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Interview with the Governor of Tyumen region Sergey Sobianin taken by IA Neftegaz.Ru. October, 19, 2001.

I was shocked by what has happened. A monstrous attack on peaceful New-Yorkers is a challenge and a serious lesson to all the mankind. Let's remember, however, victims of terrorist attacks in Russia. A wave of explosions in Moscow, Dagestan has reached the American continent. I hope the world community has realised that murderous events in Chechnia and Balkan countries, endless threats of Bin Laden and his accomplices are links of one and the same chain. Peace negotiations with terrorists and search of compromise don't help, alas, to avoid danger. And nobody knows in which country and at what time the next explosion will thunder. Who can pledge that tomorrow the terrorist attacks will not repeat?

International terrorism gets larger scale.
Tyumen region is the richest store-keeper of Russian national property - oil and gas. The unique technical complexes for oil and gas extraction, refining and transportation are located on its territory. One of the most powerful energy systems of Russia - Tyumenenergo company, is located in Tyumen region.
What is your attitude as a private person and as a State Power representative to the terrorist attacks? What measures are being undertaken in Tyumen region to ensure security of people, technical and civil objects?

S.Sobianin: I was shocked by what has happened. A monstrous attack on peaceful New-Yorkers is a challenge and a serious lesson to all the mankind. Let's remember, however, victims of terrorist attacks in Russia. A wave of explosions in Moscow, Dagestan has reached the American continent. I hope the world community has realised that murderous events in Chechnia and Balkan countries, endless threats of Bin Laden and his accomplices are links of one and the same chain. Peace negotiations with terrorists and search of compromise don't help, alas, to avoid danger. And nobody knows in which country and at what time the next explosion will thunder. Who can pledge that tomorrow the terrorist attacks will not repeat?
We have strengthened the guard-system at energy enterprises, oil and gas pipelines, airports, railways on the territory of the region. Streets of Tyumen City are patrolled as usual. Dwelling blocks, cellars and attics are inspected. But this is routine work. Though we can't rule out the possibility of home-bred terrorists who can commit attacks after having watched TV. So far this only ends by calls about fake "laid bombs". The calls are checked. Telephone terrorists are searched and punished.

Tyumen region is a separate subject of Russian Federation. However, there are two equal subjects of RF - Khanty-Mansiysk and Yamalo-Nenetsky Autonomous regions on its territory which makes Tyumen region a "complicated subject of RF. What are your interrelations with KhMAO Governor A.Filipenko and YaNAO Governor Yuri Neelov?

S.Sobianin: We have normal relations. Dozens of mutually beneficial investment projects are prepared. Many of them are in process now. During the last months we have done more for integration then within past ten years.
"Agreement on general directions in Social and Economical spheres for Tyumen Municipal Authorities, KhMAO and YaNAO" has been signed. We've moved from power distribution among the three Governors to solving problems of industry development, health care, social sphere. Hundreds million of rubles are already working in the economy of the region. These are the first, though important, steps. A good political atmosphere is created and now we are to restore the lost economical and political contacts.
For a long time we've been witnessing obvious opposition between the north and the south of Tyumen region. This conflict willy-nilly involved not only power structures but also all the inhabitants of the region. Now we've put a stop to this political disorder. People's hopes came true for political accord, stability of development, calm in our region. At present the okrugs(i.e.reagions) are investing money into the economy of Tyumen region.

An electorate campaign of the Tyumen regional Duma deputies has been started. Deputies from Tyumen region, Khanty-Mansiysk and Yamalo-Nenetsky autonomous regions are elected to the regional Duma. Won't these elections influence negatively on the established relations between these subjects of Russian Federation?

S.Sobianin: Many people were looking forward to beginning of the electorate campaign. Some of them were eager to check how united and polite we would be. And probably someone was waiting for conflict political situation during the elections to the regional Duma. This hasn't happened. And will not. There is no any conflict between RF subjects. And that's what counts.

4. On September, 14, 2001 there was a conference of Governors' Council in Salekhard. At this conference together with A.Filipenko and Yuri Neelov you discussed coordination of tax policy. What are the concrete steps, which are taken to implement the programme to "go live"?

S.Sobianin: Earlier the Governors' Council has dealt with minor questions, often not very important; there used to be a lot of debates. Nowadays one can see an efficient system of Governors' activity. If we determined the line of investment policy or tax policy, we come back to these questions at every Council meeting and discuss them again.
At three-Governors' Council in Khanty-Mansiysk we have signed the letter to the President of Russian Federation, which suggested the alternative scheme of resource payments distribution which would take into account the interests of the mining districts.
The solving of the problem aroused after changes in the Federal Tax Code and the law "On bowels". Its solution required concentration of all our resources and political powers. One wrong step would have led to considerable decrease in regional budget; impoverishment of the social sphere, which is already poor; liquidation of most regional programmes and as a result considerable change for the worse in the life of inhabitants of the region.
We were supported by a number of the State Duma deputies fractions, by RF President and payments for natural resources were retained in our budget. For the first time in the last years the Governors of the region, of the autonomous okrugs (i.e. regions) have stood up together for the interests of the whole region. In this complicated situation we have won a big victory, which will enable the region to successfully develop in future.
At the last conference that took place in Salekhard on September, 14 we have fixed compensations from the regional budget to the enterprises that carry out oil and gas production on the territory of the autonomous regions. They are as much as 8% of the total sum of equipment and materials purchased from the enterprises of Tyumen region. Thus we make Tyumen still more economically attractive. Earlier there used to be cases when oil industry workers ordered necessary products in Yekaterinburg or in Moscow though we have plants producing them here, in our region. That happened not due to the fact that products are better or cheaper there but because of our political situation. Now everything has changed. The largest part of the products are ordered in the region. We've signed an agreement with Tyumen Oil Company according to which 80% of equipment for "Uvatski Project" will be produced in Tyumen.
In the sphere of tax policy we have agreed to defend the interests of the unified Tyumen region.

Basic directions of your strategy of Tyumen region stable development presupposes expansion and quality changes in economical base of the region. Among them are:
  • forced development of oil refining and petrochemistry;
  • development of mining industry: surveying the eastern slope of the Ural mountains;
  • further increase of energy system capacities;
  • development of Tyumen region system of transport;
  • revival and development of timber industry;
  • development of engineering;
  • development of agriculture in southern districts of the region.
What measures are undertaken to launch this program in the real life?

S.Sobianin: Generally speaking, the socio-economical situation in the region is fairly satisfactory. There are positive tendencies in most of the branches, dynamics of growth. Condition in the social sphere is improving, we bring everything in order: from ensuring people's welfare to budget expenditures problems.
A strategic direction in bowels usage sphere is development of the Uvatski project. It is a long-term project that lays the foundation of oil and gas industry development in the south of the region. About 35 billion rubles will be invested into local fields. During the first five years the regional and local budgets will receive over Rur 1,5 Bn taxes from this project.
Moreover, above 3,000 well-paid jobs will appear. When ordering products of engineering industry, construction industry priority will be given to local enterprises. Besides, there will be an auction on licenses issued in 11 oil districts. An open auction concerning sands extraction in Tumashevski field will switch the Vinzilinski Glass Plant to maximum production.
The expected profit from the Uvatski project realization is over 25 billion rubles for the Federation, over 15 billion rubles for Tyumen region and over 4 billion rubles for Uvatski district.
We have signed an Agreement with "Sibur Co" officials in Tobolsk on joint activity in preparing a number of large investment projects which will make it possible to increase the volumes of petrochemical products extracted at Tobolsk fields almost by twice. It will also enlarge the contribution of Tobolsk petrochemical industry into development of social sphere.
As for the power system, there's been a serious problem of non-payments. It involved Federal structures, cities, municipal districts. But we have managed to sign a very important Agreement with "Tumenenergo" about debts restructurizing. Now we are checking the mechanism of indebtedness and solving the problems. There won't ever be any mass energy disconnections in Tyumen. After the reconstruction of Thermal Power Station-1 is completed we won't have to be worried about it.
At the three-governors' conference we discussed the key issues of the unified transport system. Its realization will make bus services as well as transportation by river more available to people. Besides, the project has been approved on creating a unified Center of flights administration. As for the roads, the Tyumen - Khanty-Mansiysk road will be reconstructed. The Governors agreed to give 20 billion rubles each for its repairs. This all-region program will be among priority questions in 2002. Taking into account the fact that the road from Salekhard to Surgut is now being constructed, connections between the three RF subjects will grow still closer. Besides, the Ob-Irtysh steanship line is moving to Khanty-Mansiysk, the region where major transportations are made by river.
The timber industry has increased production by 23 per cent this year which exceeds 4 times general production growth tempo. There have been considerable changes in the system of products supplied to the market: instead of wood materials finished products are supplied now. Enterprises try to improve the quality of their products. Nowadays many enterprises experience financial difficulties and lack of money for development. This year 100 billion rubles were allocated on the return basis for financial support of timber enterprises. Not long ago we signed an Agreement with "The State Investing Corporation" that is going to invest a considerable sum of money into our region. The Company representatives paid special attention to the timber industry. They visited the timber plant "Krasny Oktiabr", took the business-plan prepared by the plant officials.
In spite of positive trends on the machine-building enterprises in the south of the region, this branch is so far working below its capacities: sales market is poorly researched; production capacities are not used to the full. Equipment is outdated. That's why one of the approved priority issues is technical renovation of the industry, inculcation of modern technologies. We are already able to view the result of it: this year investments into engineering industry grew by 1.5 times.
It's pleasant to note that there are positive changes in the agricultural sector of our region. At the beginning of this year the Region Administration allocated 1.6 billion rubles for purchase of mineral fertilizers, modern machinery, etc. These investments proved justified. There hasn't been such a harvest for a long time. During the last 30 years the highest mark reached one million three hundred thousand tons. The plan for this year is one million seven hundred thousand tons, and that's not the limit. That happens due to inculcation of modern technologies, using modern machinery and equipment, planting new varieties of crops, making use of modern fertilizers that help to restore the soil and raise the yield-capacity of crops. The most important thing, however, is the stability. At least 1.5 million tons - we should aim at this level every year.
The situation in stock-breeding industry remains difficult, we've been taking measures to improve it.
An anti-crisis program for stock-breeding and cattle branches will be prepared next year. 60 million rubles will be allocated for development of stock-breeding. In my opinion, this should result in serious positive changes.
This year the regional budget allocated a credit for reconstruction of the byres and building new ones.
The agricultural department, district administrations are facing the necessity of creating a sound conception of agricultural production development. Every district must realise in what direction it should develop, how to better avoid the crisis, how to get bigger harvests. With it all the programmes should be based not only on good wishes but on definite financial, economical, scientific grounds, on definite sales markets.

What social problems does the region face and how are these problems solved?

S.Sobianin: Situation about drugs in Tyumen region can be called unsatisfactory. According to information of RF Government, our region takes the 4th place in Russia in non-medical consumption of drugs. The south of the region alone is taking the 15th place. This year we've increased financing of anti-drugs programme by 3 times (up to 77 million rubles). An Antidrug committee was established in the region in March, 2001. The created Council struggles against illegal use of drugs; 25 cars were purchased to help patrol the cities of the region.
Since April the regional administration has been carrying out an action "Where death is sold". About a thousand messages were sent to the pager with registered nick "Life" about the places of drug trading. 74 legal cases were opened, 17 of them were submitted to the court. In the first half of 2001 - 2,538 offends connected with illegal use of drugs were registered.
At the beginning of September we had a conference and established the regional public association "Life without drugs" to clarify to everybody that it's impossible to overcome the drug-addiction problems only by force of officials, it's necessary that public organisations join the struggle against the evil.
At the last Governors' Council have decided to pay special attention to the border between Russia and Kazakhstan, which might be the base stream of "white death" coming to Tyumen and especially to the rich cities of the north. We decided to allocate 21 million rubles (7 million from each RF subject). This will make it possible to enlarge the number of frontier-guards at the Kazakhstan border and thus to close the way to drugs. For the time being there will be 240 frontier-guards there, next year we'll bring their number to 320. Now we are concentrated on the struggle against drugs, but there is more complicated work to complete before: to distract young people from the very thought of taking drugs. And this will be the best solution of the problem.

What regions of Russia present priority to Tyumen region?Why?

S.Sobianin: Traditionally economy of Tyumen region is oriented to the Urals, Siberia. Inhabitants of our region are key customers of many engineering plants in Sverdlovsk, Cheliabinsk, Perm regions. We also cooperate with Siberian Academic base in Novosibirsk and with oil refining plant in Omsk. Naturally, our basic partners are in the North regions.

Is the region's economy able to develop on its own or additional investments are still required?

S.Sobianin: It's difficult to develop without investments. Now we are doing our best to attract more investors to Tyumen region. There are certain results already: investors' interest to our region keeps growing and in the last couple of years the total sum of investments increased almost by three times. At present our plants receive a lot of orders and we are setting further tasks: improvement of quality, replacing the outdated equipment, inculcation of new technologies. Investments should be directed into science at first.
Our Administration guarantees the security of investments. For this purpose an investment-industrial division was established in the regional administration that consists of investments policy department, industry department and the department of interregional contacts and trading. At present over 200 investment projects in all the branches of industry are prepared. We work on investment policy through different organizations - KhMAO and YaNAO officials, the regional fund of enterpreneurs' support, European Bank of reconstruction and development, Russian banks, industrial enterprises. Not long ago we agreed to cooperate with The State Investing Corporation.
To draw foreign capitals we've got to create positive image of the region on the international scene. In June, 2001 Russian Internal Ministry carried out the presentation of Tyumen region. Our investment projects aroused vivid interest among foreign partners, there were proposals of cooperation from Sweden, Italy, Finland, China, Germany, Great Britain.
In 2002 the Dutch Ministry of Economy will start investing into JSC RITZA to expand its hot-houses farm. The total sum of the project is USD 5 million.
We are working on joint-projects with businessmen from Hungary, Moldova, the Ukraine, Belarus.
Since 1992 the region has been cooperating with German county Low Saksonia. Since 1993 a new mechanism is being realized to draw credits for investments into a separate region. It is the credit-barter line Tyumen-Germany in the framework of Agreement with German Federal Ministry of economy, supported by RF Government, RF Ministry of energy.
We develop cooperation with German partners in different directions: drilling and repair works at wells, water-cleaning construction in the south of the region, a factory of medical nourishment in Tyumen.
The plant of remedies has concluded the contract on the purchase of infusion solutions, medicines in pills and capsules.
The number of enterprises working with German investments amounted to 29. 27 of them are located in the south of the region. 5 of them were established in the framework of strategic alliance between JSC Gazprom and German Company Ruhrgas AG with JSC Zapsibgazprom as a partner (Stroimashservice, Sibshvank, Zapsibomikron, Zapsibruhrgas engineering, Sibkomplectmontazh).
In Khanty-Mansiysk Autonomous Okrug there are two Russian-German companies dealing with oil production. The German side has invested over 6 million DM into social sphere, education and agriculture.
In July, 2001 we signed "The fifth working program of Tyumen region and Low Saksonia county cooperation". It includes measures in different spheres - from cultural exchange and educational programs to economical projects in Tyumen, Ishim, Zavodoukovsk.
For the first time one of the main purposes of cooperation was defined as drawing German and other international investors into the projects presenting priority to the region. At the recent meeting in Yekaterinburg with Linda Cross, General Consul of Great Britain, we discussed the possibility of British investments. In her opinion all the projects present interest for British businessmen, partially because of constant competition with Germany. We agreed to exchange groups of specialists and hope to continue successful cooperation.
Investments into the fixed capital in the south of the region grew up to 133 percent. Dozens of Tyumen enterprises are being invested to. This year the opportunity to complete construction of remedies plant arose there. This happened due to the cooperation with the Government of Khanty-Mansiysk region.
I would like to point out that more than USD 30 mln were put to the realisation of the small projects with the help of KhMAO Government into economy of the south. Administration of the region has reviewed the approach to the activity of the non-budget fund of enterpreneurs' support.
Before the Administration of the region had twice established a fund of this kind. However both sides had losses, the budget is still paying them off. At present the fund of enterpreneurs' support is giving profit, it drew over 30 million rubles for realization of small investment projects.

The Tyumen region is suggested to be a national field to run & test new strategies of housing departments' work. As a person who in due time roused Kogalym-City, what would you do to reform and upgrade the housing authorities in a separate region?

S.Sobianin: We can't postpone housing reforms any more, later we'll have to pay much for this idleness. The equipment is getting outdated with every year, we can't even dream about economy. We've got to alter the situation urgently. Average housing deterioration in the region is 50-60%. We've made heroic efforts and stopped the increase of indebtedness to power engineering workers. On the one hand the region's officials are ready to accept the big "energy debt" that was accumulated by Tyumen budget and municipal organizations. On the other hand Tyumenenergo isn't going to raise tariffs for electric power, though it was planned initially. I'm satisfied with the fact that debt obligations problem was solved in the process of negotiations and we didn't have to switch off electric power in the houses of defaulters. Though in any case they will have to pay off their debts. I think we'll stop once and for all the trend of mindless debts accumulation.
The housing departments are still unable to pay their debts to the Federal budget. To solve the problem the help of the subject of Federation will be needed. We want to restore the communal economy of the region at the expense of the budget. Hundreds of billion rubles are needed to improve the situation in the housing sphere. It consumes huge amounts of money. The system of payments requires regulations. Before there were no individual approaches to this problem in a separate region. Now the situation is changing: next year budget is formed with the individual tariffs included. A special department to deal will deal with cases of non-payments is established. This figure is gradually dropping and we expect complete repayment next year.
The main problem is that people pay different sums for the public utilities in different cities of the region (from 30 to 80 percent). It depends on the local municipal administrations. Now we are working to equalize the payments.
On the functioning scheme of housing departments…
We won't be able to build the market mechanism from the start as the whole system is based on the planned economy of socialism times.
In my opinion, the key to the reformation system of public utilities is strict control over expenditures, heat and hot water consumption. It's impossible to speak about civilized relations in the public utilities sphere, while not taking it to the consideration. And we've not only got to speak about it but also to inculcate everywhere controlling meters when constructing new living blocks.
Nowadays practically no municipal houses are constructed. The owners of apartments should have enough money to be able to pay public utilities services. Then the reform will depend on the man himself and be oriented upon him, not upon monopolists or municipal officials. We are prepared to reform the public utilities system not at the expense of people but at the expense of precise reform organization.
Payments for public utilities shouldn't exceed 22% of a family's income. People themselves will exercise control over the quality of public utilities services which will stimulate its growth.
Speaking about this reform I would like to note that 60 km of heat communications have been replaced in Tyumen this year. If we go on at this pace we will justify the title of an experimental site.
Besides reforming public utilities sector, we are solving one more problem - the improvement of Tyumen. It's time for the regional center to become a real Siberian capital. It's pleasant to realize how the city is improving. This year we've done much more than during the previous years: to mention only the fact that this year we have repaired 55 km of roads. If we keep these tempos for 3-4 years to come we'll bring Tyumen city to order. And its inhabitants will be by right proud of the city where they live.

Tyumen region is the first region in Russia that approved the budget for 2002. Moreover it is non-deficient. Is there enough money in the region? Is the region's stable development ensured?

S.Sobianin: I wonder where you met a Governor being satisfied with his budget? The previous Governor's team accumulated a huge amount of debts that we have to repay now. Certainly I was told that I shouldn't pay off the debts, spend money from the budget. But I am not used to working this way, because I have no right to leave behind any unsolved problems. That is the only reason that there appeared proficit in the region. We are not going to redistribute money from teachers or doctors to repay the debts of the region, we've allocated additional money for it.
On September, 28, i.e. a month before the determined date, the regional Duma accepted the budget of Tyumen region for the year 2002 that is 17,022,421,000 rubles, income of 17,449,007,200 rubles. The proficit of the budget remained as before: 426,615,000 rubles. We plan to spend it on repaying the credit obligations. For the first time the regional budget is formed as a non- deficient one, we'll live only on what we earn without getting into debts.
According to forecasts, the income of the consolidated budget of the region will make up 19,840 million rubles, i.e. one third above the level of the current year. Naturally, nobody is guarded against global financial crises, sharp drops of oil prices. But if the dynamics of economical development stays stabile, then our life will surely become better. Much better. The budget for 2002 has a clear social tendency. We plan to increase expenditures on education, public health care, culture and art considerably (36-55%). The budget workers' salary will grow up to 70 percent. We raise it gradually: twice in this year, and plan to raise it in future too. Municipal organizations can count on a larger than today financial support.
Considerable increase of income doesn't mean that the tax-payers' money will be spent offhand. On the contrary, expenditures will be cut where it is possible to do it. For example, if the share of officials' financial support was 8.4% at the beginning of the current year it will drop to 4.6% next year.
The changes which are taking place in our country build a different social political climate both in the country and in our region. Russia and all its inhabitants have received reliable prospects of stable development, revival.

The editor's team of the Information Agency thanks Press-Secretary A.Romanov for the organisation of the interview with Mr. Sobianin

Source : Neftegaz.RU