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One of the mechanisms used to support industrial entities is the provision of land for rent without holding an auction. The moscow government is implementing this mechanism as part of large-scale investment projects (lsip) for the construction of industrial production facilities. We spoke with Alexander Prokhorov, Head of The Department of Investment and Industrial Policy of Moscow about how to implement a lsip.
Alexander Prokhorov
Head of The Department of Investment and Industrial Policy of Moscow
– Mr. Prokhorov, Moscow has a fairly large number of measures for supporting business, and one of them is the so-called LSIP. What is it, and how is this program implemented today?

– The essence of large-scale investment projects is to provide land for future industrial facilities on preferential terms. This is one of the measures used to support industrial enterprises in the capital in addition to tax breaks, subsidies, consulting support, etc. This mechanism helps to resolve several problems at the same time: It attracts investments into the economy, creates new jobs for Muscovites, helps to develop high tech production facilities in the city, and genera­tes additional tax revenue for the city's budget.

Thanks to LSIP mechanisms, companies can expand their productions, modernize their facilities and create more technological and compact infrastructure in their facilities. Say, for example, a certain enterprise needs to expand, build additional production facilities, and the land they want to build upon is either owned by the city, or its property status is not defined. In this case, after assessing the entire project we can make the decision to rent this land plot under LSIP conditions for a period of six years without an auction.
–How many decisions on renting land plots under LSIP conditions have already been made for enterprises wishing to develop their production?

– First and foremost, let me say that the decision to rent land without an auction is made by the Urban Planning and Land Commission of Moscow. Since 2016, the Commission has approved the implementation of 33 large-scale investment projects. A total of 42 land plots with an area of more than 77 hectares have been allocated under these conditions. The maximum land plot area that can be provided under this program is more than 1 million square meters. For the city this means some considerable investments.
Companies will invest more than 53 billion rub into the implementation of their projects. The number of jobs these pro­jects will create is also important. More than 14,000 specialists will be able to find a new job.

In 2019 alone, the Urban Planning and Land Commission made 11 decisions to provide land for rent without auctions within the framework of LSIP. New productions will be built on 11 land plots with a total area of 40.7 hectares. The planned construction area amounts to more than 266,000 square meters. The total declared volume of investments is also quite considerable – 27.6 billion rub, and more than 5,000 jobs are expected to be created.
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OF INVESTMENT to the city of Moscow
– Can you be more specific? What projects will appear in the city under the LSIP framework?

– Last year, PSF CROST completed the first stage of their project in the Voikovsky district of Moscow. This project provided more than 500 new jobs and around 1 billion rub of investments.

Moreover, two other projects are almost ready. This year we expect to receive permission to launch a new plant that will produce stamped steel products. The investor for this project is Alpha Automotive Technologies. We also expect a similar permit for a meat processing facility. The investor for that project is PC Elitgrupp Invest. Overall, these projects will create 800 new jobs, and the volume of planned investments will exceed 2 billion rub.

I would like to discuss some important projects in the food industry, too. Hlebozavod No. 28 will add another production building for baking bread in Moscow's Zelenogradsky administrative district. VNP RUS plans to build a plant for processing organic fruits and vegetables with a total area of more than 10,000 square meters in the west side of Moscow.

Rot Front's production facilities will also be expanded, and this is yet another example of the developing food industry in the city. The enterprise will increase production volumes and its assortment of pastry products. Adjacent to their current grounds, an additional workshop will be built, with a total area of more than 33,000 square meters. Last year, Rot Front opened a new highly automated production line to process cocoa beans; the amount of investments stood at 1.3 billion rub. The new facility manufactures four types of cocoa products, and no similar production exists in Russia and the CIS or in Eastern Europe.

After these projects are implemented, more than 1,500 high tech jobs will be created in the food industry and the total planned volume of investments will amount to approximately 9.5 billion rub.

– What about Troitsky and Novomoskovsky administrative districts? Will there be any enterprises appearing in New Moscow?

– Naturally. Investors have been busy working on developing Moscow's Troitsky and Novomoskovsky administrative districts. In 2019 alone, the Moscow Urban Planning and Land Commission authorized the provision of three land plots with an area of more than 30 hectares to build new industrial facilities in New Moscow. These facilities will provide 3,000 new jobs to residents in the Troitsky and Novomoskovsky administrative districts. The total volume of investments into the construction of these facilities will amount to roughly 16.5 billion rub.

For example, the LSIP program in New Moscow will enable the construction of a plant that will produce totally unique housing construction modules. Each module is a block of up to 100 square meters in area with all the necessary engineering systems included at 97% readiness. Ready-made apartment units will be delivered from the plant to the construction site, and only a few hours will be needed for installation. With the help of new technology, construction of a 22-story building will take less than 20 working days, and will be of the highest quality.

After this project is implemented, roughly 2,500 new jobs will be created. The investor (MonArch Innovation Technologies Combine, LLC) plans to provide around 15 billion rub for the construction project. The total construction area will be 160,000 square meters.
Obviously, we support such innovative, robotized productions, and will be ready to help them – not only with land but with other forms of support as well.

– What are your future plans?

– One of our main goals is to reduce the time needed to file documentation to rent land plots under LSIP. Currently it takes six months, but we are working on optimizing the procedure and halving this time at the very least to three months, if there is no need to change the rules for land use and construction as adopted in Moscow.
Audience: 16+