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Prime Minister Vladimir Putin chairs Government meeting

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Vladimir Putin’s opening remarks:

Good afternoon, colleagues,

Let’s begin with good news today. I would like to present Svetlana Orlova, deputy speaker of the Federation Council, with the Pyotr Stolypin Medal, second class, for her significant and longstanding contribution to the legislative process. Congratulations, Ms Orlova!

Let’s get down to business now. I suggest we focus on a new draft of the Federal Targeted Housing Programme.

Resolving housing problems is certainly one of our main priorities. This policy is aimed at providing new apartments or new houses to as many Russian families as possible. People should have a range of options for improving their housing depending on each family’s income and current circumstances. These options must include state support, mortgage or personal savings.

The Housing Programme lays out our plans for the next five years – it is a five year programme in fact. We have worked out a set of tools to encourage housing construction, which is essential for providing housing to special groups of citizens.

Let me remind you that the federal government alone has invested around 1 trillion roubles in housing during the recession. This has enabled us to keep the situation stable.

In 2009, nearly 60 million sq m of new housing was commissioned, and another 33 million was introduced in January-September 2010. But as we all know, most projects are completed at the end of the year, so we should instead evaluate this year’s results in early 2011.

We have implemented large-scale programmes to provide free housing to World War II veterans and active military personnel, and we continue to work on such programmes now. We have also supported families which found themselves unable to pay their mortgages because of the economic downturn.

The demand for housing is recovering rapidly as the total amount of mortgage loans has more than doubled in a year. This is a good sign.

Our key goal now is to lay the groundwork for future growth so that construction volumes begin growing steadily in 2011 and more funds and resources flow into the housing market stabilising its development. To this end, the Housing Programme is introducing an entirely different procedure for initiating new construction projects.

In line with this procedure, each Russian region will have to draw up a regional housing development programme, introduce a simplified system for allocating land for construction projects, draft their guides for urban planning and set aside cash for building utilities infrastructure and roads for the new developments. Citizen’s initiatives, such as setting up construction cooperatives, should also be encouraged.

The government, in turn, will provide support for regional programmes, which will be selected on a competitive basis. Those chosen will receive additional federal financing which they will be able to use to build roads in areas being developed and to pay interest on the loans they took out to build utilities.

The Ministry for Regional Development will also assist the regions in securing loans from state development institutions such as the state Vnesheconombank (VEB), the Agency for Housing Mortgage Lending (AHML), the Housing Construction Development Fund and the Housing and Utilities Reform Fund.

Under the Housing Programme, we will certainly continue fulfilling our obligations to the special groups of citizens I just mentioned –active and retired members of the military, residents of the North, the victims of the Chernobyl nuclear accident, relief workers and several other groups.

As we have promised, we will also allocate funds specifically to deal with the problem of old and hazardous housing in towns along the Baikal-Amur Mainline (BAM). This problem has never been specifically addressed before; those structures were not classified as “hazardous housing” because they were  not even considered housing – just temporary accommodations. We will direct funding to the relocation of people from the Norilsk industrial region and to the construction of housing for the employees of the Russian Academy of Sciences, and we will resolve the housing problems of young families and encourage further development of mortgages.

As you know, by 2016 we must reach the level of   building about 100 million square metres of housing per year. Let me emphasise that we need not only  square metres but improved housing that meets the modern standards. When we discussed economy-class housing, we agreed that it should be decent housing. This is actually what happens more often than not. What I’ve seen with my own eyes convinces me that we are on the right track. In carrying out the Federal Targeted Housing Programme, we will support innovative projects in the construction industry and the production of building materials with higher standards of energy efficiency, reliability and eco-friendliness. I’d like to ask the Ministry of Regional Development to complete drafting  the new construction standards as soon as possible, primarily for low-rise buildings and the economy-class housing that I’ve already mentioned. New construction standards are a very important issue. They must be reliable, effective and modern and should not impede the development of the construction industry.

The next item on our agenda is also closely linked with upgrading living conditions. I’m referring to a considerable increase in road construction at the federal, regional and local levels. We must repair urban and rural roads. I’d like to emphasise that this has been, and remains, a major goal for regional and local leaders. For its part, the government is ready to assist with this.

To concentrate resources on the execution of this task, we have decided to establish special road funds. They will draw money from the budget, excise duties on petroleum and diesel fuel, and a number of other payments such as leases for roadside facilities. According to our estimate, the Federal Road Fund will have 387 billion roubles in 2011.

The regions should also create their own road funds. I’d like to emphasise once again that we will primarily provide assistance to the regions that set up these funds. We have drafted the necessary amendments to the Budget Code and are about to submit them to the State Duma. I’d like to ask the deputies to review the government’s proposals as a matter of priority. I’d also like to request that our colleagues in the regions  promptly make all of the decisions necessary for establishing road funds.

This will allow us to launch the new mechanisms for funding road construction next January.

Dear colleagues,

A wide range of international events are  scheduled for this week in the CIS, Eurasec and the Customs Union. For that reason, we must discuss a package of agreements that we plan to sign with our partners in the near future.

Our goal is not only to improve the operation of the Customs Union. We are already actively involved in the next stage of integration – the formation of the common economic space (CES) with our traditional partners, primarily Belarus and Kazakhstan.

I’d like to remind you that the CES must be set up no later than January 1, 2012. The legal foundation for it must be prepared in advance.

Moreover, those who deal with this issue professionally on a permanent basis know that we have agreed with some of our partners, first of all with Belarus, that if the ratification of a package of CES documents is ready ahead of time, meaning before January 1, 2012, we will revise some terms of our economic cooperation, including in the energy sector. In other words, we will decide whether or not to apply export customs duties on certain types of our products. This is a very important issue for us and our partners, and I’d ask the negotiating team to keep these agreements in mind and do all it can to launch (or at least to coordinate and let our colleagues ratify) the package as soon as possible. It would be great if they managed to do this by January 1, 2011. If not, they may do this a bit later, but in any case I’d ask them not to delay this work. We must do everything we can for this to be completed as soon as possible.

Let’s start working.