Meeting of State Council Presidium 2021-10-19 16:25:00 Novo-Ogaryovo, Moscow Region Vladimir Putin chaired a videoconference meeting of the State Council Presidium on Russia’s transport strategy until 2030, and forecast until 2035. The strategy was prepared in accordance with Russia’s national development goals and objectives, to ensure maximum consideration of the economic interests and expectations of all transport services market players, primarily users – citizens of the Russian Federation living in cities and villages, remote and hard-to-reach regions. * * * President of Russia Vladimir Putin: Colleagues, good afternoon. At today’s meeting of the State Council Presidium, I propose discussing the draft transport strategy of Russia planned for the period to 2030 and including a forecast for a longer period, the more distant horizon of 2035. This document does not just establish long-term benchmarks; importantly, it is also meant as a framework for the government’s work, for the Russian regions, the key areas of business, as well as construction, engineering and logistics companies, and transport engineering enterprises. The future contours of the national transport system must be determined while taking into account new technological challenges, our economic and social objectives, development plans for the regions and the entire country, and the creation of competitive transit corridors. We certainly need to be mindful of the current global trends concerning transport, which is becoming more environmentally friendly and efficient worldwide, both in terms of fuel consumption and in other parameters. We will talk about this today. I would like to note that specialists from ministries and state agencies were not the only ones who helped draft the Strategy. Much work has been done by the State Council commissions and relevant State Duma committees. I know that yesterday, the State Council hosted substantive discussions of the Strategy and mechanisms for its implementation. Working groups, involving regional leaders, business leaders, and experts, met at the Russian University of Transport. The university has joined us today, and I would like to take this opportunity to wish all the best to its staff, leaders, and students – this year, the Russian University of Transport, the legendary MIIT, marks its 125th anniversary. It is gratifying that this university, founded in the Russian Empire, with its rich educational and awareness-raising traditions, is also active in drafting the country's strategic plans, and provides an academic research base for the development of domestic transport. I wish the university staff success and all the best. Moving on to the agenda of today’s meeting, there are several matters of principle I wanted to highlight. As we agreed with our colleagues, the updated transport strategy must focus on what people need now, and seek to improve the quality of life for our citizens, as well as offer more opportunities for businesses, including SMEs. What this means is that each Russian citizen, no matter where he or she lives, must benefit from transport services that are reliable and safe. Let me remind you that our country’s Constitution sets forth this requirement. Of course, this means that passenger transport and cargo shipments must be carried out dead on time, leaving and arriving at the right time and day. Building on the strategy’s provisions, the Russian regions will draft, with support from the federal Government, their own development plans for the transport sector, factoring in the required financial, organisational and other resources. It has to be noted that we have a big country, and regions can vary by size, population, distance between their cities and other communities like villages or townships, as well as in terms of their economic and budget capabilities. Accordingly, there is a big difference in the development of their transport infrastructure as well, but we need to make sure that we achieve higher standards across the entire country. This means that we need not only to build roads, stations, ports and docks across the country, but also to provide for proper maintenance of the existing infrastructure and ensure quality and timely repairs so that regional and municipal infrastructure meets the existing norms. For this reason, it is essential that we find the best way to balance spending on new construction and infrastructure maintenance so that we do not have a situation we sometimes find ourselves in where new construction is launched before completing what has been already started, losing money on unfinished construction projects. Yesterday you had a lively discussion on this matter. I am asking you to share the results of this debate today. I would like to draw your attention to the following: transport in Russia and the rest of the world is becoming “greener” or more eco-friendly. People are starting to make broad use of electricity, hydrogen and other low-carbon energy sources and I would also add gas to them, instead of petroleum or diesel fuel. This applies not only to public transport but also to commercial freight shipments and the use of private cars. As you know, there is an excise duty in the price of traditional fuel. It is the main source of income of the road funds that pay for the construction and repair of roads. In the past decade, the total length of road surfaces in Russia has increased by 400,000 km with the help of this resource. Federal roads were put in order – the share of repaired roads increased from 39 to 85 percent. It is important to achieve such tangible positive change as regards regional and municipal roads as well. I am confident the regions of the Russian Federation will confirm that much still has to be done in this respect. Obviously, a shift in demand toward cleaner fuel may affect the income of the road funds. Yes, this is not very tangible so far but there is a trend towards this and we must bear it in mind. I would like to ask the Government to report on what decisions it is planning to make in this context. Furthermore, to ensure the dynamic advance of the national economy as a whole, we must develop comprehensively all types of transport: air, water, rail and motor. It is necessary to make them meet the requirements of the people in the best possible way. At this point, I would like to say a few words about an issue that is particularly important for remote, difficult-to-access territories. We have often spoken recently about the development of general aviation. We discussed this issue at a meeting on the socio-economic development of the Far East in September. Once again, I would like to emphasise the need to expand the network of intra-regional air routes, to modernise small airports and update the aircraft fleet on these flights. In general, flights on small aircraft should become more affordable to passengers. I suggest that today we have a detailed discussion of plans for systematic, long-term work in this area that directly affects the interests of people in many Russian regions. And one more point. One of the key goals of the strategy is to develop public transport, municipal and suburban commuting. This is important not only for large metropolitan cities but also for small residential areas that sometimes do not have enough convenient routes to the regional centre and where buses, carriages and commuter trains are quite worn out. This year, we launched an innovative lending tool to replace the public transit fleet in the regions with new vehicles, with pilot projects now being drafted in 12 constituent entities of the Federation. Importantly, these initiatives should be appealing to private investors. However, I would like to point out that these projects will not pay back in all regions, even in the long term. In this regard, the Government needs to come up with special approaches to support investment in public transit, including direct subsidies for repaying interest on loans, so that we do not end up the way we did on some issues directly related to housing and utilities, I mean water supply and sewage. Some governors complained that when these areas of responsibility were passed over to private companies, the latter, unfortunately, often failed to fulfill their obligations, and the dedicated funds were used towards other projects, not sewers or life support systems in the form of water supply or sewage systems, or were even wired abroad. We had cases like that as well. So please use extra caution when applying the same schemes to municipal transport. Colleagues, the draft transport strategy will include the outcomes of today's discussion and the regions’ opinions and will be submitted for consideration by the Government. I want the Cabinet of Ministers to review and approve this document during one of its upcoming meetings. Importantly, actual work should begin immediately, both at the regional level and at the level of federal ministries and departments once the strategy is adopted. I want the Government, no later than the first quarter of 2022, to draft a detailed plan for implementing the transport strategy and to do so in direct dialogue with heads of the regions and leading companies from the industry. It is also necessary, in close contact with the constituent entities of the Federation and business associations, to work on major systemically significant transport projects, both existing and the ones that are being planned. Planning must be done in the most careful way, and miscalculations are unacceptable here, since an investment of colossal proportions is at stake. Everything must be in harmony, and one project must harmoniously complement the next one. This is the way to build a transport strategy, and the plan must serve as a tool for implementing it. Of course, this should positively impact regional economies and promote the development of entire industries and sectors of the economy. Let me stress once again that our transport-related plans, projects and programmes must pursue the main goal, which is to improve the quality of life, so that it is more comfortable and convenient. It is important to make sure that every person knows how and in what timeframe significant transport problems will be resolved, and the regions clearly understand what kind of tools they are going to get in order to make these changes happen. I suggest that we move on to our agenda. Let us discuss everything that has been scheduled for today's meeting. <…> Vladimir Putin: I would like to thank all those who worked on this crucial document. In fact, they have done an immense amount of work. But what would I like to say? Of course, all of this was done in the previous period. Basically and on the whole, this is extensive, necessary and good work. And certainly we are now talking about a strategy for a period until 2030 and beyond. There is no doubt that we will use all that has been mentioned today, including as a possible addendum to the drafted list of instructions. What would I like you to focus on? If we look at how this work has been carried out in previous years, if we take certain areas of focus in the development of transport infrastructure… In principle, I have information on each of these areas, but I would like to cite as an example what has been obtained as a result of verifying the implementation of the earlier decisions and laws on seaport infrastructure development. In fact, Russia’s port capacities have tripled to 1.2 billion tonnes over the last 15 years. At first sight, this is an impressive figure, but… We have 67 operating seaports, but only six of them are running at full capacity, while 61 are, mildly speaking, underutilised. The main factor impeding their greater competitiveness is the lack of an effective digitalised freight management system. I am talking about the competitiveness of the industry as a whole: speaking about ports, we mean the importance of ports within the transport infrastructure in its entirety. We approved decisions on this system’s development, but they are still to be implemented in full. Why am I talking about this now? These, as a rule, are comprehensive problems. Take, for example, Kaliningrad, where customs registration takes approximately 12 hours, while the freight carriage across the region of the Russian Federation itself – just two hours. But it is stuck at customs for 12 hours. And what are the results? I have just mentioned competitiveness. As a result, our neighbours at the port of Gdansk [in Poland] have increased transhipment volumes alone 12-fold over the last 10 years. They should thank us for our sluggishness and improper work processes. The next point is property management. The Finance Minister has just said that everybody wants to receive federal funds. It may be – well, it actually is – the easiest way, he is right. We often take the measures proposed by the economic bloc, including the Finance Ministry, with a grain of salt. But in this case, I cannot but agree with him. If we look at how property is managed… For example, between August 2019 and November 2020, one company using infrastructure facilities in the seaport of Vyborg under a lease transferred 21 million rubles to Rosmorport while the company itself made 1.2 billion rubles, including by subleasing that infrastructure. Basically, the company paid peanuts and then subleased the facilities to make good money. Look, if we continue with this property management approach, we will eventually run out of federal money. Mr Siluanov is absolutely right. I have already spoken about steps that should have been taken to build a modern system for monitoring cargo traffic. I will come back to it. Why was that not done? One of the reasons is because the industry did not provide the necessary funding for this purpose. And do not tell me that the Finance Ministry refused to give it. These are priorities of the industry itself, and, apparently, in the previous years they were not properly identified. As concerns the infrastructure itself, we have been discussing and developing our nuclear-powered fleet for quite some time. Why? Because we want to deploy it on the Northern Sea Route. Great, we are doing everything right: the border service is operating and the Defence Ministry is working to protect national interests – while 40 percent of the core facilities are in disrepair. Some ports along the Northern Sea Route such as Naryan-Mar or Dikson have not seen any kind of investment whatsoever for 30 years. Thirty years or perhaps even more. My reference documents say it has been over 45 years. How can that be? This has to do with developing the Northern Sea Route. I understand, and we are throwing money at the Emergencies Ministry because it is responsible for safety. But who will be responsible for loading cargo though? Who will do this job? The waters, territory and infrastructure at the port of Dikson are unserviceable. Socially important cargo is discharged over an undeveloped beach while there is an oil terminal being built next to it with a certain amount of funding we provide. Yes, it is necessary, no question about it. But why does socially important cargo have to be unloaded over a beach? Synchronisation between the different types of transport – we have already talked about synchronisation, more precisely, we have talked about insufficient synchronisation, say, in the Eastern Operating Domain. The railway infrastructure is underdeveloped, for example in the approaches to seaports. By the way, the same is happening in the southern regions, in Daghestan, and in the Azov and Black Sea basin. Board to board transhipment is growing. But what about the environment? This raises environmental issues. We understand how important this is today. And oddly enough, the Federal Service for Environmental, Technological and Nuclear Supervision still does not have consolidated data on the inspections carried out by its territorial subdivisions in 2018–2020 or the violations exposed during them. Why is this? There is no consolidated data. What are they doing there? Therefore, I would like to inform you that, based on the results of those inspections, corresponding instructions will be given to the Prosecutor General's Office and other law enforcement agencies to check compliance with the laws, concerning transhipment, spending of budget funds and the use of state property. But overall, I would like to return to the strategy – and I want this to sound like a positive result of the work on the transport strategy – I would like to remind everyone, and maybe I am repeating myself here, but nevertheless, I consider it absolutely necessary to say this again: the main goals of the strategy are to enhance the spatial connectivity and accessibility of Russia’s vast territory, to improve people’s mobility, increase the volume of transit of goods, to shorten transit time, and develop multimodal logistics technologies. The document promotes the digital and low-carbon transformation of the transport industry, and expeditious introduction of new technologies. I really do hope that the targets stipulated in this strategy will be achieved. Let me remind you that according to the baseline scenario, investment in transport should grow to 3.1 percent of GDP in 2024–2030 from an average of 2.3 percent in 2014–2019. Let me remind you that the total investment that we propose to allocate to this industry in the period up to 2035 is about 60.4 trillion rubles, which is a lot. But we expect these investments to yield a cumulative economic effect of about 160 trillion rubles. About 90 trillion should be obtained in 2021–2035, and another 70 trillion, in the period up to 2050, in the longer term. However, we will be able to achieve this result, the country will achieve this result only if we work smoothly, harmoniously, with discipline and full responsibility for the work entrusted to us by this country. I want all of you to be set for such constructive and concrete joint work. And returning to where I started, to the very beginning, I also want to thank those who have worked on the strategy. A lot of work has been done, but more needs to be done now to work out a plan for the implementation of everything envisioned. Thank you very much to all of you. Good luck.