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President of Russia Dmitry Medvedev: Good afternoon, colleagues. Let’s begin our work.

I recall that exactly a year ago, we met in Sochi, here at Krasnaya Polyana, and discussed priorities in planning for the beginning of our work in making key preparations for the 2014 Olympics. We defined our priorities as creating a modern sports infrastructure, modernising our hotel and transport networks (including the construction of railroads and highways), and constructing utilities and gas pipelines. Clearly, our first task today is to analyse what has been done in this period. No doubt, all of us are working on this. I was here this summer and I had a chance to look at a few things just now, but we nevertheless need to see the whole picture: where we are today, what needs to be done in the more distant future, and what needs to be done soon.

I am certain that we have all the necessary capacities for holding the Olympics at the highest possible level (that was our goal when we applied to hold them here), and in spite of the economic downfall, we can implement all of the projects we planned. We are working on all of this now. Let me remind you that in order to use our budgetary funds and private resources more efficiently and in order to improve the coordination of our efforts, a new draft of the Programme for Building Olympic Facilities and Developing the City of Sochi as a Mountain Resort was passed last July. In addition, we agreed from the very beginning that although we will be hosting the Olympics, a major, important event, and we fought hard for this privilege, ultimately, our goal is to essentially turn Sochi into a new city, with comfortable living standards for all its citizens and the best possible setting for vacationing. I think that this is the main purpose of the work that we are doing together.

It has been reported to me that overall, the work is progressing successfully. As far as I understand, 220 out of the 235 projects are being implemented in full accordance with the construction schedule that was set last year. We are running somewhat behind schedule on 15 of the projects, although as far as I understand, these lags are not critical, and we will be able to properly catch up on them by further organising our work.

By September 2012, in accordance with the plan, we will complete the construction of entire transportation and engineering infrastructure. By July 2013, the construction of all sports facilities should be completed. Some of them should even begin to undergo pre-Olympic testing and host sports competitions by the end of 2012.

Within this context, it is imperative to resolve the following challenges, and I would like to outline them here today.

First of all, we must continue working while strictly observing the construction schedule for Olympic facilities and work with the assumption that any problems that come up today must be taken care of. The key cause for our problems is non-compliance with deadlines for preparing documentation regarding the planning and allocation of land. These are our greatest complications.

I want to point out to everyone present here, as well as federal and local authorities and [the State Corporation for the Construction of Olympic Facilities and the Development of the City of Sochi as an Alpine Sports and Recreation Resort] Olympstroy, that it is imperative for us to accelerate the process of providing Sochi citizens with land for housing construction to substitute for the property appropriated for government needs, as well as to accelerate building housing facilities. This work must be conducted in accordance with existing legislation, including the key law that was amended accordingly, while ensuring that the rights and interests of property owners are not violated. Thus, landowners must be provided with new land and compensation based on the law, as well as on current market prices.

I must emphasise again that there should be no delays in this process. I therefore suggest that the parties in charge – i.e., Olympstroy and the Krasnodar regional administration – monitor this situation. Meanwhile, the Cabinet should generally supervise the situation and ensure that work is being carried out.

Second, in designing the sites, the most modern approaches and engineering solutions should be used. This applies to architectural projects as well as urban planning. Up to now, many of the construction ideas we have seen unfortunately resembled typical projects from the 1970s. The plans to develop the region do not take into account the rapidly increasing burden on the transport corridors in Sochi and nearby areas.

As a result, we continue to see traffic jams on Sochi’s roads that last for hours. Everyone who lives here knows this all too well from personal experience.

Third, our major projects must be economically attractive to private investors. This is highly important, and is particularly true in transportation, small-scale power generation, communication, and building waste treatment facilities as well as hotels. In my Presidential Address [to the Federal Assembly], I noted that the main problem in the Caucasus republics is that of unemployment. Our goal is to do our utmost to use the labour resources available in this region. This includes employing individuals from the Caucasus republics, and opportunities for investment. I would like a separate report in regard to this issue to be submitted for my consideration. I hereby request Deputy Prime Minister Dmitry Kozak and Presidential Plenipotentiary Envoy Vladimir Ustinov to monitor these processes, particularly in regard to this matter.

Fourth, in building these facilities, we must pay very close attention to the environment. We must do this not because the International Olympic Committee has asked us to, but because we need to do it for ourselves. We need to constantly monitor the environment. And none of the technologies we are using should cause damage to the environment. The overall risks of this kind of damage must be minimised. This is a very important task for the Cabinet, for regional authorities, and for municipalities – everyone participating in this process. Naturally, it is also an important challenge for Olympstroy and private companies that are participating in this construction. We need to monitor technological security, take a very serious attitude toward insuring the facilities being built and the contractors’ responsibility.

Incidentally, the events that took place at the seaport showed the importance of using such instruments for compensating losses. Overall, in planning the facilities and tackling the challenges that stand before us today, we must always think about how the projects can be most convenient for the local residents who will be using them, down to the smallest details. Take, for example, the ski lifts that are slow or simply stop midway. Here, people pay good money, and yet they may find themselves spending an entire hour hanging mid-air in a ski lift. This is absolutely unacceptable now, and in the future, when there will be an influx of people, these sorts of occurrences should just about be reduced to zero. How? This is an area where we cannot be cheap. If we are building a ski lift, we must also have a back-up ski lift, as well as roads. Thus, all of these details are the direct responsibility of Olympstroy, the Commission and, of course, everyone present here now.

In conclusion, I would like to once again note that thoroughly preparing for the 2014 Olympics will provide us with a unique opportunity to resolve several problems at once. I already indicated the first problem – simply developing Sochi as a new city and creating a resort where millions of Russian and foreign citizens will come to spend their vacations. This will involve the creation of new jobs and improved living standards.

Second, we must naturally create a world-class sports infrastructure in order to give a strong push to the development of winter sports in our nation, as well as programmes for improving our citizens’ health, a matter we have been addressing in various formats. Thus, Olympic facilities construction should be closely linked with the recently-passed national Programme for Developing Physical Education and Sports.

Naturally, all of the facilities we are constructing will later be used by professionals and average sports-lovers, people who simply engage in sports activities. This, too, is probably one of the most important challenges we are currently facing.