In the industrial park near Minsk, the construction works are in full swing. Their scope is particularly impressive, especially taking into account the fact that four months ago work on building roads and underground infrastructure was carrying out. The first major object of Great Stone should be put into operation at the end of the year.
The park is located 25 kilometers from the capital, near the airport, the railway and the motorway Berlin — Moscow. The head of the state signed the Decree on its establishment in 2012. The authorities offer investors tax preferences for 10 years, as well as opportunities for duty-free market of the Eurasian Economic Union countries and a window to Europe. In May 2015, the heads of Belarus and China accelerated the creation of the Great Stone Industrial Park. What is being done on the ground in the woods in about a year after the meeting at a high level?
“The primary task on the agenda is to complete the construction of engineering and transport infrastructure,” says Kirill Koroteev, First Deputy Director Genera of Industrial Park Development Company. “At the moment, the readiness of the electricity, water, sewage, gas and communication utilities is almost 100%, the readiness of the first roads with total length of 13 km is 90%.
According to him, the readiness of engineering structures, such as water intake pumping stations, treatment facilities of rainwater runoffs and utility fluids, transformer and distribution substations is from 40% to 90%. The first buildings are to be ready in August. In general, the necessary infrastructure will be available to residents this autumn.
After inspecting the substation and water treatment facilities, we headed to the first object under construction – the logistics sub park that is being erected by China Merchants Group. What we saw greatly impressed us. Just three months equipment to dig the ground of 25 hectares started its work. And now there are powerful frames of the buildings of the first phase. This is three logistics warehouses with an area of over 15 thousand sq m each, a container terminal (site) – more than 26 thousand sq m, a business center with a hotel, an exhibition center, a range of related support utilities and facilities.
The average amount of the staff involved in the construction of the park is 1.2 thousand people with a planned increase to 2 thousand people in the near future. Mainly builders from China are involved in the China Merchants Group facility construction. Their working day starts at 7 am and lasts until 9 pm, with a lunch break from 12 to 14.
Near the China Merchants Group object Industrial Park Development Company is engaged in construction of office and production buildings, which will be leased for future residents.
“One of our resident, ZTE company has already expressed a desire to place a research center here. Banks also show interest. Our office will relocate here. We will gradually make habitable the territory, thus, setting an example to others,” said Kirill Koroteev.
Moreover, preparatory works have begun on the sites that will house the large manufacturing companies. There are still only two of them. The project of Chengdu Sindzhu, which will deal with the production of supercapacitors for electric buses, is at the design stage; the company plans to get down to the construction works this year. 13 hectares of land are set aside for the more well-known company Zoomlion. “Three kinds of equipment have already been identified, which will produce the company: 2 types of valves and vacuum suction cleaner. Their task is to enter the construction stage of production infrastructure this year. This is the real prospect of the year,” sums up Koroteev.
The volume of investments in the objects of the park has already exceeded 100 million US dollars, and by the end of 2016 the amount will double. According to Koroteev, the construction of internal and external infrastructure of the park is funded from several sources. But only 3.6% of total expenditure is the budget of Belarus, and the rest is money of investors, and the Management Company, as well as technical assistance of China. There is a soft loan of Chinese Eximbank, it is issued against guarantees of the Belarusian government, but provided by the statutory fund of the joint venture in which the Chinese side owns 68% of the shares.
“The main goal of our sub park is to promote Belarusian export on the way to China. No one, except China Merchants Group, taking into account their distribution network around the world, can do it. With their help, we want to carry out deliveries of Belarusian products to the PRC. Or let us mention the hotel being part of the complex. There was always a problem of accommodation at the airport for passengers, pilots, because there was no a hotel near here. We currently can close this question,” says Koroteev.
“Several dozen projects are being elaborated. But we minimized the practice of signing agreements of intent. Because it is time to move into action.
What work is being done by you?
“We work to attract investors and residents by all channels, which are possible. The focus of our attention is not only China, but also Europe and Asia. The Bavarian chemical cluster helps us to attract companies in the Park in the field of new materials and pharmaceuticals. We want to create an investment and venture capital fund, to enter the pool of promising innovative projects.
Residents are provided with tax preferences provided. Is this enough?
“Simply benefits are not enough, simply infrastructure is also not enough. Complex approach should be chosen. The Ministry of Economy has a team of experts which prepares proposals for the benefits; they study mechanisms that suppress attraction of investors.
Another problem is to link the development of the park strategy with the strategy of the country development. What investors do we need? What areas we want to develop? Can we allow not only new technology to the park is? In which niches do we need investors, so as not to compete with the current production? It won’t be a secret if I say that we could fill the park with investors very quickly, but they would create competition to existing plants. Not all ministries welcome and encourage this. This is a hard task to combine all the nuances. We need to find those who will not create competition, but will be high tech at the same time, and so on. The working group at the Ministry of Economy should solve this problem. Then for us (the Management Company), it will be easier to move forward, following the strategy. We and Zoomlion chose manually the types of cars that are not produced in Belarus. It is painstaking work. And one of the deterrent factors.
One more question about the creation of housing and social infrastructure of the park. The Administration of the park and the Minsk Oblast Executive Committee are asked to form a plan and identify sources of funding for the maintenance of the objects.
“Today, we have started to adjust the general plan of the Park. Residential buildings are not in such demand as it was earlier. Therefore, at the first stage we are reducing the number of potential tenants from 25 to 10-10.5 thousand. There are difficulties with the creation of social infrastructure in view of the budget deficit (kindergartens, schools, hospitals). Currently we are negotiating with the Ministry of Commerce of China, the Chinese government about the next tranche of technical assistance, which will help to solve this problem and to build the infrastructure for the grant funds and even, perhaps, a few houses.
We have designed one quarter. When we coordinate its construction with the construction of social infrastructure, then we will proceed to the construction of residential houses. Housing will be build by our joint company. Later we will define whether it is rental housing or direct sales.
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