Presentation was made during the Russia Forum New York 2013 series - “Invest in Moscow: Doing Business in Russia’s Capital” which was held at the Princeton Club of New York on October 28th.
2. Key Economic Indicators in 2012
GRP, billion of USD
341
357
382
400
421
445
Structure of GRP
Industries
Share, %
Wholesale, retail
2011
1.7%
$57b
+17,6%
$32.4b
+8.5%
2012
2013
2014
2015
Debt to
GRP ratio
City
Budget
Investments in
fixed assets
2 | Investment Climate of Moscow | 2013
2016
17,0
Wholesale of fuels
2010
24,1
Manufacturing
276
14,4
Business services
9,8
Transportation &
communication
9,3
Social & government
sector
8,4
Real estate services
5,5
R&D and IT
4,4
Construction
2,4
Other
4,7
3. Key Economic Indicators in 2012
Moscow City (106 h)
New Moscow (145 h)
7,6m sq m
+9%
Real-estate
constructed
12m
Population
$19.6k
Average
annual salary
+12.8%
$4.2b
+5.9%
23%
3 | Investment Climate of Moscow | 2013
Foreign direct
investments, FDI
Share in Russian
incoming FDI
4. Investors Believe in Moscow
4th Highest FDI Volume
in Greenfield Projects in the World1
Overall Positive Feedback
From Investors
Cumulative FDI (2008 – 2012), number of investments
1375
London
Top 25 European Cities
of the Future 2011
9th
Place
Economic Clout:
Cities of Opportunity 2012
7th
Place
1133
Shanghai
4th
Place
Top cities ranked by the
number of large companies
996
Hong Kong
661
Moscow
Sao Paolo
654
Paris
641
618
Beijing
New York
477
Sydney
462
Barcelona
399
Frankfurt
385
Dusseldorf
384
0
500
1000
1. Not including Dubai, Frankfurt or Warsaw
Source: The Financial Times; rankings official websites
4 | Investment Climate of Moscow | 2013
1500
5. Moscow Focuses Its Efforts on Creating a Favorable
Investment Climate Across Three Key Areas
Forging successful private
and public partnerships &
incentivising private sector
to lead the projects
previously managed by
public body
Encouraging business activity &
improving business climate
Business
environment
Business
opportunities
5 | Investment Climate of Moscow | 2013
Place to live
Developing enjoyable &
clever urban
environment convenient
to work and live
6. Business Environment
Strengths
Guiding Principles
•
Qualified personnel
•
•
Subsidizing employers’ expenses on
personnel education
Cost cutting in business
operation
•
Reduction of administrative
procedures
•
Simplifying interaction of
business and government
•
Enhancement access
to infrastructure
•
Competition policy elaboration
•
Strengthening Moscow’s
investment image
•
•
Low taxes (13% personal tax, 20%
corporate tax)
Tax exemption for innovative
companies and car producers
•
Developed infrastructure (IT, social,
transport, etc.)
•
Sound scientific opportunities
•
Developed financial market
•
Balanced budget policy
•
WTO and Common Economic Space
member
6 | Investment Climate of Moscow | 2013
7. Doing business in Moscow
Time, days
Starting a
business
Dealing with
Getting construction Registering
electricity
permits
property
2012
29
281
423
43
2013
18
281
344
44
2014
12
146
Doing Business
ranking
7 | Investment Climate of Moscow | 2013
152
90th
20
112th
118th
place
2012
place
place
th
20
place
2018
2014
2013
"I have visited many countries but nowhere I found
the devotion to improve the business climate the
way I find it in Russia, and particularly in Moscow“
Jim Yong Kim, President of World bank
8. Development of Competitive Environment
• Enhancement of government procurement procedures
• Promoting competition in property and land tenders
• Encouraging competition in product markets
• Uniform and transparent rules
Concession
City’s
OFFER
Tendering
Process:
1. Choose a suitable
project
2. Examine the project
and documentation
Sale of Property and
Shares
TENDER
Leasing Land and
Nonresidential Premises
3. Pay deposit
4. Submit application
5. Attend the tender
Joint Venture
6. Win the tender
7. Sign the contract
Location
Approval
8 | Investment Climate of Moscow | 2013
9. We’re Driving Institutional Changes to Ensure Investor
Support – Several Core Institutions Already in Place
Protection
of Entrepreneurship
Committee
Moscow Innovation
Development Center
• Tool for elimination
of administrative
barriers and
systematic problems
• Innovative
investment
champion in
Moscow
• Hotline for any
problems with
implementation of
investment projects
• Coordinator of all
high-tech
investment
promotion initiatives
• Advocate in
contacts with
government bodies
and infrastructure
providers
• Guide for all hightech innovation
zones and programs
9 | Investment Climate of Moscow | 2013
Moscow City
Investment Agency
• Dedicated project
coordinators for
major projects
• Omniscient
navigator of
Moscow investment
system
• Partner in finetuning investment
projects
• Public-Private
Partnership
initiatives
Committee for
involvement
of state assets
• Disposal, lease, PPP
and other ways to
profit from city
property
• Education, health
care, culture,
entertainment and
leisure, sports, etc.
10. New Business Opportunities
Strengths
•
Largest city in Europe
•
Fast-growing economy
•
Economic, political
and commercial center
Guiding Principles
•
Advantageous
geographical position
•
Public property involvement
into economy
•
Opportunities of innovation and
industrial infrastructure
•
Extensive city investment
program
10 | Investment Climate of Moscow | 2013
•
Attracting investments
to priority areas
•
Increasing productivity
and wealth of population
•
Developing flexible state support
for investment projects
•
Implementing public-private
partnerships (lifecycle contracting
and concessions)
•
Expanding infrastructural capabilities
•
Developing New Moscow
12. Moscow as a Basis for Urban Area Development
Moscow Targeted Investment Program for 2014
Investment, M USD
Key features
12,000
11,891
8,030
• Stable
investment
program
• Increasing
focus
on transport
8,000
12.7
48%
52%
11.9
12.8
11.9
Investment, B USD
12.0 11.9
38%
32%
31%
33% Other
60%
62%
68%
69%
67%
2012
2013
2014
2015
40%
investment
Transport
68%
2011
100%
2016
1,429
4,000
12%
1,289
11%
599
5%
0
Total
Transport
Residential
estate
12 | Investment Climate of Moscow | 2013
Social
Utilities
208
97
2%
1%
Construction
Economy
stimulation
239
Other
13. Transport Infrastructure
Railway
Bringing private and public sector together in developing transport infrastructure
Creating a merged transportation system for the agglomerate
Implementing cutting-edge information technologies
Focusing on Public transportation
+150 kilometers of subway lines
15.9b passenger-kilometers in 2012
+70 stations
+240 kilometers of main routes
$5b annual CAPEX
~300 trains ($4b)
3rd interchange circuit
3,000 train cars with
$6b of train procurement and
$6b-$9b maintenance cost
255 transport hubs:
163 multifunctional as capital
structures
Subway
Transport
hubs
92 in operation as junctions
13 | Investment Climate of Moscow | 2013
Railway
Moscow
Small Ring
Railway
9 directions
54 kilometers of railroad
31 stations
19 transport hubs
33 trains with 7 cars each
$4b of train procurement and
$4b-$6b maintenance cost
14. Transport Infrastructure
Roads
South Alternate to Kutuzovsky Avenue
Toll road to Skolkovo with 3 kilometers
$0.9b of investments with 50% funded by city
1.6 million square meters of real estate
North Alternate to Kutuzovsky Avenue
Toll road to Moscow-City
11 kilometers
$2b of investments
Overground Transport 2014-2016yr
242 km of lanes for public transport
30 km of tram lines
4 200 vehicles
Central Ring Road
521 kilometers Located 50 kilometers from Moscow Ring Road
with 75% of investments financed by the state
and 25% by the private investments
2022 completion year
14 | Investment Climate of Moscow | 2013
15. Industrial Zones
Optimizing of territorial location of industrial and scientific facilities
209 industrial zones
Developing along a mixed-use model (workplaces + housing + social
infrastructure)
Reducing commute time
ZIL Industrial Zone
6.5 kilometers from Kremlin
Territory of ZIL, ha
125
Nagatinskaya Poyma Park
95
Total developed area, mln m2
4.6
Commercial and residential real-estate, mln m2
1.6
Total investments
$5.2b
Private investments
$4.4b
15 | Investment Climate of Moscow | 2013
MosAutoZIL
Construction of CKD
assembling facilities with the
capacity of
per year
50,000 units
16. Government Support of Innovations and Industries
Government support of innovation
Innovative infrastructure development
Technoparks
Slava
Strogino
MosGorMash
FizTech XXI project
Technopolises
Moscow
Industrial parks
Zelenograd project
Rudnevo project
Special Economic Zone
Zelenograd
Tax exemption for 10 years
Management company
0-1,1% property tax
0,01-0,3% land tax
Residents
0% property tax
13,5% corporate tax
Financial support
Compensating credit interest on construction and development
technopark
Compensating credit interest on construction and development of
technopolis / industrial park
Amount granted
<$3.2m
<$9.5m
Government support of industrial sector
• Curbing the growth of tariffs on resources for industrial consumers
• Granting benefits in exchange for investments
• Subsidizing interest expenses, leasing payments, employers’ expenses on personnel education
16 | Investment Climate of Moscow | 2013
17. New Moscow
• New center of growth
and attraction
• Polycentric development
Area development*:
• Development of
multifunctional areas
• Bringing transport
and social infrastructure
up to the standards of
Moscow
• Linear arrangement of roads
+1.087m population
Growth points
+1m jobs, incl. 0.3 m
in social sector
(social and business clusters)
+37 km of metro lines
Agroregion “Rogovo”
Agroindustrial cluster “Klenovo”
Logistic and agrocluster “Voronovo”
Logistics cluster “Kievskyi”
Historical and recreational complex
Innovation and science center “Troitsk”
Medical cluster
Educational cluster
Business center “Kommunarka”
Aeropolis “Vnukovo”
Technopark “Mosrengen”
+837 km of roads
+27m sq.m. of public,
business and industrial
buildings
International Financial Center at Rublyovo-Arkhangelskoe
+51m sq.m.
of housing
+146k hectares of area
Technopark “Rumyantsevo”
*forecast up to 2035
17 | Investment Climate of Moscow | 2013
18. Healthcare
Developing private health care including public-private partnerships
Import substitution of medical services
Increasing accessibility to public and specialized medical facilities
Medical care within walking distance
1st PPP project in healthcare sector
29k sq.m. of reconstruction area
23 polyclinics with $650m of
investments
6 fixed facilities with $200m of
investments
+46 units constructed with
private investments
$145m of investments
$32m concession fee
20142016
#63 City
Hospital
1.5 hectares of land
$80m of investments
130 beds
20-30% of services provided to patients
with mandatory health insurance
4.5-year lease
Leasing benefits for 20 years
Cardiology
Center
3 operating rooms
4 laboratories
25-30% of service by compulsory
health insurance
18 | Investment Climate of Moscow | 2013
Doctor is
Nearby
1 Rub per 1 sq.m.
Reconstruction and equipping
medical offices
11 premises were conveyed to investors
18 premises are ready for auction
Overall 100 facilities
19. • Reducing the deficit of educational
services
Education
• Developing the private sector of the
education system
City Program for Education, 2014-2016 years
$983m of investments:
60 preschools
16 schools
23 outbuilding of elementary school
+56 preschools & 29 schools constructed with
private investments
• Promoting competition in the industry
• Increasing the quality of, and demand
for, education
• Building and remodeling schools,
kindergartens and other institutions,
including via public-private
partnerships
• Creating full-cycle educational facilities
Program for Creating
PRESCHOOLS
• Arranging schools in accordance with
international standards
Concession
Land Rent
Preferential
Premises Rent
BOT model
1.5yr of construction
15yr of operation
$5.2k pubic financing
per child
Rent during
construction
and operation
Leasing benefits
for 49 years,
with an annual rate of
1 Rub per sq.m.
Results: 3 land plots, 9 premises
Current situation: Auction announced for 13
premises
Targets: 18 premises and 2 land plots by year-end
19 | Investment Climate of Moscow | 2013
Similar program
‘Preferential Premises
Rent’ is being developed
for schools
20. Sports
Improving accessibility and attractiveness of the city’s sports infrastructure
Hosting the 2018 football World Cup
Constructing sports infrastructure
Developing tourist infrastructure
City Program for Sport, 2013-2016 years
~80
Auctions were held to rent 15 land plots following the
construction of sport and recreation centers. Auction is
announced for 10 units. 60 land plots is going to be auctioned
Sport and recreation
centers
7 cycle tracks
11 football fields
1 skiing resort
Football arenas with sport, hotel and other complexes
Luzhniki
Size of the stadium, kilo seats
Investments, billion of USD
Spartak
CSKA
Dynamo
81
44
30
45
3,6
0,5
0,35
1,5
20 | Investment Climate of Moscow | 2013
21. Urban Environment
Developing of public areas
Architecture and historic preservation
Balanced city-planning
Walking accessibility
Libraries – $350m
Cultural centers - $65m
Theatres and concert halls – $1,2b
Exterior lightening - $625m
Footpath area - $110m (2014y only)
Cinema – 2 lots with 10 theatres and
$154m initial price till the end of 2013
2014-2016
program
for
developing
Culture
sector
300 meters from Kremlin
13 hectares of land
hotel with 340 rooms
$429m of investments, including
$146m for hotel
Largest exhibition complex in
Russia
237 hectares of total area
480k sq. m. of constructed area
Park
Zaryadye
Moscow
river
Outstanding
projects
All-Russia
Exhibition
Center
361 hectares botanical garden
615 buildings
45 architectural landmarks
21 | Investment Climate of Moscow | 2013
Nagatinsk
Poyma
Park
The project covers embankments with
10% of territory of old Moscow
It includes construction of roads,
bridges, developing recreation zones
Peninsula park
94.8 hectares
298,6k sq. m. of commercial
real estate
$900m of investment
22. Place to Live
Strengths
•
Broad cultural heritage
•
High level of safety
•
Public areas
•
•
Guiding Principles
•
Balanced development of residential,
transportation and social
infrastructure in Moscow as a global
capital
Entertainment and leisure
attractions
•
Cultivation of a comfortable
urban environment
Government services
via the Internet
•
International educational standards
•
Infrastructure preparation
for 2018 football World Cup
•
Improvement of ecological conditions
•
Construction of hotels
and rentable housing
•
Quality medical care
•
Strong educational
facilities
22 | Investment Climate of Moscow | 2013
23. Thank you!
Leonid Kostroma
Moscow City Government
Moscow City Investment Agency
Strategy Deputy CEO
KostromaLV@mos.ru
www.mosinvest.mos.ru