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The Roscongress Foundation is a socially oriented non-financial development institution and a major organizer of nationwide and international conventions; exhibitions; and business, public, youth, sporting, and cultural events. It was established in pursuance of a decision by the President of the Russian Federation.

The Foundation was established in 2007 with the aim of facilitating the development of Russia’s economic potential, promoting its national interests, and strengthening the country’s image. One of the roles of the Foundation is to comprehensively evaluate, analyse, and cover issues on the Russian and global economic agendas. It also offers administrative services, provides promotional support for business projects and attracting investment, helps foster social entrepreneurship and charitable initiatives.

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Far East Concession Programme: First Results and Future Prospects
6 September 2022
12:30—14:00
KEY CONCLUSIONS
The Far East Concession Programme is in place and working

It is only through criticism and failure that we are able to improve in some way. I’ll cite a few figures – a year has passed, and I would not say I expected the results we have seen. In and of itself, the concession is a pretty non-trivial and complex mechanism. It covers a great many different fronts, and is very much multifaceted. It requires a great deal of expertise from the regions in order for the process to be set up. We have a number of colleagues here today from Magadan Region – one of the first pilot regions to approve quite a few concessions at the government commission presidium. Today, the region has eight facilities worth a little more than RUB 12 billion. And we have already set out budgets to support these concessions over the coming years — Anatoliy Bobrakov, Deputy Minister of the Russian Federation for the Development of the Far East and the Arctic.

The Infrastructure Menu is a federal project which was instituted in January last year on the initiative of Prime Minister Mikhail Mishustin. Six tools are incorporated in a single federal project together with indicators – specific accomplishments. These six tools include publicly funded loans for infrastructure, <...> infrastructure bonds issued by DOM.RF, funds provided by the National Welfare Fund to the Assistance Fund for the Reform of the Housing and Utilities Sector for utilities infrastructure, and subsidized loans and support from VEB to develop infrastructure. Taken together, we are looking at more than RUB 2 trillion, with an implementation period running until 2030. <...> In terms of the Far East, each of the 11 regions there has obtained these [extrabudgetary – ed.] loans, and funds have already been issued for the purposes of financing. Around RUB 15 billion is planned for this year. That includes selection and cash execution. And already now in September, the regions have RUB 7 billion to show. In total, 98 projects are set to be implemented as part of the programme in the period to 2025. These include major projects that the regions have long dreamed of, such as a bridge over the Lena River — Maria Sinicic, Director of the Department for Integrated Development of Territories, Ministry of Construction, Housing and Communal Services of the Russian Federation.

All these tools enable us to participate in the concession, which absolutely plays a key role in lifting us up. We are not only able to implement projects which are purely of a business nature, we can also implement projects of a social nature. Today we signed the Far East Concession with the Ministry for the Development of the Far East and Arctic. This covers Belaya Gora and the famous town of Arsenyev, where helicopters are manufactured. We really do have our regional institutions there. However, it is all too municipal at the moment, and we would of course like to turn it into a resort. Separately, I would like to say that we are very much focusing on tourism, and of course, tourist infrastructure is extremely important to us. And in order for it to become a tourist Mecca, we need tourists to visit us all year round, and not just in the summer months. A great deal has been done in this regard — Vera Shcherbina, First Vice-Governor – Chairman of the Government of the Primorsky Territory.

ISSUES
The actual application of the Far East Concession does not always match the initial idea

The Far East Concession is not yet a factory. It’s more like a boutique which manually addresses a range of issues. But we are on the way towards turning it into a factory, to making it a programme-based solution — Pavel Seleznev, General Director, Public-Private Partnership Development Center.

We envisaged the Far East Concession to be a development tool which would boost private investment for both industry and social infrastructure. <...> However, it has unfortunately morphed into a tool used to address urgent issues in a region. By this I mean we occasionally began to see facilities appear which previously existed in industry programmes, and which quietly migrated to the Far East Concession. I’ll say straight way that we will change this state of affairs, and will do so through regulation — Anatoliy Bobrakov, Deputy Minister of the Russian Federation for the Development of the Far East and the Arctic.

We have gone down the road of PPP (Public-Private Partnership) since 2015. We encountered a few problems in 2015–2016. These were related to the quality of concessionaires. It turned out that selecting air conditioners on a competitive basis did not pay off. That’s because there were bankruptcies and new private partners came to replace the old. There was red tape associated with court decisions, and so on and so forth. Naturally, we are doing everything differently now. The question is what we want to gain from the Far East Concession. First of all, this capital investment return mechanism is what distinguishes it. That’s probably the most attractive aspect of it. Of course, we can cover the criteria pretty comprehensively. It’s good that they are pretty broad-based. Let’s define them a bit more clearly. The Far East Concession acts in favour of those regions with an idea of how to use this tool. However, we would like to point out that in terms of limits, longer time frames need to be in place. That way, the Far East Concession will not just be for our republican players, but also for businesses, which can come on board and sign agreements which employ the Far East Concession — Kirill Bychkov, First Deputy Chairman of the Government of the Republic of Sakha (Yakutia).

SOLUTIONS
New tools and clear project selection criteria are needed

At the behest of President of the Russian Federation Vladimir Putin, we are currently working on another tool. A five-year infrastructure modernization programme is in the works. This also includes co financing measures and involves the regions having their own five-year utilities infrastructure modernization programme. It is our hope that selection will begin as early as January next year. One hundred and fifty billion has been earmarked annually up to 2027. These are the tools which one way or another require co-financing through extrabudgetary sources, hence our direct link with the concession. Today, we can see a lot of work being done by concessionaires, major corporations, and the regions. That’s because this is an operational tool existing alongside the public funding which is being allocated — Maria Sinicic, Director of the Department for Integrated Development of Territories, Ministry of Construction, Housing and Communal Services of the Russian Federation.

The concession programme is a tool which should help remove any elements of mistrust. ‘Mistrust’ is a simple word which we don’t tend to pronounce out loud, but it is something which exists, and it foments a kind of tension between the state, the authorities, investors, banks, and so on. <...> The scale of everything we do should be somewhat more structured and clearer in terms of the aims we want to achieve. We, together with the regions, lack clear criteria to select these projects. <...> At a scale like this, we need to prioritize industries — Mikhail Chachin, Vice President, Sberbank.

The programme to establish schools under the Ministry of Education has essentially been in place for 18 months now, and I can say that the Far East Concession does indeed exist for education in the Far East. That’s because over these 18 months, seven regions of the Far East participated in this programme. <...> In order to do something so precisely and quickly which will bring genuine results, we need to set out the rules of the game from the very start. That’s because you need to have rules for people to use roads. You need to know who the traffic police are, and what their rules are. All that’s left is to write the rules down. Banks and investors – both market and federal players – need to know at a federal level what the cost of joining the programme is in order for them to come on board — Alisa Denisova, Executive Director of the Business Block, VEB.RF; General Director, Proshkola.

We have signed a contract for an important project – a series of railway flyovers via the Trans-Siberian. You know that the Baikal–Amur Mainline and Trans-Siberian Railway are in stages of active development. Traffic is increasing, and we consider it to be crucial to seamlessly connect cities, regions, and territories via the Trans-Siberian. And the first pilot project – involving the development of the settlement of Novobureysky and housing construction – is critical both for residents, and for Russian Railways as a whole. This is both about safety, and economic development. We are expecting DOM.RF to join this initiative as well. We have always treated the concession as a tool that enables us to attract an efficient operator in addition to private investment with the aim of effectively implementing projects — Pavel Puzanov, Deputy Chairman of the Government of the Amur Region.

The material was prepared by the Russian news agency TASS