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The main subjects on the agenda were developing stretches of international transport corridors in southern Russia for export and import traffic and international transit, and carrying out big investment projects in the region to build and modernise port, road, rail and airport infrastructure, in accordance with the Russian Federation Transport Strategy through to 2030.

Before the meeting began, the President, together with Prime Minister Dmitry Medvedev, visited the Mithridates Staircase, one of Kerch’s most famous sights and an ancient historical and cultural monument. The staircase was built on Mount Mithridat in 1833–1840. It has 432 steps and leads from Kerch’s central square to the hill’s summit.

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Excerpts from transcript of the State Council Presidium meeting on developing transport infrastructure in the Southern Federal District

President of Russia Vladimir Putin: Good afternoon, colleagues,

We will discuss today the development of southern Russia’s transport infrastructure. This is a comprehensive task and is crucial for the future socioeconomic development not only of this region, but of the whole of Russia.

The Azov and Black Sea basins already account for more than a third of all freight flows going through Russian ports. The Southern Federal District plays a big part in export-import traffic, including as part of international transport corridors such as the North-South corridor.

We must make active use of the concrete advantages our access to the Black Sea and the Caspian Sea gives us and develop transport infrastructure that is convenient for both domestic and cross-border transport. At the same time, we must base our plans not only on current needs and demand, but also on the future outlook. We need to work for the long term, analyse the likely passenger and freight flows in 5 or 10 years’ time, and take into account integration development and the activities of organisations such as the Organisation of the Black Sea Economic Cooperation (BSEC).

Of course, construction of the bridge across the Kerch Strait is another important point on our agenda today. This is without question a national project of exceptional importance. The bridge will ensure Crimea’s full integration into the general national transport system and will create new opportunities for economic growth.

The construction is proceeding at a good pace, but I want to remind you that this project is not about the bridge alone. It also requires work to prepare road and rail approaches of the highest standards and put in place all supporting and related infrastructure on the Krasnodar Territory side and in Crimea. I stress that this crossing must function as a well-coordinated whole right from the start and ensure a rapid and uninterrupted transport link with Crimea.

I asked Mr Medvedev to make a close examination of the situation with work on the Crimean side. I remind you that we allocated an additional 5 billion rubles for road construction in Crimea this year, bringing the total up to 18 billion this year. This is quite a solid sum. It could be higher, but the real issue is not so much the sum itself as how the money is used. Mr Medvedev will probably tell us in his remarks todays what he saw and how the work is going.

Another item on our agenda today is comprehensive development of the Southern Federal District’s freight transport system. Freight transport volumes are increasing but the railway links serving the Avoz and Black Sea ports are practically at their limits now. The main roads are overburdened and the internal waterways are little used. We discussed these issues in detail at a recent State Council Presidium meeting, as you will recall.

We need to eliminate the bottlenecks and increase transport arteries’ throughput capacity. Incidentally, we have already discussed before the need to build a railway route that bypasses the Krasnodar hub. The relevant instructions were issued and I want to hear today about how this work is progressing.

It is important to remember that our neighbours in the region are also not just sitting idle and are busy creating attractive conditions for international transport companies, including in big ports. We must be ready for this competition and offer freight shippers quality services. This includes rapid delivery and conditions for processing various types of goods.

We also need to find a balance between the different types of transport. This approach would benefit the companies using transport services and the transport companies themselves. We must get private investors actively involved in this infrastructure development work. We already have experience here, for example, the project to develop terminal facilities on the Taman Peninsula. What was the company involved in this project called? ATEK.

Incidentally, we agreed to take into consideration that the private investors are putting their own resources into the project, billions of dollars, and we will keep in mind that the company is investing its own money, and that it is ready to continue this investment and put in even more money than before. This means that we must develop the needed infrastructure approaches to this port. I take the position that these decisions have been made and must be carried out. Let me add that all transport development plans must give maximum consideration to environmental protection issues.

Millions of tourists from around Russia and abroad come to southern Russia, to the resorts of Krasnodar Territory and Crimea. Quality passenger transport, including on interregional lines, and reliable public transport are therefore very important issues. I know there are some proposals in this area and we will discuss them today.

Modernising the rolling stock for passenger transport is another issue. This particularly concerns Crimea, where the transport fleet is in real need of modernisation. We must work consistently on this task.

Finally, one other important area is to improve transport infrastructure in the Southern Federal District towns that will host FIFA World Cup matches in 2018. The new international airport terminal in Volgograd has already opened. Work continues on the Yuzhny airport facilities in Rostov-on-Don. We will need to go there and take a look at how this work is going. I understand that it is going to schedule. There are also big plans for modernising the road network.

Let’s start the discussion.

I give the floor to Mr Sokolov.

Please, go ahead.

Transport Minister Maxim Sokolov:Mr President, Mr Prime Minister, colleagues,

The Southern Federal District is indeed strategically important for developing our international economic ties, raising our importance in the system of global transport routes, and developing our domestic tourism industry.

The federal district has more than 130,000 kilometres of roads, around 7,000 kilometres of railways, and more than 4,300 kilometres of internal waterways. It has 15 river ports, 19 sea ports, and 13 airports.

Despite the objective current difficulties, the federal district’s transport system has developed well over these last years. We continue active work to develop the road system and our efforts have considerably increased the pace of work over the last two years.

The length of roads of federal significance that meet the required standards increased by nearly 7 percent last year. By the end of this year, we expect that more than 55 percent of the federal roads will be brought up to standard and will give us an increase this year of 10 percent.

Work is currently underway in the Southern Federal District on construction, rebuilding, complete overhaul and repairs to a total 625 kilometres of road and we have upcoming projects for another 560 kilometres of road. This year alone, more than 40 billion rubles in federal budget money are being allocated through government programmes to finance roads in the federal district’s regions, and total budget money for the regional road funds in the Southern Federal District come to nearly 50 billion rubles this year.

Of course, Mr President, as you noted, the main project in the Southern Federal District and indeed in the entire country is the construction of the bridge across the Kerch Strait and the approach routes. You and the Prime Minister are keeping personal watch over this project and its implementation and have visited the site yourselves, but for the other participants’ sake I will briefly describe the project.

The bridge is 19 kilometres in length. The road part has 4 lanes and will allow a speed of up to 120 kilometres an hour and throughput capacity of 40,000 cars a day. The railway part has two tracks with throughput capacity of at least 50 couples of trains a day, with passenger trains travelling at 80 kilometres an hour.

The construction is now in the most active phase. The bridge is being built simultaneously across the full length in eight sections. Piles are being driven into the land and into the seabed to form the supports for the road and rail sections of the bridge. A total of just over 7,000 piles will be driven in. Currently, nearly 2,500 have already been installed to their design depth. We have 116 supports of the 595 planned supports already completed, and work is underway on another 138 supports. Assembly of the bridge’s spans is already underway on the land sections. Assembly of the arch spans for the part of the bridge over the water, through which shipping will pass, is an important stage in the construction work. This work is currently underway on the Kerch side.

Around 3,000 builders from different parts of Russia, including Crimea and Krasnodar Territory, are taking part in the work. More than 6 million tonnes of various goods for the construction work have been unloaded at the site. The construction is proceeding strictly to schedule, partly thanks to timely completion of supporting infrastructure on both sides of the Kerch Strait.

Three temporary working bridges with total length of more than 7 kilometres have been built, as well as two technical bridges, technical, warehouse and industrial sites and temporary docks. Housing for the builders has been completed and is in use now. This covers 3,600 people on the Taman side and close to 1,800 on the Kerch side. Thirty kilometres of temporary roads have been built.

All needed measures to ensure environmental and transport safety are being carried out during the construction work. As we reported, we plan to open the bridge to working traffic on the road section by December 2018, and on the railway section a year later, in 2019.

(Mr Sokolov went on to describe in detail the construction of the road and rail approaches to the bridge from Krasnodar Territory and Rostov Region and on the Crimean side).

Looking at the situation with rail transport in the Southern Federal District in general, it is positive overall and there have been increases in both passenger and freight traffic in the region. This year, trains transported close to 6.5 million passengers to the Black Sea resorts, which is 16 percent more than in 2015. Using the single ticket system, we expect rail passenger traffic to Crimea to come to around 400,000 people this year, which is 15 percent higher than the 2015 result.

As far as freight traffic goes, 75 million tonnes were delivered to the Azov and Black Sea ports last year, which was up 15 percent on 2014. This year, the positive trend has continued and we expect an increase of around 7 percent. But, as you rightly noted, the region’s railways are currently operating at their throughput capacity limit.

We have started carrying out a number of projects over these last years to develop passenger and freight transport capacity. They include construction of a second main line from Volgograd to Krasnodar, bypassing the Krasnodar hub, and the work to electrify this line. There is also construction of the line to bypass Ukraine, and development of the Novorossiysk station. We completed a major project in the region at the end of last year – a sorting station, kilometre 9, at a cost of 11 billion rubles. Of course, these railway construction projects also include the approach routes to the Taman port.

State financing and participation in rail infrastructure development in the region comes to more than 220 billion rubles for the period through to 2019. This is not counting the investment that was made during the period before the [2014] Olympic Games. Once all of the planned projects have been completed, throughput capacity on the railways will come to 100 pairs of passenger trains a day, or 134 million tonnes of freight a year. This will be sufficient. We are effectively doubling freight throughput capacity and increasing passenger traffic capacity by a quarter.

We have planned 15 pairs of passenger trains a day in the summer period for direct links to Crimea through to 2020, and around 9.5 million tonnes of freight. Budget optimisation through to 2019 reduced financing for the Krasnodar hub bypass by around 29 billion rubles. We need to complete this project in full, of course, otherwise it will not be possible to ensure good access to the ports or to the other resort towns in the Azov and Black Sea region.

As far as Crimea goes, the Kerch Strait bridge and its close approach routes will offer sufficient throughput capacity reserves. Concerning railways in Crimea itself, I note that thanks to federal budget subsidies, the railways are working in stable fashion now and traffic has increased considerably. We have seen an increase of 34 percent this year compared to 2015. The number of railway carriages arriving via the ferry crossing is now up by 22 percent.

We have preserved more than 9,000 jobs on the railways. We have agreements with the authorities in Crimea and Sevastopol to maintain a slight surplus of jobs given that the railway link via the bridge will start working in 2019 and we will need to have the required number of workers ready.

We are carrying out complete overhaul of infrastructure using the subsidies allocated for this work. This year, 30 kilometres of railway were repaired and another 50 kilometres will be upgraded next year. We are also studying various electrification options as part of the plans to develop the Crimean rail infrastructure. You gave an instruction on this with a deadline in October. We will approve the proposals with the Government and will brief you on this within the deadline. Increasing traffic on the Crimean railways and electrifying the lines will require additional energy capacity. We already know that we will need around 130 megawatts in addition. This matter will require further work.

Of course, we will also need to modernise the passenger carriage and locomotive fleet so as to have comfortable modern trains operating on the Crimea route when the bridge opens to traffic.

We will need to purchase new rolling stock and locomotives on a basis of, as I said, 15 pairs of trains a day. This will need around 1,000 carriages and 40 locomotives. We also need 14 motorised wagon trains made up of 10 carriages each for local trains, as we are actively developing these routes on the Crimean Peninsula.

These purchases could serve as an anti-crisis measure for supporting our local machine-building industry. Development of Crimea’s infrastructure and purchases of rolling stock could be partially financed through extra-budgetary sources. We are actively discussing these matters.

Let me say a few words now about the air transport sector. As I said, the Southern Federal District has 13 airports, 8 of them are international airports, and 7 are part of the main national network. The federal state programmes have planned for reconstruction of the airports in Krasnodar and Elista. A new airport terminal opened recently in Volgograd, and a new airport facility will be ready to open in Anapa in December.

Of course, we place great importance on Simferopol’s airport in our plans to make Crimea a more attractive tourism destination. We forecast that traffic through this airport will come to more than 5.2 million people in 2016, which is higher than passenger traffic was during the Soviet years. We plan to complete construction of a new terminal by 2018, which, in the first stage, will be designed to handle around 7 million passengers.

Also very important for the region is Yuzhny airport in Rostov-on-Don, which is being built as part of the preparations for the Football World Cup. To be more exact, I should say that a popular vote has proposed giving the new airport the name of Ataman Platov.

Acting on your instruction, Mr President, we are working with the Rostov Region Governor, and our colleagues from Aeroflot and other airlines to organise the route network and develop passenger flows, including tourist traffic, for this airport’s successful operation.

This year, three state air travel subsidisation programmes are being implemented in the district. One of them has made it possible to establish direct transport service between Simferopol and 58 cities in our country.

The second programme has made it possible to operate 14 subsidised routes between district cities – Sochi, Anapa, Gelendzhik, Simferopol – and cities in Siberia and the [Russian] Far East, such as Vladivostok, Irkutsk, Norilsk, Khabarovsk and Yakutsk, among others.

The third programme ensures year-round subsidised transit service to the Southern Federal District for all categories of citizens on 24 routes. The total volume of budget appropriations under these programmes was 1.2 billion rubles. In the first eight months of this year about 100,000 passengers flew under these programmes.

Colleagues, there are 15 river and 19 sea ports in the federal district. To ensure the development of port infrastructure as part of the federal targeted programme to develop the transport system, investment projects are being implemented to develop the ports of Taman, Novorossiysk, Azov, Gelendzhik, Temryuk, Kerch, Yalta, Yevpatoria, Sevastopol and Feodosia.

In keeping with your instruction, Mr President, following a meeting on transport infrastructure development in southern Russia last September, the Government approved a roadmap for the development of sea ports in the Azov and Black Sea basin through 2020. Under the Inland Water Transport Development Strategy, as well as in keeping with the recent instructions issued by the previous State Council Presidium, the Bagayev low-pressure hydro-system on the Don River is being built. The project is part of a federal targeted programme with 22 billion rubles in budget funding. Exploration work is now underway.

The stable operation of the Kerch ferry service has been ensured. Effective measures are being taken to increase its capacity, improve the quality and convenience of passenger transit and ensure transport security.

(Further on, the Minister spoke about a number of problems dealing with maritime transport).

Now, a few words as regards automotive and urban passenger transport. As of September 1, 2016, 224 organisations have been operating in the region, which are engaged in passenger transport by bus, and there are 17 trolleybus depots and 10 tram depots, with total passenger traffic exceeding one billion people.

In 2013–2015, 1.5 billion rubles were allocated under the federal programmes of co-financing regional budgets for the purchase of trams and trolleybuses, as well as natural gas-fuelled buses . Over that time, the fleet was renewed with 581 vehicles. In addition, there is a separate municipal surface transport renewal programme being implemented in Crimea with the overall financing totalling 11.5 billion rubles, including around five billion rubles from the federal budget.

Before 2020, 829 vehicles will be purchased. By now, 230 buses and 32 trolleybuses have already been supplied. But, of course, we believe it necessary to consider extending these programmes as they have proven to be effective and directly sought-after for the urban economies of the regions.

Mr President, Mr Prime Minister,

We have drafted a list of instructions on the issues reflected in these remarks, aimed at their speedy resolution. This project was discussed with all agencies concerned, and also with the Executive Office of the Government and the Presidential Executive Office. We are urging the State Council to support it.

In conclusion, I would like to say that the Transport Ministry has been and will always be doing its best to make sure that the transport system, including in the Southern Federal District, is not a hindrance, but a stimulant for the development of our country.

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Vladimir Putin: To conclude our meeting and discussion, I would like to make the following point. Of course, the Kerch Strait bridge is a landmark project. But we are here to discuss not only that. We are talking about expanding the entire transport infrastructure in southern Russia, which includes a road to bypass Krasnodar and roads to bypass Rostov, the effective functioning of railways and motorways, the effective use of ports and the prospects for using and building new ports in southern Russia. This involves vast amounts of cargo handling and resolving major issues related to the entire economy. Therefore, we have drafted corresponding directives, which we will amend to include all that was said during our discussion today.

We discussed virtually the same topics in Novorossiysk a year ago. Now we are back to these issues, and we will not lose sight of them, just like we will not lose sight of transport infrastructure development in the Far East, Siberia, the North, meaning the Northern Sea Route, and northwestern Russia. There is, too, a major transhipment complex there, which is quickly expanding. I would ask you to keep in mind the nationwide importance of this complex.

With regard to Mr Bocharov’s [Governor of the Volgograd Region] proposals, I am not sure if we will all fit in the helicopters, since we came here on helicopters, but we will try to go and see the construction [to build the bridge across the Kerch Strait], and make sure that everything is going at the right pace and as scheduled.