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Visit to Tver Carriage Works

January 10, 2018, Tver

During his working trip to the Tver Region, Vladimir Putin visited Tver Carriage Works, where he was informed about the plant’s operation and shown its finished products.

The plant’s General Director Andrei Solovei informed the President about its performance indicators and the efficiency of the government support measures.

Vladimir Putin visited a number of shops and viewed some finished products: the Ivolga urban electric train and a low-floor tram. The President was also shown the plant’s double decker passenger carriages.

In addition, Mr Putin met with the plant’s employees and answered their questions.

* * *

Transcript of meeting with employees of the Tver Carriage Works

President of Russia Vladimir Putin: Good afternoon. How are you faring here at the plant?

Remarks: Very well, thank you.

Vladimir Putin: Much has changed here since I visited the works in 2009 during my previous trip. True, you had a difficult period starting with late 2014 and during 2015 and 2016. But we have seen growth across the board starting last year – production and salaries and, as I understand, the number of workers.

Probably, 2016 was the most difficult year. Your enterprise ended the year with a loss of almost 200 million rubles. Meanwhile, last year net profit already exceeded half a billion: 546 million rubles, right?

General Director of the Tver Carriage Works Andrei Solovei: 547 million rubles.

Vladimir Putin: 547 million. This is a very good figure and the current pace is also very good.

We will have to talk – I have promised to talk to the Governor [Tver Region Governor Igor Rudenya], directors of the Works and your major shareholders about ways of loading your works and other similar plants in the future.

This may be a bit far away from you but you have probably heard that starting from January 1, we cancelled the main tax – VAT – on long distance shipments. This immediately allowed the shipping company to make additional purchases because they have extra money to spare.

They have bought over 300 carriages: 307 carriages last year, and next year they will buy more than 500 and up to 600 carriages.

I looked at your new products – they are super, really first-rate. No doubt, they are at the world level and even better than other world models. This is very good and I am sure you are pleased, and our passengers will be pleased.

You have developed one more competitive product – the Ivolga electric train that competes with the Lastochka train. But as we have already mentioned, it will be necessary to discuss this with the Ministry and Russian Railways.

We should not forget that Lastochka trains are also produced by our people, Ural workers, and it is necessary to ensure work load for them too. It is important to look at the advantages of these trains and where they may be used. At any rate, we will think about the work load to make sure the number of workers goes up rather than down and salaries are increased.

Salaries have already increased compared to last year. I do not know, you should have noticed this yourselves. In any event they are much higher than the average for the Tver Region, which is good in itself. We will continue building on this work in all areas. So I would like to wish you success.

Oleg Zakharov: Oleg Zakharov, head of the training centre.

Mr President, I attended the meeting with you in 2009 and I would like to…

Vladimir Putin: This was a sad meeting.

Oleg Zakharov: Yes, absolutely. And that is exactly why I would like to thank you for the decisions that were made when money was allocated for the purchase of rolling stock in the short term – about three billion…

Vladimir Putin: We contributed money to the Russian Railways equity capital and they used it for purchases.

Oleg Zakharov: Yes.

We appreciate the decision to eliminate VAT for long distance transportation services in the mid-term perspective. We feel how it helps us in our work. We feel your support and hope that with hard work and your support in 2019 and 2020 our enterprise will work to capacity and, therefore, do good work.

Vladimir Putin: We adopted this measure to last through January 1, 2030. And so, the funds that are thus saved for the carrier should be spent (and the Government will strictly monitor this) on the purchase of rolling stock and its modernisation.

Incidentally, there is no shortage now but next year (I may be just slightly off) about 1,800 carriages, in 2019, and then in 2020 about 2,000 carriages will have to be replaced. There is no shortage for the time being but this should be done on a permanent basis nonetheless.

Oleg Zakharov: I see. But I would still like to note that the Works did not mark time all these years. We did not just wait for support but worked hard to expand the range of products. I am sure Mr Solovei told you about this. I would like to ask your opinion on our new products – electric trains on which we are pinning big hopes – but actually you have already expressed it. We are glad you like them.

Vladimir Putin: Ivolga trains are beautiful, powerful and modern. I also saw the tram. The tram is absolutely wonderful. Probably it is really one of the best models in the world. So please accept my congratulations. I hope that you will continue in the same vein. What is particularly gratifying is that you developed these models yourselves.

Oleg Zakharov: Absolutely so.

Vladimir Putin: Practically nothing foreign is left, just some details. As they said, they will be replaced with domestic products in the near future.

Andrei Sokolov: Andrei Sokolov, resistance welding specialist.

Does our enterprise have opportunities to increase production? And what are our planning horizons?

Vladimir Putin: We have just mentioned this. While the passenger company bought 307 carriages this year, next year it will purchase over 600 carriages. We extended this measure of support – VAT relief for long-distance passenger transport – until 2030.

But what shall we do in addition to this? We have just discussed with your main shareholder opportunities to export rolling stock abroad – both trams and carriages. If such contracts are on the horizon, we will be ready to issue loans to your purchasers abroad.

Mikhail Yevseyev: Head of the frame and body shop Mikhail Yevseyev.

Mr President, in terms of orders, our enterprise is growing well. But there is a question related to secondary vocational education. As of 2017, only 16 electric welders were trained in Tver. And the demand was about 500. Is there any programme that will boost the development of secondary vocational education?

Vladimir Putin: We have many such programmes developed both by the Ministry of Education and the Ministry of Industry. These are interdepartmental programmes. A lot of manufacturers are directly involved in this work.

You probably heard and saw how much attention we now pay to the training of highly skilled modern workers, and we hold competitions. Our young workers win first places in international competitions. In Abu Dhabi, they essentially placed first as a team. We already hold national competitions on a regular basis. There are many programmes.

Unfortunately, Tver has not participated in these programmes yet. You have such an energetic and young governor. I think that he will be up on the general trend. Without a doubt, we will continue this. And of course, we will involve Tver.

Olga Pylayeva: Mr President, I am Olga Pylayeva, electric welder. I wanted to ask a question about education in higher educational institutions, that children do not know what they should know, and I would like our children to study for free in the future. And do you plan to change anything?

Vladimir Putin: No, there will be no fundamental changes. Paid education will continue to exist, but free education will certainly be preserved.

Olga Pylayeva: The National Final School Exam (EGE) – that is the question.

Vladimir Putin: As for the EGE, it is probably better for us not to go into details now, not to get into this discussion. There are pros and cons, I will not talk about downsides now, though they exist, but the advantages are that the number of children, applicants from outside metropolitan areas increased sharply after the introduction of the National Final School Exam.

In fact, there are many talented people in all parts of Russia. The EGE in a certain sense balances the chances of all applicants. Again, there are downsides, but this system works. It needs to be improved. As for free education, it will certainly be preserved.

Maxim Yelshin: Mr President, I am Maxim Yelshin, frame and body shop. This is my question: today, the minimum wage is below the subsistence level. Are there plans to raise the minimum wage to that level?

Vladimir Putin: I don’t think this affects you personally, however, it affects a great number of people, about 4 million people, and not just those who get this minimum wage. Today this figure is only 9,489 rubles in our country.

We have been talking, and keep talking, about the need to bring the minimum wage up to the so-called subsistence level. The subsistence level is calculated on the second quarter of the previous year and currently stands at 11,163 rubles. So, on the one hand we have a minimum wage of 9,489 while on the other, the subsistence level is 11,163.

This means that those who get minimum wage have an income below the subsistence level. We have discussed the need to make the minimum wage at least equal to the subsistence level quite a bit. This has always come down to one thing – lack of budget capacity.

This is obviously unfair; it skews the labour market which should be civilized, a person should get at least the minimum to be able to live on, and if he cannot, the situation is abnormal.

Last July we raised the minimum wage to 70 percent of the subsistence level, and to 80 percent as of January 1, 2018. We were planning to finally make them equal starting January 1, 2019.

A short while ago I met with Mikhail Shmakov, head of the leading trade union, and he raised the issue of moving forward the balancing of the minimum wage and the subsistence level. He suggested it should be done by May 1 on the labour holiday. I told him then that we would look into the feasibility of this based on the Russian economy’s performance.

At this point, I can say (I just met with the Finance Minister yesterday), that the positive trend in the Russian economy remains. We have a budget deficit below expectations; our gold and currency reserves are growing. This means the Russian economy is on the upswing, and the trend is continuing.

We can balance the minimum wage and the subsistence level as of May 1 this year. We will do that. It will impact approximately 4 million people. They are not just government and municipal employees, they also work in small business and a percent of working retirees. In addition, the minimum wage is a baseline for calculating pregnancy and childbirth allowances and temporary disability allowance.

There is one point that can bring up questions from self-employed individuals because they pay, or rather have always paid into the social funds, and a sharp increase in the minimum wage affects them, as they are basically people whose incomes are not high.

To avoid this problem, we added a cut-off, and as of January 1, we separated contributions by self-employed people from the minimum wage. So this will not really affect them.

We will do this starting May 1. And it is crucial that it is always adjusted, of course. And from that day on, the minimum wage should not drop below the subsistence level

Alexander Zaitsev: Mr President, a question, please. Everything is getting better with us in Russia…

Vladimir Putin: Everything cannot be always good.

Alexander Zaitsev: Not everything, yet things are getting better. Last time you came here there was talk about building another bridge across the Volga river. As the first survey went on, followed by a second survey, things just settled down quietly. I am afraid they will do another survey and everything will just get quiet again. Can you somehow assist in that?

Vladimir Putin: Such issues are decided jointly by a respective Government commission, I can tell you about the developments.

I was here in 2009, and last April, in reference to what you are talking about, we spoke; the situation is not changing, and in terms of the number of vehicles, it is deteriorating. It deteriorates in the sense that the number of vehicles is growing, the traffic load on the bridge and the roads in general is increasing. For that reason I gave instructions to the Ministry of Transport, and the Government, and under these instructions they should offer proposals on design documentation this February. Then we will see how much it costs and how long the construction will take.

I can tell you in advance that it will cost over 10 billion rubles. I will tell you privately what the commission is saying about this, but we will work with the commission.

Alexander Zaitsev: Because Tver is doing a lot in terms of tourism, and the traffic congestion on weekdays is too much.

Vladimir Putin: Yes, I understand. There must be another bridge across the Volga.

Alexander Zaitsev: Actually, the old bridge was to be converted into a pedestrian bridge so people could walk freely and have a great view. And then we will see.

Vladimir Putin: I will not be cryptic. The commission is showing some hesitation about where these 10 billion rubles can be found. We will look further into this; I think they will find them.

Alexander Zaitsev: Little by little, I hope this will start moving.

Vladimir Putin: It should not be little by little. There must be a schedule, and it must be complied with, otherwise it will be little by little – the way they used to build in the Soviet Union with 200 bridges unfinished by 2000. They were started in 1985, even in the early 1980s, and 200 bridges were abandoned and unfinished. This will not do.

There must be labour discipline here, similar to what you have. You make four carriages [per day], is that right? And the bridge should be built in the same way – high quality, on schedule and at minimal cost. We will work on this by all means, and I completely agree with you, there should be another bridge across the Volga.

Andrei Solovei: Mr President, let me take this opportunity. You are running for President of the Russian Federation, will take part in the election. If it is not too late, I would like to offer my help, and since I have always voted for you…

Vladimir Putin: Thank you.

Andrei Solovei: …can you consider me a trusted person in the Tver Region? I am ready to be helpful to you here.

Vladimir Putin: Will your colleagues support you? This is a surprise to me. Thank you very much. I appreciate it.

As head of such a successful enterprise, and not just successful, it is an enterprise that has overcome hardships and trials in its development in 2009, in 2015, and 2016, you got everything rolling again, and look what beautiful products you manufacture, they are in demand domestically, and I am confident we will get them out to foreign markets. So, thank you very much.

Andrei Solovei: We have already signed a contract with Cuba for 68 carriages.

Vladimir Putin: I know.

Andrei Solovei: And now we are working with other countries.

Vladimir Putin: Because Cuba needs support down there. But it is ultimately support for companies like yours. Thank you very much.

Andrei Solovei: Mr President, can we have a group photo?

Vladimir Putin: Of course, we can. With pleasure.

January 10, 2018, Tver