Fedor Turkin: "The state should fulfill its obligations at full scope and firmly demand the same of business, presuming it has necessary rights for it"

The absence of Law on a Private-Public Partnership in Russia slows the development of the construction industry and the economy. This opinion was expressed by the C hairman of the board of directors of "RosStroyInvest" Group of Companies Fedor Turkin in his interview with "Construction Weekly" journalist Tatiana Kramareva.

- Do you think our market is attractive for the foreign investors today?
- There are several decent foreign companies working in St. Petersburg (eg YIT, NCC), and there are Russian companies as well that have successfully completed IPO (Etalon, LSR). I must say that they work very effectively in other regions. In general, however, despite the stagnation of the construction market in Europe, foreign investors show limited interest to the Russian market. The explanation is simple: foreign investors in Russia do not feel sufficiently protected. But still Czech, Turkish and some other companies are showing serious interest in penetration or strengthen their positions in the North-West, and in particular in St. Petersburg and Leningrad region. Maybe Czechs possibilities are rather modest, but the Turks have a very significant potential in this region. If the mechanism of public-private partnership (PPP) would start working, the results can be very significant.

- What are the current projects appropriate for PPP?
- Infrastructure projects: bridges, roads, sewer, water lines, etc.; social facilities, hospitals, schools, etc. Foreign investors are obviously interested to join these projects, we just are not ready to accept them. The State is not ready to take on the obligations to protect the investor and this is one of the most substantial parts of the PPP scheme. We do hope that this will be spelled out clearly in the new federal law on PPP, the adoption of which the business community is counting on. I think that the presence of legal and state guarantees make many potential investors "to knock" at our doors, i.e. China, Japan and Arab countries. But it is not enough to attract the resources. We have to learn to use them properly and we have to learn to do that.

- Recently the Russian legislation system has been updated, yet much remains imperfect. What can make the market more harmonious, in your opinion?
- First of all, you need a PPP law. Besides, we require certain amendments to tax legislation. In principle, if we compare the Russian tax system with Chinese or Turkish, it turns out that everything there is much tougher. Nevertheless, the proposed legislation mechanisms are working there, and this is important. It is necessary that the State should fulfill its obligations at full scope and firmly demand the same of business, presuming it has necessary rights for it.

- Do you see signs of improvement in the Russia’s economic situation?
- In brief – we do not observe any obvious signs of improving the economic situation here. We continue to export the raw materials, we import what they do from the raw materials. Construction industry is sort of the exception - one of the few growing industries. On the other hand, internally we have become much stronger: government, business, and each Russian person. This is natural. Overcoming difficulties is making us stronger.
 

- What else do you think the State needs to develop the economy?
- It is obvious that at the heights of power they do not clearly realize that they need there more people with the entrepreneurial mindset. The sample is situation with the Olympics: In spite of all the difficulties in the course of construction, Russia has successfully built all the promised miracles. Today, after the Olympics, the question is - how to manage and dispose all this Olympics wealth, all these facilities? This requires an entrepreneurial and state administrative approach at the same time. The goals have to be developed and the ways to achieve them have to be find. It is necessary  to recoup the money spent, giving the push for the development of several industries - sports, resort and business tourism, food industry, passenger transport, etc. At the same time, the entire infrastructure of Sochi should be available to the Russians. If Olympic facilities were build according to PPP schemes accepted in the World, the issue now would not be standing, it would have been resolved prior to construction. The term “Entrepreneurship” refers to the ability to generate ideas and implement them in life. It is not only about the development of the economy, it is spread to all areas of human activity - science and education, culture, politics, development of civil society and the country's overall development. I dream that in some not very distant future, our state machine would be such that the development would be a natural and necessary component for its existence. It is like riding a bicycle: You are pedaling - you go. No efforts – you are stopped or even falling down.

- If you are thinking of that entrepreneurial approach and your group of companies, what should you undertake to enter a new international level?
- Lots of things to do. But whatever our steps are going to be they should lead to the main result. "RosStroyInvest" Group of Companies should become a self-sustaining structure. We can observe that phenomenon in different parts of the World – self-sustaining, self-developing structures are very effective.
Of course, we have to develop our team. Already today, every top manager of "RosStroyInvest" is responsible for much more than just his own circle of duties. He is representing Russia.
Finally, to enter the international level, we need projects fulfilled in cooperation with foreign companies or financial institutions. Such projects may be born this year. It is possible that one of our current projects - hospital in the district of Sertolovo is going to become a pilot international project.
As a global company, we must work abroad in the fields of design and construction. Thus, we will be transparent to foreign public authorities, financial institutions, as soon as we will work according to their rules. Of course, there should be several foreign projects: in China, the Arab countries, Turkey, Europe, America. We need to feel the pulse of the World, and we need to be recognized.