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President Vladimir Putin: Good afternoon, dear colleagues!

Our session is taking place literally several days before the beginning of 2006. And one of the most significant political events of this year was undoubtedly beginning to work on the highest priority questions and issues the country is confronted with, something we refer to as national projects.

As you know, this work will enter a completely new phase next year—the phase of the pragmatic realization of the most pressing issues.

In this connection, I considered it particularly important that here with you, my dear colleagues at the State Council, we discuss these basic questions, establish the means of collaboration between the agencies of federal and regional power, and thereby define precisely the forms of this cooperation. I consider this to be extremely important.

I think that you too understand that we are obliged to consolidate as much as possible our efforts so that the most essential, vital problems for people have been solved in the most effective way. These tasks, as we recall, are in the fields of education, public health services, housing, and agriculture.

A great deal of the preparatory work has already been done and important legal acts have been passed. From the first months of the coming year they will facilitate the transition to effecting various measures concerning the projects.

You know that next year we shall be spending more than 160 billion roubles on these projects. I want to point out that this impressive amount imposes on all of us a great responsibility, and requires us to work harmoniously and efficiently together.

All of us used to complain that there was never enough, never enough money. Now we have as much as we can cope with. I say again: it is necessary to spend it competently and efficiently.

We should achieve substantial results. But it is also necessary to understand — and you too are aware of this — that, for example, in order to increase the availability of housing, a significant modernization of the sector of housing construction is required. It is not enough to just allocate the money to this program; it is necessary to undertake decisive steps to improve the way the economy works as a whole and in this sector in particular.

For us it is obvious: in order for a housing program to start up in earnest, it is necessary to sort out issues related to the question of land ownership, the politics of town planning, municipal services, and access to medical care and education. We must achieve a higher level of work in these establishments and in the various branches as a whole.

From this it follows that the so-called expanded government, that is the Federal government and the governors, which are represented in this hall, should work more efficiently and more effectively — as a single corporation. And it is precisely now that this stage is beginning, when subjects of the Russian Federation should turn in earnest to practical work. It is obvious that a higher level of readiness on location will directly influence the results of efforts of all government power to accomplish the tasks under discussion today.

It is the regions together with municipalitieswho will be organizing timely financial payments. It will be necessary to coordinate closely both purchases, installing the equipment, and constructing new installations, in order to determine the recipients of additional and expensive medical services.

Certainly, the broad spectrum of such crucial problems demands a well-defined administrative system to oversee the projects and the creation of a thorough control system, a system that guarantees coordination and coherence at all stages of our work, where every link in the chain — from federal departments to establishments on location – must operate according to general principles and procedures.

I also insist that you attend assiduously to the expenditure of financial resources. The government's task is to find the most economic way to transfer these public funds to their ultimate recipients within the allotted time frame and at a minimal cost. And the state cannot begin to pay inflated prices to implement the measures related to these projects. It should not pay for the negligence of specific officials, or for their slow actions.

As far as prices are concerned, that is a special case and a special subject. Everything should be organized in the most efficient and, I repeat, the most up-to-date way, so that not a single penny is spent illicitly.

Therefore simultaneously and in parallel with the realization of the projects it is necessary to begin monitoring immediate measures already taken. Here again the major question is control over the purpose of utilization, over – let me say it straight out – the commercial effectiveness of every rouble spent. And to realize this sort of control in practice it is necessary for public control to really function—I have already spoken about this.

Dear members of the State Council!

In conclusion I shall note again that the governors directly influence the financial and economic policy of the regions. And you all know all about the ideology behind financing national projects. It does not presuppose the passive distribution of money or substituting regional and local programmes at the expense of the federal government in the fields of public health services, education, housing policy, or agriculture.

Almost two thirds of all funds allocated towards meeting the social needs of the citizens of the country are channelled through the budgets of the territories, and we are helping to resolve a lot of additional issues by virtue of financing these projects. I want to emphasize that these are additional issues. Therefore it would be wrong if substantial work in priority areas was replaced by simply profiting from subventions from the federal budget.

I hope that the Russian regions will invest their own resources in the projects and invest not only through financial means but also by efficiently organizing administrative work.

I draw your attention to the fact that the extent to which national projects are implemented effectively should become the criterion, in any event one of the major criteria, for evaluating local authorities.

I thank you for your attention and I turn the floor over to Dmitry Anatolevich Medvedev. Please go ahead.