Irina Babyuk: “We have created an entirely new investment policy in the city”

This year will be the twentieth anniversary since St. Petersburg’s delegation has become a regular participant of MIPIM. Irina Babyuk, Сhairwoman of the Investment Committee of St. Petersburg, told the Construction Weekly about key changes in the investment policy of the city over the past 20 years.

---

— Irina, the Russian Investment Forum has ended in Sochi. How effective was it for St. Petersburg?
— One of the main results is that St. Petersburg once again won the ROSINFRA national infrastructure award in the category “Qualified Customer”. In 2017, we expanded our staff of PPP specialists. As a result, the number of projects in this field went up from 5 to 27, and the amount of declared investments increased from 290 to 589 billion rubles.
To support further development of PPP, the city signed two agreements at the forum. The first agreement, a concession one, puts the stadium on Krestovsky Island under management of FC “Zenit” for 49 years. The second one includes Leningrad Region in the “Autoprom North-West” automotive cluster.
Special attention was paid to presentation of social infrastructure PPP projects, namely the reconstruction and adaptation of the Imperial Stables, the construction of the ITMO Highpark in the satellite town of Yuzhny, and the Water Supply and Sanitation Cluster established with the support of SUE “Vodokanal of St. Petersburg”. Governor Georgy Poltavchenko, Head of St. Petersburg delegation, presented these projects to Prime-Minister of Russia Dmitry Medvedev, and Deputy Prime-Ministers of Russia Dmitry Kozak and Olga Golodets.
At our exposition, we also presented a special economic zone of St. Petersburg, the Unified System of the Construction Complex, and a retrospective of implemented projects: the Western High-Speed Diameter, the Multi-functional Sea Cargo Complex Bronka, the Proton Therapy Center, the development of New Holland Island, and others.
On the whole, we demonstrated successful and promising investment projects and competitive benefits of doing business in St. Petersburg.

— In the Creative Capital Index, St. Petersburg gained the highest score in the category “Government”. What further steps are you planning to take in this direction?
— St. Petersburg is the most supportive Russian city for creative industries. This year, we gained 66.56 points in the category “Government” and were just a few decimals behind Moscow in the overall ranking, while in 2016 the difference was 8 points.
In addition to support of investment projects in creative industries, the Committee is updating the legislative framework to promote and facilitate creative business.
We have developed a law which allows small and medium enterprises to rent a space on favorable terms and organize a creative business there. One of the objects planned to be turned into a creative space is the former rubber plant “Red Triangle”. The city is now considering ways to develop this territory.

— In mid-March, the annual international real-estate exhibition MIPIM will take place in Cannes. St. Petersburg is a regular participant of this forum. Which projects are planned for presentation this year?
— This year will be the twentieth anniversary for St. Petersburg as an MIPIM participant. Over these twenty years, we have created an entirely new investment policy in the city. We have an effective state support system for investors; we have gained a successful experience of PPP project implementation and developed a portfolio of promising investment projects in various fields. We will present these and other achievements, as well as prospective plans, at the exhibition.
Within the business program, it is planned to discuss opportunities to attract more foreign investments, private-public partnership, and prospective directions of development.

— Speaking of the economic outcome of the year 2017, what is the dynamics of main indicators? Which project can you single out?
— According to preliminary data, the volume of investments into capital stock of organizations in St. Petersburg in 2017 amounted to 658.5 billion rubles, which is 79.6 billion more than the 2016 operational results. Considering that after the final adjustment, given a stable economy, the volume of investment increases, we expect that the total volume of investments in 2017 will exceed that of 2016.
To improve the investment climate, last year we lowered the minimum investment limit required to obtain the status of a strategic investment project, which enables to implement economically and socially important projects with lower investments. Also, new standards were implemented to increase the efficiency of provided preferences. As a result, 9 projects were recognized as strategic in 2017, and the amount of their declared investments amounted to more than 47 billion rubles.
In general, the Committee supports over 70 high-priority projects costing in total 1.2 trillion rubles and about 400 projects with the volume of investments up to 1 billion rubles.

— For a year now, the front office for investors has operated on a new site. Could you please tell us about the results of its work?
— It was a good idea to move the front office to a new site. Last year, natural persons and legal entities received 9% more services than in 2016. Moreover, the front-office received a high praise from the acting director of the Doing Business project, the Ministry of Construction, Housing and Utilities, and the Agency for Strategic Initiatives.
The main principle of the single window system is the focus on customers. For the convenience of investors, there are meeting rooms in the front office and three multi-functional service windows. And to improve customer satisfaction, we introduced a CRM system which enables online structuring of projects steps as well as preparation and implementation of projects.

— The city also pays a lot of attention to preparation of hotels for the FIFA World Cup 2018. What results have been obtained by now? Which projects are most attractive to investors?
— One of the main tasks of the Committee is to form a favorable business climate and attract off-budget investments in development of high priority segments: three-star hotels, hostels and floating hotels.
In addition to tax and property exemptions, in 2017 the Committee applied the concession agreement mechanism to hotel infrastructure development projects: a tender for reconstruction and operation of hotels based on a concession agreement was announced. This year we are planning to announce three more tenders.