Translated material
"Neither evict nor set fire to"
Problems with land in Sochi did not scare investors
The main topic of the Sochi Investment Forum , held this weekend, was attracting investment in infrastructure projects. Moreover, if on the first day we talked about projects throughout the country, then on the second - only in Olympic Sochi. In total, according to the acting Minister of Economic Development German Gref, 169 investment agreements and protocols of intent worth $22 billion were signed during the forum. The forum in Olympic Sochi attracted almost nine thousand participants this year. If in past years one Winter Theater was enough to hold the forum, which was then called the Kuban Theater, then, having become the Sochi Theater, it occupied almost the entire center - from the Sea Terminal building to the Pearl Hotel (the total area of the territory where the forum was held was 40 thousand sq. meters.)Despite the fact that the organizers of the event consider the transition from a regional scale to an all-Russian one to be one of the main achievements, investors still paid the main attention to the Krasnodar Territory. According to Deputy Governor of Krasnodar Alexander Remezkov, the region signed 132 agreements and protocols of intent for a total amount of $17 billion. By the way, last year at the forum contracts worth $5 billion were signed, which was an absolute record at that time. This exceeded the amount of contracts concluded at all previous Russian forums, including St. Petersburg.
Some current projects are simply amazing. One of the most expensive will be the creation of an artificial island in the Black Sea. The shape of the island will follow the outlines of Russia. It has already received the name “Federation”. The island will be created by M-Industry CJSC, with which the regional authorities signed a protocol of intent. The cost of the project is 200 billion rubles.
Among other most capital-intensive agreements is an agreement between the Krasnodar Territory and Basic Element on the implementation of socio-economic programs, also worth 200 billion rubles. True, what specific programs these would be were not told to journalists.
In addition, an agreement was signed between the region and the Chinese company China Yuran Group on the construction of a five-star hotel and golf course. $1.2 billion will be spent on everything.
Vladimir Putin came to the forum to convince investors of the attractiveness of infrastructure projects. The heads of fifty largest Russian and foreign companies were invited to meet with him. Mr. Putin said large-scale investments are perceived “as great confidence in Russia.” “I want to assure you that you will enjoy the most immediate direct support from the government and regional authorities,” he noted. The President expressed satisfaction with the implementation of the proposal with which he addressed businessmen at the last forum, namely, to invest more actively in the regions of the Southern Federal District.
This year, the problem of infrastructure development comes to the fore, primarily in the implementation of a new national idea - the Olympics in Sochi. In preparing Sochi for the 2014 Olympics, “we are ready to interact with private investors, including foreign ones,” Vladimir Putin said. “There will be no difference in attracting investors based on nationality.” Only two principles will be important here: price and quality,” he emphasized. In the south of Russia, investments are currently most in demand in the development of seaports and airports, in the construction of roads and railways, the head of state noted. And although the urgent need for such infrastructure arose after Sochi’s victory in the Olympic competition, it is obvious that the effect of such projects will manifest itself both before and after the Olympics.
The recently created Development Bank, Vnesheconombank, set an example in this direction for private investors. The head of the bank, Vladimir Dmitriev, signed several agreements at the Sochi forum directly related to the tasks formulated by the country’s president. One of them involves the construction of the North-Eastern cargo area of the port of Kavkaz (proposed investments - 2.5 billion rubles). To implement this project, VEB entered into a cooperation agreement with the administration of the Krasnodar region, the Northern Lights oil company and the Azov Transport Company. The document provides for the development of financing schemes and the subsequent implementation of the project itself.
Another major infrastructure project that will be implemented in Kuban with the participation of VEB is the design and construction of the Krasnodar-Abinsk-Kabardinka toll road. This road, which will connect the capital of the region with the Black Sea resort of Kabardinka near Gelendzhik (the length of the route is 147.4 km, the total investment requirement is at least 117 billion rubles), is only part of the general agreement on cooperation in the implementation of transport development projects infrastructure in the region. VEB entered into this agreement with the regional administration and the federal Ministry of Transport. It is expected that projects under this agreement will be implemented on public-private partnership terms. VEB's press release on this matter emphasizes that the implementation of the agreement will help improve the environmental situation in the region and develop tourist and resort areas.
True, there were some incidents. Thus, the governor of the Krasnodar Territory, Alexander Tkachev, pointed out an obvious infrastructural limitation - every piece of land already belongs to someone. He told how difficult it was to fight with land owners when laying a new runway. “According to the current legislation, we can neither evict him nor set him on fire,” the governors demonstrated their excellent knowledge of Russian methods of fighting for land. Investors who had just been told about macroeconomic stability and predictability of the rules of the game were literally speechless. But Vladimir Putin retorted instantly. “The fact that everyone is dancing around the owner is normal. This is how it should be,” he instantly reassured private investors.
Several proposals from the business community were discussed at the meeting. Thus, the President of the Russian Union of Industrialists and Entrepreneurs, Alexander Shokhin, took the initiative to create a fund for financial support of medium-sized private investment projects - up to 5 billion rubles. That is, those projects that cannot legally qualify for funds from the investment fund.
In response to proposals from the head of the Russian Union of Industrialists and Entrepreneurs, Vladimir Putin gave Mr. Gref instructions to create a system of administrative support for small-scale investment projects. The minister, for his part, noted that it is not profitable for the federal budget to support such small projects, and proposed transferring them to the regions. “For cheaper projects, we are considering the possibility of allowing regional budgets to create the same form of support (as the federal investment fund),” he said. The government colleague was supported by the acting Minister of Finance Alexey Kudrin.
The head of the Interros company, Vladimir Potanin, said that the commissioning of many facilities in Sochi is hampered precisely by the lack of roads, electricity, and treatment facilities. “You don’t need to repeat your mistakes. Infrastructure should get ahead, not catch up,” he emphasized. The head of the Basic Element company, Oleg Deripaska, agreed with him, saying that now one of the main problems in the development of infrastructure projects is the low quality of design. According to him, because of this, for example, the construction of the airport in Gelendzhik, which is being carried out by his company, is being delayed.
On the forum itself, acting First Deputy Prime Minister Sergei Ivanov outlined the development and modernization of roads as one of the main priorities in the development of transport. “The volume of government funding for these purposes is constantly growing. Thus, last year more than 170 billion rubles were allocated, and in 2008-2009 the growth of budget expenditures will continue. By 2010, we plan to reach the milestone of 4 thousand km of new roads per year, and in the future - by 10-12 thousand km,” he said. Private investors will also be able to take part in this large-scale construction. According to him, “it would be wrong to solve the problem only by increasing government appropriations, and we plan to create a network of toll roads and develop the practice of concession agreements.”
Naturally, one of the main issues for both forum participants and journalists was government appointments. Interest in this issue has especially increased after Vladimir Putin announced on Friday that new Prime Minister Viktor Zubkov had already presented him with a new government structure. Each of the six acting participants present at the forum. ministers, and all well-known figures, from the head of RAO UES Anatoly Chubais to the president of VTB Bank Andrei Kostin, had to answer this question twenty times a day. “Be patient, everything will become known in the coming days,” the acting acting director urged. Deputy Prime Minister Alexander Zhukov, Vremya Novostei correspondent.
German Gref, answering a question about how the uncertainty with the composition of the cabinet affected investor sentiment, noted: “We have probably already reached the happy moment when, regardless of the presence or absence of the Russian government, investors are ready to invest over $20 billion. I I think that investors adequately understand both the political and economic situation in Russia. And the fact that the key figure is President Vladimir Putin. We, as Canadian hockey players, will work until the last minute,” the acting director said with a smile. minister.