Tatarstan and Moscow agree on honest load in national projects
The Kazan Kremlin said that the share of regions in co-financing is sometimes higher than established proportions
The real price of national projects for regions was discussed at a briefing in the Kazan Kremlin last week. It turns out that in a number of cases, Tatarstan’s costs in co-financing are much higher than established proportions. At times, it is a third of the whole financial load, and sometimes more than a half (considering all related costs). For instance, in Housing national project where housing development is impossible without infrastructure, but the costs on its creation completely fell on regions. In addition, the Kremlin’s speaker commented on the transition to project financing in construction, the employment problem of Ford Sollers joint venture’s employees and the upcoming meeting of President of the republic Rustam Minnikhanov with the director general of Coşkunöz Alabuga. More is in Realnoe Vremya’s report.
One proportion — other costs
The topic of implementation of national projects was raised at a briefing in the Kazan Kremlin on 4 July. At Prime Minister Dmitry Medvedev’s meeting the day before, regional leaders had complained about difficulties in the financing of national projects. It was said that the share of regions in co-financing is sometimes higher than established proportions. According to the Russian government’s decision, the federal part of the co-financing must be from 80 to 99%, but, in reality, a region’s share might reach almost a half of the costs.
According to official Kremlin representative Liliya Galimova, supervisors who have specific national projects in the republic were set a task to work on the issue of co-financing proportions in cooperation with federal ministries:
“It is 49/51%, or 82/18%, that’s to say, co-financing proportions are different depending on the national project. All the risks arising when implementing national projects are discussed. Particularly the housing development issue was discussed quite seriously. We must understand that infrastructure is needed when erecting a house — kindergartens —, laying roads. Undoubtedly, all financial load to build these facilities falls on regions. So it turns out that the share of a region [in the financing of a national project] rises,” Galimova stressed.
At the moment, investment programmes to attract additional financing, for instance, in social facilities, are considered in Tatarstan: “Now we are building a nursery together with the federal centre. It is the construction of two-storeyed nursery complexes through 2022. We combine programmes so that we will be able to implement them with the lowest costs,” the Kremlin speaker noted.
Visit to Yekaterinburg
President Rustam Minnikhanov’s two-day business trip to Yekaterinburg to participate in Innoprom international industrial exhibition was to begin on Sunday. It is a big event — over 60 regions are expected on the exhibition, visitors from more than 100 countries of the world, 600 industrial companies from 20 countries will arrive. Tatarstan will also have its own stand with achievements in digitalisation, robotic automation; samples of Eidos Robotics, RariTEK Holding, Kazan Motor Production Association, Zarnitsa, Elekon factory and others will be presented.
The signing of agreements between RariTEK Holding and Gazinvestproject CJSC from Tyumen on development of the gas and fuel market was to be specified. Minnikhanov is also going to take part in a meeting of Minister of Trade and Industry Denis Manturov and Minister of Industry and Technology Mustafa Varank.
Today, on Monday, Minnikhanov has a scheduled meeting with the director general of Coşkunöz Alabuga LLC, the meeting and its format were to be specified. Galimova noted that Tatarstan was one of the key partners of Turkey in Russia: “This explains the participation of our president in this format of meetings. The company produces over 6 million units of car body parts a year. The volume of investments in Alabuga SEZ is 2,4bn rubles, 1,3bn rubles are the volume of taxes paid to all budget levels.
“Moulded steel parts for the car industry is another project of the company, it was launched last year. As of Q2 this year, the volume of investments is 180,5m rubles, 42 jobs. It is planned to discuss the project to sign a number of agreements between the Turkish and consumers of the product with this company,” the Kremlin representative explained.
Ford Sollers factory used to be this kind of consumer for long, which localised its production in the same Alabuga, but due to the restructured joint venture, an agreement on sale of products manufactured by the Turkish enterprise to make moulded parts for Aurus cars is expected to be signed.
In 2018, international trade with Turkey totalled $314 million, by 3,3% higher than in 2018. “Commodity turnover has been steadily showing confident growth since 2018, there are all prerequisites for reaching the indicators we had before the crisis in our relationship with Turkey,” Galimova concluded.
Majority chooses money
As for Ford Sollers itself, the government of the republic continues addressing the workers’ unemployment issue. Due to the closure of factories, over 1,000 people remain unemployed. Galimova reminded that the company offered an option of layoff by paying from 5 to 12 basic salaries when the restructuring was announced. “Or there is an employment programme in which Ford joint venture took social obligations,” she added.
The republic’s government also thought about options with the necessity to provide enterprises of Kama Industrial Park KAMAZ Master, which, according to Galimova, has a huge shortage of specialists, with qualified staff. “The majority of people have been employed, transferred, according to the numbers.”
Misunderstanding between developers and banks
A question about the situation with project financing was also raised — banks are still trying to establish relationships by new rules because a corresponding law came into force. A meeting with representatives of developers and banks took place at Minnikhanov’s initiative to understand what issues the sides misunderstood. “Developers themselves raised quite many problems because nowadays not all of them have signed agreements, a big number of documents are still considered by banks’ security service, including analytic departments,” Galimova specified.
According to recent data, the construction of 178 sites will be completed by old rules, that’s to say, the rules that were applied before escrow accounts. 52 sites are switching to new project financing.
Developers asked banks to adopt a unified format of the application: “At the moment, it turns out that a developer submits a set of documents. If the developer gets a refusal there, he goes to another bank, while he has to submit a completely different set of documents there, it takes much time, including examination.” It turned out that banks have problems when processing documents, as most banks simply don’t have specialists who know how to work with such documents: “This also drags the document review process. This is why the issue of staff training has been raised.”
The Ministry of Construction will formulate these issues as a specialised ministry by August when a meeting of the working group headed by the Tatarstan president takes place: “It will be possible to talk and consider the remarks with a wider representation at the level of federal ministries, the Central Bank.”
Galimova noted that Minnikhanov is going to have meetings with Chairwoman of the Central Bank Elvira Nabiullina and discuss nuances of project financing with her.