Invest Priorities - 2015

MOSCOW INVESTMENT STRATEGY
2014-2025
May 2014

2
CAPITAL INVESTMENTS in Moscow
Source:
Russian
Federal State
Statistics
Service
(RFSSS)
bln. US $
Private,
demand-
driven
59%
26%
Budgetary
(infrastructural)
Private,
competitive
15%
2012
23,4 24,1
29,1
39,3
2009 2010 2011 2012
44,3
2013
Source:
IBM, Moscow
City
Investment
Agency
MOSCOW INVESTMENT STRATEGY 2014-2025

3
INVESTMENT STRATEGY: OBJECTIVES AND RESULTS
45%
2012
2025
• To attract private investments
into spheres traditionally funded
by public funds
• To improve investment climate for
private investments , considering
social and urban priorities of the city
• To increase volume of private direct
investments, to improve competitive
position against international peers
Private,
demand-driven
Budgetary (infrastructural) Private,
competitive
25%
30%
59%
26%
15%

4
INVESTMENT CLIMATE: STRONG POSITION AND RISKS
Economic, political and business center
of Russia and the CIS
The largest distribution market in
Europe
Favourable geographic location,
regional logistic hub
Solid and balanced city budget,
high credit ratings
“New territories” potential
Budget’s dependence on “capital rent
income”
Increasing international competition
for investors
Increasing international competition for
highly skilled labor
Decreasing Russia’s economic growth
rate
Условия ведения
бизнеса
Skilled workers, a high
proportion of the population with a higher
education
Developed financial market (compared
with other Russian regions)
“Russian gateway to abroad”
Advanced IT infrastructure
Considerable scientific potential
Russia’s general problems associated with
a low level of property rights protection and
inefficient justice system
Deterioration of the image of Russia’s
business climate internationally
Limits to cost reduction
Место для жизни
Rich historical heritage
Vast opportunities for recreation
Positive growth of public spaces
(parks, pedestrian zones)
Relatively low crime level
High cost of living (especially for
foreign employees)
Overuse of urban infrastructure
(e.g. congestion)
Relatively low quality of social services
(compared with global peers)
Potential business opportunities Business environment Comfortable place to live
StrongpositionsRisks

5
INVESTMENT STRATEGY: OBJECTIVES
• To attract private investment into areas traditionally funded mainly by budgetary funds, for example,
by involving in the economic turnover inefficiently used city properties (education, health, transport,
culture, etc.).
• To create highly paid and highly productive jobs (technology parks, science parks, and industrial
parks).
• To develop Public Private Partnership (PPP) projects.
POTENTIAL BUSINESS OPPORTUNITIES
• Cost reduction of business operations by simplification of administrative procedures, improvements
in tax system, etc.
• Competition development and enforcement of clear «rules of the game»
• Creation of infrastructure facilities for project realisation
• Development of flexible state support system
• Promotion of Moscow’s investment image
IMPROVING BUSINESS ENVIRONMENT
• Balanced infrastructure development
• Creation of comfortable urban area
A COMFORTABLE PLACE TO LIVE IN

6
STRATEGY IMPLEMENTATION: MEASURES AND PRIORITIES
General measures, aimed at
improvements in the city’s
investment image in general
Specific measures, aimed at
attracting investments to
priority fields

7
GENERAL MEASURES: BUSINESS OPPORTUNITIES
BUSINESS OPPORTUNITIES
Attraction of private investors into
areas traditionally funded mainly
by public funds
Involvement in the economic
turnover
of inefficiently used city
properties
Reduced rent of city
property in priority
sectors
Public Private Partnership
(PPP) projects
Subsidies for public services
to private
organisations
Long-term contracts
(Lifecycle Contracts)
Support for investment
projects
Creation of highly paid and highly
productive jobs
Support measures for
priority sectors
Technology, science, and
industrial parks creation
The inflow of investment
and job creation by
improving the existing
business environment

8
GENERAL MEASURES: BUSINESS ENVIRONMENT
Improvements in business environment
Cost reduction of
business operations
Simplification of
administrative
procedures
Time and cost reduction of
administrative procedures
included the Doing Business
rating
Optimisation of other
administrative procedures
(based on business appeal)
Activities of the Headquarters
to protect the entrepreneurs’
rights and legitimate interests
Conversion of public services
into electronic form
Tax policy
Tax benefits for
investors (for priority
sectors)
Regular assessment of
the efficiency of tax
incentives
Transfer of the tax
burden to property,
rather than the activity
Tariff policy in the energy and
public services sector
Long-term tariff planning
Tariff optimisation
The introduction of network
connection fees
Involvement of consumers
of utility resources in the
payment planning process
Competition development and
establishment of “clear rules”
Further improvement of
the public procurement
system
Increased competition in
the property and land
auctions
Improvement of Moscow’s
investment image
Alignment of direct
communications and
feedback from investors
Promotion of Moscow as
a place for business
Work with international
sources of information
Bilingual unified
information investment
portal

9
GENERAL MEASURES: A CITY TO LIVE IN
Moscow – a comfortable city to live in
Balanced infrastructure
development
Balanced urban policy
Changes to the city
planning rules and
regulations
Development of a
polycentric city structure
Creation of parks,
pedestrian zones, etc.
Integrated development of
territories (including
comprehensive
redevelopment)
Expansion and modernisation
of transport infrastructure
The development of the
public transport system
Intelligent traffic
management systems
Reorganisation of parking
space
Creation of a comfortable city
environment
Improvement of
social service quality
(education, public
health service, etc.)
Service improvements of
Government organisations
Increased private sector
involvement
Public security
The development of
a legal residential
rental market
Saving the city’s
historical heritage
Restoration of cultural
heritage sites, using
funds by private
investors (preferential
rent)

Priority fields
Transport
Infrastructure
Health & Education
New Economy Traditional Industry Financial & Business
Services
Wholesale, Retail, Logistic Travel, Hospitality,
Leisure & Sport,
Urban Environment
Housing & Utilities

Field priorities
OBJECTIVES AND PRINCIPLES:
• Improvements to the transport situation in
Moscow;
• smoothing of key burdens on a city budget;
• development of Public Private Partnership
mechanisms;
• promotion of new technologies, including
administrative;
• creation of a united transport system for the
whole Moscow agglomeration .
Transport
infrastructure
OBJECTIVES AND
PRINCIPLES:
• Promotion of private sector
growth, competition
development, quality
improvement and price
reduction, creation of new
facilities;
• attraction of foreign investors
with competencies which are
lacking or insufficient in
Moscow;
• creation of attractive projects
for private businesses
considering city’s interests.
Social sphere
(education & health)
PRIORITIES:
• Reconstruction and modernisation of existing
healthcare services, using PPP mechanisms;
• support in construction of private health services
using funds of private investors;
• using private investment for creation of
preschool and school facilities, using PPP
mechanisms;
• attraction of private investments to high-school
and professional education;
• promotion of education programmes recognised
internationally.
PRIORITIES:
• Tube development;
• public transport modernisation;
• development of railway services ;
• long-term purchases of trains;
• creation of transport hubs;
• road building, including different forms
of PPP.
TOOLS AND
MEASURES:
• Concessions, long term
purchases (lifecycle
projects) and other forms of
PPP;
• building transport
infrastructure using special
Moscow investment
program.
TOOLS AND
MEASURES:
• Reduced leasing price
(1 rub per 1 sq. m);
• subsidiaries for private
businesses providing
services for Muscovites;
• concession s and PPP
mechanisms;
• consultation and
support.

Industry priorities
• Creation of well-paid and highly
productive jobs;
• development of knowledge intensive
spheres ;
• attraction of international investment;
• increase in production and export of
high-technology products with greater
added value;
• building infrastructure for innovative
industries.
«New economy»
• Optimisation of industry
territories, increasing efficiency;
• increase in competitive industries;
• restructuring of inefficient
enterprises.
«Traditional
industry»
TOOLS AND MEASURES
• Concessions for investments;
• elaboration and approval of
documents concerning urban areas
that cannot be redeveloped;
• subsidies to compensate costs for
personal training.
PRIORITIES:
• Upgrade of existing industries and
increase in their productivity;
• introduction of energy saving
technologies;
• improvements in safety and
environment facilities.
PRIORITIES:
• Electronics, microelectronics,
nanoelectronics;
• development of new materials,
laser-based and radiation
technologies;
• aerospace complex;
• pharmaceuticals (as related to
research and development);
• telecommunications and
information technologies;
• other spheres.
TOOLS AND
INSTRUMENTS
• Creation of infrastructure
for technological and
industrial parks;
• tax privileges for residents
of science, technological
and industrial parks;
• subsidiaries for innovative
companies;
• consultation and support.

Industry priorities
OBJECTIVES AND PRINCIPLES :
• Integrated land development:
accommodation, infrastructure,
employment within walking
distance ;
• creation of economic conditions
attractive for investors
considering city’s interests;
• maintenance of cultural heritage
objects and their involvement in
the economic turnover.
Urban area
OBJECTIVES AND PRINCIPLES :
• Upgrade and develop municipal
infrastructure;
• transition to financing of
engineering public infrastructure
by using funds of utility service
providers.
Public services
PRIORITIES :
• Electricity, heat and gas supplies;
• Develop and upgrade collector facilities;
• water-pipe and canalisation facilities;
• clearing and processing waste water;
• unified lighting area development;
• creation of network of public toilets.
TOOLS AND
MEASURES :
• Long-term
contracts;
• Public Private
Partnership
mechanisms.
TOOLS AND
INSTRUMENTS :
• Elaboration of
redevelopment
projects;
• attracting private
investment into
renovation work and
maintaining the sites by
offering them for long-
term lease;
• consultation and
support.
PRIORITIES :
• Redevelopment of existing
territories;
• renovation of cultural heritage;
• involvement in the economic
turnover of shabby objects;

Results
Investments in capital
($ US bln.)
Foreign direct investment (%)
Competitiveness index of the cities in the world (The
Global City Competitiveness Index), Moscow
Private investment in
education (% to 2012)
Private investment in
health services (% to 2012)
GRP per worker
(% to 2012)
OVERALL RESULTS
Opportunities for business
32,42012 402016 822025
152012 202016 302025
58/1202012 502016 30-402025
100%2012 300%2016 700%2025
100%2012 300%2016 700%2025
100%2012 120%2016 200%2025
Moscow in Innovation Cities Top 100
Index 74/4452012 602016 50-552025

15
REALISATION PLAN: SHORT-TERM PROJECTS (EXAMPLES)
Transport:
• Life cycle contracts to purchase rolling stock for the Metro;
• PPP in building and maintenance of Northern Back-Up for Kutuzovsky Avenue;
• Creation of transfer hubs (255 overall).
Education:
• Reduced leasing rate for private schools and kindergartens (40 objectives in 2013-2014)
Health services:
• Reduced leasing rate of 1 rub per 1 sq.m for «Doctor Round the Corner» project;
• Concession projects.
Urban area:
• Reduced leasing rate for cultural heritage;
• Old industry modernisation.
«New economy» High-tech:
• Investment proposals and state support: Zelenograd, special economic zone, Moscow
Technopolis, innovation cluster and other infrastructure for innovative production.

Invest Priorities - 2015

Recommended

Recommended

More Related Content

Similar to Invest Priorities - 2015

Similar to Invest Priorities - 2015 (20)

More from Департамент науки, промышленной политики и предпринимательства города Москвы

More from Департамент науки, промышленной политики и предпринимательства города Москвы (20)

Recently uploaded

Recently uploaded (20)

Invest Priorities - 2015