Putin Says No Funding Cuts for APEC Summit
By Anatoly Medetsky
Ria-Novosti / APPutin, First Deputy Prime Minister Igor Shuvalov and Transportation Minister Igor Levitin taking a boat tour Monday.
Prime Minister Vladimir Putin on Monday inspected one of the biggest federal construction sites, the Pacific port of Vladivostok, saying the government will not cut funding promised to spruce up the city before a major Asian economic conference in 2012.
But it remained unclear Monday whether he meant the latest, leaner funding plan or referred to the original spending guidelines, drafted during the days of windfall oil revenues and budget surpluses, which was a notch larger.
The government earmarked 202 billion rubles ($6.8 billion) in federal budget money for work to build bridges, an airport, roads, hotels and other facilities for the Asia-Pacific Economic Cooperation forum, a regular event for leaders and business people from its members, including the United States.
"Budget allocations will not be reduced," Putin said at a meeting on construction progress that he held in the country's largest city on the Pacific coast. "At the same time, we don't intend to increase the budget for the program, either."
There has been some confusion about the exact amount that Moscow wants to spend on the APEC summit, which Vladivostok will host after an undetermined U.S. city handles the event in 2011. An estimate obtained by Vedomosti showed at the end of last month that the federal budget would curtail the spending by 6.2 percent, to 189.4 billion rubles.
A spokesman for the Regional Development Ministry, which composed the estimate, said the ministry would be unable to comment Monday. Regional Development Minister Viktor Basargin has previously said spending cuts were possible. He told Putin in May that officials could save about 7 percent of the costs by opting to use federal budget money to pay advances for the work, instead of taking out bank loans and paying interest.
Putin appeared to refer to the leaner budget estimate when he said the federal budget would allocate 71 billion rubles for the preparations next year, the figure from the Regional Development Ministry's reduced budget. The federal budget has already set aside 40.4 billion rubles for the construction this year, Putin said in July.
The regional budget of Primorye, which is hosting the summit, and private investors are expected to finance some of the preparations. The overall bill, according to the Regional Development Ministry's reported estimate, will come to 265.7 billion rubles, down from the initial 284 billion rubles.
Thanks to such funding, Vladivostok is home to the second-biggest federal investment in construction after Sochi, a Black Sea resort that is gearing up to host the 2014 Winter Olympics. The government has treated both events as ways to develop local infrastructure, including a massive bridge to the impoverished Russky island, which is being built for the APEC summit.
Putin said making delegates of the APEC forum feel comfortable was worth the effort because it would improve business ties with Russia's neighbors. Since its inception in 1989, the organization has grown to include 21 countries representing more than one-third of the world's population and nearly 60 percent of global gross domestic product.
If U.S. State Department expectations are anything to go by, the event will attract an impressive number of people. APEC events happening over the course of nine days in 2011 will draw up to 20,000 participants including support staff, security, media and businesspeople, the State Department said in a November note inviting U.S. cities to bid to host the conference.
"Global media attention will focus on the APEC leaders' meetings and the city selected to host the event," the invitation read.
When the global economic crisis hit Russia last year, Putin said the government decided to go ahead with the large spending on Vladivostok, despite many opinions to the contrary, because it believed that the measure would serve as a backstop for the economy. It helped create jobs and demand across the country, he said.
Putin noted Monday that preparations progressed "considerably," but did not say whether the work was being done on schedule.
The prime minister stopped on a shore to look on as workers were constructing the 3-kilometer bridge, which is to become one of the longest in the world. He warned officials supervising the construction that it would be "unacceptable" to fall behind schedule in doing the work.
Putin promised the bridge to the nation during his final live-television call-in interview as president.