Transcript of the beginning of the meeting:
Vladimir Putin: Mr Novikov, I have signed a Government Resolution on state regulation and control of tariffs, charges, fees and natural monopoly services on rail transport. What results do you expect from it?
Sergei Novikov: Mr Putin, rail transport in general and Russian Railways in particular are undoubtedly key infrastructure not only for each specific branch, but also for the country's economic security, a key element of the strategy of development.
This resolution is in a way an institutional one, helping to form a system not only for state regulation of cargo or passenger carriage by rail transport, but also to set development priorities for the branch in general, in line with the central priorities defined by the Government.
Strictly speaking, what am I referring to and what would I like to emphasise? I will single out three groups of items.
The first group concerns investment and investment development. The resolution introduces a number of new features. One is a system of easier terms on the return of investments - up to two years. In fact, it is, strictly speaking, regulation of capital gain. It also allows establishing so-called local tariffs to fit certain market segments of cargo and passenger traffic.
The second group is in our view the main one and its significance is difficult to overestimate. It is connected with a continuation of structural change, and with competition development.
The resolution introduces a provision stipulating a flexible system of regulation - marginal price fixing. Another provision introduces a number of new components in the tariff. While today we have only infrastructure and wagon components, this provision allows terminal, carriage, container and locomotive components to be added.
What does it mean in practice? It means that competition is possible in these segments. That is to say, goods can be shipped not only by Russian Railways, but also by owner trains when a private businessman owns both the wagons and the engine. Naturally, he is also responsible for the train crew. Clearly, the infrastructure, or rails, sleepers, and other assets, remain the property of Russian Railways.
Vladimir Putin: And traffic control.
Sergei Novikov: Traffic control will no doubt stay with it. But competition can develop in these segments.
And now the third group is a group connected with control and greater efficiency of rail transport, which in essence is striking a balance between the branch's development interests and those of service users.
Clearly, the resolution is a basic and necessary element, but it calls for further work. As does the subject itself, its strategic thrust, and adjustment of aims and priorities once the third stage of reform is completed. The third stage is ending in 2010, but we will be required to take some immediate steps within the next few months, both to amend federal legislative and federal laws and to make this resolution, your directive, public. I am also referring to the issue of procedural guidelines, and new and altered price lists.
In any case, this resolution is in our view institutional in nature, which in a way completes the stage of prioritising the next steps in state price policy. It also takes due account of competition development, investment process, and growth of rail transport.
Vladimir Putin: Good. As I have said, I have signed the resolution. I expect you to do everything for the resolution to start working and for your Service to organise due control over its implementation.
Sergei Novikov: Certainly.