New economic policy in Khabarovsky region
24 investment projects from Khabarovsky region presented at the East Economic Forum reflect the whole range of industry, resource and knowledge-based potential of the region, as well as the tools of government support for economic development. Many of these tools are new and Khabarovsky region is the pioneer in their implementation. Interview with Vyacheslav Shport, governor of the region.
– Yes, we are breaking the ground here and doing it the hard way. But I am confident we’ll get through it. The development of a knowledge-based industrial production is our priority and we are pushing it. We can say that the first ASEZ (Advanced Special Economic Zones). in Russia, this new and reliable way for businesses has already started to work. Of course, we have a lot of work to do in the future and very difficult work too.
Certainly, the priority of our work now lies in creating the first Advanced Special Economic Zone (ASEZ) – Khabarovsk and Komsomolsk. They are approved by the RF Government Decree in June this year. Together with the Ministry for the Development of the Russian Far East and ambassadors in the Far East Region we have done a lot of work. We have completely formed a regulatory system both on the federal and regional levels, built methods of interaction between all levels of authority.
The financial order and resources for construction, reconstruction and exploitation of infrastructure are specified,and the management system of these territories is established. The first agreements with anchor investments, GK Energiya specifically, which will be developing its project on creating machine production for aircraft industry in ASEZ Komsomolsk, have already been signed.
– What are the main goals now?
– The main goal now is not to lose time. We have to create all the necessary conditions for the investors, future ASEZ residents in the quickest possible way, so they can accelerate the implementation of their projects. The agenda for now is to create planning projects for ASEZ sites, project documentation on the engineering and road infrastructure, socio-cultural life and a finalization of the management system – all this work needs to be executed in 2015, in order to start construction of the infrastructure facilities with the regional and federal budgets next year and for the investors to start building their own industrial capacities.
Note, that in addition to the complex development of the ASEZ engineering and road infrastructure, without which the residents cannot start their work, it is also important to solve another problem of guaranteeing the flow of workforce and creating sustainable social connections of the population with their workplace and residence.
In other words, we’re highlighting the development of the social infrastructure around the ASEZ sites. It is especially relevant for Komsomolsk. The city has a rich industrial potential, but the social infrastructure is underdeveloped. The Ministry for the Development of the Russian Far East has already approved the list of social, cultural and utility facilities that will be built in the city. We expect schools and preschool facilities to be reconstructed as well as a specialized engineer school to be built in order to develop interest in the engineering professions from an early age. We also plan to build a multistory residential complex in the Parus microrayon, next to one of the ASEZ Komsomolsk sites, the sports palace and a children’s medical center.
– In other words, we will see construction on the ASEZ sites next year?
– Yes. Out of 32 potential ASEZ residents, 6 are already ready to start construction. At the industrial park Avangard, which is one of the three ASEZ Khabarovsk sites, the work has already started. The Japanese company JGC Corporation is building green houses where vegetables and greens will be cultivated with the help of new technologies. In fact, the range of investment projects planned for implementation in ASEZ Khabarovsk is quite wide – from agriculture to steelworks… The area allows it and there is plenty of space left for new investors.
Attracting new investors is one our key goals. Moreover, we are not inviting only large businesses. In the RF Government Decrees, which confirm the development of ASEZ, there are 53 kinds of business activities for its residents – from veterinary and fish-farming to automobile and film production. The only thing they can’t do probably is banking and mining. The minimum investment threshold is 500 thousand Rubles.
It is quite a feasible level even for small companies, taking into account the serious preferences for ASEZ residents. We expect small businesses to be involved in ASEZ as well. Of course, the best advertisement for new investors isn’t what we say, but the results of successful enterprises in ASEZ. We try to do everything in our power to have more examples of success that we can present as early as possible.
– Do you plan to submit requests for the development of new ASEZ in the region?
– We certainly plan to develop a network of such territories in the future. Specifically by creating ASEZ in the Vanino and Sovetskaya Gavan port regions. A special port economic zone is already active in the Sovetskaya Gavan, approved by the RF Government Decree of 2009 and has a range of promotions for residents. However, “active” is putting it boldly. So far, it exists only on paper, due to numerous infrastructure and management problems that we came upon when trying to work out its operation. However, this experience is what helped us create ASEZ. We took into consideration all of the problems and found their solutions. We are not rejecting the POEZ, on the contrary we are working on expanding the Vanino region zone. The investment interest in POEZ is ongoing and we are expecting it to really work. The Vanino-Sovgavansky junction possesses great development potential, which is not yet discovered. It would be important for us to have a special port economic zone specializing in stevedore services, fish processing and ASEZ (which is in fact acknowledged as promising by the government subcommittee). We think that the ASEZ methods can be logically connected with POEZ to complement each other.
We also plan to expand the ASEZ regime on the Russian part of the Bolshoy Ussuriysky Island near Khabarovsk. There is a plan to create an international tourist and recreation area with a special visa regime together with our partners from China. This is certainly a unique project, but also an ambitious one, involving considerable expenses on the construction of hydroengineering facilities, keeping in mind the major flood levels of 2013.
In addition, we are working on creating the ASEZ on other sites, in particular the Chegmodin village in the Verkhnebureinsky District as part of President Vladimir Vladimirovitch Putin’s commission on developing mono cities.
– But you cannot expand the ASEZ regime on the whole region…
– Certainly, besides developing the ASEZ we are applying all the available methods of the government support of economic development. For example, such a method like supporting priority investment projects. The outcome of the competitive selection by the Russia government showed that only two projects were chosen to receive federal funding for infrastructure.
These projects are Sakhatrans, LLC constructing a coal terminal in the Vanino port and OAO Urgalugol, which plans on constructing a coal-preparation plant on the Urgal coal mining site in the Verkhnebureinsky region and increase the mining capacity. The total support will amount to 4.8 billion Rubles, which are going to be invested in road construction, power lines and utility lines. The government subsidiaries will help attract approximately 42 billion of private investment and create 3 thousand new work places. We are continuing to work on preparing new submissions from regions for the competition. For example, a big project on recovering the stannum ore industry (in fact, the Khabarovsky region is the only region in the country where this metal is produced) is already happening in the Verknebureinsky and Solnechny districts. It can most certainly count on receiving the priority status. There are other candidates in various fields from agriculture to wood processing and mineral production in different stages of readiness.
When talking about the potential, a unique project for Russia on cellulose production in the Tuguro-Chumikansky region is in its final stage of completion. The construction is planned for next year and the production is set to start in 2019. It is a project of our investors from Khabarovsk. A US company, for example, is planning to develop a unique project on exploring the largest gold and copper field in Malmyzh, Nanaysky region.
Furthermore, the region already has a system of regional investment projects. The first investor has already received tax benefits on the regional level. This is the Polymetall company’s project on the development of the Svetloye gold mine field in the Okhotsky region. On top of that, we are developing industrial parks in the region. A regional park is being constructed in Komsomolsk-on-Amur aimed at supporting small production facilities… We also entered into the federal programmee on Increasing the Mobility of Human Resources for 2015-2017. Its implementation will aid in attracting approximately 1000 professionals from other regions necessary for carrying out the investment projects. We will support the investors by using the regional budget to transfer the necessary work force. To put it another way, we are trying to apply all available methods of government support for current and new projects in all areas – from industry to tourism. We expect the current budget investments and tax benefits to pay off in the future in terms of economic growth, new work places and budget increase.
– Don’t you think you use the term unique slightly too often regarding your projects?
– Believe me, they are truly unique. The Khabarovsky region is itself a unique subject of the Russian Federation. You can hardly find another region that combines vast natural resources, beautiful nature and a high knowledge-based and industrial potential. Our goal is to use all of this for the benefit of our people, our region and our country. We understand that the economic perspectives of any region depend on the quality of collaboration with investors. We are trying to create the best possible conditions for investors, be they a small business or a big one, national or international.
We invite investors to see for themselves. I guarantee that they will receive maximum support from all administrative levels in Khabarovsky region.