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Before the meeting began, the President visited an exhibition on achievements and modern technological solutions in the road sector.

Earlier in the day, Mr Putin took part in opening the newly completed Bugrinsky Bridge across the Ob River.

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Speech at meeting of State Council Presidium for improving Russia’s road network with a view to comprehensive development of the country’s territory

President of Russia Vladimir Putin: Good afternoon, colleagues.

Today, as we agreed at the September meeting of the State Council, we will discuss construction and development of the road network. This is a never-ending and always topical subject everywhere, and in Russia all the more so.

We all know what a pressing issue this is, and how vitally important it is for our country’s life. Economic growth, business competitiveness, comprehensive regional development and successful achievement of our social goals are all directly dependent on our ability to resolve this issue. 

Road development has received a lot of attention at federal, regional and municipal level over these last years. The State Council alone has met three times already on this matter. We have touched on this issue when examining other matters too – land use, forestry, the housing and utilities sector, healthcare, education and business activity. All of this underscores the road network’s importance and the global impact it has on other sectors’ development.

A great deal has already been accomplished in the road sector. We have adopted the law on roads and road-sector activity and have put in place the legal base for raising non-budgetary investment in the road sector. We have established federal, regional and municipal road funds that over a period of not yet four full years have enabled us to double the sector’s financial resources and thus increase the amount of road construction and repair at all levels.

We have built highly complex road infrastructure (let me cite just a few examples) for the Sochi Olympic Games, the APEC summit in Vladivostok, the World Universiade in Kazan and more. The programme to complete construction of 16 bridges spanning Russia’s largest rivers, designed according to individual rather than standard projects, is now finished. Construction of these bridges began back in the Soviet period and was later suspended and all but abandoned. We returned to these projects and completed them all. We plan to implement another highly complex bridge-building project by the end of 2018 – the bridge across the Kerch Strait. 

We thus do have some clear results and have achieved a positive dynamic, but we all know very well at the same time that the road network is still a very problematic and difficult issue. Our task is transform it into an advanced and innovative breakthrough sector, but we are still only on the way to reaching this goal. There is still a lot of work to do to turn this sector into one of the powerful drivers for economic development throughout the country.

Federal, regional, municipal and rural roads must all be built following the same logic, namely, that the transport infrastructure must be rational and convenient to use and should form a network linking together our entire vast territory, our towns and villages.

Let me say again that we must expand and develop a network of quality roads. This was why in the 2012 Presidential Address to the Federal Assembly I set the task of doubling the amount of road construction and repair over the coming decade. I ask the Government and the regional heads to concentrate on this goal – during today’s discussion and in their practical everyday work.

Let me now say a few words about the areas that I think require our particular attention.

First is the price/quality relation in road construction. This has always been one of our most acute problems and the subject of a lot of public debate. It remains a serious issue today and we still need to address it. 

The authorities are putting considerable investment into road construction and repair, but this investment has not always been very efficient in producing returns. Even recently built roads often do not measure up to the required standards, wear out fast, cannot withstand today’s traffic burden and so on.

We need to take measures to make the estimates and project documentation for road works more accurate and exact. Many of the methods used are clearly outdated and the result is that we still have these ‘black holes’ into which the allocated funds disappear. We repair the same roads over and over, year after year, instead of gradually expanding the amount of high-quality road construction. The working group has a number of proposals on this subject and we will examine them today. 

Let me note the very important role played by those who place the orders, the designers, and the state expertise officials, who are responsible for the roads’ quality, reliability and service life. I think that the Chief State Expertise Directorate should be an active channel for encouraging technological progress in the road sector. Attempts to use innovative solutions run up against bureaucratic hurdles and this does absolutely nothing to encourage designers and subcontractors to use new, durable and economically more viable materials and construction technology.

In particular, it is taking a long time to resolve one of the big current problems in road construction – using longer lasting road surfaces. In this area, the road sector continues to base its work on standards dating from 30 years ago. But transport volumes were completely different then, not to mention materials and technology that the whole world is using now but that are still not used or only little used here.

I ask the relevant agencies to analyse these issues and draft coordinated decisions on promoting and introducing innovation in the road sector.

I visited the exhibition before and I see that many of you here know the things I just spoke of. It’s rather strange really, the materials and technology exist, but various bureaucratic hurdles still prevent them from actually being used. It’s quite astounding really, this kind of bureaucratic rigidity.

Maintaining roads is tremendously important too. Large vehicles cause a lot of damage and it is therefore clear that we need to regulate their use of ordinary public roads. This is a difficult matter to resolve, but we have no choice but to do so. We have already discussed this and I gave the relevant instructions about clarifying the powers of the federal agencies that oversee transport of heavy and large cargoes. I want to hear from you today about what has been done in this area. We will also discuss the proposals the State Council’s working group has drafted on ensuring road maintenance.

Another big problem is the unjustified rise of costs for the so-called inert road construction materials, that is, gravel, sand and so on. It happens that the construction or repair of a piece of road infrastructure has not even been officially announced yet and all the neighbouring land that could be used for quarrying is already bought up and the entrepreneurs then dictate monopolist high prices during the actual construction work. We need to check in each particular case who entrepreneurs behaving in this way are linked with. The Government should pay attention to this problem and develop the needed mechanisms.

For your reference, I can tell you that the price of gravel has gone up by 46 percent over the last five years, and the price of sand by 79.7 percent. Do we really have this kind of inflation? What is the reason for this situation? The price of gravel transported to a neighbouring region goes up by 20–30 percent, and the price of sand by up to 90 percent. Gravel accounts for 20–40 percent of overall construction materials costs. We cannot help but ask about the role corruption is playing here.

I would also like to hear the working group’s opinion on issues such as allocating land for road construction and how justified are the prices being asked for it. We need to take measures to prevent cases of profiteering or delay in transfers of land for road construction.

Developing the high-speed road network is another important area. We have made some progress here thanks to the use of public-private partnerships and have already brought the first sections of these new roads into operation. I think the Government should look at putting together a special programme for developing high-speed motorways and examine support mechanisms for projects of this kind at the regional and municipal levels. 

As you know, we began construction of the Central Ring Road using funds borrowed from the National Welfare Fund. We plan to allocate 150 billion rubles [$3.7 billion] from the Fund for this project. The flexible lending and repayment conditions have made it possible to dramatically lower the share of direct budget funding from 70 percent to 25 percent. We have set a precedent that opens up big opportunities for widening the use of public-private partnerships in the road sector.

At the same time, we must put more energy and effort into developing competition in this sector and get business more involved, including small and medium businesses. The Government must make a comprehensive analysis of the conditions for selecting subcontractors and concluding contracts and identify best practice in holding tenders and recommend them to the regions. I ask the regional heads to also get actively involved in this work.

Road safety is another issue that requires our particular attention. We still have a very high road toll. There has been some progress made, but we still have around 27,000 people killed every year, and often people die because help arrives too late.

The ERA-GLONASS system has been designed to send immediate signals about road accidents. The system is set for its industrial launch in January 2015. This is not simply a plan but is something that will definitely go ahead. We have worked on this system for three years and spent 3.5 billion-4 billion rubles on it, but the money has not been earmarked yet for the system’s operation and maintenance in 2015–2016. I address my colleagues from the Government: I am aware of the budget constraints and took part right from the start in putting together the budget for next year and the two subsequent years. This work was certainly not easy, but when we have spent billions on a project, we cannot just abandon it halfway. This is not good statecraft. I therefore ask you to pay attention to this matter and work on it with your colleagues from the economic side of the Government.

This system requires stable and reliable mobile telecommunications to work effectively. We recently got the report that the mobile telecommunications system is up and running along the full length of the Chita-Khabarovsk motorway, and in other regions this system has been working reliably for many years now. We must continue this work and ensure that all of our country’s roads have reliable mobile telecommunications.

Colleagues, I have just outlined some of the issues that we need to resolve in the short and medium term. You have your own views on road construction’s future, your experience in the sector and considered proposals. Let’s discuss all of these matters now and try to reach the balanced recommendations that everyone needs and that will then be incorporated in the subsequent instructions.

Let’s begin work.

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During our discussion, we determined that we still need to do a great deal to optimise this work. It is entirely clear that a great deal can be done, even considering the financial opportunities we have available to us. We simply need to spend our funds more efficiently. This has to do with methodology as well as using new materials, the regulatory framework and management. I am not going to repeat what I said in the beginning – namely, the importance of road construction in Russia for economic development, for the social sector, for us to have modern modes of transport, for improving our environment.

This is a very big list of issues that are vitally important for nearly every citizen of the Russian Federation and for the nation overall, for its economy. We have addressed this issue many times and will certainly continue to work on it. You know the saying: “what the eyes fear, the hands do.” This is exactly that case. We need to get moving on resolving all the problems that we touched on. But these are not even all the issues we face; there are many more of them.

We will certainly take into account everything you said today – I want to thank you for such a constructive and highly professional approach to looking into this very important and major topic. We will compile everything and issue instructions accordingly. Naturally, we will monitor their execution appropriately, and we will gather again more than once to discuss this matter.

Thank you very much.