Showing posts with label Housing. Show all posts
Showing posts with label Housing. Show all posts

Meeting with Vladimir Zhirinovsky.

Vladimir Putin met with the leader of the Liberal Democratic Party of Russia (LDPR) faction in the State Duma, Vladimir Zhirinovsky.

Vladimir Putin with the leader of the Liberal Democratic Party of Russia (LDPR) faction in the State Duma, Vladimir Zhirinovsky.
Vladimir Putin with the leader of the Liberal Democratic Party of Russia (LDPR) faction in the State Duma, Vladimir Zhirinovsky.

The LDPR leader described a number of proposals that his party is drafting. One of them is to tighten control over funds in housing construction.

President Putin and leader of LDPR faction Vladimir Zhirinovsky.
President Putin and leader of LDPR faction Vladimir Zhirinovsky.
Russian President with Vladimir Zhirinovsky.
Russian President with Vladimir Zhirinovsky.
Russian President with the leader of the Liberal Democratic Party of Russia (LDPR) faction in the State Duma, Vladimir Zhirinovsky.
Russian President with the leader of the Liberal Democratic Party of Russia (LDPR) faction in the State Duma, Vladimir Zhirinovsky.

Putin had a meeting with Moscow Mayor Sergei Sobyanin

Sergei Sobyanin updated the President on Moscow’s socioeconomic development in 2016, the implementation of several large transport projects, including the launch of the Moscow Central Circle (MCC) railway line, and renovation of the housing stock.

Vladimir Putin with Moscow Mayor Sergei Sobyanin.
Vladimir Putin with Moscow Mayor Sergei Sobyanin.

President of Russia Vladimir Putin:
Mr. Sobyanin, let us talk about Moscow’s performance in 2016 and plans for 2017.

Moscow Mayor Sergei Sobyanin:
Mr. President, it was a difficult year because we did not know what would happen to the economy, investments and the ruble exchange rate, as well as because of other expectations. There were many things that alarmed us. However, the main trends turned out to be positive last year.

The industry, in particular the manufacturing sector, has begun to recover; we will see a 2 percent increase, according to preliminary results. The manufacturing sector increased exports considerably, which is a positive trend that is based not only on import substitution but also means that our industry is becoming more competitive internationally.

As for attracting investment, the volume of funds invested in the city has increased by 3 percent for the first time in the past three years. In fact, this is a record high in comparable prices. We saw 1 percent and 1.7 percent increases in investment before; the volume of investment did not fall in the past years, while this year it went up by 3 percent. Moreover, foreign investment volumes remained stable. This is evidence of a stable inflow of both foreign and Russian investment. Annual investment in fixed assets is estimated at 1.6 trillion rubles, which is a lot.

Last year, we completed several transport projects that were record-breaking in terms of scale. We launched the Moscow Central Circle railway line together and it was with your support that this unique facility was built. Now 330,000 passengers use this line every day. We built 117 kilometres of roads, which is an absolute record in Moscow history. Those are not just new roads out in some field but roads integrated into the urban environment, including interchanges, over and underpasses, reconstructed roads. It was quite a complicated project. However, despite the current situation, we were able to achieve this.

The scale of housing construction was slightly lower than the peak numbers of last year. However, if we take the mean annual figure for the past five years, it was still higher than that. We can see that the real estate market is growing too. There is no doubt this industry will be developing, including civil construction, housing and commercial properties.

Small and medium-sized businesses caused us great concern. You have repeatedly told us that it is necessary to focus on building the necessary infrastructure and provide support for small and medium-sized businesses. I must say the number of small businesses in Moscow and individual entrepreneurs has increased by 10 percent, which is pretty good growth for last year. Budget revenue from small businesses has reached 17 percent, which is a more objective indicator. This means that profitability is growing, as is the number of businesses. We have achieved some very positive results.
We are finishing the housing renovation programme and demolition of Khrushchev-era buildings [five-storey blocks of flats built during the mass housing construction era when Nikita Khrushchev led the Soviet Union]. Since the beginning of the programme, we have relocated 160,000 families to 6 million square metres of renovated housing, which is a significant number. We have very few buildings left. I think we will complete the programme within the next two years.

However, even though we have succeeded in this part of the programme, there is still plenty of uncomfortable housing in Moscow to put it mildly – basically, rundown housing. I am talking about five-storey buildings of a similar design as those demolished, but their number is substantially higher. A total of 25 million square metres are occupied by 1.6 million people.

Today we are facing a dilemma. We collect money from those people for major renovation of that housing. But when we examined it we found a whole range of serious problems (Sergei Sobyanin continues to describe specific issues of the Khrushchev-era buildings that were expected to last 25 to 50 years at the time but which are now not up to modern housing standards).

Vladimir Putin:
Mr. Sobyanin, we have already spoken about this. I know Muscovites’ sentiments and expectations. Their expectations are that these buildings will be torn down and new housing will be built in their place. It seems to me that this would be the right decision. The only question is whether Moscow can afford it, what its budget can handle, and its ability to attract investors, and so on.

Sergei Sobyanin:
Indeed, this project requires huge financial resources, significant organisational and administrative costs. We know what we are facing. The demolition of the first series of five-story buildings – a far smaller project in fact – required an incredible effort. Many investors were ruined by these projects. The city took these projects over and is bringing them to a logical conclusion.

Today, Moscow's budget is rather stable. We paid off most of our debt that extended from previous years. This year, we expect good budget revenue, as I said, from the profit tax, the personal income tax. We have a safety margin. Therefore, from the financial point of view, we can see that the city has a certain potential. However, there are certain problems associated with the regulatory side of the process (The Moscow Mayor went on to cover the legal issues concerning the demolition and renovation of obsolete housing).

Therefore, Mr. President, if possible, I would like to ask for assistance in changing the regulatory framework and initiating a special law. We are ready to prepare a draft, to coordinate it, so that we could implement the project most effectively, from the legal perspective.

For our part, we will resolve all the financial and organisational issues. This will certainly be a great contribution to the renewal of the city, to improving the environmental situation, the transport situation, and to the creation of a new urban environment. It is no less important that 1.6 million Muscovites will receive new modern housing to replace the old buildings, which, I am afraid will be simply dangerous to use in 10–20 years despite our repair efforts.

Vladimir Putin:
Fine. Let us do it, but assuming everything we do is for the benefit of the people and will improve their lives – this is the kind of work and organisation I will be expecting. The next issue you will need to resolve has to do with resettlement, people’s future place of residence. It is necessary to make sure all the people are satisfied. This means you will need to work this out with the residents you will be resettling, and to do everything transparently, to show them exactly what benefits they will get from these projects.

Sergei Sobyanin:
We will do so, Mr. President, we have a wealth of experience. We usually try to resettle people within the areas they now live in, offering good options so that the vast majority of residents remain satisfied.

After the renovations, the worth of the buildings, their capitalisation will increase by at least 20–30 percent, even if the flats do not expand in terms of square meters, the quality of the housing becomes entirely different. Therefore, I believe the changes will be taken positively, especially given that we are receiving piles of complaints [about these buildings] from the residents, from municipal deputies and their associations, and the Civic Chamber of Moscow. We have grounds to say that this is a people’s project.

Vladimir Putin:
Fine, let us do it.

Sergei Sobyanin:
Thank you.

Vladimir Putin, Sergey Sobyanin.
Vladimir Putin meeting with Sergey Sobyanin.
Sergei Sobyanin.
Moscow Mayor Sergei Sobyanin.
Vladimir Putin.
Russian President Vladimir Putin.

President's meeting with Russian Government members.

Vladimir Putin met with Government members to discuss possibilities for further developing treasury monitoring of budget spending, the situation with co-funded housing development, and a number of other current issues.

President of Russia Vladimir Putin:

Good afternoon colleagues.

Today, we will discuss the results of work and further development for treasury monitoring of budget spending. Before we start though, I would like to hear a few words on recent decisions, particularly on an issue that is very sensitive and painful for many people – co-funded housing construction projects.

We know there have been many problems, as well as numerous and justified complaints that the state authorities did not ensure sufficient oversight in this sector. But new decisions have been taken, and since the start of 2017, the rules have changed considerably for developers attracting household funds to finance construction.

I ask Mr. Men to give us some more details on this matter.

You have the floor.

Minister of Construction, Housing and Utilities Mikhail Men:

Mr. President, colleagues,

Russian Government took a number of measures to act on the instruction you issued following the State Council meeting examining strategy in the construction sector. A number of changes were made to the law on participation in co-funded housing construction and came into force on January 1, 2017. These amendments aim to better protect people taking part in co-financing of apartment block construction projects.

One of the key changes is to set requirements regarding developers’ financial resources, namely, their charter capital, depending on the housing construction project’s area. The supervisory bodies in Russia's regions have gained new powers; they examine the situation, and without their report concluding that a developer meets the new law’s requirements, the developer cannot register a shared construction participation agreement and therefore cannot start raising money from the public.

The new law also makes important changes increasing the information transparency of developers working with citizens’ money. The law sets mandatory requirements regarding the content and accuracy of information disclosed. The law also regulates mechanisms for banking project financing for construction projects, involving the opening of accounts and escrow accounts for holding the funds of those taking part in co-funded construction projects.

Following your instructions after the State Council meeting, amendments were introduced and bylaws were passed to establish and begin the operation of a state compensation fund. Developers will make mandatory contributions to this fund of one percent of the shared construction participation agreement’s sum. If a developer goes bankrupt, money from the fund will be used to cover the problem building’s completion, or to repay the losses of those taking part in the project.

Russian Government has drafted additional amendments to a number of laws, which will be submitted soon to the State Duma, in order to ensure this state fund’s effective operation and establish a common mechanism for protecting shared construction participants’ rights exclusively through this compensation fund. I hope that our Duma colleagues will give these amendments their priority attention. We ask for your support on this.

The fund began operation on January 1.

Thank you.

Vladimir Putin:

In this context, there is a second question.

Housing mortgage loans have increased by around 30 percent compared to 2015–16. Overall, more than 6 million citizens have made use of housing mortgage loans to improve their housing conditions over 2005–2016. What measures do you plan to develop this process further?

First Deputy Prime Minister Igor Shuvalov:

Russian Government is working on the mortgage issue, keeping in mind the target figures set by the Presidential Executive Order of May 7, 2012. The target was to have at least 815,000 new mortgage loans a year. We had a good year in 2014, with more than a million new mortgage loans. Then we went through a difficult year in 2015. The Government briefed you and got your support for including in the anti-crisis program measures to subsidize interest rates of mortgage loans to buy newly constructed housing.

This program was quite effective and some people even consider it one of the anti-crisis plan’s most effective measures. As regards our commitments, we think for now that total spending on this measure will not come to more than 17 billion rubles, with a total of 25 million square meters of new housing purchased.

Considering the low inflation we had in 2016, and seeing that the financial market has stabilized significantly now, the Government has decided not to continue this program, because the commercial banks are already offering mortgage loans at 12 percent or less interest. Our goal under the anti-crisis plan was precisely to give borrowers a rate of not more than 12 percent. At the time when we took the decision on subsidized rates, banks were offering loans at 20 percent interest. There was practically no hope for such a product on the market.

The measure has fulfilled its task and we have already stopped it. We hope that over 2017, along with the drop in the key interest rate, Sberbank, VTB Bank and other commercial banks will also lower their rates and mortgages will become more affordable for the public.

As you noted, the mortgage loan portfolio grew in 2016, and we have reached the target figure – the statistics agency confirms a figure of 862,000 mortgage loans in 2016. We hope that the figure will pass the 1-million mark in 2017.

(Mr. Shuvalov went on to brief the meeting on the work of the Agency for Housing Mortgage Lending, its cooperation with the Central Bank and commercial banks, and on measures to get housing onto the market).

Vladimir Putin:

We all know that today’s oil price is linked to plans to reduce oil production. Mr. Novak, what is the situation with this production reduction plan?

Energy Minister Alexander Novak:

Mr. President, colleagues,

On December 10, 24 countries, the leading oil producers, reached an agreement on stabilizing the situation on the oil market and the need to start reducing oil production as from January 1 by a total of around 1.8 million barrels a day. The OPEC countries (13 countries) account for 1.2 million barrels a day of this reduction, and the 11 non-OPEC countries for 558,000 barrels a day. Russia will take voluntary part in this agreement and will potentially reduce production by up to 300,000 barrels a day.

The agreement will be in effect over the first half of the year. We agreed to establish a monitoring committee at ministerial level. The committee met for the first time on January 22 in Vienna to discuss two issues: first, the mechanism for monitoring implementation of the agreement, and second, the situation with the agreement’s implementation in January.

Regarding monitoring, we agreed that five countries’ ministers would sit on the committee. They include two non-OPEC countries – Russia and Oman – and three OPEC countries – Kuwait, Algeria, and Venezuela.
We agreed to set up a technical committee for the monitoring process. It will meet monthly at the OPEC secretariat and collect information on production in the countries party to the agreement and pass on this information to all participant countries. The ministerial level monitoring committee will meet twice a month to review the results.

Another two meetings will take place before the agreement ends. The production information’s source is data from the main analytical agencies, Platts, Argus, CERA and the International Energy Agency. At the meeting, we noted that although we have yet to receive statistics for January, we saw that all parties were serious about implementing the agreement and most had already begun. Preliminary data shows that production dropped by around 1.4 million barrels a day in January, and some countries had reduced production by more than planned and were ahead of the schedule.

As of the end of January, Russian production had fallen by 117,000 barrels per day, which is also more than double the amount initially planned by our companies. Our companies participate in this on a voluntary basis.

We have noted that the effectiveness of the agreements and decisions is already visible, since the price has stabilized at $55 per barrel. According to leading analytical agencies, the price is much closer to a fair price, about 10 to 15 barrels higher than it would have been without the deal.

Vladimir Putin:

10 to 15 dollars?

Alexander Novak:

Yes, 10 to 15 dollars per barrel.

We also see a decrease in the speculative pressure on prices, because at the beginning of the year, when prices fell hard, there was an all-time high number of traders shorting oil. Now, the situation has stabilized.

We also see a decrease in price volatility. The statistics for January show that price fluctuated within $5 relative to the median value of $55. We can now talk about the gradual recovery of the investment appeal of the industry. This year, for the first time in the last three years, all market participants expect an increase in investments in the industry, which will help avoid a collapse in production in the future.

In general, I must say that the Vienna meeting showed that all countries intend to properly execute the agreement, as it is in the interests of both the producers and the consumers. We believe that rebalancing the market, subject to full compliance with the agreements in the first half of the year, will allow us to reach the level of leftovers equal to the average over the last five years for oil by mid-2017. This is the outcome, the goal that was set in order to balance and stabilize the oil market.

Vladimir Putin:

This volume, the conventional excess amount of oil on the market, when do you think it will run out – by around mid-2017 or so?
Alexander Novak:

By the middle of 2017. It’s 300 million barrels, which is above the multi-year average of stored oil leftovers.

Vladimir Putin:

Are our companies facing any problems in that regard?

Alexander Novak:

Our companies are operating under the agreement, and do so on a voluntary basis, as it really is beneficial both for the companies and the budget in general. About 70 percent of additional revenue that we have today go to the budget.

Vladimir Putin:

Good. Thank you.

The first 2018 FIFA World Cup fan passport was issued on February 1. How is this work organized, and where will it go from here?

Mr. Nikiforov, please go ahead.

Minister of Communications and Mass Media Nikolai Nikiforov:

Mr. President,

Indeed, we issued the first fan passport in Moscow today. Admission to stadiums for the 2017 FIFA Confederations Cup and the 2018 World Cup will be granted upon presentation of two documents: a fan passport and a ticket. Registration on is required to obtain a fan passport. This can be done by both Russian and foreign fans.

Moreover, once registered, that person can enjoy visa-free entry to Russia under our government guarantee, which we issued when organizing the World Cup. This electronic document, plus a mark in an appropriate database.

Our key goal is to make visiting the event as safe, convenient and comfortable as possible. This eliminates the need to do additional checks when fans enter the stadium. Therefore, we recommend that everyone who has already bought a ticket or plans to attend matches register in advance.

Fan passport centers are open and already issuing passports in four Confederations Cup host cities, namely, Moscow, St Petersburg, Kazan and Sochi. We are talking about thousands of applications. We think the closer we get to the summer, the more applications we will process.

It’s Russian technology. We used something similar at the Olympic Games in Sochi, and we plan to use it again in 2018. Probably, we will use this standard procedure during the 2019 Student Games as well.

Overall, we believe that it should become a standard solution to ensure safety, convenience and comfort. I believe Mr. Mutko is better positioned to talk about the place of the fan passport in the overall organization concept.

Vladimir Putin:

Mr. Mutko, please go ahead.

Deputy Prime Minister Vitaly Mutko:

Mr. President, Mr. Nikiforov has already mentioned that this is an important step in our preparations for the World Cup and the Confederations Cup. I just wanted to add that this component of the security concept approved by you will, of course, allow us to bolster security measures and create a more comfortable environment.

This will also provide several additional services for our foreign guests and Russian fans, including visa-free entry, free mass transit rides in the World Cup host cities for fan passport holders, and the opportunity to see matches in other cities upon presentation of a ticket.

So we hope that we now have all the necessary capabilities in terms of information. Regardless of where they live, a fan can register and receive confirmation, and Russian Post will deliver a passport to his home. As such, we believe that this work is already underway.

We think about 700,000 tickets will be sold for the Confederations Cup. More than 100,000 applications have been filed already. About 10,000 people are in the process of obtaining their fan passports. It’s very convenient. We will think through all the ins and outs. If needed, such centers will be built near the stadiums in case someone loses or forgets their stuff. We will take care of everything.

Mr. President, we have little time left before the Confederations Cup. The overall preparations are going at a good pace, and the first match in St Petersburg will be held on June 17, which will mark the opening of the Confederations Cup.

Vladimir Putin:

Who will be playing?

Vitaly Mutko:

Russia and New Zealand.

Vladimir Putin:





Vladimir Putin in Kremlin.
Vladimir Putin at meeting with Government members in Kremlin.
Vladimir Putin, Russian Government.
President's meeting with Government members in Kremlin.
Arkady Dvorkovich, Vitaly Mutko and Alexander Khloponin.
Left to right: Deputy Prime Ministers Arkady Dvorkovich, Vitaly Mutko and Alexander Khloponin.
Denis Manturov, Sergei Prikhodko.
Industry and Trade Minister Denis Manturov (left) and Deputy Prime Minister – Chief of the Government Staff Sergei Prikhodko before a meeting with Government members.
Andrei Belousov, Igor Shuvalov.
Aide to the President Andrei Belousov and First Deputy Prime Minister Igor Shuvalov before a meeting with Government members.