First Manufacturing, Now Construction

Meeting on the development of the construction industry

In every economy, the construction industry is considered a bell-weather of how well the economy is doing, and construction is mostly related to housing, roads and such, although not 100%. Last week, Putin held a roundtable discussion with a variety of manufacturers to get feedback from them on how government aid was helping and how regulation might be hindering growth in their respected market niches, and today it’s the construction industry’s turn. For many this was their first exposure to Putin’s style of management and a look into how Russia’s political-economy is structured, and that was followed by Rostec’s excellent example. Here’s a short excerpt from what you’ll read that conveys a great deal about Russia and who its economy works for:

Putin: “One of the most important tasks of any family is to ensure decent housing conditions, which is important for every person, for every family, and the task of the state is to do everything to ensure that these goals are achieved. And recently we have been working quite effectively in this direction.” [My Emphasis]

The change from the Soviet system is that place of residence and housing are no longer assigned as Russians are free to live and work where they choose, yet it’s the state’s responsibility to provide the infrastructure for citizens to lead productive, fulfilling lives. What’s more, Russians are expected to be involved in this process by at least providing feedback at their local/regional levels via complaints and suggestions, which as some might notice is similar to the Chinese system of inclusive democracy. What comes into view when looking at and appraising what one sees is the formation of a nation as a team of its citizens which is very different from how the West is organized as supposed national representatives show no real interest in governing that improves the lot of their voting constituents as opposed to their Donors.

One of the factors impacting Russian construction is its forestry industry as the basis for housing construction is moving to wooden framed structures versus steel and concrete for what’s designated as “emergency housing.” Roads, bridges, commercial properties, and other social institutions are also within the realm of Russian construction. Plus, there are other infrastructure facets that often elude discussion like utilities. One of Russia’s national projects is to connect as many houses and other properties to gas lines that will alter the traditional “heating season” dynamic where central boiler houses generated steam to distribute to households. Gazprom was mandated that task, which you’ll see mentioned as “social gasification.” And when reading about the vast about of road building being done, it must be recalled that Russia remains a developing country in some respects. Most have seen pictures of rural Ukraine where many roads are dirt tracts that aren’t even graded and graveled; that is also the case in many areas of Russia. The construction of transport corridors to support Russia’s internal economy is one reason why Russia’s been able to weather sanctions and continue to grow. It also facilitates the movement of people in ways Russians never really experienced in the Soviet past, which is one reason why Putin promotes internal tourism so much—it’s not just healthy for Russia’s economy; it’s also healthy for Russians.

The above context ought to help readers navigate the conversation that follows. Irek Faizullin is Minister of Construction, Housing and Utilities of the Russian Federation and is the first to interact with Putin. Mikhail Khusnullin is a Deputy Prime Minister of the Russian Federation Federation and provides the long report. You’ll read about the State Company Avtodor, which is a public utility, not a private monopoly. And there’re ten other heads of major construction companies and associations who will join the conversation after the reports. As with all discussions of this sort, the read is long but much can be learned from it. Russia is clearly using a hybrid mixed-economic system that could be a model for other nations. All monetary amounts are in rubles despite the dollar term being used in some cases. And now, the discussion:

Vladimir Putin: Dear colleagues, good afternoon!

As you probably saw, last week we met with the heads of enterprises working in the manufacturing sectors of the economy and summed up some results. In my opinion, the meeting was very productive and not without benefits-I hope, both for those who came here, and for me, my colleagues, because it was a very lively conversation with people who work directly on the ground and can assess what is happening in their industry, give feedback make some recommendations and make suggestions.

In this regard, there was a desire to continue this practice and meet with representatives of the construction industry. Firstly, because you have a holiday coming up soon, August 13-Builder's Day. I congratulate you and all employees of the construction industry. And secondly, because the construction industry is a very large multiplier for the entire economy and shows very good indicators. Suffice it to say that we have never built so much housing at all. You know this better than anyone-this is the best indicator in the entire history of Russia. How much, 102.4?

I. : 102.7.

Vladimir Putin: 102.7 million square meters. This is great, a very good indicator.

Infrastructure facilities, landscaping and housing, which I mentioned, are the main areas. In general, according to preliminary estimates, the construction sector contributes about five percent of GDP to the overall" piggy bank " of the country's development, and together with the housing and communal complex-this is almost thirteen percent. This, of course, is such a serious, very powerful complex, which largely determines the stability of the entire economy. I mean, you have a lot of related companies: the construction materials industry, the metallurgical industry, and transport are busy – all sorts of things that are not related to construction! Therefore, it is extremely important.

The volume of construction works in 2020-2022 increased by almost 15 percent, and in the first half of this year it continues to grow. According to preliminary data, it amounted to 9.2 percent – this is to the base of what has already developed.

As I have already said, the indicators in housing construction are very good, but the volume of multi-apartment housing is also growing. In the first seven months of this year, growth continues, 24 million square meters were commissioned. This is plus eight percent of what it was. This, of course, is very cool.

Only with the help of preferential mortgage loans for seven months of this year, about 400 thousand families have improved their living conditions. So your industry is extremely important both for the country's economy and for the social sphere. One of the most important tasks of any family is to ensure decent housing conditions, which is important for every person, for every family, and the task of the state is to do everything to ensure that these goals are achieved. And recently we have been working quite effectively in this direction.

There are, however, questions. I asked to make changes to the legislation before June 1, 2023-to make it more affordable to build your own wooden housing construction. Unfortunately, this has not been done yet. I ask the Ministry, of course, to complete this work, to coordinate… What is there that you need?

Igor Fayzullin: Mr President, we need to complete our work. We have completed the entire structural part, so today – we also have a representative here-we can build four-story individual wooden houses. Now we have a nine-story residential building under examination. The fire department and I must complete the test of a nine-story house and get the right to build wooden nine-story houses, too.

Vladimir Putin: Yes, I have seen that we are even talking about building 12-storey wooden houses.

I. Fayzullin: And higher.

Vladimir Putin: To be honest, I can't even imagine how this is possible.

Igor Fayzullin: Technically, we can see that they are being built in the world, so naturally, today there are production facilities in Russia that can do this.

Vladimir Putin: We need to complete this as soon as possible. If you need any help…

Igor Fayzullin: The papers are still there, Mr Putin. Here we will burn it together with [the head of the Ministry of Emergency Situations Alexander] We will build this facility, work out constructive fire safety – and we will also be able to build such facilities. Currently, the four-story building is actively underway.

Vladimir Putin: Don't delay, do it as quickly as possible.

One of the most important tasks, as I have already said many times, is to resolve the issue of emergency housing. Last year, citizens from three million square meters were resettled. This is a very good indicator, and we need to continue it.

Transport construction, road and railway construction. Last year, almost 30 thousand kilometers of roads were built and repaired – a good indicator. Now I won't repeat myself here, it's been said many times: [track] Moscow – Kazan, then Yekaterinburg – Tyumen, and so on. There is much to work on further. And, of course, the international transport corridors "North-South", the Northern Sea Route, the Eastern Polygon, the BAM, the Trans-Siberian Railway, and so on.

New regions, of course. There is certainly something to do there. It seems that no one has ever done anything there at all.

I suggest we start our conversation.

Please, Marat Shakirzyanovich.

M. Khusnullin : Dear Vladimir Vladimirovich, Dear colleagues!

We have been growing steadily for more than three years thanks to the best practices and constant attention that you pay to the construction industry. I can already say today that 58 million square meters of housing were commissioned in seven months. This means that we will pass the target of 103 million square meters this year. In other words, we will update the previous year's record again.

We are not only engaged in the commissioning of housing, we are very seriously engaged in the groundwork. Together with the heads of the regions, we are preparing urban development potential, which means that it is an opportunity to get a construction permit. As of today, we already have a city potential of 410 million square meters. In other words, a person came, applied for a construction permit and started building, but they don't need anything anymore. We plan to increase this figure to 500 million square meters.

The Ministry of Construction is engaged, and this year we made a new decision: we signed a memorandum with each region on the volume of urban development potential. In other words, each region undertakes to determine how much documentation it should prepare for housing construction. That is, we are making a reserve until 2030, so that the billion square meters that we have announced, and a billion square meters, if we build it, and we are able to maintain this figure for the last three years – every fifth meter of housing in the country will be new. That is, we are very seriously preparing the groundwork.

Practice shows that we have issued 15 percent more new construction permits this year. Multi-family housing was added. This means that residents believe in the housing program, and if you look at the figures, in 2022 the population invested about $ 10 trillion in housing construction. This is the largest investor, and it believes in the state's policy that housing will continue to be built.

Of course, this was achieved thanks to the unprecedented mortgage support decisions that you supported first in the pandemic year 2020, and then this year you supported the extension until June 1, 2024. Mortgage growth, Vladimir Vladimirovich, is 1.7 trillion rubles in seven months. This is almost twice as much as last year. If we continue at this pace, we are likely to achieve a 2.5 trillion increase in the mortgage portfolio.

When we had a low rate in 2021, it was 2.5 trillion rubles. ‒ this is the best indicator in the entire history of the country. This year, at the same pace, we are likely to pass this indicator. This is a very serious topic.

I would like to note that in recent years there has been an explosive growth in individual housing construction. First, after the pandemic, people started actively building housing. Due to the fact that there was a mortgage, people began to finish building housing. The key factor is social gasification, more than 400 thousand households last year. This year – Alexey Borisovich Miller and I talked – we see a plus of about 500 thousand house buildings. These are people who have built housing or are completing it with gas. This will give an exact increase in individual housing construction.

I must say, there is a plus in the fact that we repair roads, make engineering networks, "social services". But you need to understand that we have already chosen the main stock for "individualka", and now we are developing new sites together with the regions, looking at networks. Of course, the individual housing loan program helps us here.

The number of loans for individual housing in 2022 increased fourfold compared to 2021, and this year we also see that the growth is going very well.

If earlier we decided that we can now use escrow accounts to credit developers for individual housing, if they are building housing centrally, now we are preparing a law so that each resident can individually order a house or a house kit and get an escrow account and pay a loan through a bank. If we do this before the end of the year, or at most at the beginning of next year ‒ we have it in the plan, and the law was submitted to the Duma in the first reading-it will give another serious boost to the development of individual housing construction.

I mentioned roads, Mr Putin, and I have already given this example: for example, when we started building the Moscow – Kazan highway, housing construction in Vladimir per capita became 0.9 meters per person. If we have reached the figure of 0.82 meters across the country, ten regions exceed this figure, but only the beginning of construction of this highway has led to such an increase in housing construction. Because people understand that they will reach Moscow in an hour and a half – and [choose] both second housing and permanent housing. In other words, our roads give a very serious impetus to the development of housing construction.

I can say that thanks to those systematic support measures and constant advanced financing, we reached the figure of 176 million square meters of repaired roads last year, and this year ‒ At the beginning of the year, you set us a task no less than last year ‒ we are already seeing 180 million rubles. We see 180 million square meters of repaired roads, as you have instructed, and we have received advanced financing from special budget loans that we have distributed to the regions. And due to this, we will reach the regional road safety indicator at the level of 52 percent. We were supposed to achieve this goal in 2024, and we are two years ahead of schedule.

And most importantly, I want to say that of all the national projects that we have, the national project "Safe and High ‒ quality Roads" is the most popular and most perceived by the population in terms of information coverage and approval. We hope to continue doing so.

At the same time, this year we will also try to bring all roads in agglomerations to the standard level ‒ we have 105 agglomerations, especially for large ones, this is important ‒ and we continue to work on the main network: bringing it to 85 percent in a standard state.

Vladimir Putin: By 2027?

Mikhail Khusnullin: Yes, by 2027, this was your decision at the strategic council.

Vladimir Vladimirovich, we are continuing our large-scale construction projects. Today before the meeting we have a good topic: we have completed the bridge over the Volga, naddvizhka, that is, we have two parts of the bridge connected. Just today, we opened a very significant event with the Avtodor company and its builders: we now have the entire highway from Moscow to Kazan fully connected, only asphalt remains to be laid. And on December 20, as promised, we are determined to finish the entire route, and on September 5 we are ready to start the road to Arzamas. In other words, we are also continuing large-scale construction projects along with repairs.

We are currently working on 30 city detours, which affects both the transport component and the development of housing construction. Because as soon as the bypass of cities appears, the area around it begins to be built up. We are also continuing this topic. And in 2024 we plan to reach Yekaterinburg. We are currently working on a project to get to Tyumen: part of it will be built in 2024, part of it in 2025 ‒ and then we will continue on to the Vostok highway, as we reported to you, with a bypass of cities.

Large block of work ‒ this is a communal infrastructure. At the last meeting with industrialists, you were also asked this question. Vladimir Vladimirovich, we are working on this project, and we are working on a large $ 4.5 trillion program with the Ministry of Construction. We still don't have enough sources everywhere, but I can note that 84 regions have made complete programs for the development of municipal infrastructure, where they counted all our tools that we gave, and you approved programs for investment and budget loans, special treasury loans, and development bonds. New tools over the past three years – the total cost of housing and utilities alone [is] about 700 billion. Accordingly, these are also extra-budgetary sources, this is mandatory, it is added to this amount, plus this is the tariff component. In other words, we have developed this program as a system, and now we just need to support it with financial instruments and organize it, because we can change pipes as quickly as we do roads today. Secondly, we have learned how to build quickly and efficiently. We can also set up a fast rhythm for the replacement of communications, and we have everything for this.

In addition, we continue to develop public transport through loans. You once instructed that we will soon have a State Council on this issue. We have launched a program on public transport, and we are giving loans to the regions. We believe that in the next six months we will deliver 10,000 [units] of public transport to localities. In other words, it will not only be roads, but also a good new public transport, which the population is very much waiting for.

As the state is the largest customer in the field of construction, we are seriously managing the Federal Targeted investment Program for construction. You will remember that two years ago we consolidated this program and assembled a single customer. I can say that this year we have almost half a trillion sales as of today, and we are going to exceed two percent more than last year.

What does this mean practically? We will introduce one and a half thousand objects, of which 300 will be introduced ahead of schedule. If we used to lag behind all the time, now we are introducing many objects ahead of schedule thanks to loans, advanced construction, and systematic staff work.

In addition, Mr Putin, we have very seriously tightened up our "unfinished work". I've already reported this to you. If a few years ago we had a "non-completion" of about five trillion, we have reduced almost all of it to real, that is, now we really understand all the objects that are in the"non-completion".

A large amount of work is being done in new territories, and we have integrated well. We have a single customer ‒ Avtodor-for the entire infrastructure, and the manager is here [at the meeting]. Just the day before yesterday, I was in the new territories myself ‒ I also reported this to you. I want to say that the plan of socio-economic development of the regions is being implemented. We see 4,500 objects in operation: under repair, under construction. Regions-bosses, government customers, despite everything, we are working hard.

The most positive thing is that we have started building commercial housing in new territories ‒ 100 kilometers to the contact line, and people are already building housing, people believe that there will be housing, and they are investing their money. The fact that we have now provided a mortgage mechanism, a support mechanism, and we have provided bonds – the new territories have never seen such money for the development of municipal and road infrastructure.

Vladimir Putin: Does the mortgage work?

Mikhail Khusnullin: Mr President, we are only just beginning to process the first ones, because the developers have just received construction permits. The first eight houses are already in operation, can you imagine? One house is already on the third floor. Two months ago, a developer from the south, from Rostov, came in ‒ there's already a house on the third floor, I saw it myself the day before yesterday, I looked at it. It pleases, there is faith in it. Therefore, the work in the new regions is systematically organized.

We continue to work on reducing the investment construction cycle. Since 2020, major changes have been made. I can say that today we have already reached the level where we can meet the target for an ordinary object in three years. Previously, it was up to five years. In general, we set a task with the Ministry of Construction: no object should be built for more than three years. Only very complex objects are more than three years old. We even build the Moscow-Kazan highway, which has a standard construction period of five to six years, in three years. But this is due to the reduction of… The fact that you constantly told us "SNiPs and wheezes", the fact that you constantly made comments to us ‒ we have now managed to correct this topic in many ways.

Vladimir Putin: It's not me, it's the builders themselves.

M. Khusnullin: These are builders, yes.

Vladimir Vladimirovich, in conclusion, I would like to say that we have 12 million people in the construction, housing and utilities and related industries. People all know how to work, know how to work. The Government has built up a systematic work with the regions. Every week, the headquarters, every governor from a small FAP, from a small repair or small repair club to large construction projects knows personally.

Thanks to this system, we can see the entire construction site and bring up housing. Measures are constantly being taken-thank you, you support them, we have all the tools, everything for work is there, you just need to work. So, in closing, I want to say thank you. I hope that all the tasks you set will be completed.

Vladimir Putin: Good. Thank you very much.

I looked at it, and I have a list of speakers here ‒ six people, and ten people are sitting at the table. If we are on the merits, briefly, and to the point, then everyone will speak. I'd like to listen to everyone.

Igor Anatolyevich, come on.

Igor Deriglazov: Mr Putin, I am a regional developer from the city of Kursk. Our company is both a construction organization and an organization that produces building materials, that is, we do everything in a complex. The company employs 1,650 people today. Since 2012, we have built the Severny district, one million 76 [thousand] square meters of housing.

Vladimir Putin: In Kursk?

Igor Deriglazov: Yes, in Kursk. We have built at our own expense – since 2012, we have been conducting comprehensive development of territories at our own expense – two schools with 1,000 seats, seven kindergartens, six of which have 280 seats. This year, we built a polyclinic with 600 beds, built a large temple, a fitness center [in the form of] a submarine we are building, and a shopping center with an area of 65 thousand square meters.

What are the problems of a regional developer? We currently have three sites with a total construction area of one million square meters. The main task for starting construction is to sign technological connection agreements. Under these agreements, we have about four billion rubles, with 70 percent payment and prepayment under these agreements. I would like to discuss government support in some way. We are willing to pay these figures…

Vladimir Putin: One more time: what's that for?

Igor Deriglazov: The contract of technological connection, that is, for the construction of heat, electricity, water, sewerage networks, that is, the entire infrastructure. Today, for such development, for complex development, this figure for us, for regional construction, is…

Vladimir Putin: Is it too much?

Igor Deriglazov: It's too much, yes. We are ready to pay in terms of the volume that we build in a year, but not to pay one-time ten-year construction at once. For us, a million [square meters] is about eight to ten years, and 70 percent of this figure is paid for us.…

Vladimir Putin: It's too expensive.

Igor Deriglazov: ... expensive, yes.

Vladimir Putin: As if for a future period.

Igor Deriglazov: Yes, for the future period, without having built anything yet. I would like some support in this regard. Our infrastructure bonds went well, and in 2021 we signed an integrated development agreement for 226,000 square meters, which provides for…

Vladimir Putin: There are 143 billion, in my opinion, already distributed.

Mikhail Khusnullin: 143 billion rubles have been distributed, Vladimir Vladimirovich. There is a proposal for a second 150 billion, which you have previously supported. If this mechanism worked, we could finance such projects. Because exactly within 10-15 years, this money is returned and gives a very large multiplier effect. Because no one will be able to build a network worth four billion rubles in advance, but they would have taken it out of bonds and paid it out for 10 years, and this is what we are talking about. The mechanism is very working and very popular.

Vladimir Putin: Yes, yes, I understand. But the question is to expand it a bit, right?

Mikhail Oreshkin: Yes, you have already made such a decision, and now we need to start the second "portion".

M. Khusnullin: "THE HOUSE.Russian Federation " we have promoted this program, it is very popular.

Vladimir Putin: Igor Anatolyevich, would you be satisfied with such a decision?

Igor Deriglazov: Yes, of course, it will suit you completely.

Vladimir Putin: All right.

You named the company after your father, didn't you?"

Igor Deriglazov: Yes, we are a family business. He built two million square meters in his time, and I have already built more than a million square meters. In other words, we have built three million units in Kursk. Only 150 thousand people live in our homes in Kursk, out of a population of 450 thousand – a third of the city lives in our homes.

Vladimir Putin: I wish you every success.

Igor Deriglazov: Thank you.

Vladimir Putin: We have already mentioned it, as you have heard, and our colleagues have already said, so we will move forward.

Alyona Viktorovna, please.

A. Deryabina: First of all, I would like to thank you for your attention to the construction industry as a whole. Specifically, we are talking about the work that is being done to reduce the time of the investment and construction cycle. We feel this on the ground on a daily basis.

Until quite recently, we actually even had civil construction stretching out for five years. Today, from the moment we start working on obtaining initial permits to the moment we transfer apartments to our clients, it takes us about three or three years.

Vladimir Putin: Probably four. Four more so far.

A. Deryabina: We have already been in Moscow for 3.2 years.

Vladimir Putin: But the national average is about four, although there were a little over five.

A. Deryabina: Yes.

Our company is engaged in civil engineering. We build a large number of residential buildings of improved quality and business class. We not only build, but also manage these houses later. We have 3.5 million square meters under management in our portfolio and fewer residents than our colleague from Kursk, [I. Deriglazov,] but 75 thousand residents live here.

At the same time, we are designing about three million square meters of housing and building about two million square meters. Every day we have 15 thousand workers on construction sites today.

Of course, today there is an opportunity for any developer to make very high-quality objects using the most modern innovative materials. The current situation forced us to spend a little time on restructuring logistics processes, but, in general, all these tasks were solved in one way or another.

Vladimir Putin: Yes, that's why imports started to grow.

A. Deryabina: Yes.

But what makes us wary is that we bring modern materials, and if we transfer them to low-skilled workers, then, of course, the percentage of defects increases, and this is despite the fact that over the past year and a half or two, the cost of labor has increased by 30 percent. So, of course, the obvious conclusion is that the availability of a sufficient number of highly qualified labor force ‒ this is not only a guarantee that we will build on time, but also a guarantee that it will be a high-quality product that suits everyone at the cost.

Vladimir Putin: Yes, Alyona Viktorovna, this is quite clear. And where to get it?

A. Deryabina: I think that it would be possible to look back a little bit, but this is not always a bad option, because, if you remember, in Soviet times there was a system of vocational schools all over the country. Not all people are ambitious and want to build career steps and ladders. Perhaps it would make sense to step up work in this direction, reviving some, of course, more modern and relevant reading of such vocational education, in order to train not only management in the construction industry ‒ I mean engineering and technical personnel - but also ordinary specialties.

Vladimir Putin: We try to do. Too little, don't you think it's not enough?

A. Deryabina: It's not enough, and I think it would be a little easier to do it if we were more active in promoting some reputational things related to the construction profession.

Vladimir Putin: [Related] to prestige.

A. Deryabina: With prestige, yes. Because the salary, for example, for these professions, these specialists, in the same Moscow today-from 60 to 160 thousand rubles, that is, this is a fairly good salary.

Maybe if we could find a way to promote this topic in some way and raise the prestige of the construction specialty, it would be a little easier for us to find labor for our projects.

Vladimir Putin:Do you have a lot of visitors from the CIS countries, how many in percentage terms?

A. Deryabina: A lot, a lot. But here the question is not so much that these are newcomers, the question is that they are still low-qualified. We would like to have a more highly qualified workforce.

Vladimir Putin: Good. We seem to be working on this, and your colleagues from another industry also talked about it, by the way, about training workers. We have a whole program.

Mikhail Oreshkin: We have a million new specialists in the framework of the professional development program. Your decision was made recently, and now we will expand it. If Alena Viktorovna wants to participate… We also have a similar system there: representatives of private business come and together with the state [make] joint investments in this open source. Accordingly, you can definitely find such an open source where you will be welcomed with pleasure, and you will make your contribution to this development.

Vladimir Putin: Will you take part, Alyona Viktorovna?

A. Deryabina: Where are we going to go? Since we said "a", we'll have to say " b " as well.

Vladimir Putin: Well, we already have the benefits of our meeting today. Okay, thank you very much.

Pavel Alexandrovich.

Pavel Karnaukh: Dear Vladimir Vladimirovich,

Thank you for the opportunity to report.

CLT-Development Group of Companies is a subsidiary of Sistema. We are a full-cycle developer, with a unique and largest CLT technology manufacturing plant in our portfolio, a design institute, construction facilities and, of course, an analytical unit for project management. We mainly work in the direction of developing the hotel complex.

Vladimir Putin: Vladimir Petrovich [Yevtushenkov] is also engaged in construction here?

M. Khusnullin: Wooden buildings.

P. Karnaukh: Yes. This is a unique technology that allows you to build high-rise buildings.

Vladimir Putin: Just about these high-rises-is it really possible to build a "piece of wood" in 12 floors?

P. Karnaukh: Yes, all over the world [they are building], up to 85 meters today, a record height. We thank Sergei Sobyanin, who went along with this, as Moscow is a leading city, and coordinates the renovation. Nine-story buildings, which we have passed almost all the approval cycles, have only the norms of the Ministry of Emergency Situations, and I will report on this in addition. But in general, of course, this unique technology actually surpasses traditional types of construction, such as concrete, brick, and so on, in many characteristics.

What are its advantages? This is cross-glued wood-an organic, literally monolith of a high degree of factory readiness. Without exaggeration, this technology in wooden housing construction is the most advanced and most progressive in the world.

What are its advantages? First of all, it is the speed of construction. We build three times faster than traditional types of construction. This has already been proven. We built the first four-story houses in Russia.

Vladimir Putin: And why?

P. Karnaukh: A high degree of factory readiness is the first thing.

Vladimir Putin: No, wait.

P. Karnaukh: He comes as a designer from the factory.

Mikhail Khusnullin: They collect them like Lego.

Vladimir Putin: No, reinforced concrete panels are also made at the factory.

P. Karnaukh: Yes, but the minimum number of " wet " processes that technology allows you to build very quickly. That is, there are no" wet " processes. Another advantage is that we can build in the Far North, because there are no "wet" processes. At minus 60, at plus 40-calm.

Mikhail Oreshkin: Our colleagues will be building projects in the Arctic right now.

P. Karnaugh: Yes, absolutely. We are looking at this project and hope that we will be able to implement it.

Vladimir Putin: Wooden houses keep it so cold in the Far North, right?

P. Karnaukh: To be honest, we believe that it is better than concrete buildings. The first is thickness. Second ‒ in any case, there is facade insulation and a ventilated facade. This is in any case according to fire safety standards, and in general, so that ultraviolet light does not spoil the wood, and so on.

Therefore, we believe that it is better than reinforced concrete, faster. Secondly, these are earthquake-resistant houses. To date, we have designed and are currently building a house on Lake Baikal by order of VEB.Russian Federation", its subsidiary " Baikal. Center". Earthquake resistance ‒ it can withstand shocks up to 9 points on the Richter scale.

Vladimir Putin: Is it a "live" house?

P. Karnaukh: Yes, it is a "living" house in fact, this technology, plus wood has a certain level of flexibility.

Another advantage is that it meets all the standards of both international and national "green" housing construction. That is, these are literally carbon-neutral houses.

What else would you like to mention about the technology? Our key, flagship projects ‒ first of all, we built together with Segezha Group the first four-storey houses in Russia in the Vologda region, in the city of Sokol. These are literally the first demonstration projects that have been implemented. They are already fully commissioned, commissioned and already fully populated - very good reviews.

Another advantage of the technology is energy ‒ efficient homes. We have already received feedback from people and we can see that the payment rates for the winter period are 2-2. 5 times lower than in ordinary houses that we are used to building. We designed for " Baikal. Center", we have an energy efficiency indicator of A++ is obtained.

The second significant project that is currently being discussed at our intraregional level is that we have built campuses for the Center for Physics and Mathematics in Sarov by order of Rosatom. The second stage of construction is currently underway.

We are actively developing the hotel sector. With Kosmos Hotel Group, for example, we have already started building a 35,000-square-meter hotel resort in the Republic of Karelia, and at the beginning of next year we will start building a 55,000-square-meter hotel resort on Lake Baikal, which is also a comprehensive development of the territory. That is, it is literally a technology that allows you to build completely different buildings and structures, of various levels of complexity, and much faster than using traditional technologies.

And the last thing that we are actively developing, of course, is individual housing construction.

Dear Vladimir Vladimirovich, I would like to thank you, because you pay special attention to the development of wooden housing construction. According to your previous instructions, at the last meeting that you held on this topic, you instructed your colleagues to develop a regulatory framework that will allow building high-rise buildings and expand opportunities. We see that both the Russian Ministry of Construction and the Russian Ministry of Emergency Situations are working very intensively on this issue, very quickly. But according to the roadmap, the norms will be developed no earlier than in early 2024.

Vladimir Putin: Standards for the Ministry of Emergency Situations?

Pavel Karnaukh: Standards for high-rise buildings, yes, first of all for the Ministry of Emergency Situations.

Vladimir Putin: I'll see the Minister [Alexander Kurenkov] in just a day or two, and we'll talk. If possible, we'll speed it up.

P. Karnaukh: This will help us a lot. I would like to go to the renovation in Moscow this year. This will be the flagship project. We will invite you separately to the opening, if we succeed. And we believe in it.

Vladimir Putin: Good.

Pavel Karnaukh: There is another suggestion-the application of international standards for high-rise housing construction using CLT technology. This is the second thing that can, for example, accelerate the development of the regulatory framework in Russia.

And the third thing that is important for residential housing today. We know, and according to your instructions, mortgage concessional lending is already working, but it works for specialized developers on escrow accounts. Of course, such a story should be applied for B2C [business-to-consumer], that is, for the end user, so that they can also apply and get preferential mortgage lending.

I know that all this has already been worked out, and we hope that in the near future the hearings will be held and the law will be adopted.

Thank you very much.

Vladimir Putin: And the cost?

Pavel Karnaukh: We believe that the cost today is 10 percent higher than traditional types of construction, but with mass use, let's say, we will approach the norm that has already been adopted today. Therefore, we enter the renovation within the framework of the cost set by the Ministry of Construction.

Vladimir Putin: Good. Thank you.

Anton Nikolaevich.

Alexander Glushkov: Dear Vladimir Vladimirovich,

Indeed, the industry has probably achieved good results over the past four years. These are not only financial support measures, but also the synergistic effect that Marat Shakirzyanovich mentioned in relation to administrative and technical reform.

Continuing the thesis that Alena Viktorovna [Deryabina] started, four years ago, in 2019, the number of administrative procedures in construction was almost a thousand – 980, almost 1000 pieces. Now, by introducing norms that have established an exhaustive list of procedures, the number of such procedures is 697. I think that by joint efforts-by joint efforts of business and the Government…

Vladimir Putin: 697?

Alexander Glushkov: Yes, 697 [procedures], these are all possible ones.

Vladimir Putin: I have 400 – something in my references.

M. Khusnullin: We want to go to 650.

Alexey Glushkov: This year we are working to reduce the number of these procedures to 650. This is achieved not just by cutting out certain procedures, but by optimizing them. I'll give you a simple example of an engineering infrastructure. When any developer gets the rights to a land plot, they first apply to the local government body and receive a town-planning plan for the land plot, which prescribes all the regulations for the use of the land plot.

Previously, to get it, you had to go around all the resource-supplying organizations, get certificates about the possibility of technical connection, hand them over to the municipality, and after that you were prepared with a city plan. Now, according to the system of interdepartmental interaction, the municipality does this independently – and within the same ten-day period. We have almost a month and a half less for six procedures, for a month and a half it became more convenient and faster.

In addition, thanks to staff work, business is not left out. As a public organization, we provide feedback because the number of procedures is constantly decreasing. Of course, executive authorities do not always keep up with changes in these regulations. We work together – business and government-very quickly to help ensure that all administrative changes reach the regions very quickly.

The second question is the catch phrase about "SNiPs-wheezes"that has become a catch phrase from your easy language. The procedure has been carried out for 2.5 years, and out of the 11,800 technical requirements that were under construction, 380 are now mandatory. But this does not mean that all other standards have disappeared. They have become voluntary, meaning that they can be used or alternative sources of proof of constructive security can be used.

In this regard, the State Duma has now held a hearing in the first reading, and the amendments to the draft law on technical regulation have received a positive conclusion, which makes it possible to form a register of these alternative proof options, which have a positive impact on the construction economy, of course, and, of course, on the construction time, which can not but please us all.

There is one point that our colleagues also indirectly mentioned, which is, of course, interdepartmental cooperation. The main block in relation to building codes is being developed and is actively working now. But sanitary standards and fire standards are a different format for approving these documents. These are departmental documents, and they don't come in the format of a federal law, so they change quite often.

We would like to harmonize this work in some way, so that the standards approved by various departments do not go against each other and have a positive impact on the economy. Because even the logic of fire safety in all countries is still the safety of people in order to evacuate in the event of a fire. We have a different approach – to save real estate objects. This affects the cost price. Very often, industrial builders complain that it is much more expensive to build the same plant in Russia than to build a similar plant in European countries. This is due precisely to the requirements that agencies, primarily fire and sanitary ones, impose on these objects.

Of course, structural safety is important, sanitary safety is important, and fire safety is important, but this is some kind of sensible compromise that needs to be sought together, otherwise it turns out that, on the one hand, we are moving very quickly, and on the other hand, we are being pulled back a little.

And the last thing I wanted to focus on is the self-regulation system. There is a lot of debate about its effectiveness, but today we have probably already shown – thank you for supporting the SRO's initiatives on the possibility of using free funds from compensation funds. In 2020, a temporary norm was introduced, but it is already being extended twice - that the free funds of the compensation funds of self-regulatory organizations should be used for loans to their member organizations when implementing municipal state contracts.

As a result of this norm, we have issued loans for 11 billion rubles to self – regulating organizations – 226 SROs in Russia for construction-and 6.7 of them have already been returned. The norm is coming to an end this year, and it has shown its effectiveness. I think that in the future... thanks to this measure of support-how is it, a lot or a little? – 4.5 billion rubles were spent on timely payment of wages, which is approximately 70 thousand builders received their wages on time, and the number of state contracts covered by this support measure is almost 65 billion rubles.

Therefore, I think that in the future it would be right to use these funds of compensation funds for other, maybe state or quasi-state programs, for cash gaps of contractors, in housing construction, maybe in the program of demolishing dilapidated and dilapidated housing, repairs of municipal infrastructure, because this is really a help. We have 98,000 construction contractors in the Russian Federation, who are always experiencing a shortage of working capital, and the funds of compensation funds are a very convenient mechanism for short-term gratuitous lending to such organizations.

Thank you.

Vladimir Putin: Anton Nikolaevich, I will give Marat Shakirzyanovich the floor again now-of course, we can definitely think about this. Naturally, the most important thing is not to reduce to zero the whole point of creating these compensation funds.

Now, in my opinion, the Government has already made a decision, and Marat Shakirzyanovich supported it, that contracting companies can start fairly large new projects without increasing their contributions to the appropriate compensation funds, right?

Alexander Glushkov: Yes. This measure was adopted for small businesses.

M. Khusnullin: This is a very good measure. We have taken this first step.

But I agree with my colleague, Anton Nikolaevich, that we actually adopted this legislative norm at that time, and we are collecting this money. We have accumulated a lot of money, and today we have about 170 billion rubles, if we collect them from builders and surveyors. Today they are simply placed on deposits in banks.

Therefore, we still ask the commission to work out how to keep the guarantee guaranteed, but to involve this money in the turnover precisely by the construction decision.

Vladimir Putin: Yes, it is for the construction industry.

Mikhail Khusnullin: Yes, for the industry.

Vladimir Putin: But in such a way that they are not nullified, and so that they perform this function for which they were created. Namely, to protect all participants in this process.

Alexey Glushkov: Our system of self-regulation is already 14 years old, and it turned out that by placing funds in banks, most of the self-regulatory organizations have accumulated a "safety cushion". We are talking about this "airbag".

Vladimir Putin: I understand. I hear the same thing from representatives of different industries in various versions: stop feeding the banks, what we put there. I understand everything and I understand you, and I would like to support you, of course. But this rule itself was created precisely in order to ensure security.

I need to think about it. I will ask Marat Shakirzyanovich, the Minister of [And.Fayzullina] together with the Administration [of the President] to estimate that there were no violations of these principles. But, of course, if the available funds increase, they should be used in the interests of the industry. I agree with that. Agreed.

Alexander Glushkov: Thank you.

Vladimir Putin: Alexey Andreevich, please.

Alexander Krapivin: Dear Vladimir Vladimirovich, Dear colleagues!

Natsproektstroy Group of Companies is a large full-cycle production and construction holding company that includes the design, construction and operation of the facility. The group consists of 64 enterprises with a total number of more than 75 thousand people; equipment – more than eight thousand units.

Over the past three years, the group has significantly increased the volume of work performed on the implementation of construction projects. Since 2021, the annual growth rate has been more than 30 percent.

The Group consists of three main divisions. The first division is the division of road and bridge construction. Our main customers are Rosavtodor, Avtodor Group of Companies, Moscow, Moscow Region and other regions.

The current main objects that we are building are the M-12 object, Moscow-Kazan. Today we were just talking about the bridge over the Volga-we are building it. This is a unique extra-curricular bridge: 3.3 kilometers long. We can say that it is already at a high stage of readiness, and I think this facility will be launched in December.

M-11 is a section of the Tver bypass, where the first stage will be open by the end of the year, about half of the section will be finally launched next year.

Vladimir Putin: When?

A. Krapivin: Until the end of next year.

M. Khusnullin: That's what we agreed. We are launching the first stage this year, and the final stage will be completed in 2024. This was your assignment: to bypass Tver, so that from Moscow to St. Petersburg to do without…

Vladimir Putin: Well, of course, so that there is already a full-fledged track.

Mikhail Khusnullin: Yes.

A. Krapivin: Also on August 25, the bridge across the Yenisei River will be opened, which is 1.2 kilometers long. Everything is in the plan, everything is ready.

The division also deals with fairly large volumes of construction of road and bridge infrastructure in Moscow. Now there will be a launch of the object-South-Eastern Chord, South-Eastern chord. Quite a large part of this object was built by us.

The second division is the Port Infrastructure Energy division. The main facilities that we are currently working on are the Lavna port, which we hope will be completed next year, in the Murmansk Region.

Vladimir Putin: I see, I saw him.

A. Krapivin: Also, the development of the port infrastructure in Taman by Uralchem Group. To date, we have undertaken to implement this project in a short time for them in order to ensure independent export of fertilizers by the beginning of next year. We really expect that we will be able to do it before the end of this year.

Artemovskaya CHPP, which is just starting construction this year, will be completed in 2026.

The third is the railway division. I would like to discuss the work of this division in more detail. Currently, the division has two of the most significant stands.

The first is the project for the development of the Central Transport Hub, which consists of the current WDC-3 with 45 new stops, WDC-4 – with 39, which the Moscow government together with Russian Railways plans to launch now, in August, literally on August 15, 16, 17, and, accordingly, WDC-4-at the beginning September. Projects are also in a high stage of readiness, and now everyone is working on them every day. I think we will also meet these deadlines.

We deliver them four to eight months ahead of schedule, which was planned a little later under the contract. It would also be impossible to implement this in such a short time without the personal participation of Sergei Sobyanin and Oleg Belozerov, because this is a daily coordinated work of the city authorities and the railway infrastructure. There is a lot of congestion, the movement of working trains, people, platforms, that is, these are extremely difficult processes.

Further development of the Central Transport Hub is currently being discussed. Vladimir Vladimirovich, taking into account the current pace of construction achieved, the turnaround of work, and the consolidation of labor resources in the Moscow region, of course, we really want to see the program of the Central Transport Hub develop further and new facilities appear. It seems that they say that maybe there will be a MCD-5.

The second significant object, and for me personally it is the most important, is the Eastern Polygon development project, where the group performs up to 50 percent of the total program volume. To date, work has been deployed at 108 sites. On a stretch of more than three thousand kilometers, we need to build a thousand kilometers of new, second railway tracks and 900 artificial structures.

That is, the complexity of construction in the region, in addition to weather and other [conditions], is that almost every kilometer on average has one artificial structure. At the same time, the group has significantly increased the scope of work on this project over the past three years. In three years, we have grown twice every year and have reached the planned target of more than 100 billion rubles for the Eastern Landfill this year.

Vladimir Putin: Why are there so many artificial structures? Is this the area?

Alexander Krapivin: Yes, the area is very swampy, and there are approximately 500 bridges and 400 culverts in these artificial structures. But since there are a lot of swamps, it is necessary that water passes through, for stability, respectively, the embankment.

Bridge workers from almost all over the country went there, because in fact there are a lot of objects. The labor intensity may be small, but they are located in hard-to-reach regions and at a fairly large distance anyway. Accordingly, all this was made possible by the fact that our group made quite significant investments in a timely manner. Since 2021, we have invested more than 25 billion rubles in the purchase of new equipment and the development of regional capacities. Therefore, today the company is as ready as possible to implement these complex tasks. Based on the input results, I think it will be clear that we have really grown a lot.

Dear Vladimir Vladimirovich, taking into account the above and the current pace of construction, you know, our entire labor collective – and in fact, today the Bam builders have become like-minded over the past three years – we very much hope that a long-term program for the development of the Eastern Landfill will be formed, so that we can also plan our workload for the next, I don't know, ten years old.

Vladimir Putin: We practically have it.

M. Khusnullin: Mr Putin, the second stage has been fully defined, and we have announced the decision on the third stage, and you have given instructions to work with the National Welfare Fund, and the money is even pledged there. Now it's easy to translate all this into practical terms. He is [A.Krapivin] what is he talking about? That it needs to have a perspective to load its capacity.

Vladimir Putin: We need to understand how many people we can save and what we can buy.

A. Krapivin: And it is very important to start designing. That is, even if the decision on the entire Eastern landfill is made a little later, then, of course, we would not want to build in parallel with the project.

Vladimir Putin: Yes, I understand. Why hang out?

Mikhail Khusnullin: There are overlapping works. That is, part of the work of the second stage will be related to the third, so it is advisable to design some things right now, so that you don't have to do wasteful work later.

Vladimir Putin: Good.

A. Krapivin: I can give you an example very briefly. Bridge builders: today we have concentrated more than 40 drilling machines in all areas. On average, the cost of one – about two million euros used to be, but now we use different ones, including Chinese ones. Despite such a large number of bridges, we will complete drilling operations in May next year.

We have all our workers and drilling machines in the same areas where, in principle, it is potentially possible to develop the next stages. As Marat Shakirzyanovich said, we could start some technological processes next year. Just for information.

Vladimir Putin: Good.

A. Krapivin: The group pays special attention to technological development in the railway division's operations. So, together with Russian Railways, we have developed and created a new Russian train traffic management system.

Today we can say that the safety of Russian passengers does not depend in any way on foreign technologies or foreign software. In other words, we are now fully implementing new technologies in all new projects.

In conclusion, I would like to thank you for your support to the construction industry, and we are ready to implement new significant tasks that will be assigned to us.

Vladimir Putin: All right, Alexey Andreevich. You have heard our reaction, and we will try to provide you with a stable front of work so that it is stable and without fear that something will hang up. I understand.

Alexander Olegovich, please.

Colleagues, I have a request: a little more compact, I just have a protocol event there.

A. Haidukov: Thank you for your participation.

For me personally, for our company, for all our fellow developers from the Urals and Siberia, this is a sign that we are doing the right thing, building the right houses. Invite us more often, we will build even more and even better.

As for the company, Strana Development, we mainly specialize in the construction of residential districts. We are building microdistricts in Tyumen, Yekaterinburg, Novosibirsk, Moscow, St. Petersburg and the Moscow Region.

The company is 12 years old. We started with one region, but today the portfolio consists of five million square meters, and about half-2.5 million square meters-was formed at the expense of new programs over the past three years. These are the KRT [integrated territorial development] program, which I would like to talk about today, and the program on infrastructure bonds.

In 2021, we were lucky: our company, our region-the Tyumen Region-was chosen as a pilot and a land plot was launched in a pilot project under infrastructure bonds. It was 51 hectares, it was far from the center. This land has been standing for a very long time, it could not be launched by banks, because there was not enough LCR for the economic efficiency of the project.

Due to the fact that we were able to issue infrastructure bonds for it, the project was launched, and we implemented it. Last year, the first houses were put into operation. Thanks to this low-cost infrastructure loan, we were even able to improve the quality of housing.

(Shows slides.) We made multi-level parking lots. For us, for Tyumen, this is very relevant. In these parking lots, the idea is that a person drives into the parking lot, puts the car inside, goes into a residential building using special passageways without going out on the street, and uses parking spaces.

In regions where the selling price of housing is low ‒ such solutions are expensive and impassable-we mostly have parking on the street. We have launched and implemented such a project.

Vladimir Putin: It's great.

A. Gaidukov: Yes, people are happy, and the project was implemented.

Farther. As for today's infrastructure bonds, we also have several sites, and they are being used to build microdistricts in general: schools, kindergartens, clinics, roads. Infrastructure bonds include loans for road construction. But if we could add schools and kindergartens to them, which we build and then transfer to the city absolutely free of charge, then this would improve the project's economy and the economic efficiency of these solutions, and housing would become more affordable. This is for such low-margin projects, where the project's economy…

Vladimir Putin: In this case, the region is trying to shift the social infrastructure to you.

A. Gaidukov: It depends on where-in different cities, depending on the cost of housing. Somewhere the cost of housing does not allow it to accommodate schools and kindergartens.

And in some cities, where the cost of housing is sufficient, you can combine school and kindergarten there.

Vladimir Putin: I see. Okay, I heard you.

A. Gaidukov: It would be great to implement such projects here.

About CRT programs. We, too, have been working on these projects for about five years and resettling residents from dilapidated, dilapidated housing. To date, we have already resettled about 500 families. We are moving people out of their apartments, out of conditions where there was no water, electricity, or sewage.

Vladimir Putin: I've been there, I know.

A. Gaidukov: At first, of course, not everyone liked KRT, so we launched the program together with the administration of the Tyumen region. The idea was to promote this story, KRT, so that people would be more happy about it. Because when they move into better housing, they come to us with cakes and congratulate us every year. Their lives were divided into pre-KT and post-KT.

About the implementation. We have a large company, we have designers, builders, sales people, a management company that serves everything, and we were able to build a process that we launch a new residential building every ten days. It is very important for us that these houses and apartments are realized.

We have reviewed our implementation today. We see that 90 percent of sales in the regions are mortgages, and in its structure the main thing is state support, support for IT specialists, and family mortgages. It is very important for us that these tools continue, and then we will be able to realize our volume.

Vladimir Putin: Alexander Olegovich, we are well aware of this and we are aware that to a large extent this record-breaking "harvest" of housing construction is related to mortgages. We will do everything possible to ensure that it continues. As we remember, as we know, eight percent is a preferential mortgage, now six percent is a family mortgage, five percent is for IT specialists, and two percent is for the Far East.

A. Haidukov: We can't go anywhere without it.

Vladimir Putin: Yes. We will work, we will continue.

There is only one point that the Central Bank pays attention to ‒ this is the quality of borrowers. Some borrowers are already paying 80 percent of their mortgage servicing expenses, so we need to keep a close eye on this, which we will do together with the Government and the Bank of Russia, but we will certainly support preferential mortgages.

A. Haidukov: Can I have two more useful requests?

Vladimir Putin: Please, of course.

Alexey Gaidukov:We are launching the first CRT in Yekaterinburg, and we have settled a large number of residents ‒ 200 families and a quarter. The first construction site will be launched on October 3, and at the same time, on October 3, an exhibition is being launched in Yekaterinburg – Expoforum, under the patronage of the Ministry of Construction. We would like to invite you personally to this exhibition and to the launch of the first pile. The residents we have resettled are very happy with this program.

Vladimir Putin: Thank you very much.

A. Haidukov: This is the first one.

And secondly, we have one very important project ‒ the Big Microdistrict project for 700 thousand square meters, where we want and are ready to build schools at our own expense, kindergartens at our own expense, and sports facilities. But opinions on this project were divided, and there was even a small meeting. Opinions were split in half, and we were one vote short. We would like to ask for your vote to support us.

Vladimir Putin: Take part in the voting.

A. Gaidukov: We supported you in this project. This is St. Petersburg, it is a large territory of about 70 hectares - this is 700 thousand square meters.

Vladimir Putin: Where?

A. Gaidukov: We have prepared and drawn the project. This is near the ring road, near the bypass road. There is a lot of demand for housing, there is such a territory. If there is a possibility, of course, we could implement a posh neighborhood.

Vladimir Putin: I'll keep it for myself. Thank you.

Please, Karen Gasparovich.

To.Oganesyan: Dear Vladimir Vladimirovich,

"United Customer [in the construction sector]" started its activity on February 1, 2021 and in a little over two years has ensured the commissioning of 31 federal facilities, including the federal children's rehabilitation center in Podolsk, which you opened on June 1.

Today, the project portfolio includes 172 objects of the federal program, including long-term construction projects. One third of the federal project portfolio ‒ dolgostroy: This is the Rimsky-Korsakov Conservatory in St. Petersburg, the new building of the Tretyakov Gallery.

Vladimir Putin: When will you finish?

To.Oganesyan: We will finish it in 2024.

Vladimir Putin: Are you sure?

To.Oganesyan: Exactly. And we invite you.

Vladimir Putin: It's just already… I won't say any more. You understand for yourself.

To.Oganesyan: We know that all your assignments are under special control. We will complete these facilities in 2024.

Igor Fayzullin: The main thing is that we are moving through this object without any problems.

Vladimir Putin: They keep telling me: construction workers don't like music. I tell them: this can't happen, intelligent people. (Laughter.)

To.Oganesyan: In addition, two similar rehabilitation centers in Yevpatoria and Novosibirsk, which we are also building on your behalf, are also in operation. In Evpatoria, we also plan to complete the first stage in 2024.

We are now actively involved in the construction of world-class campuses. We provide services in four regions as a federal customer: Kaliningrad, Orel, Novosibirsk, and Yekaterinburg. We also act as a technical customer for 13 concession facilities.

It is also important to note that two new objects are being transferred to us through the Ministry of Culture – new for us, but old for the industry - the Polytechnic Museum and the Pushkin Museum. These facilities were also handed over to us in 2023 for completion of construction. The deadline here will be slightly later-2025-2026, and we plan to complete it, Mr Putin.

As for the FAIP [Federal Targeted Investment Program], I would like to mention the five-year program that we have approved. It helped to balance the overall need for financing and thus solve the problem, as Marat Shakirzyanovich said, of reducing construction-in-progress projects. That is, today we are solving the problem of long-term construction projects step by step.

As for the restoration of facilities in new regions, we started this work in the middle of last year. Today, the company's portfolio includes more than 2.5 thousand objects. Our main objects are located in major cities, such as Mariupol and Sievier – donetsk-32 localities.

Last year, the key task was to ensure the start ‒ up of heat, and here, together with colleagues from the Territorial Development Fund, with regional structures, we ensured this work. It was hard, especially for the affected houses. We have provided more than 250,000 residents with heat, and this year we will fully enter the winter period.

Here it is important to mention a number of other projects that we are implementing on your behalf. This is primarily the Donetsk perinatal center. A maternity hospital was damaged in Donetsk after the shelling, and you gave instructions to build this facility.

We are taking several measures here at once, Mr Putin, which allow us to shorten the period altogether.

We started construction two weeks after your assignment. How did we manage to do this? We used a re-application project built in Tula-the Tula perinatal center. We studied it, looked at it ‒ in 2022, this object was put into operation ‒ and two weeks later, linking it to the terrain, we began to build it.

Due to the fact that we have started designing and constructing a re-use facility in parallel, we will not only complete the construction this year, but also ensure the settlement and operation of this facility on behalf of the working group. Accordingly, as a system solution, it would help us in kindergartens, schools, residential buildings, hospitals and polyclinics. In addition to unique objects, you can actively build them using reuse projects and standard projects.

Vladimir Putin: What is the problem?

To.Oganesyan: The Ministry of Construction has a huge portfolio of standard projects here, but first of all we need the will of regional managers and industry customers.

Vladimir Putin: They want it again and again…

To.Oganesyan: Yes, I have my own suggestions.

M. Khusnullin: To be different from others.

Igor Fayzullin: Everyone wants a new one.

To.Oganesyan: An important driver. The designer designs every time.

Vladimir Putin: I see. Then the [Presidential] Administration should be [decided] so that I can talk to the heads of the regions.

Mikhail Oreshkin: Yes.

Vladimir Putin: I understand and fully support you. That's the way to do it, I agree.

To.Oganesyan: The next important question is…

I. Fayzullin: And cheaper.

To.Oganesyan: Of course.

Vladimir Putin: Of course, it is cheaper and not at the expense of quality. On the contrary, if it is a good project, then it is already working. Why not?

Mikhail Khusnullin: Vladimir Vladimirovich, 27 thousand square meters on a turnkey basis in 11 months, filled with equipment.

Vladimir Putin: Yes.

Mikhail Oreshkin: We can then make friends with schools from different regions.

Vladimir Putin: Yes.

To.Oganesyan: We built residential buildings in the same city of Mariupol with full occupancy in four months, because we also used re-use projects.

Vladimir Putin: I saw.

To.Oganesyan: It is also important to note, Mr President, that we have an urgent need to produce our equipment for medical and cultural facilities. In other words, if we cover 95% of the total volume of our own, Russian ‒ made production, then in terms of medical equipment, primarily high-tech laboratory equipment, and stage sound equipment for cultural objects-here we see a huge growth point for our industrialists. In other words, we could just close our positions.

I would like to take this opportunity to thank you for coming to Mariupol. Because when you visited Mariupol, it gave an explosive increase in labor productivity. First of all, even more people, our builders, felt proud of what they are doing.

Vladimir Putin: And I felt proud of the builders, to be honest with you. Because we arrived ‒ what, three hours we were there, right?

Mikhail Khusnullin: Yes.

Vladimir Putin: After all, we didn't warn you. It's like an anthill-they work, they work, they work, it's already dark, people are still working, everything is spinning. Great!

To.Oganesyan: And most importantly, Mr Putin, they know that you can come and inspect the construction site in person at any time.

Vladimir Putin: It wasn't an inspection, I was just getting acquainted with the results of your work. Thank you very much, to all your colleagues.

Ruslan, please.

R. Baisarov: Mr President, hello again!

Eleven years ago, on your behalf, we completed the construction of the bridge to Russian Island. So far, this is the only bridge left that has broken all records for the length of a channel passage.

Today, on your behalf, the M-12 expressway is being actively built, where we are completing the construction of two unique structures – the cable-stayed bridge over the Oka (the only cable-stayed bridge over the Oka) and the Sura Bridge. Domestic technologies were used in the construction process. Why did I give the example of a bridge to Russian Island: there were 60 percent export mechanisms, and today up to 80 percent we have switched to domestic mechanisms, which is very good.

We are also building the Dusse-Alinsky tunnel on the BAM. The previous tunnel was built for about 50 years, and we set out to complete it in permafrost conditions [on time] in the region of five years, so we will complete it next year.

Zeysky Bridge – on your instructions, we have started construction, this is in Blagoveshchensk. The construction period is 2024, and we are going to complete it this year, a year ahead of schedule, in September of this year.

Last year, we commissioned the Amur River bridge to China – the only railway bridge crossing between Russia and China, we completed it, you remember this bridge.

Vladimir Putin: Yes.

R. Baisarov: We have also completed the construction of a road bridge crossing in Blagoveshchensk, which is also the only road bridge crossing between Russia and China.

What do I want to say, Mr President? We, of course, our company [BTS-Most JSC], have built all the tunnels on the BAM, there is a long history there, I will not take up your time now, but I want to thank you for supporting the initiative to introduce the mechanism of infrastructure budget loans aimed at developing regions, creating jobs and further developing the economy of our country. I'll tell you why I'm talking about this later.

Thanks to infrastructure loans, large facilities are being built in many regions today. Metro stations are being built in cities with millions of people: Nizhny Novgorod, Chelyabinsk, Samara, in particular, we have started construction of the metro in Krasnoyarsk, where about eleven thousand additional jobs will be created. I just flew in from there.

Dear Vladimir Vladimirovich, there is an important issue that requires your attention. The impact of the current key rate on the period of return on private investment in the implementation of large infrastructure projects, it complicates the implementation of large infrastructure projects. That is, the " key " plus there is a certain percentage of the bank still withdraws, that is, the key rate is very high today-it is almost more than eight percent. We come with large objects, and we have to pay a huge amount of money to the bank because of such conditions.

Together with the leading banks of our country, major banks, and private investors, we have developed a financing mechanism that will help attract private investment in the construction of strategically important facilities for the country. We would like to ask you to instruct the Government to work out this option together with us. Then we would be ready... In particular, I support Alexey [Krapivin], although he is a competitor to us on the BAM, we have difficulties there – we are currently considering very serious infrastructure projects at different levels on your instructions. There, the key rate is so high that people and companies…

Vladimir Putin: It can't be very high there, it's the same everywhere.

R. Baisarov: No, we are not taking money from the budget, we are referring to the money raised. Yes, it is the same everywhere, but when there are large amounts of investment, we are talking about large amounts, say, 600 billion…

Vladimir Putin: This is where the Government's support measures should come into effect: all sorts of subsidies and other support options.

R. Baisarov: There are different mechanisms here. If we are instructed to work on it…

Vladimir Putin: Please, with pleasure. The rate simply rose due to the fact that there were trends related to the heating up of inflation, and the Central Bank, as a key organization responsible for maintaining macroeconomic stability, had to react accordingly.

But I understand everything you're saying. If you have any ideas, please, of course, work with Maxim Stanislavovich [Oreshkin] and Marat Shakirzyanovich [Khusnullin].

R. Baisarov: Thank you.

Vladimir Putin: Please.

Alexander Andreev: Mr President, first of all, I would like to thank you for the attention you pay to the road construction industry, and thanks to this, record results have been achieved so far in the commissioning of roads and bridges.

A galaxy of well-equipped road construction companies has emerged, and the quality of both design and construction has significantly improved. Thanks to your support, planned funding, and the leadership of supervising Deputy Prime Minister Marat Shakirzyanovich Khusnullin…

Vladimir Putin: Exactly. Your orders will now go, and your contracts will go.

Andrey Andreev: Mr President, I would like to say that this may not be the right time, but Marat Shakirzyanovich used to hold the VKS, and some question arose. He says: why didn't you say anything earlier? I say: this is a matter of business principle, and maybe not quite for you. And then he said: and I will fight for each of you. I must say, it's worth a lot, to be honest.

Indeed, this has made it possible to implement a number of major projects to date, such as the Central Ring Road, M-12A, M-11 Neva and other major projects in the Russian Federation.

In recent years, our road construction company Avtoban has implemented two-thirds of the ring of the Central Ring Road, we are now implementing 35 percent of the construction of the Moscow – Kazan highway, M-12 Vostok, plus we are finishing the construction of the Tolyatti bypass.

Today, our company employs 10,5 thousand full-time employees and 8,5 thousand-in subcontracting organizations that are engaged in construction. This is somewhere commensurate with the district city.

Vladimir Putin: Yes.

Andrey Andreev: I would like to point out that every person who is engaged in road construction creates up to 11 jobs in related industries. This includes metalworking, transport, railway, automobile transportation, structures, inert materials, fuel and lubricants. In other words, there are a lot of issues related to road construction.

We understand the importance and necessity of maintaining construction at a faster pace. Thanks to the construction of the largest facilities-both by our company DSK Avtoban and [companies] in the industry as a whole – professional teams with a high degree of manageability and the ability to mobilize large forces in the shortest possible time have been formed.

I want to give you an example. We are now actively working in the new territories of the Russian Federation. It was necessary to quickly concentrate, go out, work, and so we were not alone, there were also special projects. But the fact is that after the commissioning of the first and second parts of the M-12 Vostok road, as well as other major facilities, this year there is a need to redistribute more than 30 thousand people ‒ I say this for all road construction companies that are currently engaged in construction - they are released after the completion of the facilities. We need them to move to other priority objects for the construction of infrastructure.

To achieve this, it is necessary now to start implementing the five-year infrastructure development plan at a faster pace and start work on launching projects that are approved in the plan of the state company Avtodor.

There are five priority projects: M-3 "Ukraine", M-1" Belarus", Pulkovo interchange, Orekhovo-Zuyevo bypass, M-4" Don", there are kilometers. It is very important that this is done.

Our industry largely depends on the allocation of budget funding, and in the current conditions, there is some movement of funding to the right. First, in the near future, this will not allow the introduction of one and a half thousand kilometers of highways.

At the same time, the most important thing I want to say is that we see that in this situation, a powerful resource of extra-budgetary financing remains almost unused, which was successfully implemented during the construction of a number of objects that we implemented: the Central Ring Road, Tolyatti bypass.

I would like to note that Tolyatti bypass is currently being implemented by our company through financing from a capital grant, attracting infrastructure budget loans, and preferential DOM.Russian Federation " and investments of other banks: EDB, Sber and DOM. RF Bank-you need full-fledged bank financing. At the same time, extra-budgetary funding is almost 40 percent. Without these tools, the project would have been impossible to implement.

We have a non ‒ governmental organization-the National Association of Infrastructure Companies, and together with Avtodor Group of Companies and major banks, we have done some work. The banks themselves say today that we have available liquidity in the amount of 2.8 trillion rubles, which we want and are ready to invest in the construction of facilities. They are very interested in it. However, today the high cost of debt financing remains, which is a deterrent to maintaining the pace of infrastructure development.

Avtodor Group of Companies, together with the Government of the Russian Federation and major road companies and banks, is currently developing a draft resolution on subsidizing the interest rate for the implementation of major road projects through the mechanism of concession agreements – namely, subsidizing. To do this, Mr President, we really need your support in making a key decision on subsidizing the interest rate of banks and allocating capital grants for the implementation of road construction projects.

To give an example, the five projects that I have named, the total amount is 235 billion, of which 150 billion-and they are in the plan of a state-owned company-can be attracted by bank financing. And the implementation of these projects will require subsidizing the rate ‒ I wanted to say "only", but nevertheless this is a big figure-95 billion, but over 15 years. If you spread it out on average, that's six billion a year. Although according to the schedule, it turns out that the first year is 800 million, the second year is a billion ‒ something, and so on, and only then there is an increase. That is, it reaches its maximum value somewhere in the sixth or seventh year, and this is, on average, six billion a year.

At the same time, Avtodor Group has worked out three more megaprojects: the Southern Cluster of Dzhubga-Sochi, the South-Western Chord (Yekaterinburg – Krasnodar), and the Ring Road-2 around St. Petersburg, which will allow for the construction of 1,600 kilometers of highways during implementation and with the attraction of extra-budgetary funding, as well as get different effects. According to the institutes, about seven trillion additional.

Vladimir Putin: Good.

Mikhail Khusnullin: Mr President, allow me to make one suggestion. Of course, Alexey Vladimirovich [Andreev] praised me very much, but the question is very simple. On your instructions, we have now worked out extra-budgetary funding for major projects. Here the question is simple: how much will the capital grant be, and how long will the interest rate be compensated?

We have prepared several projects. We will report to you and consult you before the budget cycle is formed.

Vladimir Putin: Good.

As for the transfer to the right, we have certain proposals from the Ministry of Finance, but we have both road construction and housing and utilities plans shifted to the left, and for very significant amounts.

Alexander Andreev: Mr President, today we are finishing construction, introducing the M-12, and a colleague is introducing facilities ‒ in fact, 30 thousand people are simply released. While there are no facilities, there is no shift to the left, so I'm talking about extra-budgetary financing, banks are ready.

Vladimir Putin: No, there is a shift to the left in terms of money.

Mikhail Oreshkin: This year.

Vladimir Putin: This year, yes. And it is significant – by how much?

M. Khusnullin: This year we have moved 180 billion rubles, while in previous years we have not moved less than 250 billion rubles. Every year we shifted from 250 to 420 billion rubles to the left, which allowed us to pick up such a pace of road construction.

Vladimir Putin: Yes. So this is happening. But the question is to continue this process next year and in the next three years. Yes, I understand, we will definitely see.

Of course, no one wants to reduce either the pace or volume ‒ the construction industry is so important. (Addressing V. Petushenko) Vyacheslav Petrovich, I think my colleague has said everything.

Therefore, we will definitely look at it all. We ourselves want to preserve both the rate of employment and the level of wages in the industry. As you said yourself, we are well aware that this is a multiplier for the entire economy, a "stove" that heats up everything. We all understand this very well.

In conclusion, I would like to say that in general, what you said ‒ of course, you noticed some things ‒ we will also respond accordingly.

But in any case, it was very useful for me to listen to you directly.

I would like to congratulate you and all the builders on the upcoming holiday and wish you success.

Thank you very much.

All the best, goodbye!

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