Working Day

13 april, 2009 12:30

Prime Minister Vladimir Putin chaired a meeting of the Government Presidium

Prime Minister Vladimir Putin chaired a meeting of the Government Presidium
"We will make sure that the regions follow the demands of those laws that have been introduced: a faster transformation of the housing sector, co-financing from the regional and local budgets, focussed and effective use of the resources allocated."
Vladimir Putin
Meeting of the Government Presidium

Transcript of the beginning of the meeting:

Vladimir Putin: Good afternoon, colleagues.

Let's start with sharing procedural information. I signed the Government Resolution on the rules governing subsidies for the air transport industry in 2009. Mr Ivanov, would you please tell everything what it is about and give us some details.

Sergei Ivanov: Mr Putin, you remember the situation that transpired at the end of last year, when our major carriers, such as "Air Union" and "Interavia" cancelled their flights. They had their licences withdrawn, their operator's certificates, and that meant that passengers suffered, as they spent days at a time stranded at the airport unable to continue their journey.

The resolution was approved to ensure this situation is not repeated. Many thanks for signing it. Five billion roubles will be made available for this. These resources will be managed by the Federal Agency for Air Transport.

The essence of this resolution is that if a company is not in a position to fulfil its duties for whatever reason, then the Ministry of Transport automatically pays out of this fund, which has 5 billion roubles in 2009. That will allow any other Russian airline to carry passengers who bought tickets from companies that are now no longer able to honour them. So this is not about supporting the aviation industry, but about supporting passengers. That means it has very serious social significance, since the state is offering a guarantee to the passengers that their tickets will be honoured, and that their flights will take place, irrespective of which company sold them the tickets initially and when, even if it is 45 days or two months before the flight.

This is the first guarantee of this kind that we have offered our major airlines, such as Aeroflot and Transaero, to scoop up those passengers who were due to fly with other airlines, which for whatever reason is unable to honour the ticket and their duties to their passengers. This is a kind of security buffer, in the first instance, for passengers.

Vladimir Putin: We need to consider the demands being made of the airlines. We must not let them get into such a situation where they're unable to carry people.

Sergei Ivanov: The agency is carrying out continuous monitoring for just that eventuality.

Vladimir Putin: Monitoring is one thing, but the appropriate demands must be made of them.

Sergei Ivanov: Yes we've also done that.

Vladimir Putin: Because in many European countries everything is all clear: If the financial circumstances of the company decline to what seem like dangerous levels, they simply have their licences taken away - in advance. That's it.

Sergei Ivanov: The agency is working on exactly that now. Currently each airline has to provide information on its financial situation.

Vladimir Putin: Good. Please make sure you pay particular attention to that. And you are also due to hold a meeting of the Maritime Collegium, aren't you?

Sergei Ivanov: Yes, we're planning to consider a whole host of issues linked to shipping and internal transport routes at the meeting. Now we are developing the concepts needed to allow the creation of a single management body for all internal water routes in the Russian Federation, since river transport is the most environmentally friendly, and also the cheapest, form of transport.

We are also planning, and incidentally it is part of the Federal Targeted Programme for the development of the transport strategy, to allocate the necessary resources to the renewal and repair of quays, ships hulls, and the whole infrastructure involved in river transport, as well as repairing locks throughout the system.

You held a meeting in Rostov at which the main and crucial decisions were taken. And now we are feeding them into a concrete programme, and we'll at least consider a draft at the Collegium.

Vladimir Putin: Good. Ms Golikova, how is work on ensuring special transport for the disabled coming along?

Tatiana Golikova: As specified in last year's resolution, we are putting this into practice in two stages. Last year it applied to disabled people and veterans of the Second World War. But this year this will also apply to disabled people, those who suffered during radiation leaks, rehabilitated citizens, and those who suffer from debilitating diseases.

Last year the first step was fully completed. This year we have already allocated the financial resources of 4.5 billion roubles, to pay up to 100,000 in compensation to those to whom it is due. We are counting on the regional authorities to make these payments before May 20, 2009.

In addition to that we held an open tender for the supply of 568 cars, which was won by AvtoVAZ, which now has to supply these 568 cars to the regions before June 1, 2009, so that they can be given to the disabled people.

Vladimir Putin: So the programme has been completed?

Tatiana Golikova: Yes, it has.

Vladimir Putin: Good. We had a very different programme, from a different region. At the meeting in St Petersburg we agreed that by April 1 we would have finished setting up the United Shipbuilding Corporation.

Igor Sechin: Mr Putin, in adherence with the Presidential Order of March 21, 2007, you gave instructions that the creation of the United Shipbuilding Corporation should be concluded by April 1, 2009.

In the timeframe indicated, nine construction companies and three regional shipbuilding centres were assigned to the United Shipbuilding Corporation.

In effect, this newly created shipbuilding centre comprises another 33 businesses including: the Western Shipbuilding Centre, which has seven businesses, the Northern Shipbuilding Centre with 5 businesses, including another six which are part of "Zvezdochki"; and the Far Eastern Shipbuilding and Repair Centre, which includes 10 businesses. So the formation of the core capital for regional shipbuilding and repair centres and the United Shipbuilding Corporation was completed by April 1, 2009.

In accordance with the Presidential Decree of March 30, 2009, this will include four businesses from under the Ministry of Defence umbrella, after the financing recovery procedure has been implemented. This will all allow me to say that the capital has been collected, and the United Shipbuilding Corporation is able to start to operate.

I would like to say a word of thanks to the Federal Service for Financial Markets, the Federal Migration Service, the Federal Property Management Agency, the Ministry of Trade and Industry, which have played the most active roles in this work and thanks to whom these decisions were made in the shortest possible time.

Vladimir Putin: How much time did you need to set up the corporation? When did we start?

Igor Sechin: Two years, Mr Putin. In that period we held 13 directors' meetings, including eleven which took place after last July, when you drew attention to the necessity to keep to the timetable, right up to today.

Vladimir Putin: Good, that's an important step in the development of our shipbuilding, which also carries administrative and legal implications. But it is an important step in the concentration of administrative and financial resources for shipbuilding.

I hope that all other plans related to real work will also be implemented on schedule, and the same goes for the organisational measures completed by April 1. Good. Thank you.

We're already in the middle of April, it'll soon be summer. How are plans for children's holidays coming along?

Alexander Zhukov: Mr Prime Minister, allocations from the Social Security Fund for children's healthcare and holidays are stipulated at some 20 billion roubles in 2009, three billion roubles more than last year.
This will allow us to grant holiday vouchers, and above all vouchers to children's health resorts, to more than five million children. Appropriations from the Social Security Fund will allow us to increase the financing of these organisations.

Vladimir Putin: How much have you increased the allocations?

Alexander Zhukov: To 600 roubles per child per day, which is about 20% more [than last year].

Vladimir Putin: We will pay for this from the budget?

Alexander Zhukov: Form the Social Security Fund.

Vladimir Putin: I see. Let's talk about the money now. You know that after my address at the State Duma I answered questions, including about the placement of our reserves. You know the answer, and I know about our funds placed in the reserves. What changes have recently taken place in this sphere?
Alexei Kudrin: Mr Putin, we have summed up the results of placing the monies of the Reserve Fund and the National Welfare Fund in 2008 and the 1st quarter of 2009.

In that period, the profitability of the funds calculated in accordance with the currency basket - the Central Bank's reserves are kept in three currencies - amounted to 4.9%. Calculated in US dollars with due regard for changes in the dollar rate against other currencies, profitability is minus 2.1%. Calculated in roubles, it is plus 30.45%, considering the devaluation of the rouble.

This profitability allowed us to gain from the placement in the reporting period. In 2008, we gained $8.6 billion in placement revenues. That is 271 billion roubles. In the 1st quarter of this year, we earned $1 billion, or 34.5 billion roubles.

The Funds' reserves were invested strictly in compliance with legislation, as is clear from the conclusions made by the Audit Chamber. We have documentary proof that we have not lost a single rouble, that the investment revenue has been transferred to the treasury, and that the monies of the Reserve Fund and the National Welfare Fund can be used for the stipulated purposes when necessary.

In this connection, the draft 2009 budget stipulates the use of over 2.7 trillion roubles of the Reserve Fund. This is liquid money, which will be gradually used to cover budget expenditures.

In addition, the anti-crisis package provides for the allocation of 257.1 billion roubles for depositing with Vnesheconombank, which we have done. VEB has issued 10-year subordinated loans to banks to this amount, thereby improving lending to the real sector. VEB has also received a deposit of 175 billion roubles for investment in the stock market. Of that amount, we have not invested only 7 billion roubles.

According to VEB, the profitability of these investments is positive. The bank is now summing up the result, and it appears that profitability is more than 10%. Taking into account the situation in the market, which has grown over the past few weeks, the profitability is positive and considerable.

Vladimir Putin: Mr Kudrin, you and I know that the countries that have reserves have pursued different policies in the past years. When the market was growing, some of them invested in high-risk but also highly profitable assets. Can you tell us what happened to these investments?

Alexei Kudrin: Yes, the decline in the funds that invested in corporate securities is approximately 20%, taking into account the fall of the respective corporate assets. I am referring to the Norwegian fund, Singapore and the other funds that invested in high-risk corporate securities. It will take them more than 10 years to restore their reserves. On the whole, they will restore them, but this means they will be unable to use them during the restoration period, or else they will register losses.

Vladimir Putin: That is, a more conservative approach has proved better?

Alexei Kudrin: Yes, we advocated a conservative approach, meaning investment only in highly liquid and very reliable securities with a large market volume. Now that we will have to use these reserves, that is, sell these securities, we will be able to do so without losses in their value, with a positive profitability, which is a policy that justified itself shortly before the crisis. Indeed, management of the Russian fund is now one of the best.

Vladimir Putin: Good. Now let's discuss the items on our agenda. I'd like to attract your attention to several issues. The first of them is complicated and unpleasant, at first glance. In medical terms, this problem can be described as a chronic disease of the economy and social sphere. I am referring to the housing and utilities sector.

It would seem that these problems are better left as they are, because the people's complaints are legitimate, and the sector has improved, but not much, at first sight.

On the other hand, unless we address these problems and discuss them publicly, we will never solve them. We should act in accordance with the Russian proverb, "What the eyes fear, the hands do." We must keep working on these problems, and the more complicated a problem, the more publicly we should discuss ways to solve it.

There are several such problems. One of them is housing construction. However difficult the situation is, we still see considerable improvements in this sector. The same goes for the housing and utilities sector.

But first let me speak a little about the autumn and winter season.
I must say that it passed without major breakdowns or accidents, although there were enough minor ones. Actually, there were 33 accidents, but this is one-third of what we had the year before. This is a positive trend.

You probably remember that it was decided at a government meeting last October that we would assess the effectiveness of regional Governments by their preparation for the autumn and winter season.
The Ministry of Regional Development is to prepare and publish the relevant ranking soon, and will also take into account its results when distributing targeted allocations among the regions.
Now about the situation in the housing and utilities sector.

Much has been done in the past few years to transfer the sector's enterprises to new operating conditions and introduce modern mechanisms of managing the housing stock and providing social assistance to the people.

On the whole, the development of the system of target subsidies for the payment of the sector's fees has been completed. Eight percent of the people are receiving them.
The partnerships of housing owners or specialised companies are managing a considerable part of residential buildings houses.

As many as 79 regions are taking part in the programmes of the Fund for the Housing and Utilities Reform, with 7 million people to improve their housing conditions within these programmes.
As of now, 120,000 people have received or will soon receive new flats.

By doing this, we will quickly advance toward implementing the goal stipulated in the guidelines for the Government's operation until 2012, when we are to liquidate dilapidated housing.

Besides, the resettlement of people from dilapidated housing and more active efforts to overhaul other buildings implies the creation of over one million jobs in construction and related industries. This is a major anti-crisis measure in the current conditions aimed at combating unemployment.

The regions have of late asked the Government to keep up the efforts of the Fund for the Housing and Utilities Reform. How much money have we allocated from the Fund last year?

From the audience: 59.

Vladimir Putin: 59 billion roubles. According to preliminary calculations, allocations to the regions will exceed 100 billion roubles this year.

At the same time, we will make sure that the regions follow the demands of those laws that have been introduced: a faster transformation of the housing sector, co-financing from the regional and local budgets, and focussed and effective use of the resources allocated.

We will focus on resource and energy saving, which implies the installation of water, gas and heat meters in houses and flats, because the people must pay only for what they really use, not for what the bills say.

Only by doing this will we develop civilised relations between producers and consumers in the housing and utilities sector, raise the quality of service and ensure an affordable level of the tariffs in the sector.
One more item on our agenda concerns the approval of the rules for financing measures to prevent industrial injuries and occupational diseases. As much as 5 billion roubles will be allocated for these purposes from the Social Security Fund.

I'd like to say that the situation in this sphere is gradually improving. However, the task of lowering the number of industrial injuries should remain in the focus of attention of the relevant bodies of power, employers and trade unions.

And the last issue to which I would like to draw your attention: As you know, the first leg of the East Siberia-Pacific Ocean oil pipeline, from Taishet in the Irkutsk Region to Skovorodino in the Amur Region, will be commissioned soon.

Transneft and Rosneft have agreed with the Chinese partners on building an offshoot to China, which will increase our export capability by 15 million metric tons a year, and create a more stable and reliable market for eastward-bound oil from our East Siberian deposits.

We will discuss the draft intergovernmental agreement with China today.

So, let us get down to the work at hand.


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