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President of Russia Dmitry Medvedev: Hello Oleg Aleksandrovich!

I hope you aren't finding the jet lag too difficult?

Plenipotentiary Presidential Envoy To the Far East Federal District Oleg Safonov: I've already adjusted, thank you.

Dmitry Medvedev: Do you remember that we recently had a meeting on the whole Far East region, on the region's development potential and its problems.

In light of this meeting I would like to discuss how work is going and how certain orders are being carried out. First of all as relates to transport and infrastructure development, which is the most difficult, the most pressing theme.

Second are the major investment projects without which no development will occur and which represent the region's main business potential.

And third, something that concerns our citizens very much is the state programme to 

construct housing in the different regions of the Far East.

What is being done? What are the problems today?

Oleg Safonov: If I may, I will begin with the housing problem. There remains some serious problems with the introduction of new housing in the Primorsky Region. There are open questions with regards to Sakhalin (a lot of dilapidated housing) and the Kamchatka region.

(Then Oleg Safonov went on to say that the housing sector grew by 72 per cent in 2007 and 352 thousand new square metres of housing became operational. However, he said that without federal grants this problem will not be resolved.)

Dmitry Medvedev: You are dealing with this. It is good that there is growth but the figure you just cited is roughly half of the average growth in housing construction in the Central Federal District.

Of course there are a great many problems in the Far East but you nevertheless need to accelerate work in this area. You need to prepare proposals for co-financing. Perhaps we need to look for any separate arrangements for the Far East. I worked on precisely this issue with regards to the national projects. Understandably, these projects may not be of the same magnitude, but they must nevertheless move forward.

Oleg Safonov: Two words on transport. It is heartening to see that we already have national aircraft carriers this year. I am referring to Aeroflot.

We believe that this will in large part allow us to solve the problem of tariffs on transportation.

Dmitry Medvedev: You need to keep your eye on two issues, on what we talked about together with the Minister of Transport. I am referring to, on the one hand, the development of competition in the transport sector in the Far East. So that there are more carriers and, naturally, normal, certified, full-value ones, and that also operate at low prices.

And secondly, you need to oversee certain special programmes for the Far East and there are also a number of ideas that are now being reviewed by the Ministry of Transport. They must be monitored.

Oleg Safonov: We are constantly in contact with the Minister of Transport and monitor these issues.

Dmitry Medvedev: And one more very important topic on which we need to work together with our colleagues the regional governors is not federal transport but rather domestic, local transport.

The situation with regards to transport at the federal level is developing and in general is moving in a positive direction. This is because in some places the cost has been reduced and it is clear who is doing the transport. However, local transport links within regions have simply collapsed. You know the conditions of our airports. In fact, often the planes simply don't fly and yet this is the only way to get to the Far East.

It is clear that this problem is not an easy one. Together with the regions we must prepare a programme for the development of local transport within one or more regions, a programme that, perhaps, combines airports and carriers which do local flights.

Oleg Safonov: Speaking about the development of infrastructure projects, I would like to report that the construction of the road between Vladivostok and Moscow might be completed by 2009. Initially, we talked about 2011.

It is heartening that Gazprom is working actively on the Kamchatka shelf. And Rosneft is starting to drill. And there is a promising position for drilling on the shelf of the Lesser Kuril Ridge, near the island of Iturup.

A significant gasification project Sakha (Yakutia) — Far East is underway and you know about the Eastern Siberia – Pacific Ocean pipeline project and the plan to build an oil terminal.

There remains a number of problematic issues for Asia-Pacific Economic Cooperation (APEC) summit. In general, we are working closely with the government cabinet and with all ministries involved in this field. I think that we will be able to directly handle the tasks you set.