News

Alexey Ulyukaev: 70 investment projects will be considered by Government Commission for import substitution industrialization (ISI)

29.01.16

The Report of the Minister of Economic Development of the Russian Federation Alexey Ulyukaev on the Commission regulations and realization of ISI policy within EEU during the session of Government Commission for ISI.

Alexey Ulyukaev: Thank you. Dear Dmitry Anatolyevich! Dear colleagues! The following project of regulations is based on coordination of the main functions of Government Commission and partially government-owned companies. I would like to remind that our Commission activity is aimed at investment projects realized by state corporations and partially government-owned companies if the sum of a project is more than 10 billion rubles (for energy industry 100 billion rubles) or projects realized by private sector if these companies use the means (even partially) of the federal budget, the Russian National Wealth Fund, Vnesheconombank. According to our estimation, there are 70 plus projects that meet these criteria. The regulations define the procedure of taking key decisions concerning three principal positions. The first is including investment project into the register; the second is correlation of operational characteristics of engineering products that are supposed to be included into the list of the projects long-term requirements; the third is approval of purchasing some engineering products abroad if one fails to involve adequate domestic equivalents into the project.

The first: register. The Commission decision on including the project into the register is a basis for making a plan of long-term requirements and contains all information for the Commission and subcommissions to take the relevant decisions. In some cases it is requested not to include the project into the register and the Commission can take such decision. For example, if the investment project is realized on account of the tied loan with the terms of supply of the relevant equipment.

The second: correlation of operational characteristics. The Government order determines 11 positions of engineering products that cannot be purchased without the Commision’s procedure of operational characteristics correlation. The regulations determine the procedure of correlation if there is disagreement between the Ministry of Industry and Trade (it prepares the documents on correlation possibility) and legal entity that initiates a project. This situation is considered during subcommission meeting. It can take a positive decision if legal entity agrees with the changes offered by the Ministry of Industry and Trade. If disagreement retains, the issue goes to the next level, the level of the Commission that takes a final decision on correlation of operational characteristics of some types of engineering products.

Approval of purchasing abroad. The Government order determines 139 positions of engineering products that cannot be purchased outside the Russian Federation without the Commission’s approval. The initiator is the Ministry of Industry and Trade again that expresses its opinion on possibility or impossibility of such approval. If the purchase outside Russia is approved, subcommission takes the relevant decision without delay.

The more complex procedure is applied when the Ministry of Industry and Trade considers purchase abroad to be inadvisable. In this case it denotes Russian manufacturer and provides its opinion that this manufacturer, firstly, is capable of supplying the product of the quality necessary for the project and, secondly, provides consistency of product performance. The manufacturer assures that the product is not only an example but the whole line will be of the same quality.

Thirdly, the Ministry assures that the manufacturer will support serviceability of this production, provide maintenance, etc. Of course, the Ministry provides its opinion that there is or there is not guarantee of the fulfillment of these obligations by Russian supplier.

This conclusion is the reason for the Commission to take the relevant decision. After that legal entity that has initiated the project can start commercial negotiations with Russian manufacturer that, according to the Ministry of Industry and Trade opinion, is capable of providing the adequate quality or with any other Russian manufacturer if this legal entity is able to find it by itself.

In some specific cases commercial negotiations results in the situation when the position concerning the product suitability has been agreed but there emerge price differences, i.e. purchase abroad is more profitable than purchase in Russia. In such cases one can raise the question of state support of Russian manufacturers: credit subsidy, other measures in order to equalize Russian price offers with those of foreign suppliers.

These are the main points of regulations. Dmitry Anatolyevich, we still have technical disagreement with a number of government agencies concerning the time for consideration of the relevant issues. We have taken a line of tight deadline for these important projects not to be frozen and for additional administrative burden not to be created but some colleagues and government agencies think that the terms should be increased. They still ask to give us several days to handle the question. Thank you.

Documents