12 february 2010

Prime Minister Vladimir Putin holds a meeting with Konstantin Tsitsin, board chairman of the state corporation Housing and Utilities Reform Fund

Mr Putin said the Housing and Utilities Reform Fund has proved to be an effective instrument for resolving the housing problems of hundreds of thousands of Russians, and said the Fund’s head should continue working in this vein this year. He also asked him to supervise the planned resettlement of people from dilapidated housing and capital repairs of residential blocks.

Transcript of the beginning of the meeting:

Vladimir Putin: Mr Tsitsin, could you please tell me how the Fund started work in 2010. We met only recently, to discuss the results of last year. Let's now talk about your plans for 2010. Could you please tell me about the first results this year and the problems you expect to encounter, first of all regarding financing, the development sites, and the basic programmes you plan to implement.

Konstantin Tsitsin: Mr Prime Minister, the Fund's two years of hard work jointly with the regional authorities have shown that the principles stipulated in the housing and utilities reform were chosen correctly. I have already reported to you that we have channelled 166 billion roubles out of the planned 240 billion to the regions in the past two years. This year, we are to provide 87 billion roubles, including some 40 billion roubles for resettling people from dilapidated housing, and the rest for capital repairs of residential blocks.

We are working according to schedule, with preparations in the regions under way. We are receiving the first requests, and will soon start transferring funds to those regions that have submitted applications.

Vladimir Putin: Will you consider other applications?

Konstantin Tsitsin: Yes, we will.

Vladimir Putin: When do you expect to make decisions on this issue?

Konstantin Tsitsin: We shall make the first decisions in February.

Vladimir Putin: How many regions will you cover?

Konstantin Tsitsin: We currently have approximately 15 applications from the regions, which have submitted the paperwork covering the balance on their accounts. These are large funds, so the first transfers to the regions will be made in February.

Vladimir Putin: How do you organise co-financing by the regions?

Konstantin Tsitsin: In accordance with the anti-crisis package, co-financing by the regions has been approved at last year's level. All regions honoured their co-financing commitments last year, and even provided more than was necessary from the regional budgets. Therefore, the regions provide an average of 9% of the required funds for these projects, which is acceptable for the regions. Everyone with whom we have discussed the issue say they are ready to co-finance these projects. I think they may even provide more funds than they are obliged to, because the demand for these projects in the regions is high.

Vladimir Putin: What about the infrastructure and land plots?

Konstantin Tsitsin: This is the first aspect we have addressed, per your directive. There are about 7,000 dilapidated houses from which people must be resettled. Unfortunately, the regions have rather neglected the problem, so that only 10%-12% of such houses have been demolished. Acting jointly with the Housing Construction Fund, we have collected the necessary information and are now processing it. It should be said that this decision has encouraged the regional authorities to focus on the problem, and they are now searching for additional funds to build new housing in these land plots. However, the collected funds are not always used for this purpose. We are going to analyse this information and report to you later this month.

Vladimir Putin: Mr Tsitsin, your Fund has proved to be an effective instrument for resolving the housing problems of hundreds of thousands of Russians, who badly need to have their housing conditions improved. We should continue working towards this end as energetically as last year. We have grounds to believe that your Fund will also work actively to resettle people from dilapidated housing (barracks) and to conduct capital repairs of residential blocks. Could you tell me about this aspect of the Fund's operation, please?

Konstantin Tsitsin: We have prepared, or rather we are currently making an inventory of dilapidated housing in the country jointly with the regional authorities, because we do not entirely trust the data the Fund and the regions have. We plan to complete the inventory in the first quarter, and then we will probably have more precise information about the amount of dilapidated housing. As for resettlement and capital repair programmes, we will certainly carry them out. Moreover, in 2011 we will spend additional revenues from investment primarily on capital repairs.

Vladimir Putin: And the last question. The state corporation is called the Housing and Utilities Reform Fund, and I would like you to remember this. The regions should not only co-finance your projects and the necessary funds for resettlement and repair of housing, but also submit programmes on the reform of the housing and utilities sector. They must de-monopolise this sector, create the partnerships of housing owners and help them on their feet, and also encourage the creation of companies that will not bring housing into disrepair on such a large scale, but help to make the next step, that is, maintain it in good order and to make repairs when necessary.

Konstantin Tsitsin: The regions are working towards this end. They have programmes for reforming the housing and utilities sector. Currently, some 70% of residential blocks in the cities where the Fund is working hand in hand with the regional authorities are managed by private companies. This is a major achievement compared to 15% in 2007.

However, the management companies and the tenants have come across a new problem: The operation of the companies managing residential blocks is not regulated at any level. Therefore, we have joined forces with the State Duma and United Russia to set up self-regulating organisations of management companies in the regions, even though there is no law covering this issue. There are 19 such companies in the regions, and we have recently established a national association of self-regulating organisations managing real estate. We believe that this is currently the best evidence that the people and these organisations are aware of their responsibility in the face of the reforms.

Vladimir Putin: One last point: When making decisions on financing in a region, you should take into account regional programmes of the housing and utilities reforms and improvements in this sphere, which is so important to the people.