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President of Russia Dmitry Medvedev: Mr Serdyukov, we are now on site at Vystrel training ground and saw some samples of new vehicles. But of course this is only one element, albeit an important one. These vehicles must be modern, drive well, have effective armour and simultaneously be state-of-the-art, accurate and powerful, comfortable for the crew that mans them, and yet accomplish all combat missions as desired.

What has been done in 2009 regarding the procurements under the state defence order – what are the results? That is the first question I wanted to ask you.

And the second: please report on how the programme for providing housing for serviceman operated in 2009.

Please go ahead.

Defence Minister Anatoly Serdyukov: You gave us instructions at the end-of-year Defence Ministry board session last March. In 2009 we tried to implement some of your instructions. First of all, as I reported, this year we focused on purchasing finished pieces and I think we achieved a lot in this regard, quite a lot indeed.

I just want to cite a few figures. We actually reduced repairs that were considered inefficient by 28 to 30 percent.

Dmitry Medvedev: Of the total amount of repairs, is that right?

Anatoly Serdyukov: The total amount of repairs was reduced by 28 percent. These saved funds, of course, were redirected towards the purchase of finished products. In accordance with your request, we bought quite a number of helicopters and airplanes – there were real breakthroughs. In 2007 we purchased one aircraft, two in 2008 and already 43 in 2009.

Dmitry Medvedev: Yes, that is a big difference. 43 planes in 2009 alone – that is a good result indeed.

Anatoly Serdyukov: Helicopters are as follows: two in 2007, 10 in 2008 and 41 in 2009. That is we fulfilled the entire state defence order for 2009.

Dmitry Medvedev: And as I understand it, we overreached certain targets since you reported to me that thanks to the money we saved by releasing funds from ongoing and other repairs, we acquired new – finished, as we say – equipment models.

Anatoly Serdyukov: Yes. Moreover, we have seriously renegotiated pricing with our major suppliers. You know that in 2009 we somewhat reduced our budget but, nevertheless, when measured by the purchase of different types of equipment, we exceeded even what we’d planned for 2009.

In line with your instructions we paid special attention to our priority issues, and of course our major priority is maintaining forces for nuclear deterrence. All the instructions contained in the Address to the Federal Assembly have been included in the plan for 2010 and we are now working on issues relating to acquisition of arms and military equipment. Literally as of January 15 defence financing for 2010 under continuing and newly concluded contracts will begin.

We have done a lot of work in research and development. After analysing various R & D projects, we stopped those which we consider ineffective. Naturally, these funds were then redirected towards those fields of R & D which, in our opinion, are promising and very important for the Ministry of Defence and Armed Forces in general. Most are geared towards nuclear deterrence as you requested. Therefore, I believe that 2010 will continue in the same way as the 2009, with emphasis on purchasing finished versions of modern weapons and military equipment.

Dmitry Medvedev: Now about housing.

Anatoly Serdyukov: With regard to housing, you instructed us to purchase 45,000 apartments in each of 2009 and 2010. In 2009 we purchased 45,614 apartments, that is even 600 apartments …

Dmitry Medvedev: More.

Anatoly Serdyukov: … more than we planned. We have good prospects for this year as well. We have two large sites in the Moscow Region where we are building about 17,000 apartments. There’s a big building site in St Petersburg, as well as ones in Krasnodar and in the Stavropol Region. We are already building apartments there.

There is no doubt in our minds that we will be able to supply all the 45,000 apartments that were planned for 2010.

Dmitry Medvedev: What will that give us?

Last year we paid for 45,000 plus, this year we will be paying for another 45,000, so that’s already 90,000. Given the already ongoing process, what sort of position will we be in?

Anatoly Serdyukov: We will have fully provided permanent housing for all servicemen who are now in line for an apartment in the Ministry of Defence.

Dmitry Medvedev: We will be keeping our promise to do that this year.

Anatoly Serdyukov: Yes, as you requested the Defence Ministry to do.

Dmitry Medvedev: Good, because of course no amount of weapons can cover up the problems associated with developing social infrastructure for the military, with the social obligations that we have in relation to the officers serving in our Armed Forces. This is very important second component of the modernisation of the Armed Forces, in which we are currently engaged.

Let’s go back again to purchasing weapons. In effect where I really put the emphasis was on the strategic nuclear forces. We are facing the same challenge this year, but at the same time we must continue with the acquisition of the latest high-tech military equipment, according to the parameters I laid out in my Address to the Federal Assembly, and acquire other sorts of weapons, including conventional arms, because we have had problems in the past with this too. We have got used to thinking that our weapons are the best that money can buy. You and I just shot with some weapons that in effect have been in use for a hundred years. This technology is estimable, but we need to move forward. Our rifles must also be up to date, reliable and – most importantly – economical. We have to maintain a normal, competitive position relative to the best examples of foreign technology.

Anatoly Serdyukov: Today we’ll show you more of what we’ve been working on.

Dmitry Medvedev: Okay, good.

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