Late last summer Russian Prime Minister Dmitry Medvedev prolonged the powers of Russian Railways Company (RZD) President Vladimir Yakunin. The government’s resolution to this effect had been expected back last June, so the unexpected pause prompted some to look at this routine formality (Yakunin had led the company since 2005 and his approval was to become a fourth in a row) as a kind of intrigue...
- Your contract has been prolonged. But many are still curious why it happened two months later than it had been originally anticipated.
- To begin with, I’ve kept doing my job non-stop all this time. I have an open-ended employment contract. It is renewed automatically unless a different decision has been made. Under the company’s Charter, the candidature for the position of Russian Railways president is approved by the government once in three years, but no exact date is set. It might have happened in June or in August. No intrigue.
- After your appointment as RZD chief you said that you had got acquainted with Putin when you returned to Russia from New York in 1991.
- We had met before my assignment in the United States several times, but those were very casual, brief encounters. In the United States I met many people, who are now well-known in Russia and in the world, I made friends with Valery Gergiyev and Sergey Lavrov, Russia’s current foreign minister. Then he was an adviser to the political secretariat of our country’s UN mission. And I was second and then first secretary at the socio-legal secretariat…
- After five and a half years in the United States was the return to the Soviet Union a culture shock for you?
- At the UN I was making about fifteen hundred dollars a month, which was a decent sum in Russia in those years. But life in New York cost a pretty penny. As for the ruble component of my salary, it was deposited on a special account at home, and we could spend the money when we went home on vacation. But then the devaluation followed, those ruble savings lost much of their original buying power. That money proved just enough to refurbish the kitchen of my apartment in St. Petersburg. But it was not enough for the rooms…
- Oh, yes. "The president alone is above the parapet in the line of fire..." That's the remark you dropped at a meeting of the Russian Football Union's Executive Committee last summer, when the future of Crimea's football clubs was on the agenda. Of course, it was not meant for the public at large. Were you surprised to see a transcript of what was said at the meeting in the dailies?
- I was dumbfounded. We made no secret of that discussion of ours. Everything that was being said there was put on record, of course, but not a single person has ever given a go-ahead to its publication. It means that somebody was very much interested in a leak like this. I won't bother guessing whose hand was at work here...
- By the way, FC Lokomotiv Moscow sponsored by RZD is again having a mess with coaches. The club’s president, Olga Smorodskaya, has changed many of them…
- In brief, the situation around Lokomotiv has turned into a serious headache for the club’s board of directors. I think that the team’s inner problems should not turn into public conflicts…
- Let's return to the July meeting of the Executive Committee of the Russian Football Union.
- I see no reason in making detailed comments on that session as its record was made public without our consent. I will just say that I do subscribe to every word I uttered then. The RFU Executive was conducting a vigorous debate, it was an open and sometimes sharp exchange of opinions, and I said that that it was very indecent of some people to think of nothing else but of a way of avoiding sanctions, while Vladimir Putin is left all alone with the aggressive policy of the US administration and their obedient Brussels.
What's one being taught in the army? The soldier's task is to safeguard the commander, to get in front of the commander in the line of fire, to protect him with one's chest, if need be. At least that's the way I was brought up. True, everybody is free to choose, but it is the right of a citizen and patriot to stand by the head of state's side in times of trouble.
- This takes us to another related subject - the split of the elites amid the latest events.
- Here is a little quote from Zbigniew Brzezinski, who recalled once that Russian clients kept some five hundred billion dollars on accounts in Western banks and then asked to decide whether that elite was still “ours” or already “theirs”. That's homespun truth. It does not matter now whether those people had been taking money out of Russia because they had no faith in the future of the Motherland. Business people can be patriotically-minded or cosmopolitan, but all of them are pragmatic. That's a fact of life.
As a person who has long been involved in political and economic studies, and not as the RZD president, I will tell you this. We should stop playing innocent - politically and economically. That innocence is long gone. The modern Russian elite emerged on the ruins of the USSR.
To my mind, time is ripe for declaring real financial amnesty and for taking steps that will let capitals return to Russia. That will let people pay a certain amount of money to the treasury and be able to sleep tight, for they will know that there will be no midnight knock on the door and no demands to give away everything they own. This money would not be redundant for our country's economy, but provide an extra resource for development. Let me say it again: billions of dollars are at stake!
- But that will make many face a really stark choice, won’t it?
- How very true! But then it will become clear at once which elite is “ours” and which “theirs”.
{article_opinion:204:'Business people can be patriotically-minded or cosmopolitan, but all of them are pragmatic'}- OK, let's take the bull by the horns. A few words about your own sons. One is resident in London and the other has become a resident of Switzerland, I hear people say...
- Viktor has been through a two-year internship in Switzerland. He was studying business. Then he returned to his hometown, St. Petersburg, where he now lives with his wife and children. He has never made any plans for starting a life outside Russia.
With Andrey it's all different. It was a great heartache for me to learn he has made up his mind to go. That happened when St. Petersburg's "Gangland" label was not so much a figure of speech but an everyday reality. Andrey used to say, "I do not want my kids - your grandkids - to be accompanied to school and back by bodyguards." Finding a counterargument was a really daunting task. Besides, Andrey has excellent education, a PhD in economics and Columbia University and London Business School diplomas. He has been quite successful in applying his knowledge in practice, doing his utmost to contribute to the development of relations between Russia and Europe. But as you can see, the march of events has taken a different turn... It would be very wrong of me if I tried to make him return. I am against pressure. Any major step in life requires proper forethought.
- But such alternatives may become very frequent for our elite, each of its members has offspring and special circumstances...
- Belonging to an elite is not all that really matters. We have for many years talked about an open society, implying, among other things, the freedom to move about the world.
- But the trend has changed now, hasn’t it?
- Let us turn from geopolitics to RZD’s matters. It is not a secret that you have opponents in the RZD management…
- But they are not enemies or adversaries. I prefer to convince people rather than to fight. It is permissible in our company to express any opinion on the issue at the stage of discussions. Like in any system where there is internal discipline, debates are terminated when a decision is made and subordinates are required to fulfill the order.
- In July, Chairman of the RZD Board of Directors Kirill Androsov spoke against establishing the United Transport and Logistics Company (UTLC), which is planned to become the monopoly operator on the market of container shipments in Russia, Kazakhstan and Belarus. As a result, the issue remained unresolved.
- It is better to ask Mr. Androsov about this. On the other hand, this issue should not reflect only the position of Mr. Androsov. He was supported by a part of the Board of Directors. Let me note that a repeat discussion of this issue was held, which causes bewilderment. Last year, a positive decision was made but now an idea to revote on the issue has suddenly emerged, although there have been no force majeure circumstances. This idea has emerged simply because someone wanted to return to this topic. It is completely obvious for me that a common container operator is necessary for the Customs Union (comprising Russia, Belarus and Kazakhstan), but it is difficult for a member of the board of directors who does not have a profound knowledge of the issue to get to the crux of the matter all at once and offhandedly. As a result, the issue stalled for several months. By the way, it’s wrong to speak about the UTLC monopoly. Unfortunately, railway transport now accounts for less than 30 percent of container shipments.
{article_opinion:207:'It is permissible in our company to express any opinion on the issue at the stage of discussions'}- Some say you wanted to see Sergey Stepashin (the former Prime Minister and former chairman of Russia’s Audit Chamber) in the RZD Board of Directors, expecting him eventually to take up the chairman’s seat…
- This formulation is not correct. I very much respect the company, in which I’m working, and this company is highly reputable in the world. RZD is not a classroom for drilling students in the field of economics or governance. Such powerful structures are characterized, among other things, by the qualitative level of the board of directors. I’m sincerely glad that quite prominent figures have appeared in the approved composition of the board of directors and Sergey Stepashin is among them. But I could not lobby for him because we always elect the chairman according to a government directive. Androsov was named again and the board of directors voted for him.
Let me repeat again, I spoke not for particular people but for their level of competence. Stepashin headed the Russian government and worked as chairman of the Audit Chamber, which actually scrutinized our activity – both with regard to the sector’s reform and the spending of budget funds, to say nothing about Sochi (RZD’s participation in the construction of the railway infrastructure for the 2014 Winter Olympic Games). During the preparations for the Winter Olympics, we were checked 1,500 times and over 300 commissions made onsite inspections. Can you imagine what this means? On some days, three commissions at once could be seen inspecting our facilities!
- As a result, you were awarded with an Order for the Winter Olympic Games.
- Yes, I was awarded with the Alexander Nevsky Order. More than 130 company employees received state awards for the Sochi Games. But this is not what matters. We talked about the need to have competent specialists in the Board of Directors. I mentioned Sergey Stepashin as a positive example. In such uneasy times as today, our team needs highly professional specialists.
- Can the sanctions affect your projects in Europe? As it is known, you planned to take part in the privatization of Greek transport assets. Are these plans still in force?
- We are still working in a normal regime but the final terms of a tender have not yet been announced. But we need to look at things realistically. The US is exerting the strongest pressure, and I don’t rule out that our partners may change their mind.
- In this regard, the United Transport and Logistics Company (UTLC), which is an internal matter of the Customs Union, is hardly threatened with anything.
- Do you have time to go into particulars?
- Everything depends on the scope of the problem. I do not interfere in the operational activity of my deputies. Let them work once they have been appointed. There are benchmarks and parameters, which have to be achieved, and they should be used to judge about efficiency. It is true that sometimes contradictory situations emerge when one of my deputies says we need to do this in one way whereas another deputy says we need to do this in a different way. In such situations, a decision is made by me. It is understandable that I know far from everything in the sector. My learning in RZD has continued for all the nine years of my work in the company. Each of my deputies taught me in his sphere of competence. I’m very proud that RZD Senior Vice-President Valentin Gapanovich in charge of the company’s innovation policy once said that time had passed when the company’s executives had tried to delude Yakunin and now it was useless to do this as nothing would come out of this. I was glad to hear these words. I remember well how I came to work in RZD in 2005 and how my execs were preparing me for my first inspection of a specific railroad. I summoned two executives to my office and told them honestly: “Well, guys, explain to me at least what I should look at, what I should ask and what issues I should draw attention to. These were the basics of the railway business that I learnt. I’m not ashamed to speak about this because now I speak the same language with any railway worker. Now there is not a single chance for any window-dressing!
- Has Crimea added problems for RZD?
- The logistics of cargo and passenger train delivery to the peninsula became more complicated, but the government has been addressing the issue, a bridge will be built across the Kerch Strait.
- Did you spend your vacation on the peninsula, Vladimir Ivanovich?
- I went on vacation to our health resort “Mys Vidny” in Sochi, for the first time since I started working in the industry. I spent ten days there. Before that, I had been to a health resort only once in my young days, when I had radiculitis. I was sent to a wrong place, and as a result, my wife returned home with two suitcases and her husband on her shoulder, that was how bad I felt. That was my entire experience of an organized vacation. This time, I went there and was glad. Of course, people can assume that perfect conditions were created for the company’s president, but I am restless, I went to other places to see what’s there. I visited Ivushka, Olimp, and I know Chernomorye well… I spoke to vacationers and staff. People have a good mood.
{article_opinion:211:'We slashed payments to management board members by the level of cargo transportation drop'}- Were you still in the south when a train accident occurred at a section near Sochi, which forced some passengers to spend 40 hours in train cars in August heat?
- On that day, I flew to Moscow. We are again speaking of the human factor. Equipment had glitches on the section. Instead of repairing it, they just turned it off because it was easier. As a result, equipment responsible for electric sectionalization, when an accident on one section does not damage other sections, burned. For four days everyone stood still – passengers, local authorities and us… An internal investigation was conducted, those guilty will sustain punishment, maybe even criminal, but what is more important is to install a foolproof system for the future!
- Some RZD officials have been switched to a part-time working week. Why?
- The measure was forced and difficult. A total of 135,000 people work in that mode. Unfortunately, today it is the only way not to fire people and keep work for them. I hope that after we receive additional subsidies, we will be able in 2015 to get rid of such numbers of part-time workers.
- What categories does the decision cover?
- In essence, it covers everyone. It allowed us to increase labor productivity by nearly 10 percent.
- How does the economy drive match with the fact that the monthly remuneration to RZD management board members rose from 1 million rubles in 2005 to an average of 6 million in 2014?
- First of all, the sum is not quite correct, secondly, no one seems to know that in 2008-2011, we slashed payments to management board members by the level of cargo transportation drop. Before the crisis, the company ensured a certain level of transportation, then it fell by 12 points. I made the decision supported by the board to cut payments to the management board by these percentage points. The order did not concern any other categories. Show me any other company in Russia that would do the same. I removed the minus from payments only the year before last. Let’s proceed. The company’s leadership, like other employees, took leaves without pay, but during these forced, unpaid holidays, we did not go fishing to a river bank but kept fulfilling our official duties. For free. I also want to stress that in line with the existing regulations, the wages of management board members were only indexed to the rate of inflation.
{article_opinion:212:'I consider my real dacha the one that is near St. Petersburg. I don’t rule out that I will return there sometime...'}- Where does that growth come from then?
- It is due to fulfillment of basic indices reached by the company and specific people. If you are concerned about my personal revenues, I have already said that I submit all relevant information to the government in line with the law. The government stipulated high wages for me, but discussing concrete figures seems indecent to me. I don’t want my laundry to be aired in public! Besides, I will note that our board of directors recently considered a new system of remuneration for management board members and stated: RZD payments are at least 40 percent lower than in other similar companies.
- I have read a post in your blog… By the way, do you keep it yourself?
- I dictate. It’s easier. I am afraid I am a bad typist. But I enter into electronic correspondence myself.
- What about polemics with those who regularly report on your houses, dachas and other property?
- Listen, I have already told you what I think about these so-called “writers”. It would be okay if they only invented stories about me, but they started badmouthing my grandchildren. This is beyond the bounds of decency, and I can’t forgive such things. I repeat, I have mentioned all movable and immovable assets subject to declaring, and I can add nothing to that. If you are interested in my personal attitude, I consider my real dacha the one that is near St. Petersburg.
- In the Ozero cooperative society?
- Yes, in that “legendary” cooperative society… It is an excellent place, now a very comfortable one. I preserved trees on my territory. I have a comparatively small plot there and a rather modest house, we built it when my children were little. My favorite dog used to live there… I don’t rule out that I will return there sometime.
Today all my thoughts are about RZD. I have never in my life taken care of one business for so long. As a rule, once in five years I radically changed the activity area. And here, for the tenth year I have been leading one specific project. The process is continuing. I don’t try to guess what happens in the future to avoid making the Lord laugh, but any normal person regularly wonders: what do I want from my life? There’s a firm principle of a manager: you can’t leave behind an unfinished project. It’s necessary to complete reforms in the industry, fulfill what has been planned. Then we will see.
I certainly don’t plan a pension with a fishing rod in hand. I can’t sit idle. I have scientific interests. When Moscow State University rector (Viktor) Sadovnichy invited me to head the state policy department of the faculty of political science, I had doubts at first and now I am glad that I agreed. Communication with students is an excellent way to ventilate the brain. Before you came, I was editing a thesis written by my post-graduate student…
- You have the academic degree of a Doctor of Science. What rank do you have, Vladimir Ivanovich?
- In line with my military service card, I am an engineer captain. As a graduate of the Leningrad Mechanical Institute. In railroad transport, there is no direct correlation of military ranks, but I have the civil rank of an actual state councilor, 1st class. I can also say that during the war, the head of the railway wore the shoulder straps of a colonel-general.
- It turns out that the RZD head is a marshal?
- I’d better stay an engineer captain. Anything rather than war…
Born November 8, 1959 in Luhansk, Ukraine. In 1982, Andrei Vandenko graduated from the Kiev National University of Taras Shevchenko specializing in journalism. Since 1989, he lives and works in Moscow. Vandenko has more than 20 years of experience in the interview genre. He was published in the major part of top Russian media outlets and is a winner of professional awards.