedev: We will have to take a decision anyway, because the current situation is just unsustainable. We must have a source of growth and we should try to make it a reasonable and balanced one, so that people understand how money is being spent. These funds should be used for actual repairs, not some imaginary projects that are never realised and the results of which no one can see, as is, unfortunately, often the case.

Thank you, Siberia and the Far East. Now let’s move on to European Russia. Let's see how things are in the Bryansk Region. Mr Denin, please go ahead.

Nikolai Denin (Bryansk Region Governor): Good afternoon, Mr Medvedev and colleagues. Currently, the region’s housing stock…

Dmitry Medvedev: Colleagues, please be brief. I have a request for you: please do not show us all these charts and tables. I would just like to let you and our other colleagues know that it is important for us that you say that you are ready and that things are in order overall. If you have any suggestions with regard to improving rules or some specific projects, then share them with us. All right? Please go ahead, Mr Denin.

Nikolai Denin: Mr Medvedev, we are 98% ready, including all thermal, electrical and boilers plants. We had a problem with basement boilers, with 25 of them in the Bryansk Region. The last boiler of this type will be dismantled in Bryansk this year.

Now, with regard to the issues that were raised by Mr Novak. Sixty-one percent of the Bryansk Region and our facilities are equipped with backup power supply sources. This problem will be resolved by 2014 as agreed. The heating season begins on October 15, and I believe that we will not have any problems with that.

Dmitry Medvedev: All right, good. Thank you for keeping it brief. Over to Tver Region Governor Andrei Shevelyov. You region was mentioned among others that are in debt. How do you plan to deal with it?

Andrei Shevelyov (Tver Region Governor): To keep it short, we are ready for the heating season and I believe that we have done a lot of work to get ourselves ready for the winter. We have built and upgraded 78 boiler plants and have repaired more than 500 km of utility lines and 2,633 km of power lines. Fuel supplies now exceed the established operational reserve by 1.5 times. Regional reserves for quick relief of emergencies and malfunctions are in place, and we have all the necessary material supplies and equipment. As for numbers, we have released 1.738 billion roubles to prepare for the heating season. We have conducted trial runs of the heating equipment in all municipalities.

Customers have requested that we start the heating season earlier this year, so we will start heating social service buildings on September 21 and they will all be heated by September 28. We will start heating residential buildings on October 1, although is still not that cold (10°-12°C), but it's damp.

The debt that I inherited is indeed one of the most challenging problems that I am faced with. However I would like to give you the correct numbers. Our gas payment arrears amount to 2.810 billion and 1.938 billion roubles – that’s the debt of Tver Utilities (TKS), a subsidiary of the TGK-2 Fuel and Heating Company. As a matter of fact, neither the Tver Region, nor any of its municipalities have anything to do with this debt. We are working on it along with Gazprom Mezhregiongaz through a working group. I filed an application to the General Prosecutor’s Office, the Interior Ministry and the Investigation Committee to have this economic entity pay its debt to Gazprom. We held the line on the debt and have even brought it down since April by upwards of 300 million roubles. To head off the increase in debt, we took firm control over timely payments for energy. We have re-paid gas debts owed by the organisations financed from the regional and local budgets. There is still a small amount of debt (90 million roubles) owed by the organisations financed from the federal budget, but we're working on it. Our colleagues are fully cognisant of the situation and promise to repay this debt. There’s a bright side to this situation as well, as most organisations are on time with their current bill payments. We have drafted debt restructuring charts. There are no arrears for gas payments in a number of municipalities.

We have a plan to ensure reliable heat supply in the area, which includes the renovation of the fuel and energy facilities. Subsidies in the amount of 521 million roubles went to municipalities from the regional budget to cover priority spending commitments with regard to providing an uninterrupted heating and hot water supply. The working group on auditing the use of funds received by utilities from customers is operating continuously. It includes members of the Investigative Committee, an Interior Ministry department and the Prosecutor's Office. Eight audits were conducted in seven municipalities, and the materials from two of them have been submitted to investigators. This year, a single cash settlement centre was established in the region, which should make energy payments transparent and improve the effectiveness of financial transactions. I believe that we will be able to resolve the debt problem quickly, and most importantly, this will allow us to successfully operate during the heating period.

I would like to support my fellow governors who spoke about major repairs at blocks of flats. I heard a comment by Mr Kozak, but we are waiting for this bill to be adopted soon, because we are drafting the budget for 2013 and beyond, and we must build a system to support these programmes regionally and locally.

Dmitry Medvedev: Thank you. There was a problem with the thermal power plant in Rostov-on-Don, correct? Please bring on the Rostov Region.

Vasily Golubev (Rostov Region Governor): Good afternoon, Mr Medvedev.

Dmitry Medvedev: Good afternoon.

Vasily Golubev: We do have a problem with heating in the town of Krasny Sulin, where we have an experimental thermal power plant. It was put into operation in 1955. There are 3,500 people living in this town. This summer, the plant filed for bankruptcy with the commercial court indicating that it will shut down the operation on January 1, 2013.

The Energy Ministry and the regional Government requested that the plant keep heat supplies in place until January 1, 2015. To replace this heat supply source, the Government drafted a project for a new plant and had it approved by experts. We plan to complete construction in August 2013, and to build a new 19.3 MW boiler plant, which will resolve the problem in full.

We are continuing to work with the Energy Ministry, and have asked them to place this plant, beginning January 1, 2013, on the list of power generating facilities that supply power in a forced mode until the completion of the 2012-2013 heating season. The plant is ready to go and we can provide the necessary amounts of coal and fuel oil. Hence, our request.

We are continuing to work with its current owner, the Mechel Trading House. We have no issues other than that with regard to our getting ready for the heating season. We believe that we are ready for it. However, we will need to resolve this problem before the heating season.

Dmitry Medvedev: Thank you, Mr Golubev. What does the Energy Ministry have to say on this score?

Alexander Novak: The enterprise does have a financial problem. They have coal at the warehouse, but they can’t use it because it was seized for arrears.  

Dmitry Medvedev: Who owns it, Mr Golubev?

Vasily Golubev: Mechel.

Alexander Novak: Mr Medvedev, we are working on this issue in order to have this experimental power plant included on the list of power generating facilities operating in a forced mode, which will allow them to extend their service life until January 1, 2015. We could then use this time to address this issue, resolve the debt problem and release coal. Again, the coal, 8%, is in place. It has been seized for failure to pay, but it is there.

Dmitry Medvedev: You should sort things out with Mechel. Talk to them and have the plant put back into operation. Sit down with our colleagues from the Rostov Region and find a way to resolve the issue. All right. Deal with it and have it fixed.

Please bring the Samara Region on. Please go ahead, Mr Merkushkin.

Nikolai Merkushkin (Samara Region Governor): Good afternoon, Mr Medvedev.

Dmitry Medvedev: Good afternoon, Mr Merkushkin, how are things?

Nikolai Merkushkin: Things are going well overall, thank you. With regard to today’s agenda, we (like many other regions) have been getting ready for the winter season since the summer. We have allocated an additional 2.8 billion roubles from the regional budget and budgets of the local companies. We are 90-98% ready in terms of boilers, utility lines, and so on.

Our reserves for major plants exceed 126 tonnes (3%). Small boilers have coal reserves at 80%. One more train car of coal and we will be good for the entire winter. As for liquid fuel, 93% of the need for small boilers have been met. Preparations are underway, and we believe that we’ll be done by early October. We expect the heating season to begin on October 8-10 as usual in our region. So we don’t have any major problems. Our region has many generating companies and they are actively preparing for the heating season. They are even ahead of schedule.

I’d also like to say a few words about the draft law that was discussed here. One of the main headaches for our people is our utilities and the condition of blocs of flats. If we have this law, we’ll be compelled to do more on the spot in order to resolve these problems. We’ll have to install meters, do repairs and introduce energy-saving technology, because without this work it will be very hard for us to improve the mood of local residents and put things in order in this sphere. Most important, maybe we should start saving money that we are now spending on the inefficient system that still exists in our housing and utilities sector.

Dmitry Medvedev: There is no doubt that this draft law will have to be adopted. Let me repeat that the main thing is to make it effective. I hope that regional governors will also take part in the final discussion of the law that is now a subject of heated debates in the State Duma. Thank you, Mr Merkushkin.

Mr Serdyukov, what could you say about the problems of the Defence Ministry in the preparations of military townships for the heating season?

Anatoly Serdyukov (Defence Minister): Mr Medvedev, I’d like to start with the Primorye Territory. We do have problems there with preparing housing for the heating season. We are now 75.2% ready, but we do understand that we must fully complete this work during October.

As for fuel, I’m surprised, to be honest. Why? Because our annual requirement is 274,998 tonnes. Today, we have delivered 145,570 tonnes of solid fuel, which compares with the norm of 66,000 tonnes, plus we have 20,000 tonnes in the boilers. On the whole, we have no problems.

Dmitry Medvedev: Check again.

Anatoly Serdyukov: Yes, I will.

As for debt, we do have a problem – we owe about 4.5 billion roubles to our suppliers. I hope in the near future amendments will be introduced to the budget and funds for this purpose will be allocated. Then we’ll pay off our debts.

Dmitry Medvedev: Naturally enough, everything that was planned in the budget will be carried out.

Anatoly Serdyukov: As for our readiness for winter, the Defence Ministry’s facilities are 82% ready. There has been some delay, but we are confident that we’ll be fully ready by October 15. I’m referring to fuel supplies and I also hope we’ll do better with certificates. About 60% of buildings have already received them, but this work is going well, so I hope we’ll be ready on time.

Dmitry Medvedev: Okay, this is settled. What about our capital? Bring in Moscow, please. Mr Sobyanin, your turn has finally come. Moscow is still the main metropolis of this country. It is not very cold outside yet and the sun was shining in the morning but I’d still like to ask you whether Moscow is ready for the heating season.

Sergei Sobyanin (Moscow Mayor): Mr Medvedev, even though the sun is shining, the temperature is falling, and the heating season will soon be upon us. All the fuel and energy, and housing and utilities facilities are ready, and fuel reserves are 20% above standard volumes.

All the boiler rooms, heating supply and power supply networks are ready, emergency response teams have been created, we have stockpiled all the required volumes for emergency and rescue operations. The situation is worse in the newly incorporated areas, although these areas are also prepared for the winter. We have conducted a lot of work there but nevertheless the state of the facilities leaves much to be desired. We will prepare for the winter and improve the level of heating and energy supply security in these areas.

Dmitry Medvedev: Good. Please pay special attention to the newly incorporated areas. Obviously it is impossible to radically change the situation in just a month or two; these areas have different levels of engineering infrastructure and they are rural to a large extent. But nevertheless they are now part of Greater Moscow and their residents will demand that the energy supply and housing and utilities services provided are up to Moscow standards. That is inevitable. We must be prepared for that.

Sergei Sobyanin: Yes, thank you. We will do this, Mr Prime Minister.

Dmitry Medvedev: Agreed.

Colleagues, are there any comments? Mr Dvorkovich, do you have anything to say? Go ahead please.

Arkady Dvorkovich (Deputy Prime Minister): In general, as far as energy and transport facilities are concerned we are permanently monitoring the situation. The ministers are reporting on the progress of the work. All the risks are being carefully analysed and decisions are being made. But in order to gradually move away from manual control in a number of areas, we have to speed up our efforts to adopt the heating supply plans. According to the law they should already have been approved. However, almost nothing has changed in any of the regions. As far as I know, the plans have been developed and approved in only a few cases. That should be the case for all villages, cities and towns. If the population is over 0.5 million the plan has to be approved by the Energy Ministry. If the population is less than 0.5 million, by the municipalities. But the plan has so far proved ineffective. I think it’s reasonable to consider delegating these powers to the regions, which will have to coordinate the plans with the Energy Ministry for the bigger cities. In other cases the regions are free to make their own decisions. Municipalities are simply unable to cope with that.

Dmitry Medvedev: So you suggest delegating powers to the Russian regions for certain categories of villages?

Arkady Dvorkovich: To delegate all the powers to the Russian regions. 

Dmitry Medvedev: If being able to decide on these issues will make life easier in the regions, where heating supply plans have to be developed, the Deputy Prime Minister is absolutely right, let’s do it. Prepare an order on my behalf as part of all other orders that will be drafted after today’s meeting.

Mr Novak, please.

Alexander Novak (Energy Minister): I’ll briefly talk about the facilities mentioned by the Head of the Republic of Sakha (Yakutia), the State District Power Station-2 and the GRES-2 power transmission line, Mr Medvedev. These facilities will be financed over and above the amounts specified by the budgetary allocations in line with the RusHydro recapitalisation programme. We are now working with the RusHydro recapitalisation sources to finance these projects. Thank you.

Dmitry Medvedev: Good, thanks. Does the Emergencies Ministry have any suggestions?

Vladimir Puchkov (Minister of Civil Defence, Emergencies and Disaster Relief): Mr Medvedev, we have held a meeting of the Government Commission on Emergency Management and Fire Safety, and we have approved a plan to protect areas if there are large-scale emergencies at power plants and energy facilities, and housing and municipal utilities infrastructure facilities. We have established comprehensive disaster-relief facilities which can be used in emergencies in various Russian regions. In addition, Mr Medvedev, we have assessed energy sustainability in various regions that are prone to these types of problems. We have also assessed six regions with the highest risks in the energy sector … The Ministry of Energy and the Ministry of Regional Development have drafted proposals to tighten control and to stabilise the situation during possible problems over the winter. Thank you.

Dmitry Medvedev: All right. Mr Kozak, do you have anything to add?

Dmitry Kozak (Deputy Prime Minister): Technically speaking, we have taken all the required decisions, issued all the necessary instructions and have reached consensus on the preparations for winter. And I would like to agree with Mr Dvorkovich on the issue of long-term work, primarily the approval of the heating supply, water supply and drainage schemes, as well as the approval of programmes on the comprehensive development of municipal utilities systems. This is a key task in the context of attracting private investment as mentioned by Ms Komarova. Right now, we have to submit a report on this issue to the President of the Russian Federation. Both regional leaders and the Government must fulfil the May 2012 Presidential Executive Order on attracting private investment into the housing and municipal utilities sector.

For today, I suggest that we make a decision on these schemes for implementing two federal laws, and that we instruct the regional leaders to approve the relevant timeframe on drafting and approving next year’s heating supply and water supply schemes for every municipal entity over a period of one month. We also have to approve all comprehensive programmes for the development of municipal utilities networks in 2013. All of this will enable us to achieve the goals set by the President to attract private investment into the housing and municipal utilities sector. We have no hope of doing this if we don’t complete this work.

Dmitry Medvedev: Are there any other comments? Is that all?

Before I make a brief summary, I would like to highlight those Russian regions which have been affected by disasters and which are having trouble housing people. First of all, this affects the Krasnodar Territory and the city of Krymsk, as well as some other areas. People should not suffer even today while they are waiting for their new homes to be built, and they should not freeze either. We must take all the necessary steps so that people who are now being put up in temporary accommodation can feel more or less comfortable, before they move into their permanent housing. Therefore, this issue should be on the agenda of all the regional authorities and I would like the Governor of the Krasnodar Territory to pay particular attention to this issue.

And I would also like to say a few words about our current video conference. I would like everyone present not to sit on their hands but to address the issue of debt because this is your responsibility. Colleagues, this means that the necessary steps have to be taken in order to ensure that preparations for the autumn and winter are made in good time. We discuss this every time, and special situations arise every time. Nevertheless, we have to try our best to minimise the problems. The Russian regions must do everything possible in order to prepare for the winter. We must proceed from the fact that regional leaders are personally responsible for these preparations. This is your responsibility! If there are any problems at the federal level, if you require federal intervention, you must at the very least inform the top executives of the relevant ministry and department in good time. If necessary, you must inform top government officials, so that the required federal decisions can be drafted. Otherwise those regional officials responsible for specific issues will once again bear responsibility, so you need to keep in constant contact.

And, finally, I would like to discuss a whole range of violations brought up by the Interior Ministry, the Federal Financial Monitoring Service (Rosfinmonitoring) and the Prosecutor General’s Office. The relevant instruction has already been issued, but I would like the top government officials, relevant ministers and department heads to resume the required work. This means management companies and organisations that supply resources. They control huge financial assets and unfortunately there are a lot of crooks working there. And we have to complete this work, no matter what. Mr Kozak, I would like to draw your attention to this issue because the relevant instruction has been issued but unfortunately the situation is not changing a great deal, and overall we need to finalise our plans in the near future. I hope that the law enforcement agencies will, wherever necessary, use the entire arsenal of law enforcement measures at their disposal, such as opening criminal cases and conducting inspections by national oversight agencies because the current state of things is unacceptable. It’s cynical, it corrupts a lot of companies, which use funding that is not their own, and this all goes unpunished. The funding either disappears or is misused. After that, we try and patch up the budgetary holes in the housing and municipal utilities sector, which does not have enough money for various projects. In reality, we have a lot of funding. All we have to do is ensure it is managed cost-effectively. I would like to draw the attention of the heads of the federal agencies to this, and the leaders of the Russian regions of course.

Colleagues, thank you for attending this meeting. I believe that we will come back to this issue again because it is an issue that has to be addressed by the Government and by the Russian regions. Goodbye.

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