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Vladimir Putin: Before opening the meeting I would like to thank the members of the special services, and above all the members of the Federal Security Service, for their efforts to secure the release of an American citizen. It is particularly heartening that the operation was carried out at a highly professional level and without any casualties. That is the main thing.

Now for the main issue on our agenda. I would like again to raise the question of how we are coping with the peak of winter colds. We regularly discuss this topic, which in itself indicates that the problem has ceased to be a routine issue for the Government. We will discuss why such a situation has arisen.

But first I would like to inform you that I have suggested that Energy Minister Gavrin should resign and he has handed in his resignation. This morning I talked by phone with the Governor of the Primorye Region Yevgeny Nazdratenko. And he told me that he too had decided to resign, although I haven’t received the documents to that effect. Neither a submission to the regional Duma nor the notices of resignation have yet reached me. But we have other information received as a result of inspections by the President’s Main Control Directorate, by the law enforcement bodies and the Russian Ministry for Emergency Situations. And I want the Presidential Executive Office to analyse this information in short order.

From the analysis of what we have today, the materials do provide grounds for resignation. I want these materials to be immediately handed over to the Prosecutor General’s Office for a legal assessment, both of the actions and inaction of the officials concerned.

But that is not all. I hereby instruct Mr Voloshin, who represents the Government in RAO UES Russia, to raise the issue of strengthening the company’s management by introducing new people at the next meeting of shareholders. This is an absolutely considered step based on the objective information at our disposal.

I think RAO UES bears much of the blame for what is happening in Primorye and some other regions. It is not only due to the failure to build up the necessary fuel stocks in order to weather the winter colds. It is also to do with absolutely thoughtless staggered cuts of power supplies to consumers, including local boiler rooms. Why was it that it was only after adverse consequences – dire consequences for the economy and the population — set in that a high-level RAO UES Commission arrived in the region and worked out an acceptable schedule of power cuts? Why?

But I feel that disciplinary decisions and hirings and firings alone will not improve the situation. And this is true of other regions. I think you will agree with me that tough measures need to be taken on matters of personnel, but it does not make much sense just to look for scapegoats in the hope that it would resolve the situation. We should look at the causes that brought about this situation. I think the root of the problem lies in the decisions made in the early 1990s, when the responsibility for the housing and utilities services was “dropped in the lap” of local governments. And neither the federal authorities nor the local governments did anything to create market conditions for the normal functioning of the housing and utilities services.

And while the housing and utilities services were devolved to the local level no adequate financing provisions were envisaged. This provoked a systemic crisis in the country’s housing and utilities sector. Almost half of the country’s regions are today in a critical situation: the Primorye, Khabarovsk, Arkhangelsk, Ivanovo, Kamchatka, Magadan, Murmansk, Novosibirsk, Omsk, Sakhalin, Yakut and Chukotka regions. The numbers speak for themselves. They confirm that we are facing a systemic crisis. The debts of consumers to the housing and utilities companies stood at 168.1 billion roubles as of January 1, 2001. And the debts of the utilities to the suppliers of resources stood at 260 billion roubles.

I am absolutely sure that the Russian Government has not done all that was necessary in order even to begin addressing the crisis. I understand that the situation had been building up over the years, but still we are responsible for people’s lives. So I am absolutely sure that the Government must take immediate organisational measures to put in place an effective structure to deal with this matter on the nationwide scale. And it should come to grips with the problem immediately. In connection with the resignation of the Energy Minister the functions of the Ministry should be reviewed. We should have a clear idea of who exactly in the Government is responsible for this sphere. Obviously, current legislation does not give the Government enough powers to address these issues, but it does not absolve it of responsibility for dealing with the crisis. If current legislation lacks certain provisions, let us go to the State Duma. I am convinced that the deputies will back us. That is what I wanted to start with today, and now let us go over to current problems.