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The President was accompanied by Presidential Aide and State Council Secretary Igor Levitin, Presidential Plenipotentiary Envoy to the Central Federal District Igor Shchegolev and Tula Region Governor Alexei Dyumin. Explanations were provided by Tulazheldormash Director General Artyom Asatryan and Director General of PTK Group – member of Tulazheldormash Board of Directors Alexander Silkin.

Tulazheldormash is one of Russia’s largest producers of machinery and equipment for railway construction and maintenance. It is on the list of backbone organisations of the Russian economy. Over 2,500 machines manufactured at the Tula plant are working in the railway sectors of Russia and CIS countries.

In order to more effectively implement its potential, Tulazheldormash has joined the group of technological partners of the word-class TulaTech Research and Education Centre. It was established in 2020 within the framework of the Science national project to bring together the capabilities of science and the real economy sector for creating unique high-tech national products.

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Conversation with Tulazheldormash workers

President of Russia Vladimir Putin: Good afternoon.

Your managers and I have just taken a tour around some production sites; to be honest, they are very impressive. In fact, I read some background materials before coming here, but when you see it with your own eyes, the effect is quite different.

A lot has been done to upgrade the plant, and the effect is colossal: both for the enterprise, and, what is more important, for Russian Railways, which means for the entire Russian economy, because Russian Railways is a key backbone enterprise of the entire economy. So, I congratulate you, and I am confident that the progress will continue at the same pace.

Would you like to say something?

Alexander Zudov: Mr President, can I ask you a question? A personal question, if I may.

Vladimir Putin: Yes, of course.

Alexander Zudov: My name is Alexander Zudov and I work here as a laser cutting operator. I live in Kireyevsk, Tula Region.

My grandfather was a miner, and he received a flat from the mine; now my uncle lives there. This flat has become dilapidated over time. Will there still be a resettlement programme for dilapidated housing, will it continue?

Vladimir Putin: It will.

This is one of the most acute problems for Tula and the Tula Region. It took decades to develop: before that, you remembered your grandfather, who received this housing.

We are implementing this programme almost everywhere across the country; at least where this problem is acute, as I said. We are talking about periods when housing is recognised as dangerous. Why? Because it is impossible to do everything at once: the volume is very large.

At the current stage, the programme is being implemented in terms of housing, which was recognised as dangerous from January 1, 2012, to January 1, 2017. On the whole, we must resettle over half a million people across the country during this time: 536,000, I believe. Approximately 480,000 have already been resettled, and it is quite obvious that by the end of this year the programme will be almost completed in terms of the housing recognised as dangerous during this period, from January 1, 2012, to January 1, 2017.

Some regions have already completed this programme to this extent. The Government has made a decision to extend this programme for housing recognised as hazardous between January 1, 2017 and January 1, 2024, for the next five years.

I believe this programme works for you – that is not my opinion but a fact – it works. (to Alexei Dyumin.) This year, you will do it ahead of schedule, won’t you? Mr Dyumin suggests it will be done ahead of schedule and the next stage of the programme for housing, which has been recognised as hazardous between January 1, 2017, and January 1, 2022, will begin immediately.

Do you want to add something? Please.

Tula Region Governor Alexei Dyumin: Mr President, I would like to add that when there are transitional moments, we are also implementing a regional programme: about 1.5 billion rubles have been allocated for 2021–2023. Therefore, we are also investing our penny.

Vladimir Putin: In general, if I remember correctly, about six billion rubles were allocated to Tula from the federal budget for these purposes in the previous period.

Alexei Dyumin: 5.6.

Vladimir Putin: Well, yes, about six.

Alexander Zudov: Thank you very much.

Vladimir Putin: You are welcome.

Yury Nikiforov: Good afternoon.

My name is Yury Nikiforov. I have a question about our enterprise.

We have imported machines, in particular for laser cutting. It is possible that there will be problems with their maintenance, in terms of a supply of spare parts. The question is this: how likely is it that domestic machine tools will be available to serve as modern analogues of these machines?

Vladimir Putin: You know, back in 2014 – I think everyone remembers this well – we took reciprocal steps in response to the sanctions imposed on Russia and limited access to our market for agricultural produce for those countries that imposed sanctions against us. It was not just a difficult, but a risky step, because, on the whole, our critics and sceptics said that we would be left without the necessary range of food products, or without any food at all.

But, as we know, this did not happen, but what happened was quite the opposite of the expectations of those naysayers who did not wish us well. Our agriculture entered the freed market with its produce, with large volumes of products higher in quality. I would like to emphasise this: it is actually of better quality than any Western produce.

Because we have begun paying special attention to environmental standards and food quality from the very start, from the first steps. Honestly, all our standards and norms on food are much tougher than in the EU countries. They were much stricter in Soviet times as well – we must give credit to our predecessors.

And now a few words about exports. Our exports have increased several times over, about two and half times, I believe. I will not give a specific number now to avoid a mistake, but in general exports are incomparable to what they were before. Exports have increased significantly whereas imports have declined; I will not list the product range now. But we used to buy chicken thighs, for example – almost 1.4 million tonnes or something like that – but now we are exporting them and fighting for a market share for our products, including pork.

Agriculture is not simply Soviet style collective farms. It is a high-tech industry today. Its progress has affected a lot of other sectors – agricultural equipment, mineral fertiliser and even software, and so forth. Space facilities are now used for agricultural production.

What you have just mentioned is the next challenge for us – high tech industrial production, and this challenge is certainly more formidable and responsible than agriculture. But what you are going through – your company should be listed as a medium-sized business – is inspiring us with the hope that we will certainly overcome these difficulties as well.

You spoke about the machine tools that you have in your company. Of course, we have the same machine tool equipment all over the country – it depends on the technicians, spare parts and maintenance. In this context, we must of course move to complete sovereignty – at least where it is necessary to improve it.

One of your executives was correct when we were touring your business. In previous years, our task was formulated as follows – to localise production, that is, produce up to 20, 30 or 35 percent of various components domestically, in the Russian Federation. We believed that this was very good, and that we should be striving for this. In general, this is the case in normal conditions. But even if we localised 90 percent of some equipment production, a machine will not move if it is missing 10 percent, as he put it.

This does not mean that we must strive for 100-percent localisation on all items, not at all; however, we must strive for 100-percent localisation and 100-percent production with regard to the things that are of critical importance. Wherever we see that we can establish good, stable, and reliable relations with partners who really want to work with us over the medium and longer term, we will certainly cooperate with them. We will not limit ourselves exclusively to our territory.

In critical areas, though, we must strive for full sovereignty, and in order to achieve this, we will work in several areas. We are already doing that, actually.

First, we created many programmes. The Industrial Development Fund, which is one of them, was just mentioned. It was created by the Government several years ago and operates effectively. Now, your leaders are also talking about expanding the use of the Industrial Development Fund. It is a very effective tool that helps companies get long money on good terms, a good interest rate. We are now creating new technological platforms and another tool, which is industrial parks.

In the first case, the amount of funds and loans stands at 500 million rubles. It sounds like a lot, but it is not enough for large enterprises or large projects. We will strive to expand these capabilities. The interest rate there is quite appealing at 3 to 5 percent.

The next programme is a programme for creating high-tech clusters, where a 100-million loan can be taken out at a good rate of 30 percent of the Central Bank’s key rate.

We have come together in Tula, which is one of Russia’s centres of machine building, in order to discuss these areas of work at the State Council. The Tula Region Governor is head of a State Council’s working group, so we came here to visit with him and hold this discussion as part of the visit. There are many details, I would rather not bore you with them, but we are having a meeting in Tula today in order to discuss these programmes.

You raised an absolutely key issue, since achieving technological sovereignty is precisely what we need to do very soon.

Yury Nikiforov: Thank you.

Alexander Kazakov: Good afternoon, Mr President.

My name is Alexander Kazakov. I work as an instrumentation service engineer.

I am interested in the following question: the prices of goods and services have gone up sharply, utility bills are up, and prices of even Russian-made products are up. Is anything being done to increase individual income?

Vladimir Putin: Indeed, prices are up, but salaries are not too high, I understand this. In fact, the level of well-being and the income level is a key issue for the country and any working individual.

Overcoming this challenge is of key importance to the state. Ensuring that Russian household incomes meet today’s needs and can secure a dignified life is the absolute number one priority for the state.

What has happened in recent years? We all remember the pandemic very well. During the pandemic, unemployment was up and some of our production facilities scaled back their operations for sanitary reasons, and the real level of individual income began to decline.

Then it began to go up slightly, and in the second quarter of last year real individual income… there are two variables: the real wage level and real income. I will not go deep into the difference, which lies only in the fact that, in addition to wages, some other income is added to real disposable individual income such as income from individual entrepreneurship and many other sources, including pensions and so on; it does not really matter. But these are two key individual income indicators – real wages and real disposable individual income.

So, last year, as you are aware, inflation in our country spiked for a number of reasons, which you are well aware of. It soared to 17 percent, and nominal wages failed to keep up with skyrocketing inflation.

What is happening now? In recent months, as of the end of the year, we have a little bit – maybe some people cannot see it – but real wages have nevertheless begun to grow throughout the country by 0.3, 0.4, or 0.6 percent; real wages less inflation. This is the first point. Real disposable individual income – I just briefly mentioned the difference – has grown a little more, by 0.9 percent.

But this year we are still expecting change for the better – I will tell you what. We believe real wages and salaries will increase by about 3–5 percent in the country overall, while real income should grow by about 2–3 percent.

Why am I talking about this? Because we have very different rates of inflation now. The peak was 17 percent and now, based on March results, it is most likely to be below 4 percent – it is being analysed now. It has been on a downward trend. In other words, inflation – price increases – is slowing down against the backdrop of increasing wages and salaries and, thus, real incomes must continue to go up.

Of course, I would like to say it again, and I apologise to those who will see and listen to us – these are average figures, and this may not be the case everywhere, but overall, they reflect a general trend despite being an average. This is absolutely clear.

Now about housing and utilities. Look, housing and utility fees increase depending on inflation because if they do not grow at all, this area, which has many problems that have accumulated over the decades, will simply collapse because there will be no revenue. How can we maintain it in this case?

But this is what we have done with electricity, heating and water rates. We have moved these payments from right to left – what we had to adjust in July of this year we did at the end of last year. We also moved the next adjustment from January 1 of next year to July 1, 2024. Thus, there will be no adjustments for a year and a half. But since payments for these adjustments were collected a bit earlier, in December of last year, we received this revenue and are hoping that the regions of the Russian Federation will spend it on developing housing and utilities. So, there should be no serious changes in this area in the next 18 months.

Yes, of course, public transport and other rates and are also going up but this is inevitable if we want to upgrade transport. To my knowledge, transport fees for public transit have gone up only twice in eight years in the Tula Region. So, we need to proceed like this in other regions as well. You are doing this gently enough.

Alexander Kazakov: Thank you.

Vladimir Putin: You are welcome.

Sergei Vorobyov: Good afternoon, Mr President.

My name is Sergei Vorobyov. I have been working at this plant for a long time now as lead specialist for tuning and testing at the service centre. I have a lot of expertise that I would like to pass on to young specialists, to train younger specialists.

I would like to know if any support measures are being developed to attract and retain young specialists in our industry?

Thank you.

Vladimir Putin: This is one of the key issues. Whenever we come together either with our colleagues from the private sector or the governors, heads of the regions, we always discuss this issue, especially now given the ongoing labour market developments.

As you know, the unemployment rate is at an all-time low of 3.6 percent. By the way, this is also a factor that should push salaries up, because there is real competition for skilled labour in the economy, that is, the focus is not on getting a job, but on getting an employee. This factor will inevitably drive salaries up as one enterprise, to put it bluntly, engages in labour pirating and uses salaries as a lure. This is one of the objective and inevitable factors behind real, albeit modest, increases in wages.

In theory, the level of wages should not be inferior to labour productivity, while highly-skilled personnel is what guarantees high productivity. So, this is a very important, one might even say, key issue.

To reiterate, we always discuss this issue with our colleagues and companies, with the association of employers, the Russian Union of Industrialists and Entrepreneurs and other associations that operate in the area of small and medium-sized business. There are government programmes to that end as well. According to a state programme, in the coming years, we will train one million medium-level specialists, i.e., top-level workers with high level training and secondary specialised education.

All these institutions are within the purview of the regional authorities; in this case they are overseen by the Tula Region Governor. Nationally, they are within the scope of responsibility of the regions. So, we have a training programme, and, to reiterate, we must train one million highly skilled employees.

However, this is not the only area of focus. We must, of course, expand the opportunities for early career guidance for schoolchildren, especially senior classes, and work more closely with businesses and companies, so that young people can take internships at companies in line with their specialties.

There is an entire range of measures that should give us the number of highly skilled mid-level specialists we need. We will keep working towards this.

Alexei Dyumin: Mr President, this year we have additional quotas for 2,500 technical university students.

Vladimir Putin: Mr Dyumin is telling me there are additional quotas for publicly funded spots at technical universities. However, as I understand, our colleague was asking mostly about highly skilled mid-level workers, whereas universities are part of the federal level of responsibility, meaning that Mr Dyumin wasted no time redirecting things up from his level of responsibility, which is the middle level, but there is no way he will get off the hook that easily.

Please go ahead.

Dmitry Makarov: Good afternoon.

Dmitry Makarov, adjuster of instrumentation and equipment, shop four.

My question is, I wanted to buy a car under a state-supported loan programme, and there is also a subsidy programme, according to which the car limit should not exceed two million.

Vladimir Putin: The cost should not exceed it.

Dmitry Makarov: Yes, the cost of a car should not exceed two million. The question is: will there be an increase in this limit? For example, 2.5 or three million?

Thank you.

Vladimir Putin: You know, Dmitry, here is the thing: I understand that having a car is one of the signs of well-being, the well-being of a family. We have a very large park in private ownership, but of course it needs constant upgrades, it is true.

One of your colleagues here asked about the machine park and about the fact that foreign-made machines require maintenance, repair, spare parts, and so on. Unfortunately, the largest decline in production in Russia took place in the automotive industry precisely because of the actions of our so-called partners, now, shall we say, former partners. They behaved very improperly, violated all their obligations, and the decline in our automotive industry amounted to more than 60 percent, 67 percent.

The enterprises are working, and this was possible thanks to the active efforts of the Government and some regional authorities; and they are working well. The problem is to organise the production of the number of cars we need and, of course, of the corresponding high quality.

This subsidy programme was, of course, aimed above all at helping people buy cars due to rising prices and inflation, which I have just mentioned, and support the car industry. These measures to support the automotive industry, in fact, are enough to hugely increase the output of automotive equipment in the near future, including passenger cars, which are in most demand. And this is the most important and most effective way to solve the problem you have mentioned.

That is, if we raise the level of support in the face of a shortage of cars, this will only result in one thing: a further increase in prices. We have retained these elements of support for certain categories of people, but in general, the general way to solve this problem is to increase in the production of the most popular cars multiple times over. And I am sure we will do it soon.

Dmitry Makarov: Thank you.

Yegor Sologub: Hello, Mr President. May I ask you a question?

Vladimir Putin: Surely.

Yegor Sologub: Yegor Sologub, chief specialist of the production dispatching accounting office at the Sprut project group.

My question is the following: I have a car and I drive every day across the Zarechensky Bridge – it has very poor traffic capacity. Will a new bridge be built to make traffic not that busy? Does the Government plan to take any steps to develop the regional transport infrastructure?

Vladimir Putin: Thank you for this question, because there is something to brag about, or rather, there is something to report on. Because, first of all, we have the Safe High-Quality Roads programme, which is being implemented and executed ahead of schedule. We planned to bring 48 percent of regional roads up to standard last year, but we managed 50 percent. It would seem that two percent is a small amount, but it is still significant, 50. And 77 percent was planned for city roads, while 79 percent was accomplished – and we plan to continue working on this. Accordingly, 51 percent of regional roads will be completed. And this work will continue.

What is interesting, what is curious and what, I hope, will bring a positive effect: we have decided that the money intended for these purposes, for road construction, will be shifted, as we say, from right to left, that is, from 2024 to 2023, if the region is ready to take the next steps to develop its transport infrastructure. If Mr Dyumin says that they are ready for such construction, because they need capacities, contracts, and so on, then he can receive the 2024 money in 2023, and repay this money in 2024, having received the 2025 money, that is, part of the work will be done almost for free. This is the first thing.

Also, an additional programme for road development was adopted totaling 1.3 trillion rubles. Of these, by the way, 50 billion, as I said in my Address, should go to the development of regional transport, mainly to buses. So, as far as the Tula Region is concerned, specifically this bridge – I do not know, Alexei, do you have plans there?

Alexei Dyumin: Yes, the Zarechensky Bridge is an acute problem. We have begun construction of a bridge across the Upa River, which, according to plans, should be completed in 2024, and this problem will be resolved. Traffic will be properly distributed from the one bridge.

Vladimir Putin: Redistributed to others.

Alexei Dyumin: Exactly.

Vladimir Putin: These are different parts of the city, right?

Alexei Dyumin: Right.

Vladimir Putin: You will finish in 2024, right?

Alexei Dyumin: The construction will be completed in 2024.

Yegor Sologub: Thank you.

Vladimir Putin: And you also receive funds from the federal budget in general, don’t you? It is a decent amount, probably five billion, right? How much?

Alexei Dyumin: 4.7 [billion].

Vladimir Putin: 4.7, about 5.

Is that it? Anything else?

I want to wish you success; you are part of a very good company. Once again, I want to return to where I started. I listened with pleasure to your leaders; they have very interesting plans, and they are serious about them. I know that they are also striving to make their organisational efforts have an impact on their employees’ incomes. I have read background reports before coming here (as I always do before a working visit, I look at the figures, read information about the region and local companies), and found that your salaries are above the average for the region. This was definitely achieved thanks to your management team, and I congratulate them.

Well, I congratulate you all on working for a company with good development prospects, because (as I said, I want to finish where I started) what you are doing is truly increasing the efficiency of Russian Railways, a backbone company of the Russian economy.

This means that, although you are working on a specific segment, the result of your work directly affects the entire national economy.

Board Member Alexander Silkin: Mr President, you have rightly noted that inflation is declining, while we are starting to index salaries ahead of inflation, because last year, we actually failed to respond to that surge we discussed as we should have.

Vladimir Putin: I see. It was 17 percent, of course.

Alexander Silkin: Yes, but now we are going to index [salaries] by about 15 percent, so we are catching up. There is no way we could drop out of the top five Tula companies in average salaries, we are working hard to avoid this – and this is the defence industry. We just cannot drop out of the top five, and salaries at this plant should be among the highest.

Vladimir Putin: ‘Five’ means ‘excellent’ in school. (Laughter.)

Thank you very much. Best wishes.