Логотип All about the Moscow industry

While The Clock Strikes Twelve...

It has always a good habit to sum up the results before the New Year Eve. This year, the tradition takes on a special meaning. The period of pandemic and time constraints was a difficult one for the manufacturing industry in Moscow. Nevertheless, the city passed this test with dignity. Alexander Prokhorov, Head of the Moscow Department of Investment and Industrial Policy, talks about the results achieved by the industrial sector by the end of the year.

Alexander Prokhorov

– Alexander, what has been done during these difficult months?

– A lot. We did a great job. This year was in many ways a landmark year for us: we were able to see in practice how well all the work processes are set up in critical situations. The Moscow Economic Task-Force Center was established to monitor the situation at key city enterprises and to provide them with the appropriate support if necessary. Many decisions had to be made extremely quickly, but overall we got through it. And this is evidenced by the figures: for example, the volume of manufacturing industry increased by 4.6% in the first 9 months of 2020. The industry's share in the city revenue increased from 6.5% to 7.2%. At the same time, the city continued to actively support high-tech industries, providing companies with both direct financial assistance and assigning them special status enabling them to save on taxes and other mandatory payments.

– How significant was the support?

 – This year, five new enterprises received the industrial complex status. 110 industrial enterprises received support of total RUB 3.1 b. These were mainly tax incentives, subsidies and soft loans. 52 enterprises received subsidies from the city budget for a total of RUB 553.9 m. Moreover, Moscow entered into 41 new subsidy agreements with 35 enterprises. Organizations that have received subsidies will invest about RUB 3.2 bn in production development. Grant agreements worth a total of RUB 204.1 m were signed with two enterprises employing disabled people. I should note that the support measures adopted in 2016 are adjusted every year. First and foremost, we rely on the opinion of business when making changes to any support mechanism. For example, the communication with business and the analysis of the special status assignment led us to the decision to reduce requirements to investors: on number of staff , on coincidence of codes of activity in different reporting forms, on one-third reduction of documents needed for receiving a special status giving the right to support measures, on correction of requirements to building density calculation for industrial complexes and parks. Moreover, we launched the Technology Bank service, which allows industrialists in the Russian capital to find advanced technological developments in order to optimize production processes, and companies offering this kind of solutions to expand cooperation with industrial enterprises in Moscow. The Moscow Investor online service on the Moscow Investment Portal began operating just a month ago - it is a one stop to promptly consider problems and proposals of investors implementing their projects in the Russian capital.

This year, industrial enterprises received support
of total RUB 3.1 bn.

 – Moscow is a megalopolis in constant development. What projects were launched this year? 

– Indeed, Moscow never stands still, and the pandemic period was no exception. We launched some very important large-scale projects. Our biggest achievement, which we have been working towards for a number of years, is the Integrated Area Development (IAD) program. The Moscow Government is currently paying a special attention to the development of inefficiently used former industrial zones within the old Moscow boundaries. We also signed our first two agreements on the integrated development of these ares this year. The Oktyabrskoye Pole and Korovino former industrial zones became pilot projects. Agreements were concluded with private investors. The first one will accommodate a new state-of-the-art hi-tech industrial technopark, residential buildings and the entire infrastructure for work and life including kindergartens, a school, an out-patient care center, and parking lots. A new production and business center with modern infrastructure will appear in Korovino.

– What is the essence of the IAD mechanism?

– First of all, we identified unused sites that are not occupied by operating businesses and are in a depressed condition. These areas just need a redevelopment. The types of permitted use and maximum construction thresholds are set for them. Then, we develop and approve the area planning documentation, conclude an agreement on integrated development, which defines the rights and obligations of the city and the investor implementing an IAD project. In the next stage, the investor implements the IAD project in accordance with the approved area planning documentation and the signed agreement: he constructs residential, industrial, public and business facilities and all necessary social, transport and utility infrastructure facilities.


What other former industrial zones will get new life?

 – Decisions on integrated development were made upon the city initiative for three more zones this year - Bratsevo, Chertanovo and South Butovo. But the contracts for these projects will be concluded in 2021. These former industrial zones with an area of 30+ hectares will host modern industrial, public and business facilities as a result of IAD. At the same time, the redevelopment of the South Butovo former industrial zone also includes residential development, facilities for educational, sports and health care purposes. Total 122 IAD areas are currently in consideration, 37+ million square meters of industrial, public, social and residential spaces are planned for construction therein. This program may totally cover almost 1,900 hectares of former industrial zones in the city.

You noted that there were several large-scale projects this year...

– That's right, besides the fourth offset contract and five agreements on the implementation of investment priority projects - what is already quite remarkable -, Moscow announced a tender for concession in utilities. Moscow is currently looking for an investor for the first concession in utilities, which involves the construction and operation of two plants for the green treatment of sludge. This is a very important project for the city, because there have been discussions about waste-free sludge processing optionsin Moscow for many years. I should note that over 900,000 tons of sludge are produced at Mosvodokanal's treatment facilities every year. And we found a solution: drying is currently the most efficient and environmentally friendly way to dispose of sludge, which allows to get a sought-after product instead of waste. Moreover, one of the important conditions for future treatment plants is compliance with global environmental standards. Now let me talk about the agreement itself. Two modern plants for green wastewater treatment will appear in South-East Moscow, the investor will have to build them within three years and to operate them within the next 17 years. RUB 25+ bn of private investment will be invested in the establishment of the plants. The city will provide sites in the Lyuberetsky and Kuryanovsky treatment facilities to accommodate these plants. The agreement obliges the investor to undertake heat treatment (drying) and subsequent sludge disposal: the output product will be supplied to cement plants as an inexpensive solid biofuel. It is planned that both facilities will produce up to 250,000 tonnes of such fuel annually in the form of dried sludge. The first stage of the open tender was already completed and three investors entered the second stage. They have to submit their proposals on the basic project conditions by February 19, 2021. And next spring, we plan to sign a 20-year concession agreement with the tender winner.

Alexander, we are talking to you right before the New Year Eve. What would you like to wish Moscow industrialists?

– Dear friends! I would like to wish you a Happy New Year from the bottom of my heart! The passing year was difficult for all of us, brought a lot of troubles, but at the same time it was in some ways a turning point. Together with you, we made important decisions and developed new support measures that will remain with us even after the pandemic. We also made key agreements, promptly interacted and helped each other, which allowed the Moscow economy to hold its ground. I thank you for the work you have continued to do for the sake of the city despite the challenging environment. I sincerely wish you and your loved ones to be healthy (this year has shown us that this is the most important thing) and personally successful in 2021, and prosperity, new heights reached, interesting project to your enterprises. Let the new year bring joy only! Thank you for your invaluable contribution to the Moscow industry!

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