Moscow Mayor’s commentary for TV Centre television

24 March 2015

Correspondent: Mr Sobyanin, let’s talk about the implementation of the Moscow Government’s anti-recession plan. Is your decision to optimise the government structure and to reduce salaries part of the anti-recession plan?

Sergei Sobyanin: I’d like to say that on the whole the situation is stabilising. Prices are becoming more predictable, the rate of inflation growth has slowed, and loan rates are becoming more moderate. However, the situation continues to remain complicated, which is why our anti-recession plan must be implemented without fail and the measures we have outlined must be carried out.

As for the reduction of personnel, this is a routine process, although the crisis has forced us to do it more quickly than initially planned. Over the past few years a system of online services has been created in Moscow, composed of over 100 government service centres where people can receive about 97 percent of all federal and municipal services. This has created the conditions for reviewing the staff list of departments, district councils, prefectures, etc., and for moving on to other staffing parameters. In addition, we have decided, as you know, to reduce the salaries of the Mayor, members of the Moscow Government, deputies of the Moscow City Duma, the Audit Chamber, and other agencies.

Correspondent: When speaking about the anti-recession plan, we should talk about the construction business in Moscow, which is the largest in the country. Are you supporting it?

Sergei Sobyanin: I’d like to say that the main focus for assisting the city economy is on preserving the programmes that we have been implementing for the past few years. They concern transportation construction, the social sphere, the development of public spaces, and so on. The implementation of these programmes, which have a large investment component and offer broad opportunities for small and medium-sized businesses, is the best way to support the city economy.

This also goes for the construction business. Moscow has not reduced the parameters of the Targeted Investment Programme, which concerns the construction of roads, the Metro, and residential blocks. This is of vital importance for the further development of the construction business.

In addition, we have approved additional measures to support the commercial sector of the construction business. In particular, we have adopted a new payment system for rezoning. In the past, developers had to make a lump sum payment for a construction permit. We have extended the deadline from one to six years, depending on the sum to be paid to the city budget. As a result, developers don’t have to borrow additional funds from banks, but can instead pay the city after the completion of their projects. This is very important.

Besides, we are trying our hardest to simplify administrative procedures as much as possible, and to issue construction permits without delay, primarily for the construction of residential buildings, because we see that interest in building malls and offices has weakened, while residential construction will continue to grow in scale, as I see it. Another impetus in this sphere was the federal government’s decision to reduce the mortgage rate from 16 to 14 percent. As far as I know, it is now 12 percent. This is a major source of funds. For our part, we have simplified the procedure of connecting new customers to power grids and other infrastructure and, as I said, changed the system for payments to the city budget.

Correspondent: You’ve mentioned transport. How is public transit being supported in the city?

Sergei Sobyanian: We continue to actively invest in practically every component of the public transport system, including the Metro. As you may know, we recently held a major long-term tender for metro rolling stock, not only for the older series of carriages, but also for products with innovative engineering. The new metro carriages will start being supplied in early 2017. In this way we are supporting the engineering industry’s innovative segment.

According to the terms of the contract, most products and component parts should be produced in Russia as part of the import substitution programme.

Also, we’ve developed a contract model with suburban carriers that enables them to invest in the renovation of rolling stock.

With regard to the Smaller Moscow Belt Railway (SMBR), we’ve signed a contract with the operator stipulating that the fee should involve an investment component to provide the SMBR with state-of-the-art, robust rolling stock. Also of importance, we’ve decided to subsidise lease payments to buy taxies and public transit buses.

Correspondent: How will the anti-recession plan provide for residents’ social protection?

Sergei Sobyanin: First of all, the anti-recession plan will keep all the benefits envisaged by Moscow legislation in place, including payments to families with many children, war veterans, home front workers, and veteran workers. It should be mentioned that Moscow’s social package is the biggest in Russia, both in absolute and relative terms. But in a crisis environment we must pay more attention to targeted support; it’s not enough to just share social benefits evenly with everyone. We must see which family needs more assistance for one reason or another. To support this, we’ve set aside an additional 1,700,000,000 roubles this year for targeted aid.

Correspondent: Now as regards your support for hotels. Today the Government Presidium considered a preferential taxation plan for hotels. How does this benefit the city and what is it all about?

Sergei Sobyanin: With five million visitors a year, the hotel business remains a substantial segment of the municipal economy.

Correspondent: Especially in this huge city.

Sergei Sobyanin: Absolutely. And we are interested in developing this segment. What problems have arisen for hotels when we introduced a property tax based on cadastral value? The tax was intended for commercial and office real estate. There have been and still are many ground-floor offices and small shops inside hotels. And they automatically had to pay the commercial rates. But for accommodation-focused hotels these rates are, of course, a heavy and unfair burden.

So, we’ve come to an agreement with the hotel business on a jointly developed solution to exempt the rooms where guests stay from the tax based on cadastral value and add in an additional factor for corridors, staircases, and other hotel infrastructure. I think this will go a long way to ease the tax pressure and make taxation fairer.

Correspondent: Do you have any tentative figures or percentage points?

Sergei Sobyanin: Property tax for hotels will be reduced by some 65 percent. This is a significant benefit for this economic sector.

Correspondent: Thank you, Mr Sobyanin.

Sergei Sobyanin: Thank you, all the best.

Sourse: The website of the Mayor and the Government of Moscow

See also
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