Vladimir Putin's opening remarks:

Good afternoon, colleagues,

We routinely monitor events in the Far East, where a number of programmes and social anti-crisis measures are being implemented. Besides, several practical instructions on social support for the residents of the Far Eastern region have recently been issued to industries and enterprises. We have come here today to analyse the effectiveness of the measures we are taking, review previous decisions and instructions, and see what is being done to implement them, and how it is done.

The Far East and its wealth are Russia's natural competitive advantage. Its huge raw materials reserves and economic capability largely determine Russia's place on the geopolitical map of the world.

We have attended the welding of the first joint of the Sakhalin-Khabarovsk-Vladivostok gas pipeline, and professionals have said again that local natural gas reserves exceed 36 trillion cubic metres. No other country has such reserves, while Russia has them in two of its regions - Eastern Siberia and the Far East.

Our priority objective in the Far East is to create conditions for a comprehensive integration of the region into Russia's economic space, to enhance its business and investment attractiveness, and to improve the quality of life of the local people.

To attain this goal, we adopted and are implementing a programme of economic and social development of the Far East and the Trans-Baikal region. Despite the problems created by the global economic crisis, we have only slightly reduced the allocations to this federal targeted programme in 2009, and have not cut at all the programme's spending on the development of the local energy sector and on preparations for the APEC summit.

The 2009 budget stipulates the allocation of 84.7 billion roubles for this programme, 23.7 billion roubles for energy projects, and 40.4 billion roubles for preparation for the APEC summit. These are huge funds.

In addition, I have today signed a Government resolution that stipulates accelerating the construction of several vital energy projects, such as the Neryungri GRS-Tommot-Maya transmission line for ensuring the operation of the Eastern Siberia - Pacific Ocean oil pipeline (1.5 billion roubles), the construction of the Suntar-Olekminsk transmission line (2 billion roubles in 2009), the use of hydropower and geothermal resources of the Kamchatka Peninsula, and several other projects.

As for the previous instructions on the development of the Far Eastern region, I would like representatives of the federal and regional authorities and company heads present here to report in detail on the measures they have taken in the following spheres.

First, this year we must finish clearing up the consequences of the earthquake in Nevelsk. All of its victims must be given new housing and financial assistance, and the city must have a modern engineering infrastructure.

I would like to remind you that 9.6 billion roubles has been allocated from the federal budget for the earthquake relief, including 8.8 billion roubles for construction. As much as 7.7 billion roubles was transferred by April 1. As of July 1, the region needed 1,587 flats, and 1,537 flats have been turned over to people. The remaining flats are to be commissioned within the next few days, by August 1, 2009.

A total of 205.6 million roubles has been transferred from the federal budget to the Nevelsky Raion municipal company for assistance to the earthquake victims. The list includes 6,852 such people. Of them, 6,673 have received assistance, which means that 179 have not yet received assistance. I would like to know why.

Furthermore, in April we adopted a new federal programme aimed at creating safe living conditions in the country's quake-prone regions. Within that programme, we have transferred 1.6 billion roubles to the Sakhalin Region alone, and 3.5 billion roubles will be allocated to the Kamchatka Territory.

There are problems with co-financing, which we should discuss. We should monitor these problems to know how we can work in this situation, and how much money and from which sources will be allocated for solving these problems. I remind you that we should spend these funds efficiently because there are no surplus funds.

Third, we must continue to implement infrastructure programmes, building up the region's capability and preserving and creating jobs.

As I have said, many of those present here today attended the welding of the first joint of the Sakhalin-Khabarovsk-Vladivostok gas pipeline. It will deliver gas not only to the region's towns and enterprises, but also to the energy facilities on Russky Island during the APEC summit.

This project was not initiated yesterday. Back in 2005, I signed the first decree on this issue. But today we will launch a large-scale, strategic project to expand the Unified Gas Supply System in the eastern regions of the country. In terms of scale and socio-economic importance for the country and the region, this project is among the largest industrial projects in the country's history.

According to experts, some 150 billion cubic metres of gas will be produced in the Far East and Eastern Siberia by 2020. These resources must become the foundation for creating large power generation and gas processing facilities, for developing modern high-tech companies in the Krasnoyarsk Territory, the Irkutsk Region, Kamchatka, Sakhalin, Khabarovsk and the Primorye Territory.

I would like to say again that a ramified infrastructure, above all in the power generation sector, is vital for the successful development of such a large region as the Far East.

Fourth, we will highlight the development of high-tech sectors such as shipbuilding and aircraft manufacturing. Detailed audits are being conducted at the local enterprises to determine development reserves and solve financing and marketing problems, including export.

I visited Komsomolsk-on-Amur in early May. We discussed the problems of shipbuilding and aircraft manufacturing, speaking about the sectors as a whole and also about individual enterprises. The shipbuilding sector is facing major tasks. It may be premature to speak about the end results now, but I would still like to hear your reports. This is first.

Second, I would like to hear reports on the situation at individual enterprises, such as Amurmetal. As far as I know, there has been some progress, including agreements with the owners, and substantial state funds have been allocated by Vnesheconombank (VEB). We will attend the signing of these agreements today.

I would like to remind you that although 100% of the company's stock will be turned over to VEB, I do not regard this as nationalisation. On the contrary, the owners may buy back the stock from VEB if the situation becomes favourable and the company works effectively. They have the ability to do so - they can work and will continue to work, and I hope they will be working effectively. So far, they have been doing their best to help the company overcome their financial problems, and we are prepared to support them.

Today I expect representatives of respective ministries and departments to report in detail on the fulfilment of the previous instructions.

We will also establish new production in the Far East. On July 27, the meeting of VEB's Supervisory Board decided to issue an investment loan worth 5 billion roubles to Sollers. A part of these funds - 1.8 billion roubles - will be used to set up a new car assembly plant in Vladivostok. This will create over 1,000 jobs in the city.

Fifth, you must take into account the fact that the Far East is an outlying region. It is our duty to do everything possible to ensure that the people who live here see themselves as citizens of Russia and not of its outlying region, that they live comfortably and are able to visit their relatives in European Russia or go on holiday at affordable prices.

We have already introduced special privileged air ticket prices for the local people. They are effective from May 15 to September 15. I believe that we should take the next step and extend the privileged regime until the end of October this year. I have recently signed a resolution to this effect. We have calculated that another 90,000 residents of the Far East will be able to use this privilege. We should also consider increasing the number of cities from which people can fly under the special privileged regime.

I would also like to remind you that we have approved free transportation of new cars made in Russia to the Far Eastern Federal District within the anti-crisis package. This privileged regime has been prolonged to the next year, 2010.

Let's get down to work.

* * *

Several documents were signed after the conference in Khabarovsk in the presence of Prime Minister Vladimir Putin, including:

- The Memorandum of Cooperation and Interaction in the implementation of the project to build a new passenger terminal in Vladivostok International Airport (between Vnesheconombank and Sheremetyevo International Airport);

- A loan agreement between Vnesheconombank and LLC Sollers - Far East;

- A loan agreement between Vnesheconombank and LLC Sollers - Shtamp;

- A tentative agreement on the sale of an 80.5% stake in Amurmetal Holding Limited (Nicosia, Cyprus) between Metropole Group Limited (BVI) and VEB Invest;

- A tentative agreement on the sale of a 19.5% stake in Amurmetal Holding Limited (Nicosia, Cyprus) between Metropole Group Limited (BVI) and Vnesheconombank.