21 august 2009

Prime Minister Vladimir Putin chaired a meeting in Mirny on the implementation of instructions issued by the President and the Government related to the socio-economic development of the Republic of Sakha (Yakutia)

Participants:

Opening remarks by Vladimir Putin:

Good afternoon.

Today is a big, joyous and festive day for Yakutia and for Mirny, where we are find ourselves - it marks the start of operation a deep-level diamond mine, one that produces diamonds by non-open-cast method. This is a new stage in the life of the town, and a new stage in the life of the industry. I want to congratulate the republic's administration, the Alrosa company, experts and workers who contributed to this achievement. This is a great event indeed.

This gives us an opportunity to discuss how instructions on the republic's development are being implemented. We have a programme for the development of the Far East and the Trans-Baikal region. Let us see how the work is proceeding here, in Yakutia.

As you know, we have addressed these problems more than once over recent years. A number of additional decisions have been adopted on the area's all-round development. We have launched and continue implementing a federal targeted programme on the Far East and the Trans-Baikal region, which provides for a substantive renovation and expansion of Yakutia's infrastructure: construction of new bridges, airports, railways and highways.

The republic is to be crossed by the Eastern Siberia-Pacific Ocean (ESPO) oil pipeline, which offers new opportunities for establishing a large oil production centre, and the development of such promising deposits as Talakan. Work is going full speed there. One of our leading companies - Surgutneftegaz - is implementing this project and the work is going well.

The Eastern Gas Programme is also off to a good start. Its priorities are to pipe gas to the regions. The republic's head has just reported gas demand for Lensk is fully satisfied. At any rate, efforts have been made to reach the programme's targets. Next in line are Mirny and other towns and cities.

We saw this programme in action at one of the facilities, where the new Sakhalin-Khabarovsk-Vladivostok gas pipeline joins the system. This programme alone, by itself, can be described as one of the largest industrial programmes in the history of this country. It concerns only the development of gas infrastructure: gas production, creation of transportation possibilities and link-up of the entire gas transportation system in Western and Eastern Siberia and the Far East.

We are already seeing positive results. Yakutia's regional gross product has increased more than one-third between 2003 and 2008, while investment in fixed capital has grown 50%.

At the same time, old problems weigh heavily, and these problems are well-known. They are: poor diversification of the regional economy; its mono-industry structure; a high degree of wear and tear of the housing stock and utility systems; an inefficient and costly scheme for supplying electricity to the region; and absence of an integrated energy space. Even despite the measures taken, one feels a colossal shortage of infrastructure facilities.

All these trouble spots particularly manifested themselves in the current economic crisis. There has been a serious drop in global demand and prices for raw materials produced in the republic, including diamonds, which make up the core of Yakutia's economy and are the main source of revenues for the budget. The diamond-producing industry has contributed up to 30% of Yakutia's budget.

As you know, the state has substantively expanded diamond purchases to support the industry. It has been decided to quadruple the funding being allocated for buying precious stones for the state treasury: this amount has grown from 3.7 billion roubles to 14.5 billion roubles. But I think even that is not enough. We understand that an industry that provided serious revenues both for the federal and the regional budget is in a difficult situation due to the global economic conditions and needs to be supported.

I just had a discussion with mine workers and I would like to repeat here what I told them -that in total state support for the industry this year must amount to 30 to 35 billion roubles. It will not be easy to do amidst the financial and economic crisis, but we will do it.

In addition, I will instruct my staff to work out a mechanism for providing state guarantees in rescheduling Alrosa's debts to Russian and foreign lenders.

But in addition to these and other anti-crisis measures to support industries and individual companies, we cannot postpone the solution of systemic questions which have piled up over the previous decades - I stress, not years, but decades. That is because regrettably, everything in the republic was exploited ruthlessly, with little invested in return.

This mine alone has produced $17.5 billion worth of diamonds in previous years, compared with the republic's $80 billion. But if one counts how much we invested in the republic and its infrastructure, these will be incomparable figures. Hence we have the problems which have taken decades to accumulate.

I would therefore like to ask the Ministry of Regional Development, republican authorities, and the federal departments concerned to quickly finalise and submit to the Government a draft scheme for all-round development of Yakutia's productive forces, transport and energy industry.

Measures should above all concern changing the structure of the republic's economy and establishing new industries, such as oil production and refining, gas production, gas chemicals, metals, and tourism.

In this context I would like to hear reports today on how work is proceeding on the investment project to develop southern Yakutia, on the construction of the Elkonsky mining and metals plant and field facilities on key gas, oil and coal deposits, and also, what is the outlook for a special tourist zone in Yakutia. There are things worth seeing here if infrastructure is provided - I do not doubt for a second that people will travel here with pleasure.

And of course transport, energy and utilities infrastructure also needs further improving, and we should discuss these things today.

In the current year, the Housing and Utilities Reform Fund has allocated more than one billion roubles for Yakutia - a substantial amount. These funds should be used to the utmost effect to solve the main problem for which the Fund was set up, namely to provide residents of dilapidated and unsafe buildings with new housing. Unfortunately, there is a great need for that in Yakutia.

Also, the Government has decided to speed up the construction of a series of energy facilities. I am referring to the Neryungry Thermal Power Plant-Tommot-Maya line and the Suntar-Olekminsk line. This year alone, 3.5 billion roubles has been allocated for these purposes. There must be no delays in their construction.

I am also looking forward to receiving proposals from federal departments and energy companies on additional financing for a number of other energy facilities next year, including the Mirny-Nyurba and Chernyshevsky-Lensk-Peledui high-voltage lines. These are important and forward-looking projects, and proper attention should be paid to them.

Lastly, I would like to hear separate reports on how the republic is implementing its anti-crisis programmes and measures. These are above all measures to support employment, optimise the budget, and monitor the situation at key town-forming enterprises.

People here have been on forced leave for some time now. I hope that work will restart in full in the near future, in September, in fact. I am also bearing in mind the support the federal centre is rendering the branch and the republic as a whole.

Let us get down to work.