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Solutions from Russian State Companies. The Far Eastern Priority

September 06, 18:15 UTC+3
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Key conclusions

State companies playing an important role in Far East development

“The amount of transit between Asia and Europe may reach 200 bln euro in the near future. The construction of a logistics center in Khabarovsk will provide 800,000 jobs, it is worth 5 bln rubles of investment, it is a serious economic activity,” said Nikolai Podguzov, General Director, Russian Post.

“As for the Far East, the company has implemented more than 70 projects in five main areas,” said Aleksey Shilo, General Director of the Center of Corporate Transportation Services, Russian Railways.

“A big investment project that we implemented in the Far East implied the construction of an optical fibre network from Sakhalin to Magadan and Kamchatka <…> It took us two years instead of one,” said Alexey Sapunov, Vice-President, Director of Far East Macroregional Division, Rostelecom PJSC. 

“RusHydro Group of companies essentially accounts for 90% of electricity generation and 80% of heat generation on the territory of the Far East,” said Sergey Tolstoguzov, Deputy Director General, Director of the Division «Far East», RusHydro PJSC.

“Russian Post in partnership with Post Bank provides financial services <…> Post Bank offers internet banking <…> It is possible to use the services of Post Bank remotely,” Nikolai Podguzov said.

“In 2017-2018, more than 1,000 medical and preventive treatment facilities will be connected to the internet,” Alexey Sapunov said.

Overarching program of the region’s development needed

“Probably today the time is ripe for creating a comprehensive program of the development of the Far East,” Sergey Tolstoguzov said.

Challenges

Limited access to Internet and connection in several regions

“In the Chukotka Autonomous Area this indicator does not exceed 10%. In Yakutia and the Magadan Region – 43%,” said Artur Niyazmetov, Deputy Minister for the Development of the Russian Far East. 

Insufficient new property construction activity, mortgage lending issues

“The new housing supply rates are 1.5 times lower than Russia’s average rate. The cost of a square meter on the primary market is 15% higher. The share of rundown, dilapidated housing is 2.5 times higher compared with Russia’s average,” said Artur Niyazmetov.

“The issue of mortgage lending is critical. 52% of residents of the Far East are not satisfied with the conditions of existing programs. 42% of residents note that the new property construction activity is not sufficient,” Artur Niyazmetov added.

High cost of railway transportation, obsolete rolling stock in certain regions

“28% of residents of the Primorsk Territory, more than 40% of the population of Khabarovsk Territory, the Amur Region and the Jewish Autonomous Province are not satisfied with the cost of railroad transportation services,” Artur Niyazmetov said.

“We see that the decrease will amount to around 40% by 2020 <…> Respective instructions have been made to develop a financing mechanism to supersede commuter equipment. One of the options is to acquire on lease with state support,” Aleksey Shilo said.

Lack of funds provided to air carriers on ‘flat’ tariff program

“The funds earmarked for the program ran out on July 16,” said Shamil Kurmashov, Deputy General Director for Commerce and Finance, Aeroflot.

Solutions

Expansion of flight subsidizing program

“It covers young people until 23 years of age, women 55 plus and men 60 plus, as well as disabled persons <…> For example, a one-way ticket to the Far East costs 12,000 rubles, a round ticket – 22,000 rubles. Previously, a one-way ticket cost 35,000, and an average resident of the Far East could allow a trip to the mainland once a year. Now the mobility has increased three-fold as a result of ‘flat’ tariffs that have been imposed,” Shamil Kurmashov said.

Regional transportation back-up

“There will be many more companies that will take this opportunity than there are now <…> Currently only Aurora performs flights from 109 cities, probably some regional companies, and only in 15 directions <…> I think it is a very small share <…> Obviously, it is necessary that a small-capacity aircraft conduct transportation services between Okhotsk and Khabarovsk,” Shamil Kurmashov said.

Support to handicapped, unprotected groups of people

“We have a Center for support for handicapped people <…> In 2017, the number of trips and transportation of handicapped people increased 1.5-fold,” Aleksey Shilo said.

“We provide services to handicapped people in all our divisions, and provide in-home services if needed,” Nikolai Podguzov said.

Provision of mortgage lending growth and development of comfortable housing standards

“We are developing standards for the whole of Russia, but pilot projects based on those standards are being implemented here, in the Far East,” said Denis Filippov, Deputy General Director, Agency for Housing Mortgage Lending (AHML). 

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