Describing St. Petersburg as in a "precarious" state, she outlined on Wednesday the program City Hall will follow for the three remaining years of her gubernatorial term in an address to the Legislative Assembly.

Assembly members' reactions were mixed, but several said the content of the address was quite removed from reality.

"It's important to bring the quality of the communal housing services up to standards approved by the government, to repair roofs, basements, facades, staircases and yards," Matviyenko said.

"Residents have to care about their own and the state's property," she added. "Together, we must do everything we can to stop domestic vandalism, which has reached dangerous levels. Every day lifts break down, windows and doors are smashed, mailboxes are crushed and staircases are fall apart.

"Not a single branch of the administration will be able to do anything if the residents are not on our side," she said. "Citizens have to take responsibility for their city, yards and houses."

Other priorities she listed included improving the city's infrastructure and the business environment, and creating standards of living close to the "minimum ones accepted in Europe."

To do this City Hall will not only have to reduce the number of people living in poverty, which is 22.6 percent of the city's 4.6 million population, but also foster the development of small businesses, which are capable of creating new jobs with higher salaries, she said.

"Administrative barriers that hinder Russian and foreign companies from coming to our city, and the patronage of certain companies by the city government over many years have created unhealthy conditions for local businesses and harmed their competitiveness," Matviyenko said.

The government plans to simplify the paperwork and reduce the time taken to get approvals for investment projects, making it possible for investors to get all they need from authorities at a single window, she said.

"We will go this way seriously and confidently, following a principle of fewer words and more deeds," Matviyenko said. "At the same time, we won't be copying some regions that have given investors more and more different privileges.

"Tax breaks will be possible in exceptional cases only, and only if investment is made in charter capital," she said.

Amendments to the law on tax breaks are ready and will soon be sent to the Legislative Assembly, she added.

"The main thing ... is to create understandable, transparent and predictable rules of the game," Matviyenko said.

One step in this direction is to set up a practice of open tenders for plots of land to renovate and develop buildings, she said.

Despite her words on transparency, Matviyenko this year allocated oil firm LUKoil 60 sites for gas stations, drastically increasing its presence in the city without any tender, in a decision that angered the local oil industry.

Her anti-monopoly committee said it had no concern over the LUKoil deal.

In-fill construction projects, which have spawned a wave of protests from residents throughout the city, are necessary, she said.

"There is a big demand for residential space. We've got to put up with this until we find new areas for construction."

Boris Vishnevsky, a member of the liberal Yabloko faction of the Legislative Assembly, said the address appeared to be a selection of the right words and good intentions, but without any firm basis.

"It sounded like the speech of a Communist leader at a meeting of the Communist Party of the Soviet Union, when all that was said sounded right but it was divorced from reality," Vishnevsky said Wednesday in an interview.

"She talks about a single window [for investors], but doesn't say that investors have to stand in a line for three months to get to that window," he said.

"She also didn't say anything about City Hall's plans to improve the city demographics," Vishnevsky said. "They have just drafted a law to get rid of financial assistance for new mothers. This is City Hall in action; the rest of what she said is just words."

In her address, Matviyenko said the city's population has dropped by 354,000 people since 1991 and the number of deaths a day is 1.9 times the number of births.

Vladimir Yeryomenko, a lawmaker in the Mariinskaya faction, said Wednesday that the address reminded him of a line from a poem by Robert Rozhdestvensky, which goes: "Everything has been calculated to the last decimal place, but it leaves the audience neither warm nor cold."

"This would be my comment," he said.

Yeryomenko was not happy that no deputies questioned the governor. The council of factions had decided against this, he said.

"It would be understandable in the case of a presidential address when there are 450 State Duma deputies in the hall and hundreds of other officials," he said. "But here there are just 50 lawmakers. It would have made sense to let each faction ask a question."

"I don't know why they decided not to ask questions. Maybe she asked them not to," Yeryomenko said.

It is unlikely that Vadim Tyulpanov, the speaker of the assembly, was satisfied with what the governor said.

"During her election campaign Governor Matviyenko made promises to bolster the city budget," he said Wednesday at a briefing.

"I would have liked the governor to show in her address how it will be possible to do this in a practical way, if not to double it, then maybe to raise it by 50 percent."

The only explanation Matviyenko gave about ways for the budget to grow was to say that a quarter of the city budget comes from taxes on small businesses, and that for this reason it should be fully supported by City Hall.

She forecast that in 2005 the budget would consist of 102 billion rubles ($3.5 billion) of revenue and 105 billion rubles ($3.62 billion) of expenditure with plans to increase both to about 140 billion rubles ($4.82 billion) by 2007.

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St Peterburg Times, June 11, 2004