Transcript of the beginning of the meeting:

Vladimir Putin: Mr Ivanov, we have recently discussed the development of transport infrastructure at a meeting with parliamentary group leaders. I talked about what had been done in recent years in Primorsk [Leningrad Region]. Another major project is being developed in north-western Russia, the Ust-Luga sea terminal. I know you have visited the project site. How are things progressing?

Sergei Ivanov: Yes, I did visit Ust-Luga in the Leningrad Region last week, to personally monitor the progress of this very important transport hub construction.

We have spent about 60 billion roubles for the project since it began in 2005, including 8 billion provided by the federal budget.

I can say that a lot of work has been done over the year since your last visit. A container terminal has been built, and a railway ferry crossing to Germany is already operational. By the end of this year, automobile ferry facilities need to be added to the transport line. As a result, there will be a ferry crossing for rail and motor transport. Trucks will be able to drive on a ferry and cross the Baltic Sea, too, like trains do now.

In addition, I would like to report an intensive construction of a fuel oil transshipment terminal, which would handle fuel oil to be shipped to European consumers. Until recently, Russian seaports had no fuel oil transshipment terminals, so we had to export about 17 million metric tons of the commodity via Estonian ports. Part of the terminal will be completed before the end of this year.

I have seen two railway loading racks fully built. Oil tanks will arrive from Kirishi [Leningrad Region] by rail and reloaded on sea transport there. There will be no need to continue our oil product exports and imports through Estonian ports.

Vladimir Putin: When will that be?

Sergei Ivanov: The first facilities will be commissioned later this year to handle 7 million tons, thus allowing us to reduce our traffic through Estonian ports.

In addition, the construction of the BPS-2 [Baltic Pipeline System-2] pipeline has begun, in line with your instruction. The pipeline will connect to the Ust-Luga terminals. A plot of land has already been allocated to build oil transshipment tanks. I have seen it for myself - it is located within the port area as determined by the government. The plan is to commission the pipeline, including oil transshipment facilities, in late 2011. The Transport Ministry is currently conducting bottom dredging. The canals are currently 16 metres deep; thus, small and medium tankers can already be loaded there.

Vladimir Putin: What is the international standard depth?

Sergei Ivanov: We want to make the canal depth 18 metres to ensure that 300,000-ton tankers could enter the deck and load large amounts of oil, mainly from BPS-2, to be delivered to European and other consumers.

When completed, the hub will ensure that we no longer be tied to the whims of transit countries. It will help diversify our oil exports. When Ust-Luga joins Vysotsk and Primorsk, the two operational ports, we will be able to use Russian ports only.

Now let me cite one more important figure concerning the Ust-Luga project...

Vladimir Putin: But please coordinate the locations of these channels, which the Ministry of Transport is building, with project operators.

Sergei Ivanov: There will be two channels - the Southern and the Northern. In fact, they already exist but their depth is only 16 metres. We will need to deepen them to 18 metres by 2012, so that vessels of all types...

Vladimir Putin: And the boundaries of the port must also be outlined. I have signed the requisite documents, but see to it that everything is done, as it should in practice.

Sergei Ivanov: The terminals have been assigned. There will be a grain, a container and an automobile terminal. The coal terminal has been already commissioned. A separate terminal will be built for chemicals and petrochemicals, and a terminal for fuel oil shipments.

Vladimir Putin: Will they be located within the port's boundaries?

Sergei Ivanov: Yes.

Vladimir Putin: Let me reiterate. I have recently signed a resolution, but you must ensure that the land plots are exactly sufficient [for the terminals]. We must not increase the territory endlessly, since this will increase project costs.

Sergei Ivanov: Yes, I agree.

As to the current situation in Ust-Luga, cargo turnover there has grown 27% in 2009 compared to last year. I have asked the transport department about cargo transshipment in Russian ports. I have been informed that 75% of transshipment of export-import cargo was carried out in foreign ports in 1998-1999 and only 25% in Russian ports. The current ratio is 13% to 87%. I think this is a very good dynamics, and that we will fully remove our dependence on foreign ports in the foreseeable future. This is extremely important for the national economy and as regards additional jobs.

In addition, I would like to say that this year we will complete the construction of many elements of the transport infrastructure. In all, the budget stipulates the allocation of 347 billion roubles for the development of transport infrastructure in 2009, out of which 83 billion will be spent on [Olympic construction] in Sochi and [construction for the] APEC summit [in Vladivostok], while the remaining on other transport projects.

To conclude my report on sea and river ports, and on sea and river transport in general, let me confirm that this year we will complete the construction of a sea passenger terminal in St Petersburg. Large ferries with tourists will be able to drop anchor at the passenger pier, not in the cargo port as before. In Ust-Luga, we will continue working on the port's water area.

Vladimir Putin: Yet, as you are aware, we should focus on infrastructure - there is no need to shift the whole burden onto project operators. Here, I am referring to roads and electricity supply systems; in short, everything related to ensuring [the port's] operation.

Sergei Ivanov: It will be funded by the federal budget.

Vladimir Putin: I know that there are some concerns in this sphere. Please take note of them.

Sergei Ivanov: Yes, of course. The concern for us [in Ust-Luga] relates to the 21-km motor road. Initially, the Leningrad Region's government planned to expand the road and pay maintenance fees, but we have decided that it will be financed by the federal budget, including with allocations for the freight motor transport.

Vladimir Putin: This issue concerns not only Ust-Luga but also other projects.

Sergei Ivanov: In addition, we will finally complete the construction of a ferry complex in Baltiisk in the Kaliningrad Region this year. We will also commission the first part of the petrochemical terminals in the port of Kozmino in the Far East. We will ship our export cargo by rail to Kozmino for reloading to tankers. We are also completing the first leg of the cargo terminal in Sochi, which will handle construction materials. These projects are to be completed this year. The funds for this have been allocated.

We are also completing the construction of a pier in the ports of Olya and Vysotsk, and the reconstruction of the sea façade in Vladivostok for the APEC summit.

The Ministry of Transport plans to buy eight specialised vessels for ports this year, such as rescue and cargo vessels. No port can work effectively without them. We have already made a lot of headway in this sphere (shows documents). This is the St Petersburg passenger port - the one I was talking about, this is Baltiisk, and this is the cargo terminal on Russky Island.

Vladimir Putin: Is this the current state of the port?

Sergei Ivanov: Yes, this is the latest information and data on the funds we are allocating now and plan to allocate in the future.

As for road building, which is, incidentally, being considered by members of the State Duma: 2009 will be a significant year for us; we will simultaneously build three big bridges across the Volga River. Construction began on the first one, in Ulyanovsk, in 1987. This year, traffic will be allowed to pass on this massive structure, with its length of roughly 13 kilometres. Also this year, construction work on a bridge in Volgograd will be completed. The third bridge across the Volga will be in the Saratov Region. This project will be delivered in full and has been financed to the tune of 280 million roubles.

These three bridges enable us to take a significant amount of pressure off the highways linking the eastern and the southern regions by crossing the Volga. Currently, motorists have to drive an additional 400 kilometres simply to reach the existing bridges. The opening of these new bridges will be, I think, a momentous event.

This year, 705km of the Chita-Khabarovsk road will be completed in asphalt concrete for continuous traffic use, while all 2,000km of the road will be completed in 2010. For the first time in our country's history, since the Tsarist and Soviet times, it will be possible to travel east to west on a relatively standard road, whereas currently it is impossible to drive there.

Vladimir Putin: It will be a motorway.

Sergei Ivanov: Yes. Now, as regards this year's largest projects. Looking at airports and the construction of air-transport related infrastructure, we have already: delivered the first phase of Koltsovo Airport in Ekaterinburg, equipped the new runway with up-to-date flight navigation equipment, built a new air traffic control tower; also, a business terminal has been built using a public-private partnership. In 2009, rebuilding work will be completed on: Elista Aairport in Kalmykia, Nizhnevartovsk Airport in the Khanty-Mansi Autonomous Area, and Gelendjik in Krasnodar. You are aware that the runway is already constructed, and that a temporary terminal will be built, so passengers will be able to fly regularly to resorts from this airport.

Vladimir Putin: We will have three airports: Sochi, Gelendjik and Anapa.

Sergei Ivanov: I think this will be good for the Caucasus' Black Sea coast. We will complete reconstruction work on the Rostov-on-Don airport; a billion roubles is being allocated to that.

In Novosibirsk, we are finishing the construction of a wholly new terminal and runway; 3 billion roubles of federal funding has been spent on that. And there is also Khatanga Airport in the Krasnoyarsk Region. We also need to support infrastructure in the north.

These are the main construction projects we are developing in 2009, and full funding was made available for them. As for 2010, we will include all our key projects in the draft budget, no longer mentioning those long-term projects such as the bridge that was begun in 1987. We will also complete construction work on those that have already been started.

Vladimir Putin: And the decision about the bridge, as I understand it, was taken back in 2007?

Sergei Ivanov: Yes.

Vladimir Putin: It's good that we're finishing it.