Alexander Khloponin: Prime Minister Dmitry Medvedev has just held a meeting on the tragedy and emergency in Derbent. Recall that water released as a result of the bursting of the dam on October 10 basically swept away 34 buildings, killing six people and leaving many injured. Mr Medvedev gathered all of us for a meeting to sum up what has been done in line with his instructions. We have adopted all the necessary decisions on this score. I think we will resolve this issue in the near future. This is simply for your information. We have allocated the necessary funds in the budget to rebuild the hydro-technical facilities, to restore the water pipe, roads and access communications and to issue housing certificates for the victims of the flood.
Now let me open it up to your questions.
Question: Can I ask you to specify the sum? Hundreds of millions were mentioned at first but no specific sum.
Alexander Khloponin: This makes about 2 billion roubles, including for the reconstruction of the hydro-technical facility, certificates to be provided to people who have completely lost their homes, as well as for housing reconstruction and renovation.
Question: Good afternoon, Mr Khloponin. My name is Maxim Tovkailo from the Vedomosti newspaper. I would like to ask you two questions if I may. The first is about the state programme. The Ministry of Regional Development drafted and published the first version of the state programme over a year ago, which set out much more substantial federal budget allocations, in excess of 2 trillion roubles. This overall sum has now been reduced more than tenfold. How will these cuts affect the results of the programme? Won’t this programme prove ineffective? And what projects have been discarded as a result of these major spending cuts?
Alexander Khloponin: It's not quite like that. We have never had that kind of ambitious state programme. Nor did we ever plan to implement this federal programme in line with the specific numbers you mentioned. The current programme, which was approved by the Government, is also worth 2 trillion roubles.
Remark: At that time there were four trillion roubles.
Alexander Khloponin: I would like to say again that our programme consists of three stages: the first stage is to be implemented up to 2016, the second in 2016-2020 and the third in 2020-2025. The 2020-2025 stage of the state programme will be adjusted depending on the results achieved.
As for budgetary and extra-budgetary funding, budgetary funds will account for just 10% of the entire programme and of this sum total. Extra-budgetary sources will account for 90% of the state programme. The budget allocations will be spent exclusively on social infrastructure facilities. This task is within the state’s remit. It will be used to complete infrastructure projects, including roads, hydro-technical facilities, etc.
So what is there to say about extra-budgetary funding sources of this programme? Well, extra-budgetary funding sources of this programme primarily amount to the programmes of natural monopolies, the programmes of major corporations and major companies, as well as the projects of the North Caucasus Development Corporation and projects of the North Caucasus Resorts Company. Furthermore, it includes decisions, which have already been adopted, to ensure the additional capitalisation of North Caucasus resorts. As you know, the Government has taken this decision, and we are allocating 60 billion roubles for this purpose. These allocations are being financed at the expense of the North Caucasus Development Corporation. Add to this the projects being implemented in the North Caucasus Federal District. And extra-budgetary funding will account for about 90% of the overall total.
Question: If I understand you correctly, there have never been plans for a federal programme specifying two trillion roubles’ worth of allocations up to 2025?
Alexander Khloponin: No, of course not, there have never been any plans of this sort. What's happened is that each time we discussed the scale of the programme, journalists gave it a different interpretation, a different reading. It is much easier to hear four trillion rouble sums, take fright and say that it’s high time to stop feeding the Caucasus. I want to say once again that this issue has never been discussed. We talked about the need for economic incentives. And these incentives have been created with the help of state-guarantee mechanisms, through special economic zones, by exempting enterprises and companies from tax, including local taxes and partially federal taxes. We also have two mechanisms for subsidising interest rates on loans, which will apply to these special economic zones … the additional capitalisation of our companies, which are already operating in the North Caucasus. I am talking about strategic companies, the North Caucasus Resorts Company and the North Caucasus Development Corporation. This is what we have discussed, and this entails specific mechanisms for expanding the economic process. For its part, the state will directly allocate federal budget funding for regional and federal projects. What we have to do now is close the big regional gaps in the areas of healthcare, education, pre-school education and medicine. This is currently our main task. And we will accomplish this objective with the help of federal allocations.
Question: May I ask another question? The media has reported a proposal by the North Caucasus Resorts Company to establish a regional state airline in the North Caucasus Federal District. Do you support this proposal or not?
Alexander Khloponin: It is still very early days for this proposal. On the whole, the idea is absolutely correct. Overall it deals with the development of small aircraft traffic in the Russian Federation. Deputy Prime Minister Arkady Dvorkovich oversees this issue at the Government level. This issue is still being discussed. Of course we would like to operate scheduled services involving small aircraft from the Karachayevo-Circassian Republic or from Mineralnye Vody to Dagestan direct, rather than via Moscow. In fact, Mineralnye Vody has now become a sufficiently high-quality and cost-effective transport hub.
Question: Good afternoon, Mr Khloponin. Andrei Biryukov, Interfax. Addressing the Government meeting, you said an instruction to draft a federal targeted programme for the development of the North Caucasus had been issued. Please explain what you meant, because there are some federal targeted programmes, and they will become part of the state programme. What did you mean in this particular case?
Alexander Khloponin: The issue is as follows. The federal targeted programme, Development of the Chechen Republic, ends this year. In 2013, the financing for another programme, the South of Russia, will finish and the financing for the Republic of Ingushetia will end in 2016, as far as I remember. Nevertheless, the government will be directly providing about 250 billion roubles for these regions, both this year and over 2014-2016.
Therefore, we propose the following arrangement for the funds provision – drafting a federal targeted programme which would contain a list of facilities and projects that are the Federal Government’s responsibility. The current plan is to draw up this new programme in 2013 and have it approved by the Government. There are two options for doing this: it could be an extension of the South of Russia programme, continuing along the same lines as before, or we could merge several programmes into a new federal targeted programme, Development of the North Caucasus.” This question is still open for discussion.
I would also like to remind you of something else: each of the three federal problems have been sequestrated, that is, cut due to the international economic crisis. As a result, some of the projects to build education, healthcare or infrastructure facilities included in those programmes were not even started because of the obvious shortage of funds. Therefore, it should be better to rearrange the existing programme, or, as I said, to include these projects in a new programme for the area’s development.
Question: Could I ask you to clarify something. At the Government meeting, someone brought up the possibility of increasing the financing for the programme after 2014 if revenues also grow. How much would you estimate that to be? There is an approved budget estimate of course. But my question is about the amount you see as sufficient for the effective development of the social infrastructure and other infrastructure in the region for the next three to five years.
Alexander Khloponin: Actually, I believe that the North Caucasus development programme has been a unique territorial support programme. There are two scenarios for the North Caucasus, an optimistic and a pessimistic (conservative) one. The conservative scenario is the one adopted for now. This scenario requires building a sufficient number of education and healthcare institutions so as to achieve a level which is about 80% of the average level across Russian regions. The optimistic scenario stipulates spending around 170-180 billion roubles on healthcare and education projects. We plan to spend 250 billion, but this plan includes more than just schools and hospitals.
The optimistic scenario is aimed at achieving a 90% level of Russia’s average, therefore the investment estimate is about 370 billion roubles. However, a final decision has been made. It is a well-considered decision and was coordinated and approved by ministries and departments. We must certainly take into account the general situation in the global economy, as well as the situation with the Russian budget. Let met stress that these programmes have been agreed with the federal ministries, as well as with each of the regions in the North Caucasus. We have opted for the conservative scenario, but it is still a development scenario.
Question: Yekaterina Karpenko, Gazeta.ru. Anton Siluanov brought up the investment fund issue. An investment fund is mentioned in the government programme for after 2016. Was it a mistake, or will this practice actually be reinstated after discussion?
Alexander Khloponin: No. An investment fund is an idea that we support – I mean, the Ministry of Regional Development and I as a deputy prime minister. However, this practice is not applied at present, although it was quite effective in the past. We believe that it would be a good way for promoting infrastructure projects. It would be good to return to this discussion, not necessarily only after 2016 – maybe earlier. This is an issue for discussion, and we will talk about this possibility starting from next year when compiling the federal programme. We will bring it up at government level with the Finance Ministry, the Economics Ministry and the Regional Development Ministry. We will consider either restoring the investment fund, or introducing a similar practice. No decision has been made yet.
Question: Are we discussing a federal investment fund or some kind of regional option?
Alexander Khloponin: What would we need a regional fund for? The federal fund has proved very effective this year. The 6 billion roubles invested (2011-2012) were spent effectively and produced good results. I am referring to infrastructure projects, as well as to the construction of an industry park in Budyonnovsk – this was a joint project with LUKoil and is now a beautiful facility, certainly worth seeing). Some of the infrastructure projects dealt with developing the North Caucasus resorts. The idea was good, but it somehow failed to work on a national scale. Therefore, it is an issue for discussion.
And that’s all for now. Thank you very much, everyone.