After acquainting himself with the work of the Academician Krylov Central Shipbuilding Research Institute, Prime Minister Vladimir Putin chaired a meeting on the development of civilian marine technology.

Vladimir Putin's opening remarks: 

Good afternoon.

Our conference is devoted to the development of domestic marine technology.

We have significant potential in this field. Historically, Russia has had several major shipbuilding clusters in the Baltic area, in the Far East, in the North, and in the Volga basin.

It is only natural that shipbuilding is the industry in which we expect the development of high-tech production, diversification, and enhanced stability of the national economy as a whole.

Today's shipbuilding industry is comprised of 168 enterprises, 86 of which are government-owned. Its sales in 2008 reached 150 billion roubles. In addition, about 200 private enterprises are engaged in ship repair and shipbuilding.

Let me remind you of the substantive discussion we had concerning the industry's problems last year, also in St Petersburg. On that occasion, a number of tasks were presented to the Ministry of Industry and Trade and the heads of businesses. Today I suggest that we review our progress on these priorities.

All organisational measures to reform the shipbuilding industry must be completed by April 1 of this year, and by that time we should complete the formation of the United Shipbuilding Corporation (USC).

Secondly, the production programme of the United Shipbuilding Corporation should be developed and approved by that time, too. The main emphasis should be on producing a range of competitive civilian ships that will be in demand in the market.

We should realistically assess our potential and occupy the niches where we can offer competitive and even exclusive goods.

First of all, we are talking about so-called science-intensive vessels and offshore technology for the extraction and transportation of hydrocarbons on the continental shelf, ice-breakers and vessels designed for icy seas, floating nuclear power plants, and research and specialised vessels.

I also think that in order to have a powerful fishing industry, we cannot do without producing our own modern fishing vessels. It would make little sense to give up our work in that massive market. We discussed these matters with the head of the industry a short while ago and I hope we will revisit them today.

At present, the USC has a blueprint of the programme of civilian shipbuilding.

The main targets are as follows: building fishing vessels, about 265 units; development of the Russian transport system under that programme, 791 vessels; planned commissions by Gazprom and Rosneft, 307 vessels before 2030.

The federal budget envisages the funding for these projects, including leasing.

Naturally, the proposed programme must match real solvent demand.

We can make domestically produced technology more attractive through extensive use of leasing instruments, as I have said.

And, needless to say, the money allocated under the federal programmes and the investment plans of natural monopolies and state-owned companies should be used to purchase domestically made technologies, as I have said many times, especially in the current difficult financial and economic conditions.

I hope that the representatives from our major companies will heed my words.

One final point. In 2009, we are launching a new, 8-year federal targeted programme called "The Development of Civilian Marine Technology".

We often say that by the time it emerges from the current difficult economic and financial situation, our economy should be more modern and competitive. Some might ask, how can this be achieved? Well, programmes such as this are part of the answer.

More than 70% of the money earmarked for this programme will finance research and development in order to build up a competitive edge.

In these conditions, getting our priorities right is critical. The future of the Russian shipbuilding industry hinges on how well the tasks for our scientists and designers are formulated.

And one more thing: we have many shipbuilding facilities, but unfortunately, they can hardly be called modern or efficient. They are in need of sweeping modernisation and wherever practicable, they should be converted to serve other needs.

At the same time, practice shows that the most effective projects are "green field projects".

In the shipbuilding industry, a breakthrough investment project of this sort that would raise the industry to a qualitatively new technological level must be the creation of new shipyards geared toward meeting civilian needs.

Let us discuss all these issues in more detail. Let's get started.

Prime Minister Vladimir Putin's concluding remarks: 

I've just looked at our investment expenses in general. We are planning to spend money on the Sochi Olympics, the APEC summit in Vladivostok, the Investment Fund projects largely linked with infrastructure construction, federal obligations, including the Defence Ministry's commitment on housing for servicemen, housing for the veterans of World War II, the housing and utilities sector, the Mortgage Agency, earlier spending of maternity capital to pay mortgage loans, and some federal budget-financed regional programmes.

I have roughly added them up and calculated more than 600 billion roubles for this year. Road construction and maintenance will cost another 243 billion roubles. By the way, last year's figure was 224 billion. This year, we'll spend 243 billion, although some expenses have gone down. All in all, we get a round figure of 849 billion roubles.

Last year, overall investment expenses were 858 billion roubles, whereas this year they are one trillion and 100 billion roubles, including over 800 billion for the construction of different projects.

So, what will we spend on the high tech spheres of the economy? There are about 300 billion roubles left. If we add Vnesheconombank's credit portfolio, and its 300 billion roubles are federal money, we'll have almost 600 billion. Banks receiving federal support will give us roughly 200 billion roubles. All in all, we'll have 800 billion roubles for high-tech spheres.

On the whole, this is not great progress compared to high-tech expenses in the past few years. There is some advance, however, despite the current difficulties with financing.

About 110 billion roubles will be spent on shipbuilding this year. It goes without saying that this spending must be effective. Shipbuilding should constitute restructuring in this context.

Today, I'll sign the Government decree on the transfer of 19 companies (from all basins - the Baltics, the Volga Region, the Far East, and the North) to the United Shipbuilding Corporation (USC). I'm hoping that its establishment will be completed by April 1, as we planned.

I'd like to emphasize the need to streamline the corporation's structure, which was mentioned by a number of speakers here. This is absolutely true. We set up our shipbuilding industry mostly for defence. Today, we should restructure it to make it modern, effective, and competitive. We know that each of its structural units has a subunit dealing with civilian shipbuilding. We should streamline everything in the most rational way.

We are also planning to launch a new federal targeted programme. I'd like to remind you once again that we have preserved almost all high-tech programmes despite the streamlining of our budget. Moreover, we have left their funding virtually unchanged. The budget provides 136.4 billion roubles for a federal targeted programme to develop civilian shipbuilding, including 4.2 billion roubles for this year. This sum will not be reduced. All in all, 17 million roubles will be allocated for civilian shipbuilding and will be used in full.

What should be done in the near future, and on what should we focus? Needless to say, we'll support investment plans for new promising projects. This was also mentioned today. We'll build up our efforts to award our shipyards with contracts from national companies. In this context, I will rely on our major companies, regional projects, fishers, and the Ministry of Transport. This was also described in detail today.

I'd like to tell the Ministry of Finance, the Ministry of Transport, and the Ministry of Economic Development that in Moscow we'll again discuss the financial burden on shipbuilding, namely taxation and customs duties. We'll analyze what can and should be done to support shipbuilding in more detail. We'll also look more attentively at the credit portfolios of the main financial institutions that receive support from the Government and the Central Bank. We should also follow-up on how the recently received funds are being spent.

I hope very much that all the measures we've discussed today will be effective and will give a good incentive to the development of shipbuilding in Russia.

Many thanks.