'If one out of 20 potential investors come — it's very good'

Tatarstan intends to support investors with a new package of tax benefits to keep investment activity

'If one out of 20 potential investors come — it's very good'
Photo: Maksim Platonov

Tatarstan is going to expand the frontal support of investors in 2022 by providing a income tax benefit for the upcoming six-year cycle. First Deputy Prime Minister of the Republic of Tatarstan Rustam Nigmatullin announced this at the meeting of the board of the Investment Development Agency of the Republic of Tatarstan on 19 January. The authorities expect that the new benefits will 'add fire' to the fading investment activity in the region, which does not inspire much optimism. “The fall in foreign investment by the end of 2021 was by 50%," Taliya Minullina, the head of the Investment Development Agency, told reporters, shocking by the depth of the collapse. Read the details in the material of Realnoe Vremya.

Tatarstan is losing foreign investments

Unfavourable macroeconomic situation associated with international coronavirus restrictions and international sanctions continues to suppress investment activity in Tatarstan. Against this background, foreign investments have collapsed by 50%, and investments in fixed assets have increased by 12% to 665 billion rubles, justifying the hope for economic recovery. In other words, it is necessary to pull the regional economy out at the expense of internal reserves, said the head of the agency, Taliya Minullina, at the reporting board meeting of the department.

“The year 2021 continued the trend of the global financial crisis. In the international context, our country, unfortunately, looks like extraordinary in terms of investments. We are not among the top ten countries that attract the most investments, nor are we major investors ourselves," her speech began with a bitter intonation. Covering the international agenda, she said that the United States and China, which attract the most investments in the world, feel better.

But within Russia, Tatarstan is in the top of investment-attractive regions, ranking sixth in terms of attracted investments in fixed assets after Moscow, St. Petersburg and the northern oil and gas heavyweight regions. But there are also difficulties inside the republic that will annoy investors. According to her, the period for issuing construction permits has increased from 62 to 79 days, with the average value of the leading regions of 43 days. Deadlines for connecting networks to electricity have also worsened.

Period for issuing construction permits has increased from 62 to 79 days, with the average value of the leading regions of 43 days. Photo: Maksim Platonov

For the inflow of investments into the social sphere, the agency has developed a draft state programme for the development of PPP.

“Last year Tatarstan was the 67th in the federal PPP ranking," Taliya Minullina self-critically admitted (before that the republic was the 52nd). “This year the state programme should be approved," she promised.

Besides, she proposed to introduce new support measures.

“In recent years, the regions have been particularly actively involved in the fight for private investors and provide serious support measures. This is a subsidy for the purchase of new equipment up to 50% of the cost, a subsidy for the purchase or construction of non-stationary retail facilities, and many others. I ask for your instructions, dear Rustam Kamilevich," she addressed the deputy prime minister of the Republic of Tatarstan.

Alabuga SEZ — growth point

This year, the Investment Council of the Republic of Tatarstan, chaired by President Rustam Minnikhanov, has approved projects totalling 49 billion rubles. The main point of growth will be Alabuga SEZ. According to the development strategy, the number of residents will grow to 195, and private investments — up to 435 billion.

“Alabuga SEZ felt a drop in the inflow of foreign investments, and even at some point, there was an internal restructuring for domestic investors," Taliya Minullina told reporters later. “At the expense of what will the growth be? At the expense of reimbursement (from the federal budget) of infrastructure costs for 15 year," she explained.

Main point of growth will be Alabuga SEZ. Photo: Maksim Platonov

The largest investor in 2021 was Rosatom State Corporation, which launched the 8,5 billion carbon fiber plant. Finnish Huhtamaki has launched a project in Alabuga for the production of environmentally safe and biodegradable packaging for 1,4 billion rubles (commissioning — 2022).

Among other private projects — the third stage of construction of the wholesale distribution centre Ozon for 1,1 billion rubles, Megastroy immediately plans to build a wholesale and retail complex for 1,5 billion rubles. Manzara in Nizhnekamsk is building a residential quarter with an investment volume of 5,5 billion rubles. In April, the carsharing service of Italian Delimobil was also launched in Kazan. Next year, it is planned to increase the capacity of the fleet to 1,000 cars and open a maintenance station.

But the largest influx of foreign investment occurred in the Aurus project from the UAE, Taliya Minullina said.

10 billion investments in milk powder from China

A new inflow of investments of 10 billion rubles is expected from the Chinese agro-industrial trading company Sichuan-Chuvashia. It intends to invest 1 billion yuan in the construction of a milk processing complex in Tatarstan. The capacity of the complex will be 500,000 tonnes of milk a day, and it is designed entirely for the production of powdered milk, which will be exported, including to China. The construction is scheduled to begin in 2024.

“This project is quite real, as it is based on the raw materials that Tatarstan can provide," said Taliya Minullina. “The project is large, they declare a large amount of investments, so several dairy districts of the Republic of Tatarstan, for example, Kukmorsky, may be involved in it. So far, we are working on choosing a site and finding the volumes of raw materials.”

Capacity of the complex will be 500,000 tonnes of milk a day. Photo: Maksim Platonov

In conclusion, First Deputy Prime Minister Rustam Nigmatullin said that the Ministry of Economy has developed a draft bill on regional investment projects, which will make it possible to provide income tax benefits. According to him, Moscow Oblast was the first to do this. “I ask you to finish it as soon as possible and submit it to the State Council," he made the request.

PSEDA of three cities do not fulfill their obligations

Tax incentives provide a serious impetus for attracting investments. One hundred and eighteen residents are registered in the PSEDA, this is 38,5 billion rubles of attracted investments, more than 17,000 jobs, the volume of revenue is 148 billion rubles.

At the same time, there is a failure to fulfill the obligations of the PSEDA of Mendeleevsk, Nizhnekamsk and Chistopol in terms of investments and capital investments and jobs, the speaker pointed out. He asked to come to grips with it.

“Not only to attract new ones, do not get upset because every new investor you talked to did not come. If one out of 20 potential investors comes, it's very good!” Rustam Nigmatullin assured.

Rustam Nigmatullin said that the Ministry of Economy has developed a draft bill on regional investment projects. Photo: Maksim Platonov

“No need to turn on the brake when there are agreements”

Another problem is the allocation of plots without bidding. The mechanism of granting land without bidding for the implementation of large-scale investment projects has been in operation for six years. Last year, nine projects worth 23,5 billion rubles were approved. This mechanism accelerates the procedures for allocating a land plot.

“It's always surprising why preparation takes a long time when there are all the solutions and tips everyone was looking for. Colleagues, this issue must be dealt with. It is not necessary to turn on the brake where agreements have been reached," Nigmatullin reproached.

On the other hand, investors themselves are sometimes misled when they change plans during the course of the project.

“If an investor is ready, then he must have a clear idea of what he wants to build. There is a inconsistency with the goals of an investment project, that is, either a person did not imagine it very well, or the conjuncture seriously changed. In the first case — it is necessary to help, in the second — before the decision of teh board, these issues need to be worked out," Rustam Nigmatullin reproached.

Luiza Ignatyeva
Tatarstan