OREANDA-NEWS. June 30, 2011. Vladimir Putin’s speech at the conference:

Good afternoon, friends and colleagues,

It is my great pleasure to greet you all here in the Urals. The Urals by right embodies the hinterland and fundamental power of our country, and the huge creative power and energy of our nation. The people of the Urals are not afraid to set themselves grand and ambitious goals and they can achieve results. I am sure that the ambitious plans we will discuss today will be put into practice. In this work we must rely above all on our citizens, on the people, supporting their desire for self-fulfilment professionally, in business and in public activities for the good of the Russian nation.

Colleagues, in working out a plan for the development of the Urals we must make the best of its competitive advantages, but we must clearly identify the problems and the “bottlenecks”, so to speak, that impede the region’s sustained development.

Many of our common, systemic problems manifest themselves in the Urals in the most concentrated form. For example, the regional economy in the Urals is still unfortunately poorly diversified and is anchored to the export of commodities and low value-added goods, which means that it is excessively dependent on all sorts of market fluctuations.

To this one must add the shortage of a modern infrastructure, above all transport, which affects the quality of life and prevents many promising projects from being launched. That is natural and understandable. If there is a road there is life, business and economic activities develop; if there are no roads, everything is at a standstill even if there are, for example, major mineral deposits that can be developed.

We face major imbalances inherited from the past. Plants were built, mineral deposits were developed but unfortunately we forgot… well, there is no point in criticising the past – perhaps at the time we could not afford to do these things, could not think about creating modern conditions for people’s lives and addressing environmental issues. And the legacy of the times when people lived in barracks and make-shift dwellings is dragging us backward.

We have no right to and will not proceed in this way in modern conditions. We cannot and will not seek development at any cost neglecting the interests of the citizens. We should concentrate on several strategic areas.

First, the improvement of the social infrastructure and the creation of comfortable and decent living conditions for our people. People really need it.

Beginning from 2009 the Urals area reported a natural population growth (this is very good news which I would like to share with you, though many of you already know it). Let me stress that we are looking at a natural growth, i.e. the birth rate exceeds the death rate. In 2010 the number of births exceeded the number of deaths by 8.6%.

We should target our industrial and infrastructure policy and develop the region’s economy in such a way as to open up new opportunities for people, to create well-paid jobs and to make sure that industrial projects do not generate environmental risks.

Second, it is necessary to significantly expand the economic base of the Urals Federal District, to ensure its stability by creating promising innovative centres, industrial clusters to support small and medium businesses, developing new sectors, for example, tourism, the nanoindustry, pharmaceutics and the services.

During the interregional conference in Volgograd in May a proposal was made to create a Strategic Initiatives Agency. Already more than 800 projects from practically all the Russian regions have been submitted through the Agency’s website. It is my particular pleasure to note today that the Sverdlovsk Region has provided the largest number of projects, almost a third of the total number (applause).

I will applaud you too, because this is your achievement. I think it would be fair if we set up the Agency’s first regional office here in Yekaterinburg.

The proposed projects are currently the subjects of public discussion and evaluation by experts. Some of the ideas are indeed very promising and interesting, including in the social sphere. For example, organising a regional network of private kindergartens, the production of equipment for the rehabilitation of children with limited abilities.

Incidentally, ten days ago the deadline ran out for accepting applications for the post of the Agency’s director-general and branch directors. About 1,000 applications are being considered. We can already see many bright and talented people with wonderful ideas among the candidates. We will soon review the results of the contest. I am planning to conduct a meeting of the Expert Council that would include the winners of the contest after July 20. During that meeting we could also decide on who will be the head of the Agency and who will be members of the Supervisory Council. The Agency should start work as early as August.

I would like to thank all those who have exhibited interest in the idea of creating that structure and have been willing to test themselves in tough competition. Regardless of the contest’s results each of the applicants will be involved in the Agency’s work and in forming its regional network.

The Innovative Industrial Forum Innoprom-2011 will be held in Yekaterinburg in two weeks’ time. I think it would be right to invite to that forum all those who have taken part in the contest and are planning to work with the Agency. It would provide a good opportunity for them to establish direct contacts, to discuss shared tasks and problems.

I would like to ask the administration of the Sverdlovsk Region to assist with organisational matters. For our part we will render all the necessary support. I have no doubt that projects emanating from the Urals Federal District will be included among the Strategic Initiatives Agency’s early pilot projects.

Third. The effectiveness of the sectors that spearhead the district’s economy must be improved dramatically. These are the fuel and energy sector, metals, engineering and the defence industry. Profound technological modernisation must continue in these sectors to ensure their entry into new markets.

And, fourth, it is necessary to substantially upgrade the district’s infrastructure: transport, the power industry, housing and utilities, road-building and repair. There has been some progress here in recent years. The key federal highways Ural and Baikal, which pass through the territory of the Urals Federal District and link it to the European part of Russia, Siberia and the Far East, are being modernised.  

The Tyumen – Khanty-Mansiysk and Yekaterinburg-Tyumen regional roads are being renovated. Road detours have been built around the cities of Chelyabinsk and Magnitogorsk. Very soon the cities of Yekaterinburg, Tyumen, Kurgan and Kamensk-Uralsky will be out of bounds for trucks and consequently will have no environmental and other related hazards.

We have allocated about 3 billion roubles for 2010-2011 to upgrade the road network in the administrative centres of the Urals Federal District: Yekaterinburg, Kurgan, Chelyabinsk, Tyumen, Salekhard and Khanty-Mansiysk.

We are rendering financial assistance to the regions in building and modernising rural roads. For your information, in 2011 the regions in the Urals Federal District received 261 million roubles in federal subsidies for the construction of roads leading to rural communities. I ask the local administrations and the party structures to keep the road repair and building situation under constant review, involving public organisations in this business. Some of you may have seen my meeting in Pskov with the people who are actively engaged in these matters as volunteers. They put their hearts in this work and are doing very well. One should look for such organisations and such dedicated people and involve them in this kind of work.

At the same time I would like to stress that what we need today is not individual projects, but a steady development of the road network throughout the country, including the Urals.

The amount of road construction in Russia should at least double over the next ten years. In order to concentrate resources on the building and maintenance of roads we have decided to create a federal and regional road funds.

By 2020 the federal and regional funds will accumulate a considerable sum: 8 trillion roubles, of which more than half, 4.6 trillion roubles, will be in regional funds. Regional road funds in the Urals will accumulate at least 750 billion roubles. Massive tasks can be tackled with such resources.

It is important to get the priorities right in this work. I suggest that a significant portion of the regional road funds’ resources be used to build and repair roads in district centres, small towns and rural communities.

And of course we should not tolerate the situation when a good road leads to a regional centre or a village, but inside the village the roads are muddy and potholed so that it is impossible to walk, not to speak of driving on them.

By the same token we must substantially increase the potential of the railway transport in the Urals Federal District. Organising interregional and commuter passenger carriage is a priority. Train stations have already been refurbished in Chelyabinsk, Yaketrinburg and Kurgan. In the future one would like to see high-speed train service between Yekaterinburg and Chelyabinsk. Russian Railways has such plans and we will support them.

By 2013 Yakterinburg’s transport hub will become a major international logistic centre. The project will be financed to the tune of 12.3 billion roubles, of which more than 10 billion roubles will come from off-budget sources.

In this connection I would like to stress that we will attract massive private investments in infrastructure and are ready to create the necessary conditions for that, to use the public-private partnership mechanisms and the potential of the development institutions. That applies to such comprehensive interregional mega-projects as Industrial Urals – Arctic Urals. But I would like to emphasise that we consider it vitally important that such projects are implemented in line with clearly defined categories such as profitability, economic returns, the returns on capital investment so that private investors who say they are ready to join such infrastructure projects should be motivated to strictly abide by their commitments.

As you know, I supported that project from the start when the previous presidential envoy was only beginning to work in this area. And I must say that a great deal has been done to implement this truly large-scale project.

At the same time – and we discussed it recently at a government meeting and I can share its ideas – we must be absolutely sure that if the federal centre invests or the regions invest in the infrastructure, say, in railways and roads, we must be absolutely assured that private business which declares that it is ready to work on these projects will contribute its share of resources. We do not want to see what unfortunately sometimes happens: the state invests money while the promised private investments are not delivered and everything is suspended, or the state has to invest more taxpayers’ money. We should work out mechanisms that would guarantee that all the participants in the process meet their obligations.

We are planning to invest considerable sums in the development of airports, with due account for the region’s northern specifics. The Koltsovo Airport in Yekaterinburg is being refurbished to become a major hub for international and domestic air traffic.

Reconstruction of the Balandino Airport in the Chelyabinsk Region, and the airports of Tyumen, Kurgan, Khanty-Mansiysk, Magnitogorsk, Noyabrsk, Salekhard, Novy Urengoi, Yamburg, Nizhnevartovsk, Uray, Nefteyugansk and several other cities is due to begin in the near future. We will pay particular attention to the development of socially sensitive air carriage in difficult-of-access areas beyond the Arctic Circle where apart form airplanes, the only mode of transport is the deer.

I would like to stress that Russia is determined to expand its presence in the Arctic. We are open for dialogue with our foreign partners, with all the neighbours in the Arctic Region, but of course we will be firm and consistent in upholding our geopolitical interests. We will develop a modern border infrastructure, meteorological stations and a system of monitoring the environment and bioresources in the region.

We are to carry out a massive cleanup operation in the Arctic: dispose of all the waste, the drums with fuel and lubricants which have been piling up around stations, military bases and northern villages for decades. I was there last year and I was horrified by what I saw. Everything has been dumped in quantities that are simply mind-boggling. Just dumped. In many places the drums have rusted and are leaking. You can imagine, many of those present here know this first hand, how vulnerable the Arctic environment is. Unless we start tomorrow the consequences of continued mismanagement may become irreversible.

We have no right to forget about the need to treat with care the traditions and economic ways of the indigenous peoples of the North for whom the Yamal tundra, the Yugra taiga and the Urals north of the Arctic Circle are their ancestral homes. Their culture and way of life must be taken into account in the development of the social sphere, the education and healthcare systems and in creating the information environment.

I would add one more thing. Not a single industrial project in the Russian Arctic will be implemented without compliance with the most rigorous environmental standards. That fully applies to the programme of comprehensive development of the Yamal Peninsula and the proposed offshore development in the Kara Sea.

We are going to set additional requirements for the companies operating offshore there. They should not only have proper technology and specialists, but sufficient financial resources at their disposal that in the event of a force majeure could be used to clean up the accidents and repair the damage to the environment.

On Yamal, as part of the liquefied natural gas project, we will build a new Arctic port at Sabetta. The base for the production of LNG will be the Yuzhno-Tambeiskoye gas field. It will get a modern LNG plant and the necessary transport infrastructure.

The project is being implemented by one of our oil and gas companies together with foreign partners. The state for its part will finance the development of the port. The total volume of investments is 900 billion, around a trillion, and perhaps even more, considering all the required infrastructure. It is a vast project not only for the Urals Federal District, but for the country as a whole.

The first LNG tankers should start being loaded at Sabetta terminals as early as 2018. We will be able to break into promising markets and greatly diversify exports and export routes, without being tied exclusively to pipelines.

In perspective, the construction of the new Yamal port is part of the massive work to revive the Northern Sea Route. A draft law currently pending will regulate all the issues of navigation along the Northern Sea Route, and we are planning to create a special structure responsible for the development and operation of that strategic transport corridor.

Modern terminals, including those fitted to handle “river-sea” vessels, are to be built on the Ob and other rivers. That will help us to integrate internal waterways with the Northern Sea Route. We will need tankers, gas carriers and icebreakers. It is a comprehensive project that would require the participation of enterprises from various industries.

Russia is a great Arctic power. We cannot do without a strong fleet of icebreakers.