President of Russia Vladimir Putin: Good afternoon, Mr Likhachev,
Mr Likhachev, we will, of course, discuss the overall situation in the sector. But I would particularly like to draw attention to and hear your report on the nature conservation projects being implemented with your involvement and, certainly, our major projects linked with the development of the Northern Sea Route.
Director General of Rosatom State Atomic Energy Corporation Alexei Likhachev: Mr President, thank you very much for this opportunity to personally report on the situation in the sector.
Of course, the global atomic community and Rosatom have felt the consequences of the pandemic, and I will discuss this separately. On the whole, I would like to say that we are coping with our tasks. I would like to note that the sector’s safety and security parameters have remained very impressive over the past six months, and we are improving them. This year, our stations are twice as reliable as they were in 2019, their reliability continues to improve, and there has been a decrease in the number of injuries. This year, no industrial accidents or fires have been reported at the sector’s enterprises.
We started the new year in a good mood, and members of our Supervisory Board approved the 2019 balance sheet. You can see the results here. On the whole, key performance indicators have been implemented by 104 percent. We reported maximum record-breaking parameters in virtually all key aspects of our activity. It is particularly important to note that this includes revenue from new products, revenue from implementing projects abroad, and the state corporation’s total revenue.
We exceeded the 1.2 trillion rubles mark last year, and our average growth rates are just under 11 percent. This year, payments contracted, especially in April and May, and we lost about 11 percent of our revenue in five months. However, we compiled plans stipulating compensatory measures, and our current task is to exceed the 2019 levels before the year is out.
Our domestic investment remains stable at around 250 billion rubles. There is also public funding but it is several times smaller than the taxes we pay. They are growing ahead of plans, as you can see, including our payments to the federal and municipal budgets. And they will continue growing.
Vladimir Putin: Do you expect growth this year as well?
Alexei Likhachev: Yes, we will transfer up to 220 billion rubles to various budgets. This is practically three times more than the 70 billion rubles we receive from the federal budget, one third of which we invest in national projects.
The average pay at the corporation is increasing. It will be more than 88,000 rubles this year, an increase of some 6 percent annually.
Our labour productivity is growing a bit faster, by around 6.5 percent annually over a period of the past four years. We are actively participating in the Labour Productivity and Employment Support national project, hoping to set a good example and become a driver on the industrial market.
Vladimir Putin: You forecast even a 7 percent growth?
Alexei Likhachev: Yes.
Vladimir Putin: How will you do this?
Alexei Likhachev: First of all, we will make use of Rosatom’s industrial system, which includes systemic work to improve operation, cut down costs, reduce stock and organise effective production process. We have rallied not only the industry businesses, but also other large Russian companies, enterprises of Rostec, Roscosmos and Russian Railways. We are working together to create operational excellence programmes.
Mr President, our construction programme is moving forward rapidly. We worked on 216 construction projects worth 400 billion rubles in 2019. This year, we will increase the scope of construction by 70 percent and the number of facilities to be completed fourfold; the majority of the latter projects are the facilities that are being built under state defence contracts. Despite the current difficulties, we have not cut back on our construction programme, and we will do our best to complete the construction of the facilities as planned. You can see that the volume of our construction projects will almost double by 2023. This concerns projects both in Russia and abroad.
It is not easy to work during the pandemic, especially abroad. I am grateful to the Government for effective…
Vladimir Putin: I see your international operations revenue is on the rise this year, too.
Alexei Likhachev: It is growing by about 10–15 percent every year in terms of dollars.
Mr President, there is something else to boast about in recent months. We have completed almost all construction and installation projects at the second power unit of the Leningrad Nuclear Power Plant [LNPP-2]. Now, the Rostekhnadzor commission is working on it. We expect to receive our license for the physical launch in July, which will be the official anniversary of the station.
A floating nuclear power plant was put into commercial operation on May 22; it has already generated 53 million kilowatt hours. This is our northernmost floating station.
Vladimir Putin: Is it working well?
Alexei Likhachev: Yes, it is. It can actually produce much more power than the region is consuming, so the reserves are large.
Vladimir Putin: How much more?
Alexei Likhachev: I believe it can produce about 60 percent more. One of the two units is almost idle.
On May 1, we began operating Russia’s largest Adygeya wind power plant with 150 megawatts. We will complete another one in the Stavropol Territory soon. These are powerful modern stations. Importantly, 65–70 percent of the equipment was manufactured domestically. We will be working to increase domestic content to 90–95 percent.
Regarding our international project, the Multi-Purpose Fast Reactor, we submitted the documentation ahead of schedule, the site is ready, the technical plan is ready. I really hope our partners in France, China, and the Czech Republic will find this joint project for future-generation reactors attractive and innovative.
Mr President, you are familiar with the Dima Rogachev Centre. We are building a radiological complex there. We are ahead of schedule and want to open it a year early. This year, we submitted the paperwork ahead of schedule, too, and got the first phase approved. We are working on your instruction very responsibly.
I am ready to comment on our foreign construction projects. We are working on 25 projects in 10 countries, and we have completed projects in 36 countries. As I have already mentioned, we have developed good relations with the Government, we do staff rotations, invite foreign professionals despite the current restrictions. We are not adjusting the construction programme this year, not even for the largest projects. Our largest projects this year are in Turkey and Bangladesh.
Vladimir Putin: Are you proceeding on schedule?
Alexei Likhachev: Yes, absolutely.
Our flagship project is the construction of a nuclear power plant in Belarus. The construction stage is over, and we are now waiting for approval from the Belarusian nuclear regulator Gosatomnadzor. We also need to receive a license and we plan to launch the plant in July.
Mr President, I would like to talk about the Northern Sea Route now. You have issued instructions to increase cargo traffic there to 80 million tonnes by 2024. We are moving towards this goal and have increased the annual traffic more than planned, by 5.5 million tonnes last year.
I wanted to let you know that we are moving towards the year-round use of the Northern Sea Route. In the eastern direction, this year we worked together with NOVATEK and Sovcomflot to convoy two LNG tankers, Vladimir Voronin and Christophe de Margerie, very early in the season, in May, when the ice is still very thick, and we did this at a commercial speed of nearly 12 knots an hour. I would like to thank NOVATEK and Sovcomflot once again for organising this effort.
Vladimir Putin: Which ships convoyed the tankers?
Alexei Likhachev: Two of our icebreakers did it. Yamal helped Christophe de Margerie, while Vladimir Voronin followed the 50 Let Pobedy icebreaker. They are our old-timers, but we have extended their warranty life in full compliance with safety requirements.
This year we will receive the first universal nuclear icebreaker Arktika. Its performance tests will begin in the last ten days of June, so that the icebreaker is handed over to Atomflot in September or October, at the latest.
Vladimir Putin: And it will start working up north?
Alexei Likhachev: Yes, this is where it will be working.
We have launched the construction of the fourth icebreaker, as per your instructions to build the fourth and fifth icebreakers of this project. I would like to add that 55 percent of the investment comes from the corporation and 45 percent from the federal budget.
Vladimir Putin: Do you think you will be able to do 30 million tonnes of cargo this year?
Alexei Likhachev: I think we will do more than that.
Vladimir Putin: This year?
Alexei Likhachev: Yes, this year.
Vladimir Putin: This means that you are moving ahead of schedule. You planned to carry 30 million tonnes in 2021.
Alexei Likhachev: Eighty million tonnes is a very ambitious goal.We need to have a little something to be able to fall back on just in case. We should not move exactly as planned; we should have a reserve. We are working close together with our mining companies, namely with Rosneft, NOVATEK and Gazprom. We see how hard our partners are working and how much they are investing in the development of their northern projects. And we try to keep with them.
Vladimir Putin: Very good.
Alexei Likhachev: Under the Ecology Project, our priority task is to convert four chemical weapons elimination plants into powerful ecology and technology parks by 2023 and to launch three new plants in Russia. At the same time, we are establishing an integrated system for recycling waste in the first and second industrial-safety categories. This waste includes the most harmful substances that can irreparably damage nature. We have the technology to recycle them to the greatest possible extent without burying them. But we need a system for monitoring and recording their circulation. We have reached complete consensus with the Government, and we are working on schedule.
We are also working on the large accumulated stockpiles. We have your instructions and are implementing them in Chelyabinsk and at the Krasny Bor landfill.
Vladimir Putin: Roughly, up to ten million tonnes?
Alexei Likhachev: Yes, something like ten million tonnes have accumulated.
We are using digital technology, and I would like to note briefly that in 2019, we, along with Rostelecom, launched the largest data processing centre in Europe. We are thinking about setting up such centres on the territory of nuclear power plants.
Vladimir Putin: Power.
Alexei Likhachev: Power and cyber-defence in full volume.
Vladimir Putin: But they are now trying to get as close to your facilities as possible, and you want them inside the perimeter?
Alexei Likhachev: Practically inside the perimeter, both in Russia and abroad. This could accommodate a large cloud storage facility, all the resources that the Government is now creating in the context of archival data and in the context of handling personal data. What we need is maximum protection.
Vladimir Putin: Yes, but your nuclear power plants have special operating regime. New private individuals and legal entities will appear here; you have to be very careful, and you need to ensure safety and security.
Alexei Likhachev: Of course, everything will be all right.
Vladimir Putin: You should ensure security access. Basically, you are right, and you should have them close. This will make their work much easier and will reduce their power related costs. We discussed this at one of our meetings.
Alexei Likhachev: We would see a 25–30 percent reduction, if they start receiving electricity from our power stations directly…
Vladimir Putin: Yes, we discussed this at one of our meetings.
Alexei Likhachev: We are ready for this option.
Vladimir Putin: Excellent.
Alexei Likhachev: And another important aspect. All our technologies and units are worthless without people. Since the first days of the state corporation, we have paid a lot of attention to our people, and we have some good results. Last year, we were rated the best national employers by HeadHunter recruitment agency, and our young specialists placed first, according to a Universal survey. We have re-established the prestige and authority of engineering careers. Young people want to work for us. We are outpacing many companies, including non-commodity companies, in this respect.
We have placed first in the World Skills Hi-Tech professions competition for five consecutive years. We won three gold medals for our national team at the 2019 world championships.
In conclusion, I would like to thank you, Mr President. In April, you signed an executive order on creating a comprehensive programme for the development of equipment, technologies and research projects in the area of nuclear energy. We have drafted this comprehensive programme, and we have coordinated it with the related agencies. The Academy of Sciences and the Ministry of Science and Higher Education, as well as the Kurchatov Institute, are supporting it. We believe that this generates tremendous synergy for industry and science. I would like to report on specific aspects separately.
Vladimir Putin: Please.