St Petersburg Governor Valentina Matvienko attended the talk. 

Transcript of the opening of the meeting:

Vladimir Putin: Mr Berlusconi, we are glad to greet you in Russia. We will have other opportunities for a talk later in the day, and tomorrow. Now, I would like to start with discussing a practical project, which might be not very ambitious, but it matters much to the city. Ms Matvienko will give you necessary details.

Valentina Matvienko: Thank you, Mr Putin. Mr Berlusconi, St Petersburg municipal transport leaves ample room for improvement, so we are planning elevated express tram lines with light, high-speed cars.

Talks with many foreign companies have led us to the conclusion that Italy's Finmeccanica suits us best. We have had preliminary negotiations with this prospective partner. Finmeccanica is willing to build a speed tram plant in St Petersburg with a proviso-Russia should purchase approximately 90 trams a year for five years. Otherwise, capital investment and plant construction will not pay.

Russia is a vast market. Every city and region has tram lines, and each needs modernisation. St Petersburg alone possesses 900 tram cars, 30% of them in need of urgent replacement for new generation speed cars-comfortable and noiseless. So I don't think sales will be a problem. 90 cars will certainly find their buyers.

Vladimir Putin: We will certainly assess the tentative impact of the project on the domestic market and Russian tram manufacturers.

On the whole, however, the Russian market is large enough, and the project might prove good.

Valentina Matvienko: It is a promising Russian-Italian project, and it will have a fine future if Mr Putin renders it political support.

Silvio Berlusconi (as translated): I am glad that an Italian company can bring its technologies to the Russian market. Russian trams certainly need modernisation.

I think a joint industrial venture is the road to take because it will give Russian manufacturers the know-how they need. They will take the opportunity and start their own production.

I have just had similar experience with Turkey, where we intend to build a helicopter plant, with the Augusta government company holding 50% of shares, and Turkey the other half.

I am confident that you will come to an agreement on the proprietorship of the new plant. The Italian Government is willing to support the project and Finmeccanica as Italy's largest industrial concern. We are ready to invest if investments are necessary.

Vladimir Putin: Mr Berlusconi, our talks are just opening. You will have an opportunity of firsthand acquaintance with many major sectors of our partnership tomorrow and tonight.

It concerns partnership in engineering and aviation, and Russian partnership with Fiat for car and farm machine production at Kamaz, one of our largest companies. The proprietors and managers of all concerned companies will tell you about their work in those sectors tomorrow.

You have mentioned partnership with Turkey. We have ambitious tripartite projects-in particular, in the energy industry. All major infrastructural ventures are making good progress. The principal is the Nord Stream gas pipeline. Though Italian energy companies do not participate in it directly, they are supplying it equipment to a sum approaching $2.5 billion-$1.3 billion at the initial stage.

As for the South Stream pipeline, on the Black Sea bottom, we cooperate with Eni on this project, and we are negotiating with prospective Turkish partners. The project is evidently making headway.

As we have arranged it, we will have an opportunity to discuss it with third partners tomorrow-in particular, with Turkish Prime Minister Recep Tayyip Erdogan, with whom we have appointed a telephone conversation.