OREANDA-NEWS. March 22, 2010. Transcript of the beginning of the meeting:  Vladimir Putin: Mr Shuvalov, in the series of measures intended to support the auto industry in Russia, we have always singled out support for the Volga Automobile Plant (VAZ). In our package of proposals for VAZ there is one assignment that is very sensitive from both an economic and a social point of view. I am referring to the transfer of social facilities to the municipal or regional levels. But in order for the level of service of these social services - medical and children's services - not to decline, in order for it to be maintained, we need to provide funding for these facilities. I asked you to work on these issues, to provide a list of these services and the amounts of funding needed.

Igor Shuvalov: Mr Putin, as per your directive in 2009, we, in cooperation with AvtoVAZ and the government of Samara Region, as well as with the Togliatti city government reviewed all the facilities that could expediently be removed from the AvtoVAZ balance sheet and transferred to municipal or federal authority. A total of 35 facilities were transferred in 2009. And the most problematic one - a medical facility - was taken into federal ownership.

Funding decisions for the federal facility were made in a timely manner and included in the federal budget for 2010. Certain subsidies were also provided for financing new facilities in municipal ownership. Nevertheless, the city government holds that, accounting for the facilities that were transferred to it in 2008, and because city revenues have declined, they found themselves in a rather difficult situation and turned to the federal government for addition financial support.

Together with the Regional Development Ministry and the Finance Ministry we calculate the value of the necessary funds in order for these social services to operate properly, and we propose the approved decision on disbursing subsidies to the Samara Region in the amount of 1.43 billion roubles. 

We proceed from the assumption that all of the earlier decisions and these additional funds - if you approve this decision - will enable us to fully fund the necessary operations of these social services. These are kindergartens, sport facilities and other social facilities. And the operations of these services will be provided for in an appropriate manner.

Vladimir Putin: In other words, the issue is being defined in the following way - In order for these services to function normally, we still need to spend a billion and some change in roubles on them. Either the federal budget will provide this money or AvtoVAZ will have to take it out of its already problematic budget and spend it for these purposes.

Igor Shuvalov: That's the way it is.

Vladimir Putin: Keeping in mind the restructuring plan that AvtoVAZ management provided and keeping in mind our purposeful action to support the company and the need to save jobs, there can be no other decision than in the affirmative. Submit the relevant proposals and documents. Of course, I agree and I will sign them.

Igor Shuvalov: Will do.

Mr Putin, I would also like to inform you that with the transfer of these facilities from the balance sheet of AvtoVAZ to federal and municipal ownership, 2,500 workers have already been registered with the medical unit or municipal services. Consequently, we have removed an additional burden from AvtoVAZ, as you said. We proceed from the assumption that combined with our other measures to create jobs, we will make a relatively smooth transition for those that have been let go from AvtoVAZ to their finding new jobs, and I will report to you on these measures subsequently.

Vladimir Putin: Good.