Address by the Governor

Approved:
the Governor of the Voronezh Region
A.V. Gordeev
April 10, 2015
 

Address by the Governor of the Voronezh Region Alexey Gordeev to Voronezh Regional Duma and executive bodies of state authority

“Investment Climate and Investment Policy of the Voronezh Region"
Distinguishedcolleagues!

Introduction
The Government of the region is making significant efforts to build a competitive and efficient economy, and thus achieve high living standards for the citizens of our region. The Voronezh region should become a well-respected region, more comfortable for living with the standards of high quality of life.

The main development directions of the Region have been defined in the “Regional Strategy for Social and Economic Development – 2020”. The region requires a substantial investment in order to provide residents with jobs, social benefits and comfortable living conditions. Industrial and agricultural development will provide stability for the regional budget, since there will be more taxes paid to be spent on improving health and education systems, culture and sports.

Work Results

As for 2014 results, the Voronezh region succeeded in keeping positive dynamics of investment growth(108% of the last year level) providing for the region the position in the top-twenty of the most fast-growingentities of the Russian Federation (the 16th place). Compared to 2009 the investment volume enhanced 2.6 times and amounted in 243.3 billion rubles.

In terms of investments volume per person in 2014 the lead of a mid-Russia indicator value has been stated in the region (the region – 105.7 K rubles/person, the Russian Federation  –  92.6 K rubles/person). 

2. Investment projects implementation
In 2014 the main investment sites were: construction of the 6th and  7th power units of Novovoronezh NPP, reconstruction of the federal highway М-4 “Don”,in the territory of the industrial site“Maslovsky”:"OFS-Svyazstroy-1" plant for fiber optic cable, "Vybor - OBD" precast factory for housing, assembled steel sections production-construction base LLC Administration Construction Company “SpetsStalTekhMontazh”,stock breeding complex establishing  and production base extension for LLC “EkoNivaAgro”,breed farm  of company "Zarechnoe,  LLC “Agro-Industrial ComplexАgroeko”.
At the moment in the territory of the region 80 investment projects, included into the programme of social-economic development of the Voronezh region for 2012-2016, are being implemented. According to the results of 2014 investors absorbed investments in the amount of 74.07 bnrubles  (including 50.13 bn rublesfor NovovoronezhNPP-2). The implementation of investment projects allowed to create additional 2150 new jobs. In 2014 26 companies implementing especially significant investment projects were provided with taxbenefits.

For most significant investment projects in 2014 there if the state (regional) support to investors  through budget subsidies in the amount of  306.61 rubles to a number of companies, including the following:   LLC “Voronezhselmash”, LLC“Vybor-OBD”, LLC“AGROEKO-VOSTOK”, LLC “Selection-Cross-breed Center”, LLC “PC “Angstrem”, LLC“Zarechnoe”. This allowed to speed the work over projects implementation and investment facilities creation in the territories of Talovsky, Verkhnekhavsky, Olkhovatsky, Ramonsky, Olkhovatsky, Novousmansky municipal districts and in the city of Voronezh.

3. Investment ratings
1.    Implementation of a significant number of new projects is high due to creation of comfortable conditions for the investors and reduction of investment risks. According to the data of “RAexpert” rating agency in 2014 the regiontook 3d place in terms of minor investment risk, which is 3 positions higher (in 2013 it was the 6th place).

2. In 2014 the regiontook the 5th place in terms of the level of PPP institutional environment among regions of the Russian Federation. At the same time the Voronezh region has been mentioned as the region with the highest indicator of rules and regulations development for PPP projects implementation in the territory of the subject.
The verified by the results of all-Russia ratings efficiency of created in the region system of cooperation with investors is based on the following fundamental principles:
- equality, i.e. a non-discriminatory approach to all subjects of business and investment activities in the framework of a pre-determined public system of priorities;
- transparency, i.e. public availability of documented information of the region government authorities (with the exception of sensitive information) ;
- best practices, i.e. using the best practices of interaction of subjects of the Russian Federation and the subjects of investment activity in administrative procedures and control for the benefit of business and investment activities.

4. Investment initiatives of the Voronezh region government

In order to create a favorable investment environment in the Voronezh region the following priority initiatives have been identified and implemented.
      
The first initiative is implementation of a science and technology  development Guidance for the Voronezh region.
Successful experience of strategic management of regional development has been gainedin the Voronezh region.  Current Strategy of socio-economic development of the Voronezh region has been acknowledged as one of the best by the expert community. The investment strategy of the Region became a part of the best practices collection of Strategic Initiative Agency.

To establish asystem of strategic documents in the Voronezh region there was developedScience and Technology  Development Guidance for the region for the first time in the Russian Federation, allowing  to  guide development trends of the regional science, taking into account Russian and global tendencies. It also allows to develop a new approach toward determining of scientific and innovative branches that requirepriority support from the state, to extend insights of possible tendencies of the future development.

Based on the Guidance data a production development and location master plan for the Voronezh region has been created which will allow tolocate production rationallybasing on the forecast for branches and separate economic sectors development.

As a part of master plan implementation there were established 354 investment sites within the region (in all municipal districts) with the total territory of more than 17 thousand ha for the location of industrial and agricultural production.

To make it more  convenienent for inverstors,  the all information has been visualized on the interactive map of the investment portal of the Voronezh region (invest-in-voronezh.ru). In 2015 theexploration of investment sites of the region will be implemented on the basis developments presented in the Guidance and master plan.

The second initiative isimplementationof 15 sections of the Standardof the executive authorities of the Voronezh region business activities to ensure a favorable investment climate in the region.
We formed an expert group to monitor the efficiency of the Standard sections implementation. It includes representatives of two all-Russia public organizations "Business Russia", "OporaRossii" (all-Russian non-profit public organization of small and medium enterprises "SUPPORT OF RUSSIA"), "Russian Union of Industrialists and Entrepreneurs", "Chamber of Commerce". They confirmed that respective executive bodies of the region fullycomplied with the requirements of all 15 sections of the investment Standard.In the framework of its implementation the total investment on active  agreements between investors and the Government of the region is 135.53 bnrubles.It is more than 50% of a yearly total of capital investments for the region.
Implementation of the Standard sections has been carried out on the municipal level as well.  In Liskinsky district of the Voronezh region there is being implemented a project forreplication of the best municipal practices.  These practices had beenidentified while a pilot project of Strategic Initiative Agency was creating a  favorable investment climate. The work has been held within the frames of the agreement between the Government of the Voronezh region, Strategic Initiative Agency and Liskinsky municipal district.Liskinsky district has been chosen as the pilot area for a reason. In2014 it was recognized by Strategic Initiative Agency as one among 8 best municipalities of the Russian Federation. Best practices of cooperation with investors,implemented in the district, became a part of the map called 30 successful municipal practices discovered in the territory of 65 pilot municipalities out of 35 regions of the Russian Federation. After the approbation of the best practices in Liskinsky district its experience will be applied in all districts of the Voronezh region.

  The third initiativeis to reduce the number of separate procedures and optimize the process of granting permits and approvals for investment projects, introduce the best practices of National Rating of the Investment Climate.

In order to launch the best practices, as discovered during National Rating pilot approbation (includes more than 47 indicators of assessment of the comfort for business running in the region), an entrepreneurs survey has been held and a "road map" of the National Rating best practices implementation was developed and brought into use in the Voronezh region.  This “road map” containsprojects of 10 executive bodies of the regional authority, Directorate of Federal Tax Service and Rosreestr for the Voronezh region.

To monitor the efficiency of the road map implementation a Headquarters for administration barriers reduction and investment and entrepreneur climate improvement has been created in the Voronezh region.Within the frame of Headquarters the following 6 work groups have been active: importphase- out, property registration procedure optimization, entrepreneurship climate improvement, reduction of administration barriers in construction,   industrial production export support and enhancement of energy infrastructure availability.  

In 2015 National Rating indicators monitoring will become one of the key tools of improvement to the regulative environment.Rescheduling for certain  procedures and elimination of some will not only reduce administrative barriers and reduce the implementation period of investment projects, but also increase rating of the Voronezh region among other subjects of the Russian Federation.

The fourth initiative – to create new and developing existing investment sites providing infrastructure.
In existing industrial parks of the region (Maslovsky, Liskinsky, Bobrovsky, Perspektiva), with subjects of small and mid-size entrepreneurship, there have been located 73 residents.The total volume of investment makes more than 25 bnrubles. In the territory of industrial parks of the regionproduction capacity of existing sites increases and new productionssites are annually launched.
In 2015 in addition to already active "OFS-Svyazstroy-1" plant for fiber optic cable (March 23, 2015),a start of 3 more productions is planned:

- "Vybor - OBD" precast factory for housing (May 2015);
-“PA Metallist” plant for bar stock metal constructions production  ;
- production-logisticscomplex“Angstrem”.

The fifth initiative is to create new mechanisms of private funds attraction, i.e. public-private partnership.
Apart from projects on establishing new productionthrough private investment, one of the main priorities in the Voronezh region is public-private partnershipin  projectsfor engineering and social infrastructure development.High-quality legal base allows to effectively increase the number of PPP projects working in the region. Thus, if in 2012 there was only one PPP project within the region (it was the first concession agreement in the Russian Federation concluded in the field of water supply), at present there are projects in medicine, sports and ecology.

In 2015 credit agencies will be involved in the structuring these projects, there will be field seminars held for experience exchange, those  will be carried out in specially formed work groups on principles defined anddeveloped by Economic Development Ministry of the Russian Federation and SP “Centre of Development of Public Private Partnership” in the regional PPP Standard.    

The sixth initiativeis participation in federal support programmesfor real sector of economic area.

In order to develop industrial parks of the region, develop potentially productive branches of economics andsupport private investors, there has been active interaction with federal ministries and institutes of development. In 2015 the main priority in redistributing funds from the federal budget to support development of investments to the region,will be participation in the following support programmes:
- project financing,
- import phase-out,
- small business support;
- industrial parks development.

The seventh initiative is implementation of the Competition Development Standard in the territory of the Voronezh region.
There are targets for competitive  environment in socially important and preferred markets: pre-school education services market, medical services,housing and utility services, communications services, retail business,ground passenger transport services, farm machinery, vegetable and fresh fruit-berry markets, tourism services. Implementation of the Competition Development Standard will be carried out in accordance with a “road map” that provides constant interaction between the region Government and “Chamber of Commerce”and “OporaRossii”.
Activities covered by the “road map”will allow to provide unhindered access of regional producers to regional product markets as well as  to reduce costs of consumers in connection of pricing formation perfection.   

The eighth initiative is developing of aninstitute of regulatory control evaluationand rules and regulations acts of the Voronezh region actual impact evaluationthat affect issues of entrepreneur investment activity implementation.
Due to created in the region system of expert evaluation 100% cover of approved regional rules and regulations acts has been provided.This systemincludes representatives of “the Big Four” (Chamber of Commerce, Russian Union of Industrialists and Entrepreneurs, “OPORA”, “Business Russia”), “Civic meeting “LEADER”, the Voronezh Region Rectors’ Council, branch self-regulating organizations -  total of 865 people. For purposes of implementation of pilot projects of Regulatory Impact Assessment carried out on municipal level agreements with executives of administration authorities have been actualized in eight municipal districts(Voronezh, Novovoronezh, Borisoglebsk, Liskinsky, Оstrogozhsky, Ramonsky, Rossoshanskiy, Semilukskydistricts).
To improve the efficiency of the provided assessment in 2015 an extension of  experts circle will be done at expense of representatives of credit entities, branch enterprises of the region, centers of support of small and mid-sized entrepreneurship.Into the subject area of the procedure there will be rules and regulations acts controlling tax and land relations will be added.
Implementation of the mentioned activities will allow to eliminate additional expenses that are put on entrepreneurs and budget, to increase transparency and feasibility of made by the state decisions, quality of state (municipal) management.

The ninth initiative is reducing the tax burden for subjects of small and mid-sized business entities.
The Government of the region prepared drafts of the laws of the Voronezh region providing the two-years-holiday for the first time registered sole proprietors that use a simplified system of taxation and or patent system of taxation and implementing the types of economic activities that provide import phase-out of livestock and crop farming product as well as consumer goods industry.It is planned to provide state support to knowledge-intensive industries and sole proprietors that are working in social field.

In case of acceptance on the federal level of all necessary amendments to the tax legislation the Government of the Voronezh region will consider the matter of decreasing the tax rate at simplified taxation system (with an object of taxation – “incomings”within the limits from 6% to 1%  andsetting the rate of the fixed taxon imputed income within the limits from 15 % to 7,5 %.

Conclusion
Today we have to work under conditions of external challenges that escalated a whole spectrum of structural microeconomic problems in the country. Each of them can be solved within frames of responsible economic policy.  

The Government of the Voronezh region and municipal authorities do not leave without attention any investment project: variants of placing new production sites with investor’s requirements considered provide means of state support, implement monitoring of state support for the project before the project launched fully.Apart from significant support from the state, the Voronezh region is quite attractive for investors due to various directions for investments. The region enjoysadvantages ofgeographical location as well as scientific potential and favorable investment climate promoting business development in the region and keeping socio-economic stability. 

I am confident that the willingness of the Government of the Voronezh region to implement new mechanisms of creating favorable investment climate,listed in this address,will enable  the expected high rates of investment growth  as stated in the socio-economic strategy for the development of the region.

 

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