Agenda: Preliminary results of the road sector for 2022, improving road traffic safety, long-term development strategies for the metallurgical industry and automobile sector.
Mikhail Mishustin: Good
The President has identified the development of infrastructure in the country as a priority for next year. To this end, the Government is providing infrastructure budget loans to the regions. This programme has proven to be effective and has been extended for 2024 and 2025. As early as next year, an additional 250 billion roubles will be allocated on the instructions of the President. They will be used to finance transport and social projects, and to upgrade the housing and utilities sector.
Expanding support for this sector is yielding results. This is reflected, first and foremost, in the increased volume of construction, including road construction.
A lot of new facilities have been completed recently, and some of them ahead of schedule. These include the motorway to Mineralnye Vody Airport, the Archangelsky Bridge in the Vologda Region, overpasses in the Moscow Region, and a section of the Northern Bypass of Lobnya, which Moscow Region residents have been expecting for many years.
The President took part in the opening ceremony for the third exit from Mytishchi a week ago. We have made significant progress in upgrading high-speed roads and in creating new international transport corridors, including the East-West corridor.
The President noted that we had already achieved significant results in modernising the federal road network, and the next step is to ensure that the regional roads are in good condition.
We will allocate over 3 billion roubles to repair and upgrade road facilities. Three regions will receive the funds: the Kamchatka Territory, Crimea and Tatarstan. Budget allocations will be used to modernise airport access roads, improve regional and local roads, and continue building the Voznesensky Trakt latitudinal motorway.
And also about the bridge crossing over the Ob River in Novosibirsk. It is being built with co-financing from the federal budget.
The President drew attention to the need to increase the capacity of Russian motorways and reduce the proportion of federal and regional highways operating in congestion mode.
The launch of traffic along this route will make it easier for drivers to access federal highways, including the Chuisky Trakt. The project is at a high stage of readiness, but because of rising prices on construction materials, additional support is needed. And it will be provided. We will allocate over 7 billion roubles for this purpose.
We hope that the decision will allow us to complete the works without disruptions and on time. And the appearance of the new bridge will naturally help offload traffic in the town and make it more comfortable and safer for people.
Mr Khusnullin, how would you rate the preliminary results of the road sector work this year? You and I discussed it in detail last week. Please, the floor is yours.
In the road sector, despite the general situation in the economy and sanctions pressure, we have managed to maintain a positive trend of development and growth year on year.
Thanks to the President’s support, your support, the systemic work of the Ministry of Transport, the Ministry of Construction and the Ministry of Finance, all interested departments and regional teams, 2022 was a landmark year for the road sector.
For the first time this year, we secured 1.7 trillion roubles on road activities from the federal budget, including the National Welfare Fund, of which over 430 billion roubles were allocated to support the regions. Our key trend is to work with the regions.
640 billion were allocated for construction, repair, and maintenance of federal roads under the Federal Road Agency, and 730 billion for trust management and construction of federal roads by Avtodor State Company. Out of this amount, 237 billion were allocated from the National Welfare Fund, for which I thank you very much, Mr Mishustin.
This allocated funding has enabled us this year to build and reconstruct over 1,200 km of roads and bring about 30,000 km of federal and regional roads up to standard.
I would like to note that over the past three years the total length of newly built and reconstructed roads has exceeded 3,000 km and over 80,000 km of roads have been repaired.
Thanks to the support we have received, including the provision of advance funding, we have seen a steady increase in the amount of work done each year.
This year, together with the regions, we have laid 170 million square metres of asphalt for repairing roads, including 5 million square metres in new areas. This is 8 million square metres more than last year and 25 million more than in 2020.
In total, over 470 million square metres of asphalt have been laid over the last three years, so more than 60,000 km of roads have been repaired.
I would like to separately mention the work of Avtodor, a state-owned company, on the construction of the Moscow – Nizhny Novgorod – Kazan motorway and in the new territories.
It has been nearly two years since you, Mr Mishustin, launched this project in 2020 during a visiting meeting in the Republic of Tatarstan, and 106 km of this highway have already been built. We have never built such a large-scale first-class motorway during two years. A total of 32,000 builders and 9,000 units of equipment were employed at peak construction. We are planning to launch the highway in its entirety next year.
Also, Avtodor, together with the Federal Road Agency, are developing further the West-East highway, which is now called Russia, after it was approved by the Russian President last week.
The state company has also completed its work on the M-4 Don motorway in the Voronezh Region. Now we have fully secured high-speed traffic up to the Rostov Region.
This year we have managed to structure the work of the road sector, first of all, thanks to the approval of a five-year plan for the sector, which, taking into account budget law, has been updated and prepared for signing. The updated plan will be submitted to the Government next week.
In order to synchronise our work with the regions, we have analysed all regional five-year plans for road construction. As a result, we have signed memoranda on road activities with every constituent entity of the Russian Federation.
Tremendous work has been done by the Federal Road Agency. Now we clearly understand in which year, which road will be built or repaired, how they will be interconnected, and what synergy effect we will get from each road.
The consolidated five-year plan is worth 13 trillion roubles, including more than 5 trillion roubles in federal funds and 7 trillion roubles in regional road funds.
Assuming federal support stays at current levels, the current pace of construction will be maintained this year.
The national road complex is fully prepared to handle all that is required of it.
Many thanks to you personally, to all your colleagues – the Ministry of Transport, Ministry of Finance, and regional teams – for the huge systemic work that we are doing.
The most important thing is that people are more timely getting better roads and new highways.
Mikhail Mishustin: Thank you, Mr Khusnullin. It is important to maintain this momentum in the next year.
The quality of roads is important not only for the speed and convenience of transportation, but also for preventing traffic accidents, and therefore, it affects the lives and health of people. The President has said recently that it is a key priority to reduce the number of areas that have high rates of road accidents.
Mr Khusnullin, could you please tell us more about additional measures that are being taken to improve road safety? Safety is the key performance indicator for all construction, including road construction.
The quality of roads, their condition, and their compliance with performance standards are important for road safety. Therefore, when making sure roads meet these standards, in addition to the asphalt-laying works and eliminating road unevenness, measures are also taken to increase traffic safety. They include the installation of traffic barriers and pedestrian overpasses, the addition of speed change lanes, the restoration or painting new road marking, and the installation of traffic signs. All these measures are designed to reduce road fatalities.
Actually, there are three main indices. The first one is the number of car accidents. As compared to 2019, the number of road accidents has reduced from 164,000 per year to 130,000 per year, that is, by 34,000. The number of injuries has been reduced by 56,000 per year as compared to 2019. The most important criterion is the number of deaths, which reduced from 17,000 people in 2019 to 14,000 in 2022, that is, there are now 3,000 fewer fatalities per year due to the system-wide efforts that we have been taking.
We have good momentum going. As compared to 2021, all indices on average reduced by 6-8 percent. We are systemically dealing with these issues within the Government Commission for Road Safety, which includes many members of the Government, the Healthcare Ministry, the Ministry of Education, and the Ministry of Higher Education and Science. The Interior Ministry, the State Road Safety Inspectorate, and all regional teams play a large role as well.
There are three main causes of road fatalities, which comprise 75 percent of the total number: crossing over into oncoming traffic, pedestrian accidents, and drink driving. We are focusing on these three causes and carried out an experiment in three Russian regions – the Bryansk, Nizhny Novgorod and Kaluga regions. The experiment showed that it is possible to reduce the number of deaths related to all three causes by an additional 25 percent using comprehensive, system-wide efforts. We have developed these measures and are introducing them all across the country.
Starting this year, we launched a trial period of the Gold Standard system for operational management of road traffic. The system provides digitalised information about all past car accidents, proposals on how to eliminate their root cause, and identifying areas with the largest number of high-risk sections, which we include in our future works on a priority basis.
I want to take this opportunity, Mr Mishustin, to thank all my colleagues for the huge efforts they have been made and which we constantly report to you about. This Government’s system-wide work literally saves the lives and health of people. I hope that we will reach all of our planned goals and that these unfortunate statistics will improve year after year.
Mikhail Mishustin: Thank you, Mr Khusnullin.
It is important to actively scale up these measures that have proven their efficiency during pilot experiments to all regions and continue to look for new solutions. People’s lives and health directly depend on the coordinated efforts and interaction of the federal and regional authorities.
I want to note that all targets of the Road Safety federal project must be achieved ahead of schedule, if possible, as you mentioned. The President also spoke about this.
Mr Khusnullin, please take this area under your personal control. Now to a different topic.
The president continues to update plans for the development of key industries under special control.
The government continues to take decisions to further enhance the technological sovereignty of Russia, including following the activities of the Coordination Council on the needs of Russia’s Armed Forces.
Two long-term strategies have been developed. The first defines the future goals and objectives of the metallurgical industry until 2030.
It is aimed at stimulating domestic demand and reorienting exports to alternative foreign markets. This implies further expansion of the railway and port infrastructure, as well as alleviating the tax burden and providing critically important raw materials, equipment, components, and other materials.
Mr Manturov, please tell us about the key parameters of this strategy. What are its expected results?
Denis Manturov: Mr Mishustin, colleagues,
The strategy developed in line with the president’s instructions is aimed at quickly adapting an industry to new conditions with a return to growth mode no later than 2024.
The emphasis is made on three main areas.
The first is the expansion of the production range, the deepening of metal processing, and the development of high processing stages. In order to do this, it is critically important for us to ensure technological sovereignty in terms of sophisticated equipment for steel smelting and the production of rolled products, while at the same time forming strong demand for domestic heavy engineering enterprises, in order to ensure raw material independence. So we will continue to support the development of new deposits and enrichment technologies for critical positions, primarily manganese, chromium, zinc, lithium ores, as well as aluminum. Having our own raw material base will ensure the smelting of special, as well as stainless alloys, and steel grades, which will increase the consolidated demand for these types of products. If we talk about domestic demand for metallurgical products in general, then its expansion is the second key area of the strategy.
We placed special emphasis on uniting metallurgy’s capabilities with the needs of metal-intensive economic sectors, such as, first of all, the construction and transport sectors, the fuel and energy complex, housing and communal services, civil engineering, and the military-industrial complex.
We have analysed all government programmes, national projects, and strategic planning documents of related industries. In total, the strategy outlines promising projects in 20 technological areas, including for the automotive industry, railway engineering, the medical industry, hydrogen energy and the aerospace industry. This is an open list, and we will update it as requests come in. As demand grows, we will continue to update standards, codes of practice, and technical regulations.
In particular, Mr Khusnullin participated in the development of an action plan to encourage the construction of modular housing on a metal frame. Its implementation will ensure the transfer of up to 30 percent of mass housing construction to this technology.
The strategy also provides for updating the standard service life of metal products and equipment in accordance with modern safety requirements.
Exports are the third area. While we face sanctions, the markets of Turkey, China, the countries of the EAEU and the CIS, of Latin America, Africa, the Middle East, and Southeast Asia are becoming priority areas for export. Our enterprises, with the participation of trade missions, are already reorienting exports, and within the framework of the profile national project, logistics support measures will be provided. The strategy also envisages personnel training, decarbonisation of the industry, and measures aimed at reducing end prices for our consumers.
All this should ensure the achieving our targets. We expect a 33 percent increase in production for finished rolled products of ferrous metals by 2030, and for non-ferrous metallurgy we are focusing on increasing consumption in the domestic market. The target by 2030 is plus 28 percent, largely due to an increase in the share of high value-added products.
I would like to especially note that in the updated strategy, we took into account the integration of enterprises in new territories, as well as the raw material base located in them.
Mikhail Mishustin: The development of metallurgy is an important area. It is necessary for positive changes in many related industries, such as the automotive industry. This is exactly what another strategy that we will discuss today is aimed at. The project is designed for a longer time period, until 2035, and the tasks to be addressed here are even more ambitious. Right now we will need not only to create conditions for saturating the domestic market with cars, when many foreign corporations have left Russia under pressure from their authorities, but also to create our own component base with the widest possible range, from the simplest parts to complex elements. And as part of this work, it is necessary, of course, to develop new promising areas. For example, not only to produce electric vehicles, but also to create an infrastructure for charging stations for them, to expand the use of gas motor fuel and hydrogen.
Mr Manturov, what changes will occur in the industry due to the implementation of this long-term strategy?
Denis Manturov: The proposed strategy has been drafted with due consideration for national development goals and the Transport Strategy. It is also in line with the Government’s initiatives regarding electric cars, the hydrogen power industry, and unmanned logistic corridors.
We suggest implementing this strategy in three stages. Speaking of short-term and mid-term aspects, there are plans to facilitate the technological sovereignty of the automotive industry and to meet demand. We will mostly accomplish this by localising production in this country and by manufacturing more cars with a standard wheelbase. This standardisation will make it possible to expand our own components base. We will modify requirements concerning the involvement of foreign partners in manufacturing components. I am talking about the creation of joint ventures where the Russian side will have a controlling interest, and it will own intellectual property rights, too.
We suggest spending most state allocations on developing components and materials via the current specialised programme of the Industry Development Fund. Mr Prime Minister, thanks to your decision, its volume has expanded to 50 billion roubles in 2022. We will also use a systemic mechanism involving a cluster investment platform that will launch in 2023.
Considering global automotive industry trends and the task of achieving technological sovereignty, we will focus on hybrid and electric cars, vehicles using hydrogen fuel elements, and remote-controlled vehicles. We have already made some achievements in these fields. For example, both KAMAZ and GAZ manufacture electric buses. In turn, Moskvich, Motorinvest, and Avtotor are moving into the electric passenger cars market. With this in mind, Rosatom is building a huge storage battery factory. We should see to it that electric cars account for 25 percent of the market by 2035.
For their part, Aurus, GAZ, and KAMAZ are implementing projects with hydrogen fuel elements. Certainly, it will become possible to put all this to use as the recharging and refuelling infrastructure (that you have mentioned) continues to expand.
One can say the same about gas-motor vehicles. Russia sees them as one of the most attractive options for reducing carbon content. On the one hand, we can explain this by the sheer size of northern and other remote territories where electric cars are less topical, in the context of current technologies. On the other hand, we have affordable gas, and automakers are completely ready to convert their vehicles to this fuel.
Demand incentives will help expand environmentally friendly vehicle fleets. These programmes now apply to classical cars, as well as electric and gas-motor vehicles. We will also add hydrogen transport to this list.
The elimination of regulatory barriers, primarily those regarding self-driving vehicles, is another important condition. Yandex is dealing with self-driving taxicabs, and KAMAZ is working on lorries. In this connection, we need to draft legislation stipulating liability for various offenses, including violations of traffic regulations. Domestic software will make it possible to expand mobility services, including car-sharing, and other car-lease plans by 15 percent annually.
While implementing the strategy both a basic and a target scenario have been stipulated. In both instances we will accomplish our technological sovereignty mission, which was outlined by the President. Under a target scenario envisioning more substantial state support, we hope to attain even more ambitious indicators already during the first stage, that is, by 2025. In effect, there are plans to expand production of auto components three times over and to double gross vehicle output (all types included). Consequently, we will expand our domestic market share from 40 percent to 80 percent by 2030.
Mr Prime Minister, we have finalised both strategies with our colleagues. If you do not mind, I suggest approving them at the nearest Government meeting.
Mikhail Mishustin: Thank you, Mr Manturov. I support your proposal. We need to start implementing all our plans as soon as possible. The development of this highly important economic sector and the living standards of millions of Russian citizens will depend on the success of this undertaking. A modern vehicle fleet provides for increased mobility, both for individuals and business.