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President of Russian Vladimir Putin: Good afternoon, Mr Mishustin,

We have recently discussed the country’s spatial development which includes the development of transport and expanding transport corridors. I talked about the need to crosslink the country and to help people get from point A to point B based on their purchasing power. I am aware that the Government has already drafted a number of decisions on this account, and I would like you to tell me more about it.

Prime Minister Mikhail Mishustin: Mr President,

We have worked through your instructions on transport connectivity, which you issued during a joint meeting of the State Council and the Council for Strategic Development and National Projects.

You pointed out the need for infrastructural crosslinking of our country’s vast territory and expanding transport links so that people can travel easily and hassle-free between the regions. Russian Railways plays a key role here. At a Government meeting held on December 24, we reviewed the company's investment programme, took into account all amendments and comments, and today, approved the Russian Railways’ financial plan and investment programme. Its volume for the next three years exceeds 2 trillion rubles, including over 730 billion rubles to be invested in expanding railways next year.

Importantly, next year we plan to complete a package of measures of the first stage of developing railways in the Far East, which we refer to as the Eastern Operating Domain project – the Baikal-Amur Mainline (BAM) and the Trans-Siberian Railway.

The second phase has started to increase the throughput capacity of the BAM and the Trans-Siberian Railway to 180 million tonnes by 2024 and ensure fourfold growth in transit container traffic. The delivery time from the Far East to our western borders will be cut to seven days.

The approaches to seaports in northwestern and southern Russia, as well as the central transport hub and southern cluster, will also be improved and expanded.

The issues raised by the industry participants and representatives of ministries and agencies were taken into account in the programme which made it quite balanced.

Mr President, you also issued instructions to develop air transport in the Far East. I would like to report that the Government has completed a vital phase in the creation of a united Far Eastern airline. A controlling stake in the Aurora Airline has been transferred to the Government of the Sakhalin Region, which has become the sole owner of that strategic air carrier, and 10 Far Eastern regions will become shareholders in the merged company in return for consolidating their aviation assets. The new unified Far Eastern air carrier will use modern Russian planes, modern technology and a flexible system of route management.

The united airline is facing challenging tasks: within the next four years, it must increase its traffic to 2 million passengers and the number of routes to more than 1,500. This will allow us to create a single regional network in the Far East and to launch direct flights between cities in that federal district without the necessity to make connecting flights to Moscow or other large cities. Of course, it is vital to offer local residents an opportunity to travel around Russia, including in their own and other regions of the country, as you have pointed out more than once.

During the visit to the Far East last summer, we talked about the importance of this for local residents. Of course, the main support measure in this sphere is the programme of subsidised flights to the Far Eastern Federal District.

Thanks to this programme, people can buy tickets at an affordable price of some 8,000 rubles. These subsidised tickets are available to students, pensioners, people with disabilities, with attendants, as well as large families.

Mr President, we have carefully worked out all the methods which can make flights affordable for more residents of the Far East and prepared our proposals. If you approve them, we are ready to allocate another 5 billion rubles to subsidise flights for the Far East residents, so that they can buy tickets for the most popular routes, of which there are approximately 21. This will allow us to transport an additional 450,000 people a year and the average one-way ticket for local residents will cost 10,200 rubles. If you approve our proposals, the Government will continue working to develop transport communications not only in the Far East but throughout the country.

Here is one more important piece of news for the transport industry, including in the Far East, where helicopters are widely used to transport passengers and medical personnel and for search and rescue operations. The upgraded Ansat light multipurpose helicopter made its maiden flight yesterday. It is a fully Russian-made aircraft, as you are well aware, which can be used for virtually any purpose. We plan to start delivering it to Russian air carriers already next year.

This is the breaking news I planned to tell you.

Vladimir Putin: This is good news and a good gift for people in the Far East. Thank you very much for your prompt response to my instruction. You also mentioned the creation of a regional Aurora airline on the basis of the existing division of Aeroflot, our leading company. As far as I remember, Aeroflot's share was supposed to be valued at 1 ruble.

Mikhail Mishustin: Correct. Sakhalin got the block of shares for a low price of 1 ruble.

Vladimir Putin: The airfare for a flight from the Far East is 10,200 rubles. As I understand it, you were talking about Vladivostok. Today, as far as I remember, the airfare is 16,250 rubles, so this is a noticeable cut, thank you very much.

Yes, I know, Ansat has flown. Please, do not forget about other aircraft, such as Mi-38. It holds a lot of promise for our market, and is also a good export item. It has a decent speed of 300 kilometres per hour, the seating capacity is good, and it is a comfortable helicopter overall. Heavy helicopters should be kept in mind. They should be upgraded and used.

You mentioned certain transport corridors, including the Eastern Operating Domain, the Baikal-Amur Mainline and the Trans-Siberian Railway. They are of critical importance for our economy. You also mentioned container transport. Indeed, the head of Russian Railways reported to me quite recently that they had run the first trains at a higher speed, and this is a very lucrative and competitive route for transporting cargo from the Far East and the Asia-Pacific region to Europe. This is a very competitive route and it must be supported in every way.

With regard to the Baikal-Amur Mainline and the Trans-Siberian Railway, I am aware that the money has been set aside, and it must be put to good use, because this route is important to our miners. I am aware of the possibility and the plan to send some coal from Kuzbass to the Azov-Black Sea basin. We are aware of what is happening on the EU market, so the Asia-Pacific region holds more promise. In this sense, it must be expanded. You are aware of it, as we have already discussed this many times. The tunnel must be built, and so on. There are things to work on.

We must not forget about the motorway corridors, such as Europe – Western China or Western China – Europe, which goes all the way to St Petersburg. As you may recall, Kazakhstan has almost completed its part of the project. We must get ours done by 2024 at the latest.

The second route, North to South, also goes from St Petersburg to Moscow and further to Astrakhan and Daghestan. We need this route, and we must definitely work on it.

Please, do not forget about the approaches to the Crimean Bridge. There are two main options: bypassing Krasnodar and then Temryuk to Taman and the other option – bypassing Rostov and then Krasnodar as well.

It is very important, I would also like to thank all our colleagues from the Government for their hard work to secure the appropriate amount of financing for the Russian Railways’ investment programme. It is important for rail passenger transport, for the rail passenger company, and it is also important for commuter rail traffic, because the rolling stock for that service needs to be replaced in a timely manner. It is also important for traction stock, 500 locomotives annually for the next three years. So it is an important, timely and necessary decision. I hope that it will be implemented and of course, I ask you to keep this matter under your personal control.

We have spoken about the need to ‘stitch’ the country together, but with such a territory as Russia’s, this cannot be done without aviation of course – this is absolutely obvious. We need to develop an entire chain of domestic aviation equipment that will serve our citizens. And we need to start with the small aircraft. We need to finally replace the An-2s. There is the Baikal, a small capacity aircraft, with 9 seats designed by the Ural design bureau; it is going to be manufactured in Ulan-Ude, 9 seats. The prototype should be ready in 2021, and in 2024, commercial production should begin, and the plane should fly in the first quarter.

Next in line is the L-410, with 19 seats, and the L-610 with 44 seats, it should also fly in 2024. I hope that production will be set up in Yekaterinburg. Then there is the Il-114–300, it has already taken off on a flight, powered by the domestically produced PD-14 engines, and this is very important. We specifically allocated money at the first stage, even took the necessary funds from Rosneftegaz to launch the project. We definitely cannot lose it.

The 95-seat Superjet has been flying for several years. We need to make every effort towards the MS-21 with the PD-14 engine so that it will go into production at the beginning of 2023 and be ready for use.

While we are on the subject of PD-14, I ask you to keep in mind the next engine, the PD-35, with a thrust of 35 tonnes. We need to help our engine manufacturers. First, I want to congratulate them on the PD-14 engine, because we have not delivered such a product for almost 30 years, I think, since the late 1980s, and that was done in the Soviet Union, and then they were not produced in Russia after that.

The PD-35, with a thrust of 35 tonnes, is a promising model, and should be ready by 2027, but we have been planning it for wide-body aircraft. Even if it is not ready by that time (these products have a long manufacturing cycle), we still need to work on the engine. It could be used in an extended version of the Il-96, but we need to help the engine manufacturers to bring this work to completion.

And lastly, we have received good news. I am very proud of our shipbuilders’ achievements. We will have a 10-tonne Haska hovercraft, which can be used year-round in all areas, including hard-to-access regions of Russia. It will be used to deliver cargo, and in 2022 we will also have a 50-tonne version of this vessel. I hope this project will be completed on schedule, and these vessels will be used to bring our regions closer together, serving our people so that there will be no inaccessible locations left. We must complete this project without fail.

The production of Meteor hovercraft manufactured at the Alekseyev Central Hydrofoil Design Bureau in Nizhny Novgorod and of 120-passenger river vessels will begin in 2021. Incidentally, a PV300 300-passenger river-sea vessel has been created at another shipyard based in Nizhny Novgorod, Krasnoye Sormovo. It could be used to transport passengers between Sochi and Crimea. During the trials, which have been completed, the vessel went from Moscow to St Petersburg and on to Novorossiysk, which is a river-sea connection. The shipyard plans to begin working on more sea-worthy vessels in 2021, and I hope the project will be completed by the end of next year. These vessels will definitely be used on the Sochi-Crimea route. I am sure they will be in demand, and that our people will be grateful.

Please, do not forget about municipal transport either. Many vehicles are being produced for cities and large towns, including modern buses and trams. A narrow-gauge low-floor tram has been produced in St Petersburg for Kaliningrad quite recently, in November.

But we must also continue – and I am asking you to take this into account – with our plans for the use of natural gas motor fuel. We have moved forward a great deal in this area, and now we must take the next step, that is by 2023 manufacture a municipal hydrogen driven bus – it uses an electric motor, but we need one on hydrogen. The next objective is to produce hydrogen-powered trains, taking into account environmental requirements and the specifications of urban transport, especially in large cities with a population of over 1 million and a large pool of municipal vehicles, many of which use diesel fuel. There is much room for improvement when it comes to the impact on environment, airborne emissions create unfavourable atmosphere in large cities. Converting municipal transport to duel-fuel, or better still hydrogen fuel is a high-demand objective.

There are many objectives and there is much to do in this sphere. On the other hand, considerable groundwork has been done. I would like to thank our colleagues for that and to express hope than all our plans will be implemented next year, in 2021, as well as in the subsequent years.

Thank you very much for the decisions made.

Mikhail Mishustin: Mr President, thank you. You have described the details of the projects we are implementing with our colleagues. I hope that all our tasks will be fulfilled. The Government has these plans on its agenda, as you have pointed out in great detail, and we are working to implement them.

Thank you very much.

Vladimir Putin: Thank you.

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