Vladimir Putin's introductory remarks:

Good afternoon,

Our meeting today is devoted to public-private partnership. But before opening it, I would like to congratulate you and all working people of the Tula Region with a record harvest in 70 years. This year's harvest is twice as high as the average of many years. We have not had such a harvest in 70 years. This is a huge effort, which was over many previous years. That means the use of fertiliser, [technical] re-equipment of the countryside and a lot of hard work. That is why I would like to congratulate you on the harvest from the bottom of my heart.

We are going to talk about public-private partnership, which is our main subject today, in many spheres - the transport infrastructure, utilities and housing, high-tech production, and comprehensive development of land.

Public-private partnership is certainly an important and effective instrument, and the experience of many countries testifies to this. Here in Russia, in particular in the Tula Region, we also have positive examples of implementing industrial projects based on public-private partnership. We have seen today, and Mr Dudka (Governor of the Tula Region) has told us again about the main elements of the big cluster which has been developed here and is growing.

I am referring to the initiative to create an integrated industrial complex in Novomoskovsk. The federal Investment Fund, the regional administration, EuroChem, Procter & Gamble, TGK-4 and other companies are involved in its implementation.

By the way, I have been told today that EuroChem has an idea for developing similar production in other Russian regions, in particular in the Volgograd Region. I agree with Mr Strezhnev (CEO of EuroChem) that we should make sure we have the best possible results in the projects that are currently under way, so that we could take their results, their profits, and put them to work on other projects.

Returning to the main subject of our discussion today, I would like to say that the use of public-private partnership allows us to use the resources and possibilities of the state, the regions and business, to lower the risks for project participants, to distribute zones of responsibility among them, and to balance their interests.

We talked about the need to employ new growth factors long before the crisis. In this sense, we invested our hopes in public-private partnership.

Much has been done since then. In particular, we developed legislation for this joint operation, passed the law on concessions, special economic zones, and the Development Bank. We also adopted amendments to the Budget Code and formed the key institutions, including the Investment Fund, which we set up in 2005.

Today, 21 projects of federal importance have been approved within the Investment Fund. Total allocations for these projects will amount to 54.5 billion roubles in 2009. Another 10 billion roubles will be invested in regional projects, which will be financed by the regions themselves.

On average, the Novomoskovsk cluster has shown that each rouble invested from the federal budget brings in about 3.50 or even 4 roubles of private investment. In other words, the efforts of the Investment Fund have catalysed the investment activity of business, just as we hoped it would.

As I see it, business approves of the state's involvement in a project and invests in it. But bear in mind that it also leads to the development of power generation, infrastructure, railways and roads, and assistance in lowering the tax burden, which all together creates a favourable business climate.

As I have said, the crisis has made its changes to our plans. First of all, we were forced to make some difficult decisions about concentrating investment resources on the projects that are almost finished and to postpone the beginning of many new projects.

Secondly, we have taken the step of using Investment Fund resources to prevent the threat of mass never-ending construction projects, particularly in the regions of the Russian Federation. We have compensated the regions the lack of their own resources by using the funds of the Investment Fund.

The Government has already decided on a series of anti-crisis solutions providing support to regional projects. And today I would like to hear reports on the progress made in their implementation. At the same time, particular attention should be paid to timely use of available budget allocations. The money must not stay in bank accounts like a "dead weight", but must be used to stimulate production.

We must also think about our prospects. The economy, as we know, must show clear signs of recovery. That means that we must pay ever more attention to development issues.

I hold that now is the optimum period to "polish off" all of the parts of the mechanism of public-private partnership. In the future, at the stage of a new economic upturn, this will allow us to move forward without wasting time.

We should look at the opportunities that are currently lacking, what specifically we are lacking, and what is hindering PPPs from being a more flexible and attractive instrument for business and private investment.

For example, it could be a matter of providing state guarantees, using infrastructure bonds, subsidising interest rates on loans and assistance with disbursement of land plots, as the case happens to be in some areas.

And of course, we need to continue searching for and selecting new promising projects, primarily in the regions - specifically those that require comparatively small resources, projects that rapidly pay for themselves and are capable of rapidly improving the socio-economic situation in specific cities. We must also replenish budgets and create additional jobs.

Particular attention should be paid to single-industry cities. Many of them have ended up in their own unique trap. The local economic mainstay, say, has plans for a large-scale upgrade of production, introducing new technology and improving labour productivity. This means inevitable personnel cutbacks. But finding employment in single-industry towns is often very difficult or even impossible for the average person.

When these cities and towns and the companies that operate in them were created, nobody gave any thought to potential problems in the future. But today we have inherited these problems, and we, of course, must deal with them.

Therefore, it is necessary to implement comprehensive plans for industrial development projects - building new factories in single-industry cities and solving their transport, energy and environmental problems while creating new jobs.

Of course, this takes time and money, but there is no other way. This is precisely the way it was done here, in Tula. And I think that this experience can be useful for many other regions of Russia.

Let us now start the discussion.

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Vladimir Putin's concluding speech:

Good afternoon,

Public-private partnership is an effective way of carrying out development projects. Such methods are working in many countries. Russia should not be an exception. We launched this idea several years ago, and have made tangible progress through these joint efforts.

Results would have been better if it were not for the global economic and financial crisis, which, I would like to emphasize, primarily restricted the abilities of private investors rather than those of the state. This is why we had to suspend many of the projects that relied on public-private partnerships, or the state had to provide the money instead of private companies. In order that these projects, and they are important projects, not be abandoned, the state supported them and took the burden of investment onto itself.

However, this does not at all mean that this method should be given up. On the contrary, the purpose of this meeting is to use the example of the Tula Region to show that this method works as a means of development, even during a difficult financial and economic downturn. This is the first point.

Secondly, the Government will continue to approve this method. This is why we have met here today and drafted a resolution. This draft is aimed at further improving the legal foundation for such partnerships, as has already been mentioned.

This legislation is aimed at ensuring funding for the projects that are now being examined by experts, both directly from the federal budget through the Investment Fund, and by the development of new approaches. This is why today we are talking about infrastructure bonds, potential subsidies, and so on.

In this context, I would like to draw your attention to the fact that infrastructure monopolies should also strive for maximum stability in their relations with other companies, ¬¬without relying on the state, although we fully realize the connection between the capabilities of the budget and the infrastructure monopolies' operation. They should pursue a realistic tariff policy and coordinate it with the state.

We have discussed this many times, and this applies not only to Russian Railways but also to Gazprom and other major companies. Coordination is a must for effective performance. I absolutely support what my other colleagues have said on this topic. This issue is reflected in today's resolution, the draft protocol.

Let's work together, and let's work hard. I wish everyone success. Thank you.