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Vladimir Putin: Before we begin our work, I would like to thank the Governor of the Rostov Region for his active work in saving people’s lives. You all know about the serious situation there. Fortunately it is more or less over now, though search and rescue work will continue. Unfortunately, these kinds of events are becoming more and more frequent here. You know about another tragedy that took place, this time in the Far East. We will have to do something serious about this and I will talk with the Prime Minister today about this issue at a separate meeting. I have asked the Governor of the Rostov Region to give the names of those who took an active part in the rescue work so they can receive state awards.

Colleagues,

The State Council is meeting today to discuss an issue of exceptional scale and importance – the state’s transport policy and ways to make it more effective.

I think we should analyse the problem by looking beyond the limits of just one ministry or sector. In other words, we need to resolve the issue by taking into account the economic realities of today, above all, the economy’s growing demand for transport services, and of course, we also have to find solutions to major national tasks.

I would like to begin by saying that the modern transport sector is not just a significant economic sector. Having a reliable and effective transport sector ensures unifying our country, developing and deepening ties between regions, helping form a full-fledged internal market and encouraging the more rational use and development of our natural resources.

Moreover, the political and economic weight of our country is decided in large part by access to global transport corridors. Transport links play a decisive part in successfully carrying out our international integration projects in the CIS, Europe and the Asia-Pacific region.

Finally, every Russian citizen, no matter what part of the country he or she lives in, should not have to feel cut off or isolated from the rest of the country. All citizens should have opportunities to travel for business and pleasure.

Unfortunately, this is not the case today. We discussed this yesterday at a meeting of the State Council Presidium. Some of our colleagues spoke of difficult situations, for example, instances of people walking 200 kilometres in the Far North.

Finally, having a transport sector that works in a stable and reliable way is an important security factor for the country and for its defence potential.

For a country like Russia with its vast territory and its regions that are difficult to access, the transport sector’s work is of immense importance.

The Russian transport services market is today one of the most promising sectors with much room to grow. There have been considerable positive changes over recent years. The volume of passenger and freight traffic is increasing all the time, and so is the demand for these services.

But a number of unresolved issues are making it hard for us to consolidate these positive trends. Restructuring in the sector has still not been completed and this hindering new investment and the introduction of innovative and civilised management methods that are in keeping with today’s tasks.

The transport network is very unevenly developed in Russia. For example, almost 10% of the population does not have year-round access to a major road network, and in Siberia and the Far East, flying – the most expensive form of transport – is the only option for a good part of the year. As concerns the Far East in particular, we also have to look more closely at the issue of creating transport links between it and the European part of the country.

Transport costs are still high in Russia; quite a lot higher than in many European countries. This is not just because of the length of our transport network or geographic factors. It is also because of our lag in modern transport technology, economic management and organisation and because we have kept ineffective financial plans in operation. Of course, transport’s high energy consumption and costs are also hindering development. It is clear that today we need to set new principles for work and define strategic priorities for the sector’s development.

Colleagues,

I think that the central question for modernising our transport policy is to reach a principally new quality of transport services and to make them more accessible and reliable.

Our task is then to develop civilised competition within the transport sector and undertake comprehensive modernisation. This is key to increasing trade flows, speeding up transportation and cutting costs for producers.

The second priority is to clearly define the place and role of the state in developing modern transport services.

The state should intervene less as an economic player and monopoly owner and should learn to work more with entrepreneurs and open up new opportunities for their initiatives. Any state funding in the sector should be justified and economically effective.

Another priority is to ensure successful foreign policy support for Russian projects and companies on the global transport services market.

Russian businesses have already taken part in work on large-scale transport projects. Thanks to this we have regained ground on the international transport and transit market.

Finally, we must seriously work to improve transport security, including making it environmentally safe. We must better protect and look after the transport infrastructure. In conclusion, I would like to remind you that our plans to modernise the sector will remain only plans if we do not bring the powers of the huge number of supervisory and licensing bodies in the sector into line with today’s demands. We must simplify border crossing and customs procedures and teach our officials to work competently and by the rules of the civilised market.

This work requires a systemic, thoughtful and orderly approach. This is the only way in which we will be able to successfully modernise our transport sector. The sector itself will then serve as an effective tool for economic growth and will help raise living standards for everyone.

Thank you for your attention.