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At the beginning of the conversation, the President pointed out that the situation in the region called for significant efforts to bring it up to standard in many areas. Vladimir Putin also noted that the Republic was a very beautiful region in every sense of the word, with wonderful people and good prospects, as well as high potential.

Sergei Menyailo began his report with immediate problems, stressing that the region needed the President's support to stabilise the socioeconomic situation and boost development.

The current development programme includes 64 projects, he said. Four have already been implemented. In particular, a centre for patriotic education and prevention of terrorism is being established at School No. 1 in Beslan, where terrorists held more than 1,100 people hostage in 2004. There are plans for social projects and rehabilitation of the victims, including training and treatment. Sergei Menyailo asked for instructions on financing these projects.

Vladimir Putin agreed the Beslan school siege was a major tragedy in Russia’s modern history that still warranted special attention and involvement, and he would definitely issue the instructions in question.

According to Sergei Menyailo, one of the major areas for the region’s development is tourism. A new tourism cluster could be developed, taking advantage of the mountainous region’s natural sights, its local traditions and customs, historical and cultural heritage. A major tourism project, Mamison, has been launched, including a year-round ski resort with the lower plateau at 2,200, the upper plateau at 4,200, the slopes clean from the forest, plus a glacier, where extreme tourism is already present. It needs to be included in the Tourism and Hospitality Industry federal project to develop a master plan for a new tourism cluster and thereby increase its investment potential and create new jobs. North Ossetia-Alania also offers possibilities for spa treatment and rehabilitation, with its unique mineral water. Rehabilitation centres could be built for various conditions, including cardiology and pulmonology.

The development of agriculture was discussed, in particular the production of fruit and berry crops which could amount to up to 500,000 tonnes in the next two or three years. Aquaculture and trout are also very promising.

There are a lot of industrial sites in Vladikavkaz and the Republic in general that remain idle today for some reason. Sergei Menyailo said that work with the Ministry of Industry and Trade and the Ministry of Economic Development is underway to put these industrial lands into circulation. Another topic: an industrial and logistics park project is at the stage of final consideration. Every day, in transit through Ossetia, 1,500 cargo vehicles pass through the Upper Lars checkpoint alone, on the border of Russia and Georgia. There is an airport with a 3,200-metre long runway. Now the construction of a new terminal building is underway. A new type of railway terminal will form the basis of this industrial and logistics park. After that, it will be filled with industrial parks, technoparks, and administrative parks like a “dry port” with a special customs zone. There are investors there, but support from VEB.RF, financial support, will be necessary.

Mr Menyailo also added that at one time there were 155 enterprises in Ossetia, accounting for about 57 percent of the GRP. Today there are only 36 enterprises giving six percent of the GRP. He suggested using Rostec technologies to load some of the enterprises and open new production facilities, taking into account the technologies already perfected in the Republic. Informatisation of the auction system is also necessary to make it transparent, which will ensure effective use of budget funds and corresponding savings.

According to the Acting Head of the Republic, the President’s support and his instructions to the Finance Ministry, the Federal Treasury and other agencies are necessary in the areas mentioned. Sergei Menyailo stressed that all of these were tasks that could be solved and that would produce good results in terms of the Republic’s development and the improvement of people’s quality of life.

Vladimir Putin drew the Acting Head’s attention to several points related not to the future but to daily life at present. First, there is water quality. The Republic cannot manage on its own in this sphere: there are major programmes related to the development of housing and public utilities which have financing, and the Republic must be included in these programmes. This work must be designed to last more than one year. Second: places in preschool institutions such as kindergartens and nurseries. This requires work.

Next, Vladimir Putin suggested working on documents on each topic in detail and added that Sergei Menyailo was a person with experience and would succeed.