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President of Russia Vladimir Putin: Good afternoon, colleagues.

I have something to tell you before we begin. We are aware of the political events that are unfolding in a neighboring country, which is our closest ally. They are about changes in the political leadership. We hope that continuity will be ensured. As Nursultan Nazarbayev left his top state post, we have every reason to thank him for his cooperation and wish him good health and every success. (Applause.)

He is one of the initiators of advanced integration between our countries. He is one of those behind the EAEU, and I can even go as far as saying that the EAEU was his brainchild. This association is very successful partly thanks to his direct support and his participation in this effort. For our part, we will do our best to maintain these processes.

As you are aware, a couple of days ago we and the residents of Crimea and Sevastopol marked the fifth anniversary of Crimea and Sevastopol’s reunification with Russia. You may be aware that I had a number of meetings with representatives of the public while I was there, and people had some questions. Indeed, much has been done, but there are other also questions, which I will deal with later.

Before we start discussing these issues, I would like to say this: as you may recall, an initiative was put forward during the annual Address to the Federal Assembly. It was about mortgage payment holidays for borrowers in difficult situations, who find it challenging to make their loan payments at some point.

As a general rule, the law is not retroactive, and this means that new legal obligations can only come about after the adoption of the relevant law. But, unfortunately for us, we did not specify this. This is partly my fault; I failed to state it explicitly, and people naturally assumed that the tax holiday would apply to all mortgage loans, including those issued earlier. But, as people say, the spoken word takes flight. Therefore, I am asking you to implement it in this format.

Let us do this as an exception. I spoke with the Governor of the Central Bank, and the Central Bank supports this decision. So when adopting the law, I ask the State Duma deputies to assume that the mortgage tax holiday will apply to all mortgage loans, including those issued earlier. This is the first question. I would appreciate it if Mr Gornin commented on this matter. Go ahead, please.

First Deputy Minister of Finance Leonid Gornin: Thank you.

Mr President, colleagues,

In fact, making mortgage loans more widely available is probably one of the key objectives of this national programme. Securing the right to a mortgage holiday is probably a very important and timely decision, a relevant decision for the further development of mortgage lending in the Russian Federation. Therefore, we certainly support this decision regarding the extension of the draft law to existing mortgage agreements.

Vladimir Putin: Good, thank you.

And please, talk it over with the State Duma deputies. I am sure they will have no doubts, they will certainly support this.

Ms Golodets, please review the Winter Universiade for us.

Deputy Prime Minister Olga Golodets: Mr President, Mr Prime Minister,

We have completed the 29^th Winter Universiade, which the Russian Federation hosted for the first time. Importantly, it was held in the very centre of Siberia, the city of Krasnoyarsk.

Our Universiade has set several records: we received top marks from FISU (International University Sports Federation), which sent official thanks and noted that it was the best event in the history of the winter Universiades.

We saw record figures for the number of participating countries. The Winter Universiade was entered by 58 countries, which was a first. Such countries as Switzerland, Canada, the Czech Republic, Slovakia and the United States had teams exceeding 115 athletes. In other words, they had a full complement of athletes in all sports.

Competitions were held in 11 sports for 76 sets of medals. All teams had leaders and key members who were already known in the world sports arena. For example, France was represented by the leader in the Freestyle Ski World Cup team rating Perrine Laffont, as well as World Cup winner Benjamin Cavet. Mai Mihara from Japan is the world champion in figure skating. Therefore, our victory looks all the more impressive. We faced worthy competitors, which makes our results look even better.

I would like to remind you that athletes competed for 76 sets of medals. Russian athletes took 41 gold, 39 silver and 32 bronze medals.

It was very important for us that for the first time we posted excellent results in sports where our success had been fairly modest before. These are freestyle, alpine skiing, speed skating and short track. This is the result of the consistent development of our infrastructure and our coaching school.

For example, our Yekaterina Yefimenkova (short track) set a new record at the Universiade. She covered 500 m in 43.2 seconds. This is an absolute record at the Universiade.

Brand-new infrastructure has been built in Krasnoyarsk that will allow us to make a real breakthrough in freestyle and snowboarding – sports that are very popular with our young people. The new school was being formed even during the Universiade, and today we note that many parents are trying to enroll their children in these sports. There are already 600 children and after the Universiade, this school will admit more children and they will practice on the upgraded infrastructure in accordance with the world training system.

The infrastructure is ready and after the Universiade, we will implement the Universiade Legacy programme that has been adopted. The Federal Siberian University will receive a new campus, a very good one, and the new Raduga training base. A new federal training centre will be established at the Sopka base. So thank you very much.

Vladimir Putin: All right, I would like to congratulate you, first of all, to congratulate the athletes on the results, and thank all the organisers.

Olga Golodets: Thank you.

Vladimir Putin: Let us return to the issue I began with, Crimea and Sevastopol.

A lot has been done in the past five years to integrate Crimea and Sevastopol into Russia from a legal, economic and social standpoint. A lot of attention has been paid and money allocated for infrastructure projects and transport. Major work continues.

Recently during the celebrations, as you may know, two powerful power stations with a total capacity of 940 MW have been launched, accounting for 90 percent of current energy consumption. In general, our energy capacity has almost doubled. This is a lot. This not only fully meets the demand of Crimea and Sevastopol, but also makes it possible to provide electricity to other Russian regions, if needed. At least, as of today, we can reduce the load on the energy bridge that was created before and can provide 850 MW of electricity to Crimea and Sevastopol.

The Taurida thoroughfare is under construction. I hope that today our colleagues will report on the progress. As a result of improved transport accessibility, tourist numbers are growing, reaching seven million last year. Other tasks are being addressed, too.

At the same time, there are problems, and we know this. People told me about this during our meetings; first of all, this concerns raising the incomes of people living in Crimea and Sevastopol. This topic was not raised, to be honest, but this problem exists and we know that it is necessary to adjust prices for some products. Some, but not all of them. However, there are certain groups of goods, including foods, such as dairy products, which cost more in Crimea and Sevastopol than in nearby regions, and we also have to think about this. We must think about the development of healthcare and education.

There are many issues, and I suggest discussing them today and making the necessary decisions to move forward at the rate that we and people who live in Crimea and Sevastopol need.

I will ask Mr Aksyonov to begin, please.

Head of the Crimea Republic Sergei Aksyonov: Mr President, colleagues,

In fact, in the five years since returning to its historical motherland, Crimea has made a breakthrough; this is true. There is both great success and, of course, problems, which you have mentioned, but most of them are being addressed.

I am certain that the peace and interethnic cooperation that was achieved after your executive order on reinstating those who were deported from the republic because of their ethnicity is the basis of Crimea’s successful socioeconomic development. As of today, all surveys show that over 90 percent of citizens find the level of interethnic and inter-confessional relations in the Republic of Crimea to be positive.

At the same time, of course, Crimea’s budget revenue growth accounts for the main share of socioeconomic development. We have managed to change the situation over the five years. Crimea’s own revenue has grown over 2.5 times compared with the best periods when Crimea was part of Ukraine: 22 billion rubles is the best result between 2010 and 2013, the highest number, reached with aid from Kiev, by the way; meanwhile last year revenue, including tax revenue, in Crimea was almost 50 billion rubles (which is exemplar), with some 120 billion rubles of federal aid provided each year as part of the federal strategic programme and other state programmes approved by federal bodies.

Thanks to this, we have managed to increase funding compared to the Ukrainian period, 2.5 times in the social sphere, 3 times in education, 3.5 times in culture, four times in sports and almost 23 times in environmental programmes because this area had received almost no funding at all. Last year we finished with a small budget surplus of 39 million, which is the result of our joint activities with the federal authorities. This is an impressive number for us. And this year the Crimean budgets at all levels will be debt-neutral, including the republic’s overall budget.

At the same time, the list of issues of main concern, including those under your supervision, primarily includes issues of healthcare. In the course of the past five years, a whole range of government programmes has been implemented in the Republic of Crimea – this includes the federal targeted programme. Within the framework of this programme, a new 12-storey hospital with a total capacity of 734 beds is currently being built in Simferopol on your instructions. It will be put into operation later this year and will have the most sophisticated equipment. Together with the Healthcare Ministry, we have addressed every task on the agenda in this regard. In the city of Yalta, a new complex of the city hospital has recently been put into operation. It cost a total of 1 billion rubles, allocated from the federal budget. We have achieved the highest level of high-tech medical care.

In 2014, only 800 people in total had access to high-tech medical care. Last year, however, this number reached 12,000 people. Within the framework of state programmes, a total of over 9 billion rubles were allocated from the federal and regional budgets, over 5,700 pieces of equipment were bought, 62 new remote medical and obstetric centres and outpatient facilities were built, and 53 healthcare facilities were partially renovated out of the planned 85. We continue to move forward in this direction.

The results of our work are reflected in a general 7.5 percent decline in the mortality rate compared to 2013; the most important indicator is a 40 percent decline in child mortality and an average two-year increase in life expectancy. We received a total of 250 new ambulances, almost reaching the target goal. All of these issues were taken care of, with no exception.

Speaking of education, out of 552 Crimean schools, over 300 have undergone complete or partial renovation and over 250 have received new equipment. In the course of the past years, we created a total of 22,000 spots in children’s pre-school facilities, while under Ukraine’s control, practically none had been created; practically none existed. Within the framework of the national projects, we will be able to provide everyone with spots in pre-school facilities, including nurseries; there is no doubt of that. Last year, we also replaced windows in a total of almost 140 schools. All this means that work in this area is being continuously carried out.

There are advances in agriculture. Thanks to support from the federal authorities, Rosagroleasing succeeded in upgrading farming equipment. Over the past several years, Crimean agricultural workers received 1,700 new pieces of harvesting and sowing equipment. Thanks go to our colleagues from the Russian Federation Ministry of Agriculture. Rosagroleasing received over 4.4 billion rubles. As of today, new equipment in the republic makes up over 50 percent of the entire machinery fleet.

Accordingly, support for agriculture from the federal centre, and partially from the republic, totaled over 9 billion rubles over the past five years, which made it possible to fully meet the needs of the Republic of Crimea in poultry, eggs, and, partly, in vegetables.

Of course, these issues have not been fully resolved, even though there is some progress. Pork supplies to the domestic market increased significantly. Today, we cover 68 percent of our needs as opposed to 30 percent at most during Ukrainian times. We have been meeting all the needs of the Republic of Crimea in fruit and berries over the past five years.

Mr President, you have already mentioned the situation with transport. The Crimean Bridge opened to traffic last year under your executive orders and thanks to your support. To date, 4.9 million vehicles have crossed it in both directions. The railway section of the Crimean Bridge will be launched by the end of this year, which will partially address the issues that you have mentioned in your opening remarks regarding an increase in food prices and, to some extent, in building materials. I am sure that prices will then come in line with the average for the Russian Federation.

Simferopol Airport was very instrumental in this regard. The new airport has seen 5 million passengers to date. This is a huge number. Therefore, last year we received a large number of tourists, with almost 6.8 million of them visiting the peninsula. Of course, there is still work to be done in this area.

The construction of the Tavrida Motorway is underway; the federal authorities and the Ministry of Transport are overseeing the project in conjunction with our colleagues. We are on schedule. A two-lane road to Simferopol is now open to traffic. This will significantly reduce traffic, primarily outside the town of Primorsky and the city of Feodosia, where people got stuck in traffic for up to three hours last year, which detrimental for the overall situation.

As for energy, Mr President, you know the situation here better than I do. Thanks to the two new gas turbine TPPs, we have become completely energy-independent over this period. That is, taking into account the energy bridge, today Crimea has more than 2000 MW, which is more than enough to support development. The Ministry of Energy of the Russian Federation has done quite a bit of work; the main gas pipeline from mainland Russian Federation has been built with a throughput capacity of 2.2 – 4 billion cubic metres. This volume will indeed make us feel secure, and will be a basis for development, since we also produce 1.6 billion cubic metres of gas annually. That is, the situation today is fully stabilised, and all issues related to the independence of our energy system have been resolved in full.

At present, two regional operators have started to implement environmental projects. We are already achieving the requirements of the programmes that other Russian regions are implementing. We have established average waste management rates, which are even lower than last year – 50 rubles per person in the city and 40 rubles per person in the rural areas. At the same time, the waste accumulation rate (the approved average again) was 2.4 cubic metres per resident per year in the cities, and 1.8 cubic metres in rural areas.

We have reached agreement with the Ministry of Natural Resources and Environment and are now drawing up a plan as part of the programme and the national projects; two plants will be built for sorting, recycling and partially burying the so-called tailings. Mr Kobylkin and I have discussed the technology; there is an understanding, and we are aiming for the federal standard.

As for water supply, today, 77 percent of the population receives clean, high-quality water. As for the remaining 23 percent who still have poor-quality water, our plans to bring the supply of quality water to 100 percent will be implemented as part of the national projects; the money has been allocated and accounted for.

As part of the national projects, the Government of the Republic of Crimea has executed 66 agreements with the federal authorities and developed 46 regional programmes worth a total of 78 billion rubles. The Government of the Russian Federation has allocated the money; we are fully aware of the total amount of work to be done. I am sure that most of these problems that you have identified today in your introductory remarks, will also be resolved through the implementation of these projects.

This is a short report, Mr President, on the five-year period since our reunification with our historic homeland. I would like to express my appreciation of the huge cooperative, collective work of the Government of the Russian Federation; without it, nothing would have happened, without the Russian lawmaker, and of course, your personal support. Many thanks.

In general, we understand that tremendous work has been done, but we have yet to retake the road that you identified for error correction. We will work together.

My report is over, Mr President.

Thank you.

Vladimir Putin: Thank you.

Mr Ovsyannikov, go ahead, please.

Governor of Sevastopol Dmitry Ovsyannikov: Mr President, colleagues,

Since the historic return of Sevastopol to the Russian Federation, the city's development has received a powerful boost. It has gained the opportunity to revive its infrastructure, build new social facilities and resolve other problems.

In the last five years, the region has been integrated into Russia’s economy and legal system. The region has established essential legislative and regulatory foundations and developed durable economic ties with Russian regions.

Here are a few figures. In the past five years, the region’s economy grew by 80 percent and by 20 percent in 2018 alone. According to the Finance Ministry, we rank eighth in the development of the economic potential among Russian regions.

Our industrial enterprises are being utilised. In five years, our industrial production went up by 150 percent and by 29 percent last year alone. Agricultural production increased by 54 percent over five years.

Small and medium-size business is making rapid headway. It employs over 47,000 people. Tax revenues went up by 43 percent in the past year alone.

In the past five years, investment in fixed assets increased 10 times, exceeding 40 billion rubles in 2018. Importantly, the share of private investment reached 46 percent.

The budget of Sevastopol and the Republic of Crimea is becoming more self-sufficient. Personal incomes are 1.7 times higher than in 2014. During all these years, the unemployment rate in Sevastopol was one of the lowest at 0.2 percent, while the number of people employed in the economy has grown by 15 percent.

Sevastopol is one of the country’s most rapidly growing cities. In five years, its population grew by 15 percent. In the rating of Russian cities by quality of life, Sevastopol went from 71^st place in 2015 to 20^th place in 2018. The average salary in the region is 2.3 times higher than it was five year ago.

During the past few years, Sevastopol has been implementing a major programme to improve the quality of the urban environment. Over 20 parks and squares have been upgraded, more than 500 sports and children’s grounds have been built and almost 400 courtyards repaired. According to the Construction Ministry, Sevastopol is on the list of Russia’s 20 most livable cities.

The region’s housing capital repair programme is now fully underway. It includes one in every five buildings, more than 800 blocks of flats. We ranked twelfth in Russia for this programme in 2018.

Over the past three years, eight kindergartens, newly built or reopened after major repairs, took in more than 4,000 children; general education and music schools opened, and twice as many children can holiday in camps in Sevastopol. This progress was achieved even though the number of schoolchildren has grown by 35 percent since 2014, and the number of preschoolers, by 46 percent.

The quality of healthcare services is one of the cornerstones of improving the quality of life. The equipment and services are being updated; more than 2,000 units of cutting-edge medical equipment have been installed; and the ambulance fleet has been completely replaced. Medical care has become more accessible in rural areas, with 14 rural health centres and emergency aid stations opened; the mortality rate, including infants, has decreased – we ranked second in Russia in 2018. Patient satisfaction with healthcare institutions has increased by 24 percent in three years.

We are also improving roads — over 195 kilometres out of 1,000 have been repaired. Public transport has been significantly updated; more than 300 new trolleybuses and buses are in service now. In two years, the number of traffic fatalities has been more than halved. The construction of the Taurida Motorway and the reconstruction of the road to Kamyshovaya Bay are in progress; other major motorways and interchanges are being designed in the city.

Over the past five years, 825,000 square metres of new housing have been commissioned. This year we rank first among the regions of the Southern Federal District in terms of growth rate. We have launched a systematic urban development programme; we have approved a strategy for socio-economic development until 2030, including 20 regional state programmes to build more than 200 facilities, funded through federal targeted programmes.

You mentioned the problems that worry people in Sevastopol, and in Crimea in general – above all, the high prices of food. The solution here may be new chain stores coming to the local market and the construction of a wholesale management centre.

Social infrastructure, healthcare, depreciation of buildings, poor quality equipment in hospitals, substandard medical doctor skills and personnel shortages remain extremely acute issues for the residents of the city. Roads as well as housing and utilities continue to cause daily concerns for citizens. Last year, we received some support from the Moscow Government. After meeting with you and Mr Sobyanin [Moscow Mayor], we joined our efforts and focused on bringing the existing healthcare, education, sports and culture infrastructure up to code. We started urban improvements.

The commissioning of blocks of flats built with various code violations is another major problem in Sevastopol. The legal chaos of previous years now has us looking for solutions that would protect the interests of the residents.

In closing, I would like to ask you to support the solutions that are truly important for the city. Creating one of the 15 federal research and educational centres at Sevastopol State University is of key importance to us. The long-term spatial development of the city involves the construction of the new Gerakleiskaya Lateral Motorway and a bridge across Sevastopol Bay.

Integrating Sevastopol manufacturing enterprises into major Russian holding companies proved its effectiveness, brought new orders to these enterprises and made it possible to begin technical upgrades. Now, in conjunction with the Ministry of Transport, we are preparing similar solutions for the Sevastopol seaport.

We would like the implementation period of the state programme for the socioeconomic development of the Republic of Crimea and the city of Sevastopol to be extended considering there is a number of sites, the construction of which will take longer than the period indicated in the federal targeted programme. There are your decisions to this effect. Crimea and Sevastopol need these facilities.

Mr President, colleagues,

We, the people of Sevastopol, are keenly aware of your support and help. With the TPP now operational, our region enjoys total energy security and good potential for development. The Taurida Motorway will increase the transport accessibility of the city of Sevastopol many times over and will give a powerful boost to the city's development. We are ready to discuss these issues, of which we have quite a backlog now, but we are confident that we will be able to clear it in full.

Thank you. That concludes my report.

Vladimir Putin: The TPP alone will give you 500 million rubles in additional revenue to the budget of Sevastopol and 500 million rubles in additional revenue to the budget of the Republic of Crimea.

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