Irina Babyuk: "We will develop a draft regional law on foreign investors protection"

Irina Babyuk, chairwoman of the Investment Committee of St. Petersburg, in an interview to Construction Weekly newspaper told about the city's investment plans for 2016, and also about anti-crisis measures that the government of St. Petersburg is ready to propose to the existing and potential investors.

– What are the results of St. Petersburg investment development for 2015 – is there any decline in investments?
– As a whole, the pursued investment policy affected the fact that, despite volatile economic situation in 2014-2015 and economic growth retardation, St. Petersburg still remains one of the most attractive Russian regions for investors. The negative dynamics of the index of actual volume of investments into capital stock has been marked only since quarter II of 2015, meanwhile in Russia – since mid-year 2013. By last year results, the volume of investments in capital stock of organizations in St. Petersburg amounted to 521.3 billion rubles, which is less than the indicator of the similar period in 2014 by 2 billion rubles. Given that, the index of the actual investments volume constituted 89%.
As for direct foreign investments, according to the data by the Central Bank of the Russian Federation, in the first nine months of 2015, St. Petersburg economy received 5.3 billion USD in such investments, which is only 1% less than the indicator of the similar period in 2014. The growth rate of this indicator constituted 98.7%, while in Moscow and generally in the country this indicator is lower – only 93 и 89.9%, correspondingly.
One positive result is that in 2015 an optimized system of service provision for investors under the principle of a single window was created, the provision of full services package at the start of investment projects, as well as projects monitoring at all stages of execution was ensured. This system was established on the base of the Investment Committee. Over one thousand investors have already used the single window front-office services, which evidences the demand for this unified center. An assessment of the single window system operation is performed regularly to improve the quality of the services provided within this system. Investors themselves help the Committee to do it. Together with the Club of Leaders business association, the monitoring of services is carried out to improve their quality.

– What investment plans does St. Peters­burg have for 2016? What anti-crisis measures is St. Petersburg government ready to propose for the existing and potential investors?
– The task of anti-crisis measures in the investment domain is fulfilled, first of all, by preferences for separate projects socially & economically significant for the city and by creation of favorable conditions for conducting business in whole. This happens through reduction of administrative barriers and an understandable mechanism of project support.
As I already said, a single window system for investors was created and the procedure for providing investors with real estate facilities owned by St. Petersburg was optimized, which permitted to reduce the process to 30 days. Also the fulfillment term and the number of administrative procedures necessary for execution of investment projects was reduced.
Besides, the Investment Committee carried out the work in part of the legislation development; in essence, it formed an effective package of measures to support investment activity in St. Petersburg that will be further optimized in accordance with new economic conditions. First of all, preferences affected the city's strategic projects. Now land plots for such projects are given for designated use at a privileged lease rate in the amount of 1.5% of the cadastral value at the stage of construction with the possibility to buy out also at a reduced price. Given that, the requirements to assign such a status are simplified – the investment threshold is reduced from 3 to 1.5 billion rubles of cumulative investments for projects in the field of education, culture, health care, physical training and sport, science and innovation activity. One more amendment has been already introduced into the law this year that concerns hotel infrastructure projects – a criteria of cumulative investments needed to acknowledge such investments as strategic ones is reduced 10 times, to 1.5 billion rubles.
Another important strategic initiative of the Committee, which is now being worked through, will be the introduction of amendments into the regional legislation with the purpose of executing integrated urban development projects. Another mechanism will be created that permits to develop urban spaces with the attraction of off-budget funds.
Currently the city law on public and private partnership is also being adjusted in accordance with the federal PPP law which came into force as of this year. I'd like to note that an important step in this area became the consolidation of private concession initiative at the legislative level, that is the possibility for a potential investor to submit a proposal for concluding an agreement. Previously this initiative could only come from the executive power bodies.
This year we're planning to develop a draft regional law on foreign investors protection – this will permit to strengthen the existing measures aimed at creating in St. Petersburg favorable conditions for executing major investment projects in the most important industries of economy including with foreign participation.

– How is the project of Apraksin Dvor reconstruction executed?
– In 2016, the state-owned management company JSC Apraksin Dvor started their operation. The basic working variant for the concept of Apraksin Dvor territory renovation is the concept developed by the Studio 44 architect office. The company adapted the earlier approved concept to the current economic conditions and increased its investment attraction by means of a partial change in functional zoning. Thus, it is planned to create apartments in the volume of some 30% of the total area on the territory of Apraksin Dvor. The historical quarter renovation will be conducted stage-by-stage, and by estimate of the management company it will be completed within seven years. By preliminary estimates, this will require some 20 billion rubles from off-budget sources.

– What about the new city zoo project: has it been actually decided to implement it in Rzhevka?
– The Investment Committee considers the plot of 123 ha on the territory of the Rzhevsky forest-park as the most appropriate place for this project execution. The ecological expertise conducted in the park showed that this territory fully meets the requirements for plots for placing a zoological park. It is possible to execute the project on this plot with maximum integration of the zoo into the green area, that is without cutting down the existing plants. Besides, and it is very important, the plot has good transport accessibility: the Rzhevka railway station and two exits from the Ring Road are nearby, and within 10 years it is planned to construct new Petersburg underground stations near the forest-park – in Yanino and on Kommuna street. Currently the Committee together with consultants is developing a scheme under which the zoo-park construction project may be executed based on the mechanism of public and private partnership. Such a scheme implies separation of financial burden between an investor and the city. Taking into consideration the existing economic situation, this will permit to considerably increse the investment attractiveness of the project.
The works on preparing the procedure for transferring a land plot for the construction of a zoo on the Rzhevsky forest-park premises from the federal ownership to the ownership of St. Petersburg have already started. The most part of the 123 ha area is managed by St. Petersburg government authorities, while one plot of 32 ha in area lies in the demarcated federal property. The process of the plot transfer will take about five months taking into account land survey works.

By the way:

The central part of the Western High-Speed Diameter is to be put into operation in August 2016. The term prolongation is conditioned by objective causes, and this is neither the fault of city powers, nor that of the project investors. Currently some 3 thousand engineers and workers are engaged in the construction, almost 200 units of special equipment and mechanisms are used; about 70 subcontractors are involved in the works, seven of them are foreign companies. We are planning to meet the specified deadline.