Budget subsidizing for suburban railway transport needs to be preserved - Putin

Russia should continue allocating federal subsidies for suburban rail transport, Russian President Vladimir Putin said at a meeting on the development of transport infrastructure.

Russia should continue allocating federal subsidies for suburban rail transport, Russian President Vladimir Putin said at a meeting on the development of transport infrastructure in Moscow and the surrounding area.

Putin instructed the Finance Ministry to calculate this issue beyond 2014.

The president stressed that "this subsidizing definitely needs to be preserved."

During the crisis period, the government provided 25 billion rubles in subsidies for suburban rail transport.

"We agreed that this will gradually be transferred to the regional level. But first of all, we need to be convinced that the regions have these funds. Secondly, it needs to be formalized that these funds will be allocated for these purposes," Putin said.

The president said he is aware that "the Finance Ministry is going to do this work step by step."

"There is money for next year, but 2014 is followed by 2015 and 2016. We need to look at that carefully," he said.

"If you just want to transfer a portion of these subsidies to the regions, and not to OJSC Russian Railways (RTS: RZHD) (RZD), then of course you can do so. But we need to be convinced that these funds will actually go towards those purposes," Putin said.

"The development of suburban rail transport in the Moscow region is a problem with a large social component," the president said.

"Directly or indirectly, it (railway transport) affects more than a quarter of the population of our country. Commuter trains are used by broad sections of the population, primarily working people, students and pensioners. As a rule, these are people with lower incomes," the president said.

"That's why we should guarantee stability and predictability in the price of travel," Putin said.

Moscow Mayor Sergei Sobyanin spoke against transferring subsidies to the regional level.

"If these subsidies are handed out to various regions - and our suburban transport, for example, touches dozens of federal subjects - it will be very difficult for all of us to come together and agree. That's practically impossible. I think this should all be centralized," Sobyanin said.

The mayor stressed that "besides subsidies, there is also the component of the railway tariff. We need to see to it that these tariffs don't grow spasmodically, at least within the level of inflation. Otherwise we'll subsidize on the one hand, and the railroad will increase tariffs, everything will flop, and we'll get a result of nil."

Sobyanin said he hopes "there will also be an understanding on this topic" with the head of RZD.

According to Putin, the development of suburban rail transport should be a priority for both the federal government and the Moscow and surrounding authorities in the next five years.

"I'm asking you to consider this project as an absolute priority in the next five to six years. It should be one of the largest infrastructure projects in the world," he said.

"This will allow us to significantly increase passenger flows on these routes from an enormous 600 million people to 900 million people, almost 1 billion," Putin said.

"I'm asking the Russian government to consider the project of suburban transport on the Moscow transport hub as a priority for implementation in the coming five to six years. It is a necessity to provide for the construction of main and additional routes for suburban transport," the president said.

He drew special attention to the need to ensure "the construction of modern overpasses to prevent congestion from accumulating at railway crossings."

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