The following issues are scheduled for discussion at the December 10, 2009 Government Presidium Meeting:

1. Relief to citizens who sustained injury and families of citizens who died as a result of the Neva Express train crash caused by the terrorist attack on November 27, 2009.

2. Financial assistance to the budget of the Perm Territory, from the federal allocations to ensure a balanced budget in said region, to render one-time material assistance to citizens who sustained injury and families of citizens who died as a result of the fire in the city of Perm on December 4, 2009.

3. Results of regional programmes to reduce strain on regional labour markets, as well as measures to support the labour market in 2010.

Regional programmes have been developed and are being implemented in all constituent entities of the Russian Federation, pursuant to government resolution No.1089 of December 31, 2008. Due to changes in regional labour markets, in the second half of 2009 these regional programmes were updated in 73 entities of the Russian Federation in order to increase the number of participants and amount of funding, and recalibrate the relative scale of certain measures.

The 2009 Federal Budget allocated 43.7 billion roubles for the implementation of regional programmes.

A total of 31.7 billion roubles was allocated from the Federal Budget to the governments of the Russian constituent entities (85.8% of the all federal spending on regional programmes). Total funding for these programmes in 2009 will amount to 37.2 billion roubles.

As of November 1, 2009 more than 2.2 million people have benefited from these regional programmes, including:

1.9 million people who received public works jobs or temporary employment, including 41,300 graduates of educational institutions who received on-the-job occupational training (requiring 25.1 billion roubles);

141,500 people who received preventive retraining (requiring 1.1 billion roubles);

72,000 people who started their own businesses (requiring 4.7 billion roubles);

More than 9,000 people who received assistance helping them to relocate to other regions to take up employment there (requiring 0.35 billion roubles).

Evidence for the effectiveness of the regional programmes in 2009 includes the following:

Wages have remained at a high level relative to previous levels (up to 85% in some entities of the Russian Federation);

A high level of employment for citizens who have received preventive retraining (about 90%);

A stable level of registered unemployment in the Russian Federation in the second half of 2009 (2.7%);

Increased self-employment among the population.

In addition, in order to relieve the strain on the labour market in the Samara Region caused by the situation with AvtoVAZ and preserve the jobs of the 14,600 AvtoVAZ employees who are not necessary to meet production targets, the Government of the Russian Federation passed Resolution No. 902 of November 7, 2009, entitled On Additional Measures to Relieve the Strain on the Labour Market in the Samara Region. The resolution authorizes additional support from the Federal Budget in the amount of 712.6 million roubles to the Samara Region in 2009, as well as 4.2 billion from the same sources in 2010.

The Russian Ministry of Healthcare and Social Development conducts weekly studies of the situation in the labour market and monthly studies of the fulfilment of regional programmes, and reports back to the Government of the Russian Federation.

The interagency working group created under the Ministry of Healthcare and Social Development regularly holds conferences in problem regions in order to assist said regions (including Samara, Kaliningrad, Sverdlovsk, Ulyanovsk Regions, the Republic of Tatarstan etc).

In addition, progress in the implementation of regional programmes is regularly reviewed at the meetings of the Government of the Russian Federation to monitor the situation in the labour markets of the constituent entities in the Russian Federation (between November, 2008 and November 2009, 29 such conferences were held, including one by telephone, three video conferences and two conferences held in the cities of Vologda and Astrakhan). Furthermore, the labour market and the implementation of regional programmes were discussed at the Government Sustained Economy Commission.

Measures to support the labour market in 2010

The Government of the Russian Federation has prepared a draft resolution that establishes the regulations for granting funds from the Federal Budget to the constituent entities of the Russian Federation for the implementation of additional measures to reduce the strain on the labour market in said entities in 2010 and 2011. In 2010, 36.3 billion roubles will be allocated from the Federal Budget for this purpose.

Appropriations from the Federal Budget are to supplement regional contributions to regional programmes that have yielded positive results in 2009, including:

organising public works job or temporary employment in the event of possible loss of employment;

preventive retraining for workers facing layoffs and on-the-job occupational training for graduates of educational institutions for the purpose of gaining work experience;

encouraging unemployed citizens to seek self-employment, and encouraging unemployed citizens who have started their own businesses to create additional jobs for other unemployed citizens; and

targeted support for individuals relocating to other regions to take up employment.

New programmes also yielded positive results, including:

preventive retraining for navigators and flight engineers laid off in connection with civil aviation transport organisations' reorganisation and/or transition to employing modern aircraft; and

assistance to help people with disabilities find employment.

At the same time, if the situation in the labour markets of individual entities of the Russian Federation deteriorates, there are plans for other measures to support labour markets in certain constituent entities of the Russian Federation in accordance with the legal acts of the Government of the Russian Federation (for example, assistance to AvtoVAZ).

The implementation of regional programmes in 2010 will both provide employment for citizens in a difficult labour market and make the workforce more qualified by organizing preventive retraining for 341,600 people, on-the-job training for 42,500 graduates of educational institutions, stimulating the creation of 1.2 million additional jobs (including 50,000 jobs intended for people with disabilities), and encouraging 60,000 people to start their own businesses.

To ensure the effective implementation of regional programmes in 2010, it would be advisable to instruct the appropriate federal executive bodies to work with the executive bodies of the constituent entities of the Russian Federation to do the following:

develop in a timely manner and submit to the Government of the Russian Federation for approval drafts of regional programmes for 2010 intended to maintain continuity in the implementation of preventive retraining programmes, on-the-job training programmes and public works programmes;

organise occupational training for employees within their professions and specialities, if these occupations and specialities are in demand, in the corresponding regional labour markets, as well as provide employment for graduates of educational institutions in 2010;

organise the implementation in 2010 of new initiatives as a part of regional programmes to provide occupational training for navigators and flight engineers laid off in connection with civil aviation transport organisations' reorganisation and/or transition of to modern aircraft; and

continue monitoring layoffs due to the failure of companies/enterprises and staff cuts in each region, as well as continue monitoring the implementation of regional programmes.

4. Guidelines for state infrastructure tariff and pricing policies and measures for implementing said guidelines in 2009-2011

The Ministry of Economic Development has submitted a draft of the guidelines for state infrastructure tariff and pricing policies developed pursuant to President Medvedev's Directive No. Pr-2326 of the Russian Federation of October 30, 2008, as well as measures for implementing said guidelines in 2009-2011. These measures set forth the policies' main initiatives, establish a timeframe for their implementation and identify those responsible for their execution.

In accordance with the Guidelines for the Functioning of the Government of the Russian Federation in the Period Until 2012, the draft of these guidelines is designed to achieve a key objective of the Russian Government by addressing issues associated with infrastructure, as well as establish guidelines for reforming the system of regulating prices (tariffs) for goods and services provided by regulated entities.

The proposed guidelines entail systemic changes that would reduce cross-subsidising, improve tariff policy, introduce long-term tariffs, develop competition in regulated industries, protect the interests of consumers, improve the functioning of regulated entities and encourage energy saving and efficiency.

The main objectives outlined in this legislation will be achieved by introducing amendments stipulating the following mechanisms to the regulatory framework:

- reducing cross-subsidising;

- increasing the effectiveness of regulated entities, including through transitioning to the use of long-term tariffs and contracts;

- applying the method of returns on capital invested in determining tariffs for the services rendered by regulated entities;

- establishing the clear-cut distribution of expenditures financed by fees paid for connection and the tariffs for the goods and services of natural monopolies, with the bulk of the spending to be financed by proceeds from tariffs;

- the use of long-term contracts to buy (by users) fixed amounts of goods and services from natural monopolies;

- granting autonomy to carry out part of the work associated with connecting consumers to utilities supply networks, on the condition that said work meets technical regulations and other mandatory requirements;

- improving the quality of investment planning;

- effective use of existing capacity;

- ensuring maximum transparency in the connection process for consumers and regulatory agencies;

- standardisation of the terms of connection and the use of model contracts for households and for small business;

- energy saving and greater energy efficiency, in particular, by switching to the consumption of utilities resources exclusively on the basis of the readings of meters.

5. Proposed Russian Railways investment programme and financial plan for 2010 and for the planning period of 2011 and 2012

The proposed investment programme and financial plan have been developed by the Ministry of Transport of Russia jointly with Russian Railways and submitted to the Government of the Russian Federation in accordance with Government Resolution No.384 of May 18, 2001 entitled On the Programme of Structural Reform of Railway Transport.

The proposed Russian Railways financial plan Russian Railways has been developed based on predictions for social and economic development of the Russian Federation for 2010 and the planning period of 2011 and 2012, which were approved by the Government of the Russian Federation at its September 23, 2009 meeting.

The proposed Russian Railways financial plan Russian Railways was revised after it was discussed by the Government of the Russian Federation on November 13, 2008 in light of the accepted scenario predicting that freight turnover would drop by 19% in 2009.

At the same time, due to the stabilisation in the freight traffic market that became apparent by the second half of the year and the increase in the carriage of certain types of goods, Russian Railways actually transported 1107.8 million tons of freight in 2009, which is only 15% less than in 2008. The projected increase in loading by 52.7 million tons and freight turnover by 231.8 billion tkm could lead to an increase in revenue from freight carriage in 2009 by 18.2 billion roubles to reach 775.5 billion roubles.

Russian Railways is therefore advised to revise its basic financial and economic targets.

Russian Railways predicts net profits of 2.1 billion roubles for 2009, instead of the previously projected 0.7 billion roubles. At the same time, optimising cash flow for the current year will enable the company to increase financing for its investment programme by 10 billion roubles, i.e. to 262.8 billion roubles, without increasing its credit portfolio.

To stabilise the company's finances, the Government of the Russian Federation in 2009 decided to provide a total sum of 78 billion roubles to subsidise revenue shortfalls from passenger and freight carriage and increase contributions to the company's authorized capital by about 28 billion roubles.

The financial plan for 2010 was prepared based on the predicted increase in freight turnover during this period, with due account for the expected indicators for 2009 and future increases in freight traffic.

Key indicators for the company's proposed financial plan for 2010 take into account the better-than-expected performance of indicators in 2009.

Total goods loaded through the network are expected to be 3.7% higher in 2010 than in 2009.
Freight turnover in 2010 is projected to reach 2.3456 trillion tkm, an increase by 84.9 billion tkm (or 3.8%) as compared to 2009.

In accordance with the expected decrease in the number of passengers travelling and the distance they travel, passenger miles in 2010 is expected to reach 154.7 billion passengers per kilometre (a 2% decrease from 2009). This includes

117.7 billion passengers per kilometre for long-distance travel (no change from expected 2009 level); and

37 billion passengers per kilometre for commuter travel, a decrease by 5% as compared to expected 2009 level.

The proposed financial plan for 2010-2012 takes into account increases in railway freight tariffs by 9.4% in 2010, 9.2% in 2011 and 7% in 2012, which corresponds to Predictions for the Social and Economic Development of the Russian Federation for 2010 and for the Planning Period of 2011 and 2012.

Tariffs for regulated long-distance passenger transportation are expected to increase by an average of 10% per year over the planning period.

Tariffs for commuter travel are expected to increase by 12% in 2010 and by 11% in both 2011 and 2012.

Russian Railways revenues from carriage in 2010 are projected to reach 1.0142 trillion roubles, an increase by 6.9% compared to the previous year. Expenditures in 2010 are projected to reach 974.5 billion roubles, a decrease of 79.7 billion roubles.

According to the proposed financial plan for Russian Railways for 2010-2012, measures to restructure the company will generate additional profits, including through the sale of shares in subsidiaries and dependent companies and revenues from the re-evaluation of the property of subsidiaries and dependent companies.

The company is projected to earn a total of 92 billion roubles in revenues from the sale of shares in subsidiaries and dependent companies in 2010-2012. Profits from shares in subsidiaries slated for sale will amount to 3 billion roubles in 2010 and 13 billion roubles in 2011.

According to the company's financial plan, Russian Railways will borrow 123.5 billion roubles in 2010 to optimise its credit portfolio, in particular, to replace bank loans.

As regards new instruments for raising money, the company will rely on the market for rouble bonds, which in the opinion of Russian Railways officials currently have optimal terms (from 3 to 7 years) and rates below the cost of bank loans.

In 2010 Russian Railways expects to report net profits of 17.1 billion roubles.

Russian Railways has prepared its investment programme and investment budget based on the company's financial potential in 2010-2012.

Russian Railways plans to invest the following (without VAT) from 2010 to 2012:

270.5 billion roubles in 2010,

285 billion roubles in 2011 and

299.9 billion roubles in 2012

Russian Railway's proposed investment for 2010-2012 includes sections prioritising the company's obligations under projects connected with the development of railway infrastructure in preparation for and during the 2014 Olympic Games in Sochi, as well as the company's participation in funding projects included in the federal targeted programme Development of the Transport System in Russia (2010-2015).

The investment programme envisages the continuation of projects being implemented by Russian Railways and co-financed through the Investment Fund of the Russian Federation, such as reconstructing a section of railway between Komsomolsk-on-Amur and Sovetskaya Harbour (which includes the construction of a new Kuznetsovsky tunnel) and providing high-speed rail service over a section of the railway between St Petersburg and Buslovskaya (which includes the construction of a bypass for freight traffic bound for Russian Baltic ports) .

On the whole, the investment programme's priorities remain projects intended to develop transport infrastructure and major transport hubs, increasing the railway capacity and providing high-speed and very high-speed service.

At the same time, it is important to note that the proposed investment budget for Russian Railways for 2010-2012 includes only previously started investment projects.

The additional materials submitted by the Russian Transport Ministry introduce amendments to the financial plan and investment programme expanding the programme for capital repairs of railway tracks. The programme for capital repair of fixed assets owned by Russian Railways will increase by 36% in 2010, compared with 2009.

The main sources of financing for the investment programme in 2010-2012 will be the company's own assets (amortization and net profits).

The implementation of the Russian Railways investment programme would bring in off-budget resources to develop railway transport infrastructure. The investment programme envisages the construction of new railway lines, renewal of the fleet of locomotives and rolling stock and development of passenger transport, as well as measures to introduce technical solutions that would enhance railway safety and incorporate multipurpose technical systems.

6. Measures to implement presidential decree No. 1033 of September 11, 2009, entitled On measures to Improve State Regulation of Aviation

The proposed government resolution on Measures to Implement Russian Presidential Decree No.1033 of September 11, 2009, entitled On Measures to Improve State Regulation of Aviation, has been submitted by the Ministry of Transport.

Russian Presidential Decree No.1033 of September 11, 2009, entitled On Measures to Improve State Regulation of Aviation, abolishes the Federal Air Navigation Service and establishes that its responsibilities will be transferred to the Federal Air Transport Agency and the Federal Transport Supervision Service.

The draft government resolution approves the necessary amendments to government regulatory acts to assign the responsibilities of the abolished Federal Air Navigation Service to the Federal Air Transport Agency and the Federal Transport Supervision Service, as well as the official list of Russian Government resolutions that become inoperative in connection with the abolition of the Federal Air Navigation Service.

The draft sets forth the procedure for determining the limits on the number of staff at the head and territorial offices of the Federal Air Transport Agency and the Federal Transport Supervision Service.

7. Providing of inter-budgetary support to the budgets of the constituent entities of the Russian Federation to assist restricted administrative-territorial entities in balancing their budgets in 2009

Under the Federal Law On the Federal Budget for 2009 and the Planning Period of 2010 and 2011, restricted administrative-territorial entities will be eligible for 5.3795 trillion roubles in inter-budgetary support for the development and maintenance of the social and engineering infrastructures, 1.3181 trillion roubles for the relocation of citizens out of restricted administrative-territorial entities and 10.4425 trillion roubles in government grants. These budget allocations have been distributed among constituent entities of the Russian Federation to be transferred to the restricted administrative-territorial entities.

In order to provide additional financial assistance to restricted administrative territorial entities, the 2009 federal budget provides assistance worth 1.0946 trillion roubles so that these entities are able to balance their budgets. These funds will be distributed by the Government of the Russian Federation.

Under Article 5.1 of the Law of the Russian Federation on Restricted Administrative Territorial Entities, assistance to restricted administrative-territorial entities from the Federal Budget is provided with due account for additional expenditures prompted by the specific security regimes in place in restricted administrative-territorial entities.

The 2010 Federal Budget allocates 2.6898 trillion roubles to the restricted administrative-territorial entities for the development and maintenance of social and engineering infrastructure , 527.2 million roubles for the relocation of residents out of restricted administrative-territorial entities and 8.8761 trillion roubles in government grants. Financial assistance to restricted administrative-territorial entities in 2010 takes into account the measures to optimise spending commitments on restricted administrative-territorial entities and the funds required to complete the construction (reconstruction) of projects that are nearing completion.

In 2009, the restricted administrative-territorial entities' projected revenues stood at 27.3 billion roubles and expenditures 29.1 billion roubles. Thus, restricted administrative- territorial entities' revenues covered an average of 94% of expenditures in 2009. When the government assistance to the restricted administrative-territorial entities is taken into account, 98.7% of the expenditures of those restricted administrative-territorial entities that reported a deficit will be covered.

8. Signing the Protocol for the Collection of Indirect Taxes and the Mechanism for Ensuring their Payment during the Import and Export of Goods within the Customs Union.

9. Signing the Protocol for Establishing the Procedure for Collecting Indirect Taxes on Performing Work, Rendering Services Within the Customs Union.

10. Signing the Protocol for Introducing Amendments to the Agreement on the Fundamental Policies for Collecting Indirect Taxes on Exports and Imports of Goods, Performing Work and Rendering Services within the Customs Union of January 25, 2008.

11. Signing the Agreement on Plant Quarantines.

12. Signing the Agreement on Veterinary and Sanitary Measures.

13. Signing the Agreement On the Mutual Recognition of the Accreditation of Certification Agencies (i.e. agencies that assess [confirm] compliance) and Testing Facilities (Centres) that Assess (Confirm) Compliance.

This Agreement is a follow-up to the Agreement on Coordinated Policies on Technical Regulations, Sanitary and Phytosanitary Measures and will serve to increase integration within the Eurasian Economic Community.

Federal Law No.187-FZ of October 27, 2008 ratified the Treaty on the Establishment of a Common Customs Territory and the Formation of the Customs Union. To implement the Treaty and the Agreement, the Parties are enacting measures to promote economic integration, ensure the free movement of mutually traded goods within the common customs territory and create favourable conditions for trade between Custom Union countries and third-party countries. However, the current legislation of the Russian Federation, the Republic of Belarus and the Republic of Kazakhstan requires further harmonisation with regard to the recognition of the accreditation of certification agencies (i.e. agencies that assess [confirm] compliance) and testing facilities (centres) that assess (confirm) compliance. In this regard, the current objective of the Parties is to formulate a coordinated policy on technical regulation in order to remove the technical barriers to trade and protect the life and health of humans, animals, plants and the environment.

The plenipotentiary representatives of the Russian Federation, the Republic of Belarus and the Republic of Kazakhstan have developed a draft Agreement, which was approved by the Customs Union Commission on November 26, 2009 (by Igor Shuvalov on behalf of Russia, Andrei Kobyakov on behalf of Belarus and Umirzak Shukeyev on behalf of Kazakhstan).

Under the Agreement, the Parties recognize the accreditation of the certification agencies (i.e. agencies that assess [confirm] compliance) and testing facilities (centres) that assess (confirm) compliance and allow representatives from the accreditation agencies of the signatories to the Agreement to carry out mutual, comparative assessments to develop uniform procedures for this purpose. The Parties to the Agreement accept responsibility for their procedures of accreditation being in accordance with international standards, which also pertains to requirements for accrediting agencies and accreditation procedures. The Agreement also identifies the main accreditation policies in need of harmonisation.

The Agreement will eliminate or substantially diminish the technical barriers to trade among the Parties of the common customs territory and create favourable trade conditions.

14. Signing the Agreement On Products Subject to Mandatory Assessment (Confirmation) of Compliance within the Customs Territory of the Customs Union.

The current legislation of the Russian Federation, the Republic of Belarus and the Republic of Kazakhstan requires further harmonisation with regard to mandatory procedures that confirm that products conform with the mandatory requirements established by the laws of the Parties to the Agreement. Therefore, the Parties to the Agreement must develop coordinated policies regarding technical regulations, remove technical and customs barriers to trade and protect the life and health of humans, animals, plants and the environment.

The Plenipotentiary representatives of the Russian Federation, the Republic of Belarus and the Republic of Kazakhstan have developed a draft Agreement, which was approved by the Customs Union Commission on November 26, 2009.

Under the agreement, if a product which is subject to mandatory conformity requirements established by the Parties (including requirements to the form and schemes of compliance confirmation) has been approved according to the established procedure for the mandatory confirmation of compliance in one of the member countries of the Customs Union, then this product is eligible for trading on the common customs territory of the Customs Union. Simultaneously, such products must be included in the consolidated list of products subject to mandatory confirmation of compliance within the Customs Union. The Party for which such products are destined will issue an appropriate certificate (the format of the certificate and declaration of compliance will be established by the Customs Union Commission) confirming that the product complies with standards set by the Country for which the product is destined.

The results of the tests and measurements obtained to confirm the compliance of the products of one Party to the Agreement are recognised by the Certification Agency of the country of destination, on the condition that the Certification Agency and the testing facilities (centre) that conducted tests and measurements are included in the consolidated register. The terms for establishing the authenticity of such tests and measurements are being formulated. The main policies that must be coordinated regarding the assessment (confirmation) of the compliance of products within the common customs territory of the Customs Union have been identified.

This means that the procedures for assessing (confirming) compliance are neither stricter nor applied more strictly than is necessary for the country of destination to be satisfied that the products conform to the relevant technical regulations or standards, while taking into account the risks that would have arisen in the event of non-compliance.

The Agreement simplifies the procedures for assessing (confirming) compliance, which will cut the cost of such procedures, eliminate or substantially lower the technical barriers in mutual trade among the Parties in the common customs territory and create favourable trading conditions.

15. Allocating Appropriate Funding to the Human Rights Commissioner in the Russian Federation for the Payment of the Yearly Membership Fee to the International Coordinating Committee of the National Human Rights Institutions (ICC).

The Bureau of the International Coordinating Committee of National Human Rights Institutions (ICC) awarded the highest accreditation status (A) to the Office of the Human Rights Commissioner of the Russian Federation, thus recognising the Office of the Commissioner as an institution that fully complies with the Principles Relating to the Status of National Institutions that Promote and Protect Human Rights (the Paris principles).

The decision further strengthens Russia's international human rights reputation.

At the same time, all national human rights institutions that receive an accreditation status of A and are members of the ICC, under Article 33 of the ICC Charter, must pay a yearly membership fee as of January, 2009. The fees paid to the ICC are required to ensure full membership for the Office of the Human Rights Commissioner in the Russian Federation. Under Article 38 of the Federal Constitutional Law On the Human Rights Commissioner in the Russian Federation, the commissioner's activities and the activities of his or her staff are funded by the Federal Budget.

To fund the annual expenditures for the payment of said fee, the draft executive order of the Russian Government stipulates annual allocations from the Federal Budget to the Human Rights Commissioner in the Russian Federation for the above purpose, including 175,500 roubles in 2009.

16. Allocating state housing certificates to the Government of the Kamchatka Territory for citizens who lost their homes as a result of the earthquake in the Olyutorsky District of the Koryak Autonomous Area in April, 2006.

 

 

* Press releases from the Department of Press Service and Information contain materials submitted by the executive federal bodies of the Russian Federation for discussion by the government of the Russian Federation