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President Vladimir Putin: Good day, dear colleagues!

Today we are going to discuss a wide range of issues related to the modernisation of Russia’s transport infrastructure.

Everyone knows that our country with its vast territory needs a modern and advanced transportation infrastructure. Without any exaggeration this is truly our path to the future. It has strategic importance for economic growth and the quality of economic transition to innovative development. I am not only talking about the creation of new opportunities for regional and international cooperation. The desirability of increasing labour mobility and communication opportunities for new resources is self-evident.

Recently, demands for transport services have continued to grow. However, the existing infrastructure is unable to meet the needs of the economy. A significant part of the infrastructure breaks down a lot, and has become technically unsuitable and obsolete. Let me give you a few examples: in the last 15 years, the number of airports in the country has been reduced fourfold. A large part of the industries devoted to rolling stock, airplanes, and ships is working at full capacity. Depreciation of fixed assets in river ports has gone from 50 to 70 percent. Utilisation levels of the airport network are nearing the critical 80 per cent mark.

The government has repeatedly issued directives to help develop transport infrastructure. Some things in this area have been accomplished, and there have been some changes. Russia has adopted and put into action a strategic plan for transport until 2020. The outline of a strategy for developing rail transport by 2030 has been approved. Just recently, I discussed this subject with Vladimir Ivanovich Yakunin, including the events related to the celebrations on the occasion of the establishment and development of the railway industry as a whole. These plans provide for the construction of new high-speed railway, the modernization of airports and roads, and the construction of new roads.

Changes in the Budget Code should improve the situation. They permit the conclusion of state contracts for the duration of the construction of major facilities. Incidentally, at our meeting today I was able to talk with the builders who are working on new bridges and highways in the region. They talked about the flaws in the system of bidding on construction jobs. I want to draw this to the attention of Igor Evgenyevich Levitina [the Minister of Transport]. Breaking this process up into separate parts, having separate tenders was probably a good idea in the beginning to ensure against corruption in this area, but now it creates difficulties for companies interested in coming up with a workable strategy for determining medium-term projects. I want to draw your attention to this.

For improving the development of transport infrastructure planned measures alone are not enough. Today we must know exactly what sort of transportation and what routes are practicable and convenient for a particular territory, primarily, of course, for residents of remote areas. For example, in the Far North, in the absence of rail service and major road transport, goods and passengers travel by river in the summer. This costs ten times less using planes, the only alternative.

At the same time, each region needs to find the optimal combination between intra- and inter-regional transport infrastructure. And so as to not be 'racing with one another', it would be good to determine both current and future transport requirements.

Next. It is irrational and unacceptable that approximately two thirds of domestic air travel goes through Moscow, and this is largely due to the stagnation of local air transport markets. We understand that, first of all, this is expensive for citizens and for business and, in addition, this overloads a metropolis that is already overburdened.

Without forming a network of public airports that includes major international hubs this situation will not change. We took the decision to create such a network last December. However, we have not witnessed a significant changes in this regard. I suggest that we talk about this today. And if my data are inaccurate, then please correct me.

Moreover, it is important that we integrate the internal transport network with international ones. I already talked about this earlier but I would like to stress this point again. This will allow us to increase our export potential, offer our partners newer, shorter, and more lucrative ways of transporting goods and passengers. And the region in which we are today, the Krasnoyarsk region, is one of the best examples of this. Aleksandr Khloponin [Governor of the Krasnoyarsk Region] told me that in some regions these lines have already been built a long time ago. Moreover, even infrastructure facilities have been built in light of the fact that we are also expected to do our part. We need to use this very obvious competitive advantage.

And yet another important issue. In recent years we have significantly increased funding from the federal and local budgets for upgrading transport infrastructure. However, these investments must be complemented by increases in private investment. This can be done by introducing modern forms of the public-private partnership. In some regions it is being done. Unfortunately, it is being done very slowly. In St Petersburg a law was adopted which contains a number of promising options and models for partnership as well as concessions. This is the kind of positive experience we need to study and copy.

I wish to draw the attention of our colleagues in the government cabinet and in the Ministry of Economic Development to this issue. I know how long it takes for regions to agree on these issues. Reaching agreements takes months, if not years. People walk back and forth between offices. Someone forgot to put a comma in one place, and the whole issue gets discussed again.

I will deal separately with the development of the transport network in the major centres and their suburbs. In rush hour they are literally suffocating because of insufficient land transport. The conclusion here is obvious: we need to work out integrated development programs for suburban and urban transport. And special emphasis should be placed on developing high-speed transport networks, express trams and other modern modes of transport. Here, obviously, you need to look for new sources of revenue and extensive extra-budgetary funds. Public-private partnership arrangements should be really attractive and beneficial not only for the state but also for those who are investing their private resources. Today I have touched only on the main topics which need to be discussed. I hope that in the course of today's discussion we can go much further.