Excerpts from Transcript of Meeting with the Government Cabinet 2007-03-12 20:29:16 The Kremlin, Moscow Economic Development and Trade Minister German Gref on Russia’s participation in the MIPIM-2007 international exhibition of commercial real estate investment projects German Gref: We are organising a comprehensive presentation of investment opportunities in the Russian Federation at the MIPIM direct investment property fair for the second year in a row. More than 40 Russian regions will be represented starting tomorrow at the exhibition. The Russian delegation includes around 30 regional governors. We will present Russia’s biggest projects, including the Investment Fund, the big projects being carried out by the natural monopolies Russian Railways and RAO Unified Energy Systems, and the projects developed by the regions themselves. The exhibition’s partner this year is the Russian region of Tatarstan. The project to reconstruct the New Holland district in St Petersburg was nominated as one of the best investment projects this year and it went on to win the prize for best project, which will be awarded this year for the architectural project itself and for the development concept chosen. Our participation in the exhibition last year resulted in several dozen very interesting projects worth a total of more than 2 billion euros. We hope that this year’s results will be just as good for the country and for a whole number of our regions. Industry and Energy Minister Viktor Khristenko on the Burgas-Alexandropoulis oil pipeline construction project Viktor Khristenko: We have practically completed work on the intergovernmental agreement between the governments of Russia, Bulgaria, and Greece, on commencing this project. I hope that the agreement will be ready for signing by the time of your visit. It opens the way to carrying out an infrastructure project of great importance that will help to resolve potential future energy supply issues in the Black Sea basin area. As the project now stands, companies from the three countries involved will be taking part. The Russian participant will hold a majority stake of 51 percent. The Russian participant has already been formed: it is a unified company, a pipeline consortium formed by Transneft, Rosneft and Gazpromneft. The Bulgarian and Greek participants will accordingly have a stake of 24.5 percent. The draft agreement stipulates that Transneft will act as the sole operator of the entire project. This is an intergovernmental agreement and needs to be ratified in all three countries. From the moment it is signed, the conditions will be in place for launching the project. We hope that, in accordance with this agreement, the international design and development company carrying out the project will be established as a legal entity during the first half of this year. We hope that this company will soon complete the feasibility study and we will then be able to sign agreements directly with Bulgaria and Greece on oil transit between this company and these two countries. Overall, the project is estimated to cost around 1 billion euros. Given the experience the Russian companies and Russian participants have in designing and building these kinds of systems, we are hopeful that we will be able to carry out the project within the shortest possible deadline. First Deputy Prime Minister Sergei Ivanov on the programme for commercial use of the GLONASS satellite navigation system Sergei Ivanov: In accordance with your instruction on the need to develop commercial use of GLONASS on as broad a base as possible, I held a meeting today with representatives of all of the ministries and agencies with a stake in the project, above all, the Russian Space Agency, the Information and Communications Ministry, the Russian Cartography Agency and the Russian Cadastre Agency, and with representatives of the big Russian IT companies currently working on joint proposals for commercial operation of GLONASS. We settled on a clear distinction between what the state should be responsible for, namely, financing the orbital group’s maintenance, in particular, and the support systems for the GLONASS ground signal, and what role private business could play. Private business is ready to work on getting the results of the system, the navigational maps and information obtained through GLONASS, directly to private end users. The GLONASS commercial operation management group will submit its final proposals at the end of this month and I will then present them to you. Regarding state users of the system — aside from all of the countries’ security services — they include the Transport Ministry, the cadastre, the Emergency Situations Ministry and all the different rescue services, the alpine rescue services. The meeting today unanimously approved a proposal to start work on a draft presidential decree obligating state users to install GLONASS/GPS reception equipment, the one we are manufacturing, so as to have the entire system operating safely and economically transparently from the moment it begins functioning, that is, from the start of 2008, when the orbital group will enable the signal to cover the entire Russian Federation. President Vladimir Putin: Good. You know how attentively I follow the GLONASS system’s development. I hope that the Government, and yourself, will also give it all necessary attention. I think we have the right to expect a dose of healthy economic patriotism from the users, especially from state agencies, of course. But I assume that in this sector of the economy we will work on a market basis, and consumers will be able to choose the best quality service. If we want them to choose GLONASS, we must ensure that it functions flawlessly, better than GPS. It must provides cheaper and higher quality service.