Putin Calls For More Private-State Partnerships

Prime Minister Vladimir Putin called for more public-private partnerships to pull Russian regions out of the crisis faster and to free one-industry towns from their “economic trap.”
“The economy … is demonstrating clear signs of recovery, so we should pay more attention to questions of development,” Putin said at a government meeting on public-private partnerships in the Tula region town of Novomoskovsk.
State statistics showing seasonally unadjusted quarter-on-quarter economic growth of 7.4 percent in the second quarter have prompted the government to revise next year’s production forecast, while President Dmitry Medvedev has proposed to “start looking at postcrisis development.”
Among the ways to make the partnership model more attractive to business, Putin listed state guarantees, infrastructure bonds, subsidizing interest rates on bank loans, and helping with access to land. The government should make sure money for public-private partnerships is “not sitting as dead weight on bank accounts but working to stimulate production,” Putin said.
The government plans to allocate 75 billion rubles ($2.5 billion) on infrastructure bond guarantees this year, and increase the amount to 100 billion rubles in 2010, Deputy Finance Minister Alexander Novak said at the meeting.
“We should pay special attention to one-industry towns, many of which are in a kind of trap today,” Putin said. “When these towns were created, nobody thought of possible problems.”
Putin’s trip to Novomoskovsk also included visits to factories belonging to fertilizer producer Eurochem and consumer goods conglomerate Procter & Gamble. Eurochem is investing 6 billion rubles into expanding production of carbamide to 2,000 tons a day at its Novomoskovsk Azot facility and to convert output to granulated products that could be exported to Europe, Eurochem director Dmitry Strezhnev told reporters. Production will begin in the fourth quarter of 2010, he said.
The town won praise from Putin for a public-private partnership to develop an industrial cluster with improved transport infrastructure, where Azot and Procter & Gamble are investing a combined 6.2 billion rubles. The project’s total cost is more than 46 billion rubles, and 8.65 billion rubles will come from the Russian Investment Fund, Tula Governor Vyacheslav Dudka said.