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Meeting with Deputy Prime Minister Marat Khusnullin

July 29, 2022, Novo-Ogaryovo, Moscow Region

Marat Khusnullin reported to the President on the situation in housing and road construction and in low-interest mortgage lending. The Deputy Prime Minister also spoke in detail about plans and ongoing efforts to rebuild Mariupol and various other facilities in the Lugansk and Donetsk people’s republics.

President of Russia Vladimir Putin: Mr Khusnullin, the construction industry is developing at a fast pace. Nearly all the tasks set to it have been implemented, and all the goals, which we talked about and which were formulated following our discussions, those that can be achieved, are being achieved.

Let us talk about the results of the first six months of the year and coordinate plans for the rest of the year in accordance with the tasks that were formulated when we discussed our plans for 2022.

You have the floor.

Deputy Prime Minister Marat Khusnullin: Mr President, I would like to begin by thanking you for holding the State Council meeting. We have adopted all the key decisions and drafted all the protocols. This will allow us to move consistently just as we have been doing for the past two years. Despite all the problems, we have fulfilled and gone above and beyond our plans, as you have mentioned.

We have prepared a number of systemic decisions, which we have already implemented, and which will help us fulfil our plans in the future as well.

I will begin with housing construction. Last year, as you have pointed out on numerous occasions, it reached a record level of 92.6 million square metres, and I am sure that this year we will reach this volume again.

We have overfulfilled plans for the first half of the year. What is even better is that the number of construction permits issued increased by 21 percent compared to the first six months of 2021, which is a very good indicator.

As for the urban construction potential, which we coordinate with the regions when it comes to building on new land plots, we are ahead of this year’s schedule. We already have urban construction permits for nearly 400 million square metres. In other words, we can keep working.

Vladimir Putin: You have laid the groundwork.

Marat Khusnullin: Yes, and we are working to develop this further.

Another block of serious issues concerns mortgage lending. We are deeply grateful to you for the decision you made at the St Petersburg Forum, which has added momentum to the market. The situation is complicated, with people waiting for new housing. But the decision on low-interest mortgages has accelerated market development. We have not yet gathered momentum, but I can assure you that we are progressing.

The amount of funds given away under mortgage programmes for families increased by 220 percent compared to the first six months of 2021, and total mortgages surged by 133 percent. The July figures have shown commendable progress. We will adjust the programme and will report to you if any changes are necessary, but we are doing well so far.

Now, to the next block of issues. Mr President, thank you very much for approving the five-year programme. We have had no five-year programmes in recent history.

Vladimir Putin: Road construction?

Marat Khusnullin: Yes.

The figures for the five-year programme are really gratifying. We have built more than 4,000 kilometres of federal roads and over 3,000 kilometres of two-lane roads have been expanded to four lanes. We are working on all the transnational corridors, and we are coordinating with the regional authorities on the transformation of streets and roads into the so-called grid road network and the construction of regional roads.

You can see on the next slide that we have completed 75.5 percent of the projects in large agglomerations and we plan to increase the figure to 79 percent in the second half of the year. Plans for 2023–2024 stipulate increasing it to 85 percent. It is the national goal set out in your executive order. We will attain it.

Vladimir Putin: Will it be 79 percent by the end of the year?

Marat Khusnullin: Yes, it will be.

Moreover, Mr President, I have every reason to be confident about this. The figure for regional roads will be 49.5 percent in 2022, whereas the overall figure for the country will be 50 percent, at least 50 percent. Construction may take longer in some regions, but the average for the country will be 50 percent, and we will report 49.5 percent as soon as this year. This means that we will undoubtedly fulfil your executive order in 2023.

Thank you very much for the decisions you have taken on the priority construction projects. The allocation of an additional 100 billion rubles has given us a boost and will allow us to attain our goals confidently. I can assure you that although spring was three weeks late this year, this really was the case, we have caught up with our planned figures in nearly all regions, and we are moving ahead of plan when it comes to investment. In other words, I can say confidently that all regions and all federal services have properly adjusted their road construction efforts, and there is no doubt whatsoever that we will fulfil the plan this year.

I would like to say a few words about the Europe-West China road. We started building the Moscow-Kazan-Yekaterinburg road 18 months ago. In my preliminary report, I informed you that we had every opportunity to open traffic on a 95-kilometre stretch a year earlier. We will launch three sections before the year is out, unless something unexpected happens.

Construction is underway, and 21,000 builders and 6,000 pieces of equipment are already operating. In the next two months, we will expand this number to 30,000 builders and about 9,000 pieces of equipment.

This rapid ahead-of-schedule construction and the approved regulatory framework allow us to expand steadily. We are now set to extend the road towards Omsk and Novosibirsk, to reach the borders with China and Mongolia. We are already planning to bypass major cities, including Novosibirsk, under our five-year programme.

Vladimir Putin: Very good.

Marat Khusnullin: This will be a trans-national corridor almost 7,000 km long.

Mr President, at our previous meeting a year ago, you instructed me to focus on road traffic safety. Members of the commission that we head today are recording positive results. I would like to note that overall road accident numbers have decreased by seven percent. Accident rates have declined by 22 percent in areas that had poor roads. Accidents involving people driving under the influence (DUI) are also down by 22 percent. This is a very high indicator.

Vladimir Putin: This is also linked with tougher penalties.

Marat Khusnullin: Yes, in effect, we are addressing this matter in a systematic way. We hope that we will, certainly, fulfil your plans in the field of road traffic safety in 2022. Of course, road-resurfacing projects also have a significant impact on this situation.

Vladimir Putin: Of course.

Marat Khusnullin: Here is our next step, Mr President.

We have started implementing the Federal Targeted Investment Programme. We have analysed all national construction projects and all clients, and we can see all the facilities. I believe that we will adopt a five-year programme dealing with roads and all kinds of capital construction projects before approving the 2022 budget.

I can say that, thanks to the decisions that you supported, and because of the letter on flexible capital investment management signed a year ago, we are spending 200 billion rubles more this year, under the Federal Targeted Programme, than in 2021. In such circumstances, these allocations of course provide sound support for the economy.

We continue working to reduce the investment and construction cycle by 30 percent. Here you can see that over the first half of the year we adopted 12 key federal laws, 100 significant amendments, and 336 documents, which made it possible to cut out about 100 procedures from the investment and construction cycle. As you were informed, we systematically, step by step…

Vladimir Putin: And the time has been reduced.

Marat Khusnullin: Yes. Of course, I would like to thank you for all your instructions. Here, by the way, we have made a separate booklet with all the laws, with notes on what they provide. All this has been sent to the regions. We worked very closely with the Duma and the Federation Council.

The next issue. A year ago, on July 1, we approved a programme for allocating investment budget loans to the regions. There were many disputes; it was not easy for us to address this issue. But even considering all the changed macroeconomic indicators…

Vladimir Putin: It was 500 billion [rubles] at the first stage, right?

Marat Khusnullin: Yes, 500, then you added a second 500.

Vladimir Putin: 250 and more.

Marat Khusnullin: Yes, 250 and then another 250. In total, we have one trillion now in operation, and 960 facilities. And even after all the restrictions, all the regions have revised their projects, changed them, and all are designing and building.

This year, we will definitely use 250 of the trillion, there is no doubt. Every office and the heads of regions report on this, the huge amount of utilities, road and transport infrastructure that is being built.

We continue to provide humanitarian aid to the Donetsk and Lugansk republics. Of course, here, Mr President, I would like to consult with you and would like to offer you this concept: a master plan for the development of Mariupol. We completed it in line with your instructions. Here you have the gist. In fact, we have already written 100 pages in great detail on how we will rebuild Mariupol by year.

I can say that we will be able to fully rebuild the city in three years under the plan that is shown here. In addition to this, we provided a detailed plan for the construction of residential buildings, renovations and current repairs; the next slide shows all social infrastructure facilities. I can say that this year we will reconstruct 90 social infrastructure facilities such as kindergartens, schools, hospitals – we will rebuild everything. We have shown the progress by year: 2022, 2023, 2024, 2025, 2030, 2035.

We have some new ideas – we have changed the boundaries of the plans and suggest including the airport in it. We are also starting to rebuild it now.

We have created completely new transport infrastructure. We want to use the railway in it and restore all tram routes. We are planning to make a new transit hub with a railway station, a port and tram lines.

We have devised completely new street standards with parking and different amenities. We have fully planned the historical part of the city and are going to hold a contest involving our distinguished architects. We have also planned the entire utilities infrastructure and a new embankment.

We looked at the ways of developing industry and the future of the Azovstal plant. We have had many discussions about this plant with locals. We can see that it is still possible to preserve a number of jobs there but without preserving the hazardous production. Overall, the plant produces 40 million tonnes of scrap, and this is an environmental problem. It is necessary to clean it up.

Vladimir Putin: They did not deal with this.

Marat Khusnullin: No, they did not deal with this. They were squeezing everything out of it.

Now we would like to create a completely new image of the city, its own image. We have described in detail all the colour and architectural solutions.

Mr President, I would like to ask you to endorse this plan as the basis so that we could discuss it with the leaders and residents of the DPR. Having taken this plan as a basis, we would be able to follow it in the near future.

Vladimir Putin: Of course.

I know that you have been there more than once. In accordance with our international commitments, we are helping the Lugansk People’s Republic and the Donetsk People’s Republic, and conducting a special military operation. However, unfortunately, this entails great costs and, let us be frank, major trials and tribulations for the people who live there. This entails destruction. And, most importantly, the leaders of both republics are asking us to help them rebuild social facilities, utilities infrastructure and residential neighbourhoods in urban areas.

I would like you to work through these issues in conjunction with the leadership of the Lugansk and Donetsk people's republics. We are now at the height of summer, but winter is coming anyway, and people should spend this winter under normal, civilised living conditions. Later, we will start building housing and people will, accordingly, obtain decent housing.

With regard to social infrastructure, the leadership of the Donetsk Republic needs assistance in building a multidisciplinary medical centre in Mariupol and a perinatal centre in Donetsk, since the maternity hospital building was old to begin with and then it was destroyed during the hostilities. So, prioritise this issue and get in touch with the leadership of the republic to deal with it.

I think both can be built within a couple of years, especially as the multidisciplinary medical centre in Mariupol can be done in conjunction with the FMBA. I spoke with its head and they are ready to help. They have, as you may know, pre-approved plans in this regard. They have built a similar centre in Yalta, haven’t they?

Marat Khusnullin: They have.

Vladimir Putin: So, it will not be a difficult thing to do. You just need to localise it and do the same thing. How long might it take?

Marat Khusnullin: I think we will open in 2023.

Vladimir Putin: Will they be operational?

Marat Khusnullin: They will.

Vladimir Putin: Both? In Donetsk too?

Marat Khusnullin: I can vouch for Mariupol, because the project is ready. We will adapt to local needs and quickly begin to build. We need more time to complete preparations for Donetsk, but we will also strive to make it fully operational by late 2023.

Vladimir Putin: We have standard perinatal centres. We are building such centres all over Russia, so I think there will be no difficulty in building one there as well. All you need to do is to tie it in with the local urban environment and fit it into the city’s general architectural ensemble. All the more so since much will be done from scratch and in accordance with modern requirements and standards.

Marat Khusnullin: Mr President, we will work everything out and let you know when we have completed this.

Vladimir Putin: Good.

Marat Khusnullin: I would like to report about another housing issue, if I may.

I have already reported several times about our approaches to restoring housing in general, citing Mariupol as an example, but that is applicable to other territories as well.

We are now drafting a three-year work schedule for repairs. We have completed a survey of 85 percent of the housing stock, and we will restore everything that is restorable. Anything that is not, we will build anew. We will specify the timeframes by years and quarters. For the people who do not want to wait, we suggest and ask for your approval to agree on issuing a housing certificate with an option to buy them a home anywhere in the Donetsk Republic. This approach, I believe, will also be in demand. This is the approach to housing.

With regard to repairs, we agreed that we will allocate 6,000 rubles per square metre for interior repairs of flats and private houses.

Plus, you directed us to work out a lump-sum payment option. We worked it out, building on the mechanism that was approved in Irkutsk during the flood. You are well aware of it. I headed the command centre there as you directed, and kept you updated about these issues. Our suggestion is to use the same mechanism for these territories, and we will issue payments to everyone who chooses to do a renovation.

With your approval, we would draft a corresponding directive together with the Donetsk Republic and approve it at Government level.

Vladimir Putin: Let us do that. But this should apply to the Lugansk Republic as well, not just the Donetsk Republic, in a word, everywhere it may be needed and where people are expecting it.

Marat Khusnullin: Then, we will work out this entire mechanism and report back to you.

Vladimir Putin: Good.

Marat Khusnullin: Thank you, Mr President.

Vladimir Putin: Let us go back to Russia. What is your forecast for housing construction?

Marat Khusnullin: Mr President, this year it will be no less than last year. Moreover, we have ongoing projects, and we will try to fulfil our plans for next year as well.

Vladimir Putin: Will it be 92?

Marat Khusnullin: I think it will be 92–93 million square metres.

Vladimir Putin: Good.


July 29, 2022, Novo-Ogaryovo, Moscow Region