Working Day

29 march, 2012 16:08

Prime Minister Vladimir Putin chairs a Government Presidium meeting

Prime Minister Vladimir Putin chairs a Government Presidium meeting
“Current procedures and regulations at all stages – from registering land plots for construction and approving projects to connecting newly built residential buildings with utilities – have to be simplified as much as possible. I am speaking about the entire range of issues related to reducing and removing all administrative barriers during construction.”
Vladimir Putin
At a Government Presidium meeting

The transcript of the meeting’s beginning:

Vladimir Putin: Good afternoon, colleagues. First, let us hear the latest information. Mr Shmatko will tell us about new rules regulating connection to power grids for individuals and companies. You are welcome, Mr Shmatko.

Sergei Shmatko: Mr Putin, you are right. Connecting to power supply networks is a major indicator of how the business community and residents assess the performance of the power sector, and is as important indicator as the cost of electricity and others.

In recent years, several major amendments have been introduced to normative legal regulation. In particular, residents and small businesses consuming up to 15 kilowatts now pay a readiness-to-serve charge of 550 roubles. Meanwhile, those consuming from 15 to 100 kilowatts pay a connection charge with a three-year extension period. This benefit alone for the business community has resulted in the MRSK Holding having a shortfall in income amounting to 12 billion roubles in the last two years. This is a considerable contribution by energy sector workers to the sector’s liberalization and resolving this issue.

More to it, we believe that we made a very important, vital decision – to prohibit including as charges grid company expenses related to existing infrastructure development. To be more specific, if the territory has the required electric power substations and the available capacity, newly connected users do not have to pay for anything except executing documents. The exception to this rule applies to new users in territories demanding more efforts to connect available power grids to consumer facilities – say, build new transmission lines, which are paid for by the users. Everything else, including increasing the transformer capacity, is paid for by the grid company.

Mr Putin, I believe that the major thing here is to achieve total information transparency in the sector. In this regard, we have made considerable progress. All of our major grid companies, such as the Federal Grid Company and MRSK Holding’s large subsidiaries, have interactive websites with information for anyone to check the available power capacity in a certain area and see if there is an opportunity to connect to the existing infrastructure, as well as to learn information about infrastructure development plans and submit an online application for review. We expect that this work will significantly decrease risks, including corruption risks in the sector that do occur and are often discussed.

Mr Putin, we have considered a number of interesting proposals lately as regards the more efficient use of current infrastructure, which is the other issue of major concern. It is no secret that we have many enterprises – for instance, in the defence industry – that were historically connected to large power capacities, but then their power consumption reduced. Yesterday, during our visit to Voronezh, I met with energy sector workers. Voronezh is a big city, with major defence industry enterprises built in Soviet times. As I was told by workers, it frequently occurs that shopping centres have been constructed and operate in these territories now, with very low electric energy consumption, which is not going to increase in the next few years. 

What we want is to implement a thorough inventory of power capacities, particularly in large cities, that previously belonged to defence and other enterprises, which do not use these capacities today and will not use them in the coming years. In this regard, we think that corresponding legal acts should be developed to allow us to put these capacities to more efficient economic use on certain conditions, not necessarily to withdraw them.

We estimate that these are large volumes. For instance, Moscow consumes up to 17 gigawatts, including during the winter period, while there is an available capacity of about 1 gigawatt, experts say. This is a lot, and if we do everything properly, we will achieve sound results and a good opportunity for small and medium-sized businesses to connect to these capacities in the near future – within a year or a year and a half.

I would like to mention that we work closely with the Federal Antimonopoly Service in this regard. We often receive complaints from users about the failure to observe the deadlines of connecting to power grids and other violations. We believe that this work to increase transparency and make use of the existing infrastructure will give us a chance to resolve all our remaining problems.

Vladimir Putin: Good, thank you. I will mention the most significant points again. Thus, a simplified connection procedure is introduced for small businesses consuming up to 100 kilowatts and for individuals consuming up to 15 kilowatts, correct? The price for connecting any electricity consumer with a capacity up to 15 kilowatts must not exceed 550 roubles. There is also a deferred payment plan available for connecting a capacity between 15 and 100 kilowatts for up to three years from the date of connection, correct? This is good news for the consumer.

Mr Fursenko (addressing Andrei Fursenko), the ministry has unveiled the results of the contest for the development programme for the activity of student associations. The contest winners include 95 universities. Will you give us a more detailed account?

Andrei Fursenko: Mr Putin, during your meeting with students in Tomsk, and upon their request, you said that it is necessary to support student self-government programmes in two major areas. The first includes professional development, student design bureaus, student incubators and so on. And the second area deals with student social life. 

We announced a relevant contest and said from the very beginning that each university should be represented by a unified student council. Now, 236 universities have filed applications. They all are controlled by the Ministry of Education and Science, and 90 percent of them brought together their various student organisations, which in itself is important. There are 95 winners, which represent 53 constituent territories of the Russian Federation, in all districts. They will receive about 3 billion roubles from the budget within two years and will attract the same amount in the form of co-funding. 

There are three main areas: student design bureaus, laboratories and innovation centres. The budget will provide 540 million roubles for these purposes over two years. This includes organising student leisure (creative clubs, hobby clubs), which will be provided with 600 million roubles. And the third, a rather large amount – support of student sports, student clubs and sport leagues – will get another 340 million roubles. The universities receive up to 20 million roubles each year from the budget. Depending on the size of the educational establishment, we modify this subsidy. They attract approximately the same amount themselves. 

As I said, since student organisations have come together under this programme, we expect that this will contribute to more efficient work with students. Besides, every application has two signatures: it is signed by a representative of student self-government and a representative of the university administration. We hope that they will interact much better internally. 

Vladimir Putin: Good. At the end of last year, in December, we signed a resolution on a contest to be held among professional specialists. We had decided to hold such a contest for the first time. The contest will have five categories: Best Welder, Best Bricklayer, Best Miner, Best Electrician and Best Heavy Hauler Driver. The final stages of the contest will be held between June and October of this year. The winner will receive 300,000 roubles, second place will get 200,000 roubles and third place will get 100,000 roubles. The ministry has already begun to choose candidates. Ms Golikova (addressing Tatyana Golikova), go ahead. How is work proceeding?

Tatyana Golikova: Mr Putin, following the government decision you mentioned, these five categories have been chosen. They were the result of an agreed-upon position of trade unions and employers, corresponding meetings were held, and based on the proposals that were made, we adopted the contest procedure and conditions this week. During the discussion process, both representatives of trade unions and representatives of employers were unhappy to learn that there will be only five categories. However some employers proposed introducing non-contest categories using the employers’ own funds. And in addition to your list, the Kemerovo Region, since it is a mining region, proposed adding four categories for workers of coal mines. The metallurgists proposed holding a contest for the best student of a vocational school providing metallurgy skills. This was also supported by the organising committee meeting, and this will be added to the government nominations events. Likewise, such contests will enjoy financial support similar to that offered by the federal government, three hundred, two hundred and one hundred. The contest stages will be held… 

Vladimir Putin: Three hundred thousand.

Tatyana Golikova: Three hundred thousand, two hundred thousand and one hundred thousand, yes. The stages will be held at two levels: at the regional level and the federal level. As you said, the federal level contest will be held between June and October. Currently five constituent territories of the Russian Federation -- the Kemerovo, Astrakhan and Belgorod regions, and the republics of Tatarstan and Bashkortostan -- have proposed holding the final stages of the contest at their facilities, locally. In this case they would operate as organisers and participate financially in organising this contest.

Finally I’d like to say that a key prerequisite is at least a three-year work record in this profession. The criteria for students of vocational schools are still being developed. In the short-term, all regions that I’ve mentioned are to submit their final contest programmes. If the June-October contests are held successfully, the results will hopefully be drawn up in December, here, with the federal government awarding the winners.

Vladimir Putin: Good. Thank you.

Now, a few words about the agenda. As you know, in Kirishi, the Leningrad Region, on March 23, we discussed gas sector development, and in passing touched upon a major issue, which is associated gas. Developed economies use some 95 percent of associated gas, and some countries ban associated gas flaring. Our country uses  75.6 percent, with the rest still being flared, unfortunately. There are some plans that are being implemented, in general companies invest a great deal -- billions and billions of roubles, a considerable investment, however it pays off well because associated gas provides heating, electricity, valuable chemicals and a growing potential of Russian exports. But last year we (our oil producers, rather, we can congratulate them on this) again took the first  position in global oil production. We had 511 million tonnes, and with that, we produced 66 billion cubic metres of associated gas. This year we plan to produce 70 billion cubic metres of associated gas.

Today we will discuss amendments to the law that will simplify access of this associated gas to gas pipeline systems. We have an extremely important objective: it is clearly unacceptable to undermine the options and economic opportunities of major gas producers, but it is necessary to use the associated gas, too. Let us discuss this issue today in more detail -- the access of this associated gas to gas pipeline systems, the simplification of the access procedure. And these standards are to come into effect starting July 1, 2012.

I’d like to focus on one more issue on the agenda, which is an extended term of technical conditions for connecting to the utility facilities of new residential buildings -- I mean the extension of the current terms following the connection to utility facilities, and preventing the need to prolong this term every three years. It is proposed to extend the term of the technical conditions for connecting to utility facilities from two to five years. I repeat: to prevent the need to go back to these procedures within a three-year period, to allow people to live in peace for five years.   

It is necessary to maximally simplify the existing procedures and rules at every stage, from the registration of a land plot as a building site, approval of a project, to the connection of a new home to the utility facilities. I mean the whole range of issues connected with simplification and lifting of administrative barriers in construction.

Last year, Russia commissioned 62.3 million square metres of housing, or 6.6 percent more than in 2010 -- in fact, we reached the pre-crisis level. I want to remind you that the highest level of commissioning residential housing was in 2008, when 64.1 million square metres of housing were registered. Currently, I repeat, last year this figure was 62.3 million, nearly the pre-crisis level. 

At the same time, I must point out that construction investment projects in Russia remain one of the most complex problems in the world. The number and duration of Russian licensing procedures is unfortunately greater and longer than in other countries. According to the data of international organisations, a Russian license requires 53 procedures or 540 days, while an average OECD license requires 16 procedures or 166 days. The difference is clear.  

 As a result, construction terms drag on and on, the expenses of the developers are obviously inflated, which leads to price hikes, final prices for one square metre, and this is an obstacle in our path toward solving the problem of providing Russian citizens with accessible housing. 

I’d like to focus on these issues, but there are other problems to address as well. Now let us start our work on the agenda.


More Information