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President Vladimir Putin: Good afternoon, dear guests and participants,

I would like to begin by greeting all of the participants in the First Railway Congress and wishing you successful work.

You are meeting today in a fine venue and in a very broad-based and representative format. This Congress not only marks the 170th anniversary of the Russian railways but, above all, offers a much-needed opportunity to discuss professional issues and examine the development outlook for a sector that is of such importance to the country.

It is clear that priority attention at this Congress will go to the tasks ahead related to the Russian economy’s ongoing modernisation. This modernisation creates increasing demand for infrastructure development. Really, what we are talking about is a quality overhaul of the national railways and large-scale technological modernisation throughout the entire sector.

In my Federal Address this year I drew attention to the need for a long-term programme to develop the railways. A strategy for the period through to 2030 (many of you know this already, and perhaps, many have spoken or will speak about this) has already been drafted and has received the Government’s overall approval. Now we need to complete the final approval stage as rapidly as possible and begin practical work without delay.

This strategy is ambitious in scope and calls for the construction of thousands of kilometres of new railway lines, overhaul of the existing network and modernisation of the rolling stock. All of this will help to make our country more competitive and strengthen its geopolitical position. It will give an important boost to social and economic development, to Russia’s advancement, and will remove infrastructure bottlenecks in the way of growth. We are already feeling the effects of these bottlenecks. This is why we say that infrastructure development in general, and development of the railways in particular, is such a priority.

What the country needs now is a new impulse in railway development, like the railway boom that took place in Russia at the turn of the twentieth century, but based, of course, on the most up-to-date technology available.

I am sure that we have everything we need, all the necessary resources, to be able to carry out these plans. The state and, very importantly, private business, have accumulated considerable investment potential today and the stable growth on the transport market is of indisputable interest for entrepreneurs.

The railway development programme we have drawn up will require many billions in investment. Budget money should not be the main source of financing but rather should stimulate and generate a flow of private investment into the sector. Experts calculate that the private sector should be able to provide up to 75 percent of the total investment required. In this context, active and systematic reform of the railways sector is the greatest priority. These reforms have already begun and their main objective is to create a genuinely market-based, open and competitive environment in the sector. This means creating stable and long-term rules of the game for entrepreneurs and investors. Competition is the best means of achieving a normal price and tariffs policy, and it is also the best means of resolving social issues such as raising wages and developing social services for the sector’s employees. More than 2,500 independent companies already operate on the rail transport market today. They account for a third of the country’s fleet of freight wagons. Private business has also begun to enter the passenger transport market. We know the problems involved in this sector, but private companies’ activity is already beginning to make a visible mark. Everybody should benefit from this increasing competition, and ultimately, this will raise the quality of transport services.

We have long since been talking about the need to make effective use of Russia’s immense transit potential. But if we want to turn this potential into profit, we need to achieve a radical increase in the quality and reliability of the services we provide, and we need to improve the speed, of course. We need to look to the highest world standards. These standards are clear and well-known. Of course, best of all is to aim to surpass these standards and provide a level of service that beats all of our competitors.

We need to offer our foreign partners competitive logistics solutions and freight handling procedures that are as convenient as possible. In this respect, I ask you to pay particular attention to ensuring coordination of the railway development programme with the programmes for modernising the country’s ports and the plans to develop transport hubs.

There is, of course, a need for radical modernisation, especially of the rolling stock. New models of Russian-made locomotives and wagons are already coming on to the market. Vladimir Ivanovich [Yakunin] takes me sometimes to the companies building them and shows me what is being done. The results are quite good but, to be frank, the quality and possibilities of this equipment do not always match the world leaders. We are most definitely on the right road, but I think that we need to make greater use of international cooperation in this area. We already have some successful projects such as the joint manufacture of locomotives organised by our company, Transmashholding, and Bombardier.

I think that in this area, as in the car-making industry, we need to encourage foreign producers to establish production facilities in the Russian Federation. We need to do more than just encourage them; we need to put in place conditions that would make it advantageous for them to work here in Russia. We have already achieved results in the car-making industry through these methods, and now leading world car manufacturers are working here. Not so long ago there was still a great deal of debate on this issue, but now there are more than ten companies working here. They include all the main manufacturers – the Japanese, Western Europeans, the Americans – their companies are all working here now. This is what we need to do in the railway sector too.

As you know, the consumers of your services – users of freight and passenger services – demand ever higher standards from the railways. They are right to demand accessible, economically advantageous and safe transport services and to expect a modern and decent level of service. These modern demands should serve as the benchmark for the sector.

Traditionally, the Russian railways have always been distinguished by their strong and highly professional team of employees, and I am entirely confident that you will be able to carry out this ambitious programme for developing our country’s railways.

I would like to conclude by thanking sincerely all of the sector’s workers for their labour which is so important for our economy and our people, and for their responsible and devoted attitude to their work. I recall the difficult years of the mid-1990s, when the gas and energy sector in general and the railways were the national economic backbone that kept us up and enabled us to come through this difficult period in our development and move on to new achievements. Everyone who works in the railways sector deserves a large part of the credit for these successes and I would like to thank you for your work from the bottom of my heart.

Thank you very much for your attention.