by Olga Kutuzova

Krasnodar

Olympic news

Edward Kuznetsov, former Director of the Economic Development and External Communications Department of the Krasnodar krai administration, was appointed as the head of the Department for Winter Olympic Games-2014 Preparation.

The new department will bring together the forces responsible for organizing the Olympic Games, solve property ownership and agrarian problems, and also pay special attention to the protection of citizen interests.

Forty-three engineering facilities together with energy supplies, public health, and environmental protection services will be allocated to the department.

The legislative assembly of the Krasnodar krai approved the allocation of additional financing in the amount of USD 60 million (1.48 billion roubles) to Sochi. This amount will be earmarked for the construction of facilities envisioned in the Federal target program “On the development of Sochi as a mountain resort.” Presently, the focus is on the construction of a hospital in the Krasnaya Polyana settlement and on repairing city roads.

The state corporation of Olympic Facilities Construction (“Olympstroy”) has presented to the Russian government a list of more than 200 sports and infrastructural facilities (including hotels), which are planned to be erected in Sochi before Winter Olympic Games-2014. The program will also provide for logistical facilities, including two port facilities for unloading and shipment of construction materials.

After the program’s approval, the government will start financing the state corporation. Also, money will be directed for designing and constructing Olympic facilities.

Dmitry Kozak, Russian Minister of Regional Development, heads the Supervisory Council of “Olympstroy”. In 2008, his agency will receive USD 708 million from the state budget. Also, private investors have already been found for 14 Olympic facilities, including the main Ice Palace complex.

Investment in Krasnodar region for 2007 amounted to 200 billion roubles

For the 11 months of 2007, the Krasnodar krai attracted USD 6.8 billion (167.2 billion roubles) of investments from various sources. The figure represents a 122.4% increase compared to investment levels for the previous year, which is well above Russia’s average rate of growth.

The greatest volume of investments into  fixed capital of large and medium organizations has been directed toward transport and communications, agriculture, the food-processing industry, the real estate sector, and trade.

Krasnodar managers will study the American program

Presentation of the American МВА program was held in Krasnodar for more than 20 most promising young managers. All of them have won in the governor-sponsored contest Young Staff for the Krasnodar Economy. During the next two years, these managers will work with Moscow professors of the National Economy Academy.

One of the majors offered within the framework of the program is Municipal and Regional Government. The program’s graduates will work in city and regional administrations. The local administration will cover all tuition costs from the regional budget.

Glass-production and oil refining factories will be constructed in the Krasnodar krai

A Moscow company RusSteklo plans to construct a glass container factory with a capacity of 600 million units per year in Dinskaya village.

Close to 50 acres of land have been allocated for the factory. Construction began in February 2008. When the factory’s production facilities become operational, the output will account for 5% of Russia’s market of glass containers and bottles. 

Raw materials for the enterprise will be supplied from the Stavropol territory and the Vladimir oblast. There are no suitable deposits of sand, quartz, and other minerals in the Krasnodar krai. Almost all large clients for the glass are located in Krasnodar and the neighboring Stavropol krai and the Rostov oblast.

Glass-container factory will produce glass bottles for alcohol and beverage factories (including the production of champagne, vodka, and beer bottles), coffee containers, one-, two-, and three-liter glass containers. The loan for construction is provided through Avangard Bank. Open Society Avangard Leasing, founded by the bank, will supply the equipment under a lease contract.

Company Amethyst plans to construct an oil refinery with a processing capacity of 500 thousand tons annually in Belaya Glina village (Krasnodar krai).

Project investments will reach USD 51 million (1.25 billion roubles), and the construction will finish in 2010.

The refinery will produce 100 thousand tons Euro-3 standard fuel a year, while the manufacturing of diesel fuel will reach 265 thousand tons per year. Fuel oil production will be 42.5 thousand tons annually.

Active purchase of real estate in Sochi

The Olympic rush has raised the prices for residential real estate, and realtors predict that prices will go up even higher. Current prices range from 500 to 800 dollars per square foot.

It is expected that this rise in living-space cost will continue for another half a year.

The cost of real estate sharply increased in the region in July 2007, when the International Olympic committee in Guatemala gave the Krasnodar krai the right to host the Olympic Games in 2014. In Krasnaya Polyana, the future International mountain-skiing center of the Olympic Games, prices on land increased by 30% almost immediately.

Sochi is still ahead of all other towns. A square foot of relatively modest (so-called “economy class”) living space in Sochi was USD 180 in 2006. Today, the price has increased three times.

Land has gone up also: the price of one acre is now USD 40 million.

Krasnodar’s Manhattan

A new strategic investor – company Continent-K, a member of the Conti group of companies, plans to construct French, English, and American blocks in Krasnodar.

Among the large investment projects, which the company intends to implement in Krasnodar is the development of the Berezoviy territory (district Prikubanskiy) and the Big Island on lake Old Kuban. 

Business-city Krasnodar Manhattan will be constructed on the island. The company also plans to build a youth block, specially designed for young families.

Also, investors plan to construct a high-tech multistory building near the Aurora cinema.  One of its walls will be made of glass with water running over it. A built-in projection system would transform the water wall into a giant movie screen. The project will take from seven to ten years, and the total amount of investment into the city’s economy will reach more than USD 4 billion.

Regional perinatal center will be constructed in Krasnodar

Twenty-three new perinatal centers will be built Russia during the next two years. One of them will be constructed in Krasnodar. The list of three federal and 20 regional perinatal centers has been approved by the Government of the Russian Federation. 

The federal agency on public health services and social development (Roszdrav) will finance the construction of these medical establishments.

Perinatal centers of the Federal agency on hi-tech medical aid will be set up in Podolsk, Yekaterinburg, and St. Petersburg.

In 2009, the first patients will be able to visit eight regional perinatal centers in Saransk (Mordovia republic), Krasnodar, Krasnoyarsk, Perm, Volgograd, Kemerovo, Rostov-on-Don, and Tomsk.

Lawmakers have allocated USD 560 million (13.715 billion roubles) for the construction and equipment of regional perinatal centers in 2008-2010.

Rostov oblast

Main investment projects of the Rostov oblast

A civil-engineering design of a southern transportation hub near Rostov-on-Don, a universal port, and three new construction materials factories were among the projects submitted with a request for financial support to the Investment Fund of the Russian Federation. 

The Southern Hub project envisions the construction of a new international airport on the site of the former air base Bataisk. The hub would service eight million passengers and process 70 thousand tons of cargo per year. The length of the runway will reach

13 000 feet, allowing to accomodate all types of aircrafts. The cost of the project is USD 820 million (20.1 billion roubles).

The second project, the Rostov Universal Port, calls for the construction of the Zarechnaya industrial zone that would serve as a container terminal. The zone would be capable of processing up to three million tons of cargo per year. The general investment budget of the project is USD 280 million. The third project, proposed by Open Company EuroDon, envisions the construction of three new factories in the Oktyabrskiy region of the Rostov oblast, including plants for sandwich-panel manufacturing (one million square meters per year), hot galvanization (20 thousand tons per year), and metal construction components (12 thousand tons a year). Their total cost is USD 87 million.

Volgograd oblast

Investments are directed to manufacturing development in the Volgograd oblast

In 2007, investments into the fixed capital of enterprises of the Volgograd oblast stood at USD 2.39 billion (58.7 billion roubles).

According to state statistics, for the 11 months of 2007, commercial entities invested USD 1.73 billion (42.4 billion roubles) into fixed capital, representing a 24% increase above 2006 numbers.

The highest volume of investments went to the manufacturing sector (34%). Transportation and communication systems followed at 16.8%.

The Volgograd oblast administration makes investment activity stimulation one of its top policy priorities, as production growth leads to job creation. Currently, 20 investment projects are included in the region’s list for state support in the form of tax privileges, budgetary financing, and state guarantees.

A venture fund with a capital of USD 11.42 million (280 million roubles) has been created to finance innovative projects.

Volgograd oblast projects

The biggest investments are expected in the construction of a bio-ethanol manufacturing complex. The implementation of this project will provide a commodity market to agribusinesses; 200 additional workplaces will be created, and the amount of budgetary tax revenues will be increased.

The second large-scale project is the construction of an oil refinery at the Novoanninskiy oil-extraction factory. Its cost is about USD 81 million (2 billion roubles). 

The third large investment project is the construction of a pig-breeding complex for one hundred thousand pigs in the Mikhailovskiy district.

Volgograd exports to international markets

Foreign trade turnover of the Volgograd oblast for 2007 was around USD 3.5 billion. The figure showed a 25% increase compared to 2006. Exports have risen by 18%, imports by 70%.

The significant growth in imported products can be attributed to the intensification of investment processes and the introduction of modern manufacturing technologies at such enterprises as OJSC Volzhskiy Pipe Production Factory, LUKOIL-Neftepererabotka Ltd , JSC Kamishinskiy Glass Factory, OJSC NPG Sady Pridon’ya, and many others.

Throughout 2004-2007, the Volgograd oblast has been on the list of the largest exporters of raw materials, metals, and processed products. In 2007, Volgograd enterprises sold USD 1 billion worth of mineral oil, as well as USD 1.2 billion worth of metals and metal products.

Social programs are priorities for Volgograd

USD 81 million (4.9 billion roubles) has been allocated from various sources of financing in order to implement a regional target program “Social development of the countryside 2010” in the Volgograd oblast.

The program envisions housing construction in the countryside, as well as improvements to local schools, public health services, and enhancements to electricity, water & gas supply systems. The program also provides for upgrades to the communications infrastructure and road repairs.

Special attention would be given to construction of living space for young families and agriculture sector professionals. The program would cost more than USD 24.7 million (670 million roubles). 

Analysts suggest that the program would affect the lives of 1 800 rural families, raising the volume of municipal services by 45% and attracting more than 1 200 of qualified young specialists to the countryside. Gasification projects would bring gas services to more than 100 rural areas.

Additionally, the government plans to expand the network of roads connecting rural settlements and provide 30 thousand rural consumers with telecommunications services.

Loans for the development of agribusiness in the Volgograd oblast

As a direct result of implementing the Development of agrarian and industrial complex national project, 12 743 loans for a combined USD 80 million (2 billion roubles) were made to small-business agricultural consumer cooperatives in the Volgograd oblast last year. The amount is almost two times higher than the figure for 2006.

Small agribusinesses of the region generally receive loans from four sources, the Volgograd branch of Open Society Rosselkhozbank, Open Society of the Volgograd branch of SberBank of the Russian Federation, Open Society Volgoprombank, and credit cooperative societies.

Credit cooperative societies gave out 8 238 loans in the amount of USD 30.7 million (753.7 million roubles). Another 3 340 loans totaling USD 31.5 million (773.2 million roubles) were made by the Volgograd regional branch of Open Society Rosselkhozbank. SberBank provided 1 044 loans for USD 17.38 million (426 million roubles), and Open Society Volgoprombank made 121 loans totaling USD 3.94 million (96.65 million roubles).

The increased volume of loans to rural farms made possible equipment upgrades and fueled marketing activity. Also, 57 trade and storage facilities for agricultural products and 70 facilities for artificial cattle insemination have been established.

Construction of interregional water system

The Federal Commission on the Selection of Projects Applying for State Support approved RF Investment Fund financing of Volgograd oblast’s water supply project.

The project, entitled Southern Interregional Water System (SIWS), seeks to address the problem of insufficient potable water in parts of the Southern Federal District. The same problem exists in three neighboring regions, the western territories of the Astrakhan oblast, the northeast districts of the Stavropol region, and the Kalmykia republic. 

The project calls for creating a system of water supply for satisfying the population’s demand with relatively low direct expenses.

Arguments in support of the plan include the discovery of abundant fresh underground water in the Stavropol region.

Other important factors are the high degree of water-fence engineering system reliability and favorable transportation conditions.

Project implementation would allow for the provision of safe, potable water to more than three million people, living in four southern Russian regions. Epidemiologic conditions can be improved by as much as 30%. Moreover, 30 thousand new jobs would be created. The system would be highly flexibile, as it would provide more than one source of potable water to a given city in case of emergency situations.

The approximate length of main water pipelines is 860 miles. The cost of the Southern Water System construction is USD 1 billion (24.7 billion roubles). The project can be completed by 2013.

The cost of the Volgograd oblast component of the program is expected to reach more than USD 326 million (8 billion roubles). For 2008, the region has allocated USD 32 million (800 million roubles) for the preparation of design charts for water pipelines.