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President of Russia Vladimir Putin: Mr Yakunin, the summer season has begun, and I have a couple of questions in this context.

First, what is happening with local trains? You are aware of the problems we had with this issue not so long ago. What is the situation in this area now? What has been done about the issues that people raised and the complaints made? I would like to hear not just about the situation with local trains, but about passenger traffic in general, taking into account that the summer holiday season is underway. Of course, I would also like to hear about the company’s results for the first six months and the figures for traffic in general, freight traffic and so on.

President of Russian Railways Vladimir Yakunin: First of all, following your instruction and under the Government’s direction, we have done a lot of work directly with the regions.

After you stepped in on the issue, the routes that had been cancelled with the regions’ approval were restored. There are still some outstanding matters to resolve, but they are related to the fact that on some of the routes, there really are no more than a dozen or so passengers using the local trains. In this situation, it simply is not viable to use electric commuter trains for passenger traffic on these routes.

We are settling these matters with the regions in such a way as to ensure that people will still have transport options to get them to where they want to go.

Vladimir Putin: You need to be more attentive to such matters.

Vladimir Yakunin: Since your intervention and the Government decision, we have concluded agreements on local passenger transport with practically every single region and we will complete the work that remains to be finished.

We did have some problems, but let me say that the Government gave us tremendous help here, especially [Deputy Prime Minister] Mr Dvorkovich, who took this matter directly into his hands. I think we will be able to close all the issues.

Regarding passenger traffic, the elements are still creating difficulties for us, as you know, but the work we did [in Krasnodar Territory] in preparation for the Olympic Games made it possible to deal with the negative impact [of the floods], although the water was higher than knee-deep on the station tracks at Adler.

The station workers turned off the electricity and worked the switches manually. They took care of the children and other passengers, looked after everyone. With the city authorities’ help, we found possibilities for getting passengers to their destinations by coach, where possible. There were no complaints, reproaches or anything of this kind.

In preparation for the summer season, we opened new routes using double-decker trains. Last year, we ran these trains on the Moscow-Adler route. This year, we have added the Adler-Moscow-Kazan route. These are popular options with the passengers because the cost of travelling in double-decker trains is lower. As always, we are running up to 500 additional routes over the season.

Regarding the freight traffic situation, it reflects the general situation, of course, and the general economic trends we see in the country today. But we have managed to stabilise the drop in freight traffic at just 1.7 percent for the first six months of the year. When I say ‘just 1.7 percent’, I am not implying that this is not much. This does have a negative impact on the economy and reflects what are not very good trends, but at the same time, the figure is nonetheless only 1.7 percent.

Let me note at the same time that we are achieving all of the target indicators that were approved by the Government and the company’s board of directors.

I also note that in accordance with your instructions, we are doing a lot of work now to manage costs and risks. For example, with inflation as it is currently calculated by the Economic Development Ministry, and the current growth in the industrial and consumer price indexes, we have managed to keep our cost increases at a level of 6.4 percent.

This demonstrates that the people responsible for this work in the company are experienced professionals. At any rate, our close cooperation with the Government’s finance and economic officials, especially with the economic officials, is producing positive results.

Vladimir Putin: Good.

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