RF Ministry of Economic Development and Trade approved co-financing scheme proposed by Sverdlovsk Regional Government for construction of Titanium Valley

The application for federal co-financing of the construction of TitaniumValleywill be submitted in February, 2013. The RF Ministry of Economic Development and Trade approved the co-financing scheme proposed by the Sverdlovsk Regional Government for the fist-order construction of the special economic zone of industrial production type “TitaniumValley” according to which federal authorities shall take almost half of all expenses upon themselves. The news were announced on December 13th, by Artemiy Kyzlasov, General Director of the SEZ “TitaniumValley” Managing Company.

Participation of federal treasury in the construction of SEZ in Urals was made possible thanks to the efforts applied by Evgeniy Kuyvashev, Governor of the Sverdlovsk Region, who brought up this issue at his meeting with the RF President in November and later on, a week ago, at his meeting with the Prime Minister. Vladimir Putin and Dmitry Medvedev sustained the co-financing scheme developed by the regional authorities. Eventually the head of the RF Government charged the RF Ministry of Economic Development and Trade with a mission to hold a special session and discuss the possibility to co-finance of SEZ construction.

Artemiy Kyzlasov said, “On Tuesday we held a session at the RF Ministry of Economic Development and Trade. We managed to define the scope of works and procedures based on which we will prepare our co-financing application to be filed to the federal government. Our approach to the problem was supported. We based our assessment on the following data: the total budgetary funding amount for the first-order construction will be 7.67 billion Rubles. And 1.3 billion Rubles, which shall be spent on payoff infrastructure projects implemented within the framework of SEZ construction, will be loaned from credit institutions, Vneshekonombank, for instance. The rest of the money needed will be divided in a proportion 51 to 49: 51 % – from federal budget and 49 % – from the regional one”.

According to him these settings lay basis for the application to be submitted to the RF Ministry of Economic Development and Trade. According to Mr. Kyzlasov, “It is not that easy to prepare an application for submission. It can’t be done in a day or a week. I think we will be able to submit it at the beginning of February”.

General Director of the Titanium Valley SEZ Managing Company reported that activities related to SEZ construction in the first half of 2013 will be budgeted by the Central Ural region – 500 million Rubles are allocated for these purposes.

Apart from submission of the application, there must be made some changes to the RF Government Decree on creation of SEZ in the Central Ural Region in order to get funds from the federal budget. “The current revision of the decree sets out that the special economic zone project shall be implemented with the regional funds only. We have to change it so that it could provide for federal co-financing too”, said Mr. Kyzlasov.

He also told that two new residents may appear in “TitaniumValley”. Their applications will be considered by the Supervisory Board on December 28th. After they are discussed by the Expert Council under the RF Ministry of Economic Development and Trade it will be possible to agree upon their participation in the project.

One of them is Praxair Company – leader in technical gas manufacturing. “They will build a relatively small bottled gas manufacturing plant. On the second stage they intend to erect a gas-separating plant for VSMPO. It is estimated that the first investment stage will be 6–8 billion Euros. What concerns the second stage, the data isn’t yet available”, said Artemiy Kyzlasov.
The second applicant for SEZ membership is an Ural-based company “Stroydormash”. It means to deal with large-modular assembling of dedicated construction machines and aims to strengthen localization of its production facilities afterwards. Preliminary estimations show that the company’s investments will be as high as 10 million US dollars.

As of today 4 residents of “TitaniumValley” have already been examined by the Expert Council under RF Ministry of Economic Development and Trade, of which 3 have been granted approvals for participation. According to the schedule the first companies to come to the construction sites will be “Sinersis” and “Stroydiselkompozit”. According to Artemiy Kyzlasov, another 10 residents are at different stages, preparing documents necessary to submit applications to the RF Ministry of Economic Development and Trade.

The release was drawn by the Governor’s Department for Information Policy.