Policy in the Field of Consumer Market and Services Development and Regulations

Providing population of the Republic of Karelia with consumer goods and services of high quality, providing equal availability of services for city dwellers and countrymen is one of the major conditions of increasing living standard of the population. Government of the Republic of Karelia within the scope of powers given by the current legislation, is following policy in the field of development of transportation, communication, tourism, information technologies, provides control of prices and tariffs.

Efficiency of functioning of all branches of economic complex of the republic is impossible without reliable and trouble-free work of transport and communication.

In success of timber industry, mining and building complexes of the republic merits of enterprises of railway transprot and water transport are obvious. It is hard to overestimate role and value of motor transport, good roads and road transport works for inhabitants of the republic. Volumes of transportation of cargoes and passengers by transport agencies grows annually, geography of transportation extends.

Transportation Industry

Transportation Industry. Government of the Republic of Karelia took measures for further development of transport complex of the republic, and monitored its work. In 2006 transport agencies kept volumes of transportations of 2005, there has been transported 18,3 million tons of cargoes, commercial turnover of goods of transport enterprises has made 26,2 billion tons per km. (102.2% to the level of 2005), there has been transported 42,7 million passengers. Passenger turnover has made 1 870 million people per km.

Realizing powers on organization of transport service of the population, Government paid great attention to effective functioning of public passenger Motor Transport and further development of suburban and intermunicipal routes of the Republic of Karelia. It was possible not only keep an operating routing network, but also to open inter-city route Petrozavodsk-Kem and interregional route Petrozavodsk-Veliky Novgorod. Now the routing network in the republic includes 103 suburban and intermunicipal routes.

For the first time in 2006 on a competitive basis more than 34 large and small carriers were permitted to perform passenger services by motor transport.

The Federal Law 122FZ of 22.08.04 preferential travel to public motor transport is excellent, therefore Government RK operatively solved questions of the organization and financing of transportation of the passengers, using the right of social support, there was a financial help to institutions of local government on transportation of the specific categories of the population.

According to the Law of the Republic of Karelia On social support of some categories of citizens and recognition of some acts of the Republic of Karelia as invalid, citizens entitled to social support, monthly monetary refund (MMR) of phone services, radio receiving station and public transport facilities are stipulated. In view of opportunities of the republican budget, MMR is increasing annually. If in 2005 it made 160 roubles, in 2006 - 284 rbl. since January, 1st, then in 2007 it has increased up to 360 rbl., and on results of the first six months of 2007 it is planned to increase MMR to about 400 roubles per person a month.

In addition in 2006 for providing equal availability of public transport services for some categories of citizens local budgets and transport organizations were allocated 38,7 million roubles from means of the republican budget.

In 2006 in republic there has been transported 7,6 million passengers entitled to social support, with granting 50% of fare discount, it has been sold 62 thousand social monthly tickets.

Government of the Republic of Karelia solved questions of bus fleet renewal, in 2006 due to the budgetary credit there had been purchased 2 comfortable buses of increased capacity for transportation of tourists and passengers, in addition in 2007there will be purchased 5 buses more.

Last year quantity of appeals of citizens to republican authorities on unsatisfactory organization of motor transportation reduced considerably.

On results of 2006 by Motor transport it has been transported 848 thousand tons of cargoes and 10,3 million passengers. As a whole, parameters on cargo and passenger transportations have exceeded the level of 2005 by 11% and 55% accordingly.

Since 1998, Government of the RK and Oktyabrskaya railway conclude annual Cooperation Agreements aimed at increase in volumes of transportation and improvement of quality of services rendered by organizations of Railway Transport.

Electrification of Karelia railways proceeded. In 2006 in Idel-Svir piece of line electrification it has been invested 4,758 billion rbl. Construction of railway station in Segezha is completed.

There have been solved tasks regarding preservation of quantity of suburban passenger trains and coordination of passenger transportation tariffs in suburban transportation. In 2006 budget of the Republic of Karelia allocated the sum of 6 872 thousand roubles to finance charges of state support of railway transportation in the suburban traffic. Some categories of citizens, whose social support concerns to powers of the Republic of Karelia, from January, 1st to May, 15th, and from October, 1st to December, 31st, 2006, were rendered 50% discount for suburban railway transportation.

Government of Karelia cooperated with institutions of local government of cities and regions concerning coordination of closing stations for some kinds of operations, work of inactive pieces of line, delivery of cars for enterprises of the republic.

With the purpose of increasing volumes of transportation there has been concluded the Agreement on Cooperation between Russian Rail Roads, Inc., Government of the Republic of Karelia, and Severstroy, Ltd. Subject of the Agreement is creation of joint venture of Russian Rail Roads, Inc., and Severstroy, Ltd., in the sphere of providing transport service of the territory in the gravitation zone of inactive pieces of line of Juškozero-Suojärvi and Lendery-Brusnichnaya. Complex development of this territory is provided, first of all, due to involving mineral deposits in economic turnover.

In December, 2006 the new Agreement between Russian Rail Roads, Inc., and Government of the RK on interaction and cooperation in 2007-2008 is signed.

In 2006 railway transportation enterprise worked stably. Them have transported 17,4 million tons of cargoes that has made 101.2% by 2005, turnover of goods increased by 2.8%, passenger turnover increased by 2.7%.

Within 2006 Government of the RK in cooperation with the White Sea - Onego Shipping Company, Inc., worked on solution of tasks on transportation of cargoes and passengers by Water Transport, and fleet modernization.

Navigation of 2006 has begun in due time. According to the shipping company, it has been transported 3,8 million tons of cargoes. Decrease in comparison with 2005 has made more than 20% that is caused by reduction of internal freight traffic as a result of redistribution of freight traffics from water transport to railway and automobile transport.

Corvette Travel Agency, Ltd., carried out passenger transportations on the line from Petrozavodsk to Velikaya Guba through Shala, and on intercity line Petrozavodsk-Barany Bereg. In addition in 2004-2006 the company has organized transportation on the line Belomorsk-Solovki. In 2006 the shipping company carried out transportations on the line from Petrozavodsk to Barany Bereg through Zimnik by hovercraft meant for 10 passengers. In navigation of 2006 it has been transported 147 thousand passengers that corresponds to the level of 2005.

For state support of water transport in 2006 budget of the Republic of Karelia allocated 379 thousand roubles.

In 2007, at state support in the form of budgetary investment credit, it is planned to purchase two hovercrafts meant for 50 places each for transportation on the line Petrozavodsk-Kizhi, Velikaya Guba, Sennaya Guba. Opening of Pitkäranta-Valaam regular line is planned.

Within the scope of Internal Water Transport sub-program of Transport System of Russia Modernization (2002-2010) Federal target program and the White Sea - Onego Shipping Company, Inc., own development program in 2006, Onego Shipyard, Ltd., continued construction of vessels for river-sea navigation within Karelia project.

The Government managed to solve the problem of increasing volumes of financing of works on reconstruction of water development facilities of the White Sea-Baltic channel. In 2006 transfers on these purposes from the federal budget have made 67,5 million roubles. In 2007 volume of investments is planned to make 87,5 million roubles, in 2008 - 321 million roubles, in 2009 - 190 million roubles. Due to these means it is supposed to finish reconstruction of hydroconstructions of the Хth turn of Northern slope of the White Sea-Baltic channel in 2009-2010.

In view of the importance of the city of Petrozavodsk as a capital of frontier transit subject of Russia, Government of the RK took measures on development of Air Transport, first of all on preservation and further development of Petrozavodsk airport. Measures were taken on renewal of activity of the airport in Kostomuksha with the purpose of expansion of routing network on local air-lines.

Due to expiration of licenses of some kinds of aeroport activity in the 4 quarter of 2006 Government of the RK has taken measures on reception of above mentioned licenses and continuation of work of the airport.

Now Petrozavodsk airport offers regular flights on the route Cherepovets-Petrozavodsk-Helsinki-Cherepovets. In sunmmer period flights on routes Petrozavodsk-Moscow-Petrozavodsk, Arkhangelsk-Petrozavodsk-Solovki, to southern regions of Russia are carried out, volumes of transportations by charter flights to Arkhangelsk, Yakutsk, Naryan-Mar increase.

In 2006 Northwest base of aviation forest protection Federal State Institution and Petrozavodsk Airport Joint-Stock Company have transported 13,6 thousand passengers (123.6% to the level of 2005).

On state support of some actions in the field of air transport in 2006 Government of the RK allocated 752,3 thousand roubles. Besides, due to navigation conclusion in 2006, the aviation enterprise has been in addition granted 512 thousand roubles, that has allowed to keep flight to on the local air-line Petrozavodsk-Kizhi-Sennaya Guba.

Primary goals in the field of transportation for 2007 and the next years are the following:

• preservation of passenger transportation by motor, air, railway, water transport in full;
• continuation of construction of new vessels, purchase of hovercrafts, further replenishment of the park of electric trains and buses;
• continuation of reconstruction of water development facilities of the White Sea-Baltic channel;
• maintenance of completion of Ledmozero-Kochkoma piece of line construction;
• creation of Karelprigorod, Inc., suburban passenger company.