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'Siberia is indeed a land of superlatives: bigger than Europe and the US combined, with the biggest gas reserves in the world'

Vladimir Putin demands action to develop regional air routes

By The Siberian Times reporter
07 August 2014

Russian president warns that 'the work is going slowly' and calls for progress.

'We took a decision to develop regional air transport and routes, and this means establishing a company for the purpose. The government already made its decision on this matter, but it seems that the work is going slowly. What is the problem?' Picture: nakanune.ru

Transport minister Maxim Sokolov said there had been a marked rise in domestic flights within Russia, but Putin indicated more should be done for residents in the east of the country. 'We have just received the air traffic statistics for the first half of the year,' said Sokolov. 'To date, the number of passengers carried comes to 41.5 million people. This is an increase of nearly 11 per cent on last year's figure.

'Last year, international air traffic grew a lot faster than interregional traffic, but this year we are seeing the reverse: regional traffic is growing around three times faster than international traffic. Russian airlines alone have carried around 20 million passengers on internal lines.

'This was made possible thanks to the regional transport support programme. There are five such programmes in all, and the Transport Ministry has earmarked around 9 billion roubles in its budget for supporting interregional air transport. 

'These support measures will enable airlines to carry another approximately 1.5 million people and open around 80 new domestic routes'.

But Putin countered at a government meeting: 'We took a decision to develop regional air transport and routes, and this means establishing a company for the purpose. The government already made its decision on this matter, but it seems that the work is going slowly. What is the problem?'

Vladimir Putin demands action to develop regional air routes, airports and 'fast-trackzones'.


Vladimir Putin demands action to develop regional air routes, airports and 'fast-trackzones'.


Vladimir Putin demands action to develop regional air routes, airports and 'fast-trackzones'.

‘Rysachok’ (Little Racing Horse) - Russia's new regional plane taking up to 16 passengers or two tons of cargo. Pictures: kremlin.ru

Sokolov said the government had decided this year 'to increase the number of airports operated by Far East Airports Company. A decision is also ready on organising the Airports of Krasnoyarya Company, adding seven regional airports to this company.'

These moves are seen as crucial to providing modern air transport to Siberia and the Russian Far East. 

Putin told him: 'Don't delay with this work. And you really do need to reflect on support measures for the regions, because if these measures are not in place, it will not be in our advantage to produce our own small aircraft.

'There is seemingly big demand, but no orders are being placed, and the reason there are no orders is because it is expensive. We therefore need to propose mechanisms that would enable us to develop traffic on these regional routes and thus have the incentive to build our own planes'.

He stressed: 'We need this market and we need it to have reliable demand. If we do not have the demand, no one will make the planes. We will buy a couple of planes here and there abroad, but this is not what we need to develop our own aviation sector.'

Vladimir Putin demands action to develop regional air routes, airports and 'fast-trackzones'.

Russia's new regional plane taking up to 16 passengers or two tons of cargo in military colours. Picture: Valeriy Kuzmin

Aleksandr Galushka, minister for the development of the Russian Far East, said that work was underway to implement the decision for 'fast-growth zones', part of a Kremlin strategy to boost the development of this vast region bordering the Pacific. 

'A team from the Ministry for the Development of the Far East, together with the regions, has examined more than 400 proposed sites for the rapid-growth zones,' Galushka said. 'The criteria we are using are the sites' attractiveness to investors as places to build new facilities that focus on the big and fast-growing markets of the Asia-Pacific region.

'Given that the Far East faces some well-known limitations in terms of logistics, infrastructure, and human resources, there are not many suitable sites. 

'Only 14 were selected. Each of these sites is important to us as a potential source of accelerated economic growth. Work is under way now to draw up comprehensive plans for each site's engineering and infrastructure development. This work will be complete by September 1. 

'We will then have a clear idea of which specific decisions we need at each site to bring them fully into line with investors' expectations.

'As far as the marketing efforts go, we have put together a database of 4,400 big manufacturing companies with exports worth 10 trillion dollars to the Asia-Pacific region countries. We have held talks with more than 300 of these companies on investing in the rapid-growth zones, and have presented the potential sites that we selected and the main provisions of the draft law that we prepared'.

Vladimir Putin demands action to develop regional air routes, airports and 'fast-trackzones'.

Aleksandr Galushka, minister for the development of the Russian Far East, said that work was underway to implement the decision for 'fast-growth zones', part of a Kremlin strategy to boost the development of this vast region bordering the Pacific. Picture of Vladivostok: The Siberian Times

'So far, five memorandums of understanding have been signed with foreign investors on investing at these sites: three with Japanese companies, one with a Chinese company, and one with a New Zealand company.

'The heads of the biggest South Korean companies, Samsung, Lotte, LG, and Daewoo, and the biggest Japanese companies, Sumitomo, Kawasaki, Hitachi, Mitsubishi, and Mitsui, have personally expressed interest in the rapid-growth zones.

'We have also developed a model for according tied loans to residents of the future sites in the Far East with the Japan Bank for International Cooperation, Export-Import Bank of Korea, and China Development Bank.

'Overall, the work with foreign investors potentially ready to enter the rapid-growth zones shows that our policy of developing competitive growth hubs in the Far East and radically improving the investment climate is probably the best economic response to attempts to create foreign policy difficulties for our country's development.

'As far as the legislative work is concerned, we have drawn up a draft federal law on the rapid-growth zones. The draft law's two key provisions are deregulation and tax incentives. As far as deregulation goes, the key principle is to use the one window system for investors in the zones. 

'This makes it possible to greatly simplify and reduce the amount of administrative formalities involved.

'It offers a free customs zone at the sites, reduces the time it takes to conduct the necessary checks, offers preferential rental rates and connection to engineering networks at the sites, allows investors to bring in the needed qualified workers outside of quotas, and offers a simplified procedure for land allocation'. 

Vladimir Putin demands action to develop regional air routes, airports and 'fast-trackzones'.

‘The heads of the biggest South Korean companies, Samsung, Lotte, LG, and Daewoo, and the biggest Japanese companies, Sumitomo, Kawasaki, Hitachi, Mitsubishi, and Mitsui have personally expressed interest in the rapid-growth zones'. Pictures: teksyndicate.com

On tax breaks, Aleksandr Galushka made clear that 'investors who enter the rapid-growth zones during the first three years following their establishment will benefit from an insurance contributions rate of 7.6 per cent for the first ten years; tax holidays on profit, land and subsoil extraction taxes; and a simplified and fast-track procedure for reimbursing VAT.

'The various government ministries and agencies have already approved the draft law, and its key provisions have been approved too with the Presidential State-Legal Directorate and the Presidential Experts' Directorate.

'The only remaining conceptual issue to be settled is the draft law's scope. The State-Legal Directorate and the Presidential Experts' Directorate think that the draft law's scope should be limited to the Far East and perhaps (as the Experts' Directorate suggests) to single-activity zones. 

'We have come up against this conceptual objection, but we think that we will be able sort out this one remaining matter and will be ready to submit the draft law at the autumn session.'

Putin stressed the need to back the plans with money. 'I ask the Finance Ministry above all and the Economic Development Ministry to ensure the necessary financing, because without it, these plans will not be able to go ahead.'

Comments (1)

The problem is Mr President...you are doing too much gallivanting where you are not wanted. No wonder, Siberian matters are lagging behind.

PS. Leave Ukraine!

PPS. Investors make sure to read the small print...
jojnjo, Dublin, Ireland
23/08/2014 00:45
0
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