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"Places and opportunities to invest in Kamchatka will be enough for everyone!"

Head of the Corporation for Development of Kamchatka Krai Nikolai Pegin on investments and well-being of business in the region

The Corporation for Development of the Kamchatka Krai (KRCC) has accumulated in its portfolio not only investment ideas and projects for more than 200 billion rubles, but also unique experience in solving problems of entrepreneurs at all levels of government. In an interview with EastRussia, the general director of the KRCC, Nikolai Pegin, explains how to achieve competition among investors for promising projects, whether it is possible to effectively influence the federal agencies "from below", whether there will be mass tourism on the peninsula, what exactly is the evidence of improving the investment climate in the region, and why should Kamchatka participate in the numerous business forums.

"Places and opportunities to invest in Kamchatka will be enough for everyone!"
- "The Development Corporation of the Kamchatka Krai" has formed a portfolio of investment projects in a number of key industries for Kamchatka. Can you tell us what is the most important and "tasty" "inside the portfolio" at the moment?
- The corporation of development of Kamchatka has really formed and promotes an investment portfolio worth more than 200 billion rubles. From this portfolio, the Corporation takes an active part in the implementation of investment projects, the total amount of which exceeds 36 billion rubles. 

These are projects in the mineral and raw materials sector, for example, the construction of a mining and metallurgical plant for the extraction and processing of Ozernovskoye gold ore, which is sold by OJSC SIGMA. The project is in a high degree of readiness for launch. 

There are projects in the field of road construction. For example, we proposed to our Chinese partners from Yiha Highway Engineering Co., Ltd a project to reconstruct the transport system of Petropavlovsk-Kamchatsky on the principles of public-private partnership through a concession agreement. We are talking about the construction of a road linking the Petropavlovskoe highway and Solnechnaya street of the regional center. The negotiation process is going well. We plan that a corresponding agreement will be signed with Chinese partners this year.

The project supported by the KRKK, initiated by KZB-DONKA LLC, is successfully developing. It provides for the creation in the area of ​​the village of Vyvenka, which is located in the north of the Kamchatka Territory, a large plant with innovative equipment for waste-free production, capable of processing up to 100 tons of pollock, cod, flounder and navaga per day. Considering that such an enterprise in a remote area will have not only economic, but also serious social significance, the corporation provides all-round support to the promotion of the project. The volume of investments will exceed 500 million rubles. Bringing the plant to full capacity will provide employment and decent wages for 120 workers and employees.

Just a few days ago, an investment agreement was signed with an individual businessman Sergei Monzharenko, whose goal is to build a fair of agricultural producers along the Northeast Highway of Petropavlovsk-Kamchatsky.

We are also escorting a reconstruction project for the port station in the northern village of Ossora. At the meeting of the Investment Council of the Kamchatka Territory 13 March the project with the support of the KRCC was given the status of a large-scale investment project, which allows the initiator to lease a land plot without bidding and enter the active phase of the project.

And, of course, the corporation will support such significant projects for the entire region as the construction of a new passenger terminal at an international airport, a regional hospital, and the Petropavlovskaya Gavan shopping and entertainment complex.

- Let's take a closer look at some points. The Ozernovskoye MMC project expects to receive the first industrial gold in the spring of this year, the main capacity should be earned by the year of 2019. Have you had any problems?
- Systemic difficulties encountered in the implementation of the project, basically overcome. One of the main ones concerned the creation of land transport communications linking the plant being built with the existing roads. For today, as you know, this issue is resolved. For the construction of the route leading to the field, funds from the federal and regional budgets were allocated as a measure to support the investment project. Now the road has been built and is in operation.

The experience gained by the ICRC in accompanying the implementation of the Ozernovskiy MMC investment project helps with the support of other investment projects in the mining sector. Recently, we successfully represented on the investment council in the Kamchatka Krai a project involving additional exploration of the Mutnovsky gold-silver-polymetallic deposit with the prospect of building on its base a mining and smelting enterprise with an enrichment plant. After the introduction of all capacities into operation, the initiator of the project, STEPPS East, expects to extract significant amounts of gold and silver, and further "to ensure the full extraction of all useful components of economic interest." 

By the way, the extraction of precious metals in Kamchatka increased last year. Gold was mined 6682 kg, silver - 16 676 kg and platinum - 391 kg. And with the commissioning of the Ozernovsky MMC, the volumes of Kamchatka gold will increase by several tons, and we will get closer to the Russian leaders in gold mining - the Amur, Magadan regions, Chukotka ...

- Working with Indian TATA Power on the project to develop the Krutogorovskoye field, does the Corporation somehow participate?
- Until a certain moment, the Kamchatka Development Corporation accompanied the implementation of this investment project. After a cycle of negotiations between KRKK and the investment company Kleros Capital, held in 2013, our foreign partners, together with the corporation, organized an expedition to the western coast of Kamchatka, in which representatives of TATA Power also took part. Then, not only the reserves and quality of coal were analyzed, but also the climatic and navigational conditions of the area and water area of ​​the Sea of ​​Okhotsk adjacent to the deposit were studied. Subsequently, a fairly large number of studies were carried out confirming the feasibility of investing in the project. The costs of various studies, modeling business plans, and conducting survey work amounted to about 70 million rubles. 

In 2016, the Kamchatka Development Corporation transferred its developments to the Ministry for the Development of the Far East and the Government of the Kamchatka Territory. Then they were engaged in the project and, as we see, quite successfully. The "subsidiary" LLC "FINR", created by TATA Power in Kamchatka, won an auction in December last year for the right to use the subsoil of a coal deposit.
- In February, the construction project of the Kamchatka Regional Hospital, which you also mentioned, was included in the list of socially significant construction projects that will receive funding from the federal budget, in March the project was briskly discussed at the Days of the Korean investor in Vladivostok. Tell me, what is the interest of the Koreans?
- Back in 2016 - 2017, the government of Kamchatka and the KRCC held several rounds of talks with the Korean partners about the possible participation of foreign business in the construction of the regional hospital, its equipping with modern equipment, and training personnel for work in a medical institution. Even statements were made by the official Korean circles about the readiness of their country's business to invest in the construction of a regional hospital. But at some stage we, having felt the decline of interest from foreign partners to the project, began to search for other investors.

We again heard about the readiness of the Korean side to participate in the construction of the regional hospital in February at the talks between the deputy chairman of the regional government Valery Karpenko and the representative of the KRKK with one of the heads of the investment company "CDS Union" from Seoul In Kim. We introduced the foreign entrepreneur to the current status of the project. It was also said that in the future, if the Korean side does not lose the desire to invest in the construction of the regional hospital, the issue of choosing an investor will have to be decided on a competitive basis. Mr. Kim announced his readiness to "offer the best conditions." Then the Korean side repeatedly stressed the seriousness of the expressed intentions and the readiness to send a large delegation of businessmen representing several well-known companies to Kamchatka.

- And the search for other investors, which you mention, brought the results?
- A Russian company with a positive business reputation expressed its readiness to participate in the construction of the regional hospital on the principles of public-private partnership. At present, the official partner of the Kamchatka Development Corporation, the international audit firm Ernst & Young, is actively working on a concession agreement. KRKK accompanies the project, and this process has very positive dynamics. Today we are close to completing the pre-investment stage of the project. 

- So, there is competition among investors for participation?
- The region has created a favorable investment climate, which practically guarantees a profitable investment. In addition, it cannot be ruled out that the position of the Korean side was influenced by the allocation of federal funds you mentioned for the construction of the first stage of the regional hospital. We are talking about an amount exceeding 4 billion rubles. But this, I am sure, is only one of the aspects that force our foreign partners to join the competition for the implementation of the project in Kamchatka. 

- Another long-standing problem that Kamchatka managed to solve is the construction of a new airport terminal: JSC "Airports of the Regions" from the group of companies "Renova" entered the facility. Plans for the construction of additions to the terminal in the near future to enhance passenger comfort and create a business hall are part of this project?
- Expansion of the areas of the current passenger terminal due to fast-erected structures has nothing to do with the implementation of the investment project you are talking about. To improve the quality of passenger service for the period of construction of a new passenger terminal, this year at the airport will be held non-excessive activities to expand the areas of the old terminal. In other words, additional areas will be added to the old terminal building, where the main modernized areas will temporarily be located, including a waiting room for luggage, a waiting area for passengers, and production facilities.

- And what is the dynamics of the main project?
- In February, at a meeting in which the Deputy Prime Minister of the Territory Yuri Zubar, the head of the "Airports of the Regions" Yevgeny Chudnovsky took part, the parties noted the planned and consistent implementation of the joint-stock and investment agreements. We also solved a number of organizational, legal and technological issues, and determined the algorithm of actions for the near future. 

The progress in designing the airport complex and the accompanying infrastructure was discussed in detail. The fact that the project was granted the status of a resident of the TOP and the investor made the first transaction in the amount of 3,5 billion rubles in the capital of the MAPK indicates the successful dynamics of the pre-investment stage of creating a new airport complex.

- You spoke about TRK Petropavlovskaya harbor. Do investors show interest in it?
- The project provides for the conversion of the former workshops and open production sites of the Freza plant into a tourist infrastructure facility. It includes a complex of hotels, aparthotels, shopping, entertainment, congress and exhibition grounds, catering facilities, and a walking area.

Most recently, the Moscow division of the British firm Aukett Swanke has completed work on a pre-design sketch for the reconstruction and re-profiling of investment sites for collective use. Expert studies carried out last summer showed that industrial premises can be reorganized into tourist, commercial and cultural and entertainment facilities. This approach reduces the cost of implementing an investment project by at least three times. Investors from Russia, South Korea, and, more recently, entrepreneurs from Germany are showing substantial interest in participating in the project.

- While the documentation is being worked out, are there any real changes in that area already taking place?
- The complex will include a yacht port, which is already an active facility, and in the long term we are planning to become an international port. Last year, we increased the number of mooring places for yachts and boats by installing modern pontoons built in St. Petersburg in the marina area, which have no analogues in Kamchatka. The visit-center began its development. In it tourists on the eve and after sea walks enjoy spending time.

- If we talked about tourism, the remoteness of Kamchatka, of course, can be considered a "myth", but it remains a geographic fact. In your opinion, will the overall transport accessibility of the region increase the flow of investment?

- Let me disagree with you regarding the "geographical fact" about the remoteness of Kamchatka. If we talk about foreign tourists, in the countries of South-East Asia, in which almost half of the world's population lives, our peninsula is one of the most near Russian regions. This statement also applies to Canada and the United States. In these countries, especially Asian, the tourist interest in Kamchatka is huge. We often hear about this at the talks from our Japanese, South Korean and Chinese colleagues.

They talk about tens of thousands of their compatriots who are ready after the completion of the construction of a new passenger terminal at the airport, after the completion of the reconstruction of the berth of the marina and the improvement of the whole terminal complex, the expansion of the hotel network to come to Kamchatka to get acquainted with its unique nature. And in this context, of course, increasing the transport accessibility of the region will lead to increased investment. And not only in the strategic sector of the economy for Kamchatka - tourism. Obviously, we will get a multiplier effect for the entire economy of the region.

Already today we trace the steady tendency to increase the tourist flow. The transport accessibility of Kamchatka for Russians is improving. You are well aware that the federal government has subsidized passenger flights to Kamchatka and other regions of the Far Eastern Federal District for a number of years. Incidentally, due to this, we note the growing annual flow of domestic tourists to Kamchatka. This trend forced entrepreneurs to invest in the development of the hotel business. Only in the regional center are two large hotels built, the number is expanding and the quality of tourist products is increasing.

Today the region faces the task of increasing the volume of domestic tourism on the peninsula not only at the expense of the VIP segment, but also making it accessible to the middle class, and, therefore, mass. As part of achieving this goal, in January, the governor of the region Vladimir Ilyukhin and the general director of TT-Travel LLC TUI Russia Taras Demura signed a cooperation agreement. In particular, it involves working with air carriers to find solutions to reduce the cost of tickets for economy class passengers.

- And the investor, if he is interested in investing in Kamchatka, himself must find a way to the peninsula?
- I do not agree. This we must create such an investment product and so interest that the investor does not have a share of doubts about the correctness of the decision made - to invest in Kamchatka! Our task is to fight for it, to provide it with the most comfortable, competitively favorable operating conditions, including those concerning transport access in the whole range of understanding of this issue: both on the way to the peninsula and on the peninsula itself.   

- Investors from the outside come more and more. Is the local Kamchatka business jealous?
- Until 1991, Kamchatka remained a closed territory with an almost mono-oriented economy. The turmoil of the nineties, the crises of the two thousandths left Kamchatka Terra incognita for investors and large-scale economic development. Therefore, we are at the very beginning of an interesting journey and there is enough space for everyone ... 

As for the possible jealousy on the part of entrepreneurs in the region to investors coming from outside, here we see the very medal that has two sides. First, business is not a bench for friendly gatherings. The business world and competition are inseparable phenomena. On the other hand, regional business is aware that new investments in the economy of Kamchatka create additional opportunities for them, and expand sales markets.
- Do investors who come with large projects to Kamchatka have problems requiring a settlement at the federal level?
- The development corporation of Kamchatka during its work has acquired not only experience, but also serious professional competencies in various areas of investment activity. In fact, we have become a competence center and a single window for the investor. And of course, from time to time there are problems requiring solutions at various levels of government. Mechanisms for their solution, direct communication lines with federal bodies of executive and legislative authorities at the Corporation for the Development of Kamchatka are built. At the same time, we are almost guaranteed to receive support from the RF Ministry for the Far East, the Government of the Kamchatka Krai, the Far East Development Corporation and other organizations that have built a consistent and effective policy of supporting entrepreneurship and investment.

Most of these problematic issues, in the event that there is an objective evidence base for the expediency of their solution, do not remain a barrier to the implementation of an investment project. The region, for example, received permission from the defense ministry to operate the gold deposit, which is in relative proximity to the military facilities. 

In its turn, the development corporation of Kamchatka, having encountered difficulties in the implementation of the Dalniy Industrial Park investment project, was able, with the assistance of the Minvostokrazvitiya and the Far East Development Corporation, the Agency for Investments and Entrepreneurship of the Government of the Kamchatka Krai, to secure budget allocations for the creation of energy infrastructure facilities , resulting in the project received additional development dynamics.

The theme of a separate big conversation is the legislative initiatives of the Federation subjects, development institutions, business communities within the framework of the formation of a favorable investment climate and promotion of the potential of the regions of the Far Eastern Federal District. 

Vice Prime Minister Yuri Trutnev, speaking at the final board of the Ministry of the Interior, paid special attention to the formation of the legal basis for the accelerated socioeconomic development of the Far East: "30 federal laws, 150 government resolutions essentially created a new economic space in the Far East, formed a competitive investment climate. , that we can confidently say that the process of accelerated development of the Far East has shifted from its place and is gaining momentum. " 

At the heart of a large part of the "30 federal laws, 150 government regulations" lies the initiative of the regions and business of the Far Eastern Federal District, to which the federal authorities provided support.

- In other words, do you value the sense of local business about how the development of the Far East is proceeding at the state level, as positive?
- Of course, I would have sinned against the truth, start to assert that everyone satisfies all. But in general, the attitude of the Kamchatka business to the policy of accelerating the social and economic development of the Far East, which is being conducted by the country's leadership, is positive. In the Far-Eastern Federal District there are unique conditions for doing business. Only in Kamchatka to date, there are about 70 measures of financial and non-financial support of business.

Representatives of the business community spoke of their deep interest in the conference organized by the KRCC and the regional government "Business and Power: Time to Invest in Kamchatka". Independent experts come to the same conclusions. In particular, the All-Russian Center for the Study of Public Opinion. 

One of the latest studies of VCIOM concerned the resources, barriers and opportunities of the Far East. The survey was conducted not only in the regions of the Far Eastern Federal District, but also in other regions of the Russian Federation. The ideas about the quality of life in the Far East, the situation in the labor market and the labor force, the conditions for doing business, the social package in the regions, and many other parameters were analyzed.

The head of VTsIOM Valery Fyodorov said: "Kamchatka is at the top of the list, it looks better than a significant part of the DFO regions, I'm sure it did not happen by itself, it is the result of the active work of the management team that has been created and is working for the past years ".

Additional proof is also the hard work of the investment council in the Kamchatka Territory. Last year, at its meetings, 19 considered large-scale investment projects that claimed to receive a particular status. A significant part of these projects is supported by the Development Corporation.

In March an entrepreneurial forum will be held in Kamchatka. In your estimation, what is the main point of creating another communication platform? Is it not enough for forums?
- It seems to me that the platforms on which there is an opportunity to build a direct dialogue between business and government are necessary. There can not be many of them.

I have already said that recently the government of the Krai and the Development Corporation held a conference "Business and Power: Time to Invest in Kamchatka". Its format presupposed an open dialogue in the face-to-face mode of business and government representatives in key areas that determine the region's positions in the National Rating of Investment Attractiveness. Entrepreneurs talked about the situations they encountered at one stage or another in the implementation of their projects. Representatives of the regional government, federal executive bodies, gave comments, told about the changes, in some cases agreed on subsequent meetings to stop possible conflict situations.

The forthcoming conference offers a slightly different format for the dialogue between business and government, with a certain bias towards methodology, analysis of positive practices developed in other regions of the country and the possibility of their application in Kamchatka. It is also interesting that the entrepreneurial associations of Kamchatka took part in the preparation of both forums, the layout of their problems. 

In the province, other sites have been created and are successfully operating, on which the business world has the opportunity to conduct a direct dialogue with the leadership of the region. I will mention only two of them, headed by Governor Vladimir Ilyukhin. This is the "Business Club" and the Investment Council in the Kamchatka Territory. 

In the formation of such sites, the use of their potentials, complexity is important. Only it allows us to successfully resolve issues affecting the business environment and the formation of a favorable investment climate along the whole depth, across the whole range of strategic issues.

- Participation in forums in outside Kamchatka as fit into this strategy?
- In interaction and establishing a dialogue with investors, as I have already said, complexity is needed. As in any work, some areas are more significant, some less, but they are all necessary. It is important to meet with investors and work with them at interregional and foreign sites. Therefore, we have created the Moscow office of the KRKK. Offices in Petropavlovsk-Kamchatsky and in the capital allow the Corporation to work almost around the clock.

In a separate category, we single out work with investors in the territory of the region. I have repeatedly said that it is possible to learn about Kamchatka, to get acquainted with its potential anywhere, anywhere in the world, but you can only love Kamchatka in Kamchatka. Therefore, we invite partners to the peninsula, for this purpose we use a method of work, such as post-conferences, when a group of participants comes to Kamchatka after the main event. The first of these was held last year after the conclusion of the Eastern Economic Forum. In this year we hope to organize two post-conferences. In September - after the Eastern Economic Forum-2018, and a little earlier - after the forum on the development of transport and logistics capabilities of the Far East, which will also take place in Vladivostok.  

- An important factor in the regional investment climate is the shortening of the terms for the provision of public services and administrative procedures. In your estimation, how has the situation changed over the year?
- Probably, it is necessary to talk not about my assessments, but about objective indicators. They allow us to say that in the region bureaucratic barriers that prevent the normal implementation of entrepreneurial activity are gradually reduced.

The average period of connection of consumers to power networks by the beginning of last autumn amounted to 109 calendar days, which is less compared to last year. The time for obtaining construction permits has also decreased. The number of procedures required to obtain a construction permit, subject to the simultaneous submission of applications for technological connection of the project to engineering networks, fell to six.

There are positive developments in other areas of business. The terms and number of procedures for registering property rights have been reduced. In some cases, they take even less time than established by the target model. For example, the deadline for approving the scheme for locating a land plot on the cadastral plan of the territory in the Kamchatka Territory does not exceed 10 days, and the procedure for assigning an address to a land plot and a real estate object is within 6 days. The target model allocates to these procedures, respectively, 18 and 12 days.

State registration of rights to immovable property on applications submitted electronically in the Kamchatka Territory can be completed in 7 business days, state registration of mortgages for non-residential real estate will take 5 working days.

In order to complete the design of the establishment of the enterprise in the divisions of the tax service in the Kamchatka Territory, it takes three days.

I would also like to add that the Krai Government, the Kamchatka Development Corporation, the business community intend to further promote the creation of favorable conditions for doing business, further improving the favorable investment climate in the region. From project to project, from initiative to initiative - we are ready every time to prove to the investor the maximum interest in cooperation, in joint success.
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