Phases of realisation of investment projects

Phases of realisation of investment projects

Realization of investment projects supposes two phases – pre-investment and investment. At the pre-investment phase, on the basis of acquaintance with a potential object of investments, a potential investor and a management of the corresponding territory, the investment project is specified and the decision on the beginning of realization of this project (transition to the investment phase) is made, or the decision on refusal of the project and investments is made.

Pre-investment phase of realisation of investment projects

Pre-investment phase of implementation of the investment project in the Novgorod region:

Phases of realisation

At this phase the acquaintance of a potential investor and a territory administration with each other is carried out, and also the acquaintance of the administration with the project, and the investor – with the territory.

The potential investor is provided with the information on territory, investment sites, engineering communications, transport schemes, etc.
Representatives of the administration of a corresponding territory arrange reception and support of the investor, and his consultation on the questions connected with realization of the investment project.

In order to choose an optimal scheme of realization of the project at territory of municipal district for the potential investor, the special forms connecting technical, resource and ecological parameters of the project are developed.

While considering investment project a special attention is paid to its ecological safety.

  1. Investor –organization, intending to implement investment project at the region territory.
  2. Information on the investment project includes:
    • certificate on the organization, intending to implement the investment project at the region territory;
    • basic indicators of the investment project from the point of view of social and budgetary efficiency, sources of financing, influence factors on environment under the form 1 “Investment intention”;
    • requirements to industrial sites on the basic kinds of resources with indication of existing economic, ecological and other restrictions under the form 2 “Information for approval of a site for placing investment project”;
    • project of presentation of an individual businessman.
  3. Preliminary consideration of IP in the economic committee of the Novgorod Region.
  4. Local government bodies of the city district and municipal districts of the region on the basis of the acquired information on the investment project prepare conclusions on the possibility of placing of the investment project at the territory, on the possibility of provision it with necessary resources, costs of engineering support of the chosen industrial site for realization of the investment project and present them to the economic committee.
  5. Specialized committees – local bodies of federal bodies of executive power, executive authorities of the region, on the basis of the presented materials prepare the conclusions on feasibility of realization of the investment project at territory of the region, possibility of provision necessary resources, providing of the state guarantees and tax privileges and present them to the economic committee of the region.
  6. Authorized organizations – organizations interested in realization of investment projects at territory of the region, on the basis of the presented materials prepare offers on sites of placing of the investment project at the territory of the corresponding municipal district, cost of engineering support of the industrial site.
  7. The economic committee of the region on the basis of the presented materials and offers prepares conclusions:
    • on completion of the presented by the investor information on the investment project or impossibility of realization of the investment project at the territory of the region and forwards it to the investor (7a);
    • on necessity of realization of the investment project at the territory of corresponding municipal district and forwards it to the Governor of the region and (or) deputy Head of the administration of the region (7b);
    • on recognition of the investment project as a priority (PIP) and necessity of consideration of PIP at the coordination council under the Governor of the region on improvement of investment activity (7c).
      (7c) Projects meeting of at least one of following requirements are considered to be priority investment projects:
    • investment project is implemented in the priority directions of social and economic development of the region: agriculture, housing construction and production of building materials, mechanical engineering (development of a cluster of automotive components), timber industry complex (creation of vertically-integrated structures), tourist industry, power on alternative kinds of fuel;
    • total volume of investments under the investment project constitutes not less than 350 million rubles;
    • budgetary efficiency of the investment project (the sum of all taxes to the consolidated budget of the region per year to the volume of shipped goods) constitutes not less than 5 percent.
  8. The Coordination council under the Governor of the region on improvement of investment activity (CC) is created by the Decree of the Governor of the Novgorod region of 8.1.2008 No. 181 and performs its activity according to the provision on CС.
  9. CС considering investment projects takes into account their contribution to the creation of conditions for strengthening financial base of social and economic development of the region and effective activity of the organizations located at the territory of the region.
    CС makes decisions on:
    • feasibility of realization of the investment project at the territory of the region on the basis of the conclusions of the economic committee of the Novgorod region, a presentation submitted by the investor, with attraction in necessary cases of corresponding specialists depending on nature and volume of solved questions;
    • signing of cooperation agreement or protocol of intentions between the Administration of the region, the Administration of the city district or municipal district of the region and the investor;
    • consideration of a candidate who is responsible for implementation by the organization, located at the territory of the region, of the investment project among the heads of executive authorities of the region, local government bodies of the region for the purpose of optimization of passing the stages of realization of PIP;
    • possibility of granting of the state guarantees and direction of an intercession to the credit and other financial institutions on consideration of the business plans presented by the investor with respect to their financing;
    • possibility of granting of the tax privileges in accordance with the established procedure on the basis of the conclusions of the economic committee of the Novgorod region and the committee of finance of the Novgorod region.

Pre-investment phase of the implementation of the investment projects in Veliky Novgorod is basically the same. However it is necessary to take into account some peculiarities at placing investment objects in production zones of the city district which will be considered below.

Investment phase of realization of investment projects

As a rule, on an investment phase questions are to be solved:

  • grantings of the land plot and choosing the form of the right of the disposal of the site;
  • constructions (adaptation) of real estate objects;
  • connections of these objects to engineering communications;
  • equipment (re-equipment) of investments object by necessary equipment, inventory, etc.;
  • hiring, preparations or retrainings of employees.

During all phases of the investment project in the territory of the Novgorod region the potential investor is accompanied by executive officials from among the leaders of executive authorities of the region, local government authorities who provide the investor with information materials necessary for decision making development, who will organize business meetings, provide realization of necessary legal procedures, coordinating the investment project with the strategy of development of corresponding territory.

Investment phase

  1. At the given stage the Administration of the region, the administrations of municipal districts and the investor finally make the decision on a place of realization of the investment project. The decision is making according to the requirements of the investor to the investment site and availability of a suitable site in municipal district territory.

    The administration of the Novgorod region has up-to-date and authentic information about availability of such sites, about engineering infrastructure available there, possibility to fulfill the requirements of the investor in electric energy, natural gas, water, sewerage, autoroad and the railway, etc. Availability of such information is provided by regular, agreed, laborious work of the Administration of the region, local government bodies of city district and municipal districts (further local government bodies) and corresponding services. At the given stage it is extremely important not to make mistakes because later on begins long enough formal procedure of obtaining of the land plot for realization of the investment project, and in case of mistake the investor will lose considerable time and the Administration will lose its image. In the Novgorod region, to avoid such mistakes, mandatory surveys of investment sites are organized for the investor. Representatives of economic committee, representatives of local government body participate in such surveys, other profile committees and services also are involved in the surveys if necessary.

    At the given stage the investor should formulate the vision of the rights of ownership by the land plot as the proprietor or as the tenant. Accordingly, the municipal district should confirm possibility of obtaining of the plot of land in property or in rent. For example, if the investor wishes to initially have the plot of land only in property, it may be found out that to make it is not possible for the reason or the restrictions established by the law (the lands of general use, the land is in 20-meter coastal strip, etc.). In this case the investor all the same will have to agree on rent of the land plot or to look for other land plot.

  2. According to earlier reached arrangements with the investor the local government body starts one of the procedures of granting of the land plot, namely:
    • (2.1) Organizes an auction on land plot sale in the property;
      • Organizes auction on sale of the right of rent;
      • Organizes the land plot provision according to the procedure of the preliminary coordination.
    • The decision of this question as well depends on desire and possibilities of the investor and of desire and possibilities of the municipal districts. As a rule, the organization of auctions on sale of the land plots in the property and sale of the right of rent (2.1 and 2.2) is performed for land plot use in a broad range. That is the land plot can be used for any permitted types of activity on this land plot. For example, the industry lands assume construction, of the industrial enterprise in general, instead of construction a specific enterprise for production of specific goods. As a rule, for the foreign investor the question of acquisition of the land plot in property is essential. Here it is necessary to mean that land plot acquisition in property or acquisition of tenant right at auction, on the one hand, as has been told above, assumes more a broader range of its use. On the other hand, in this case all risks of realization of the project lay down on the investor and if on some reasons the project realization does not take place, the investor has a question: “What to do with the acquired site now?” Besides, any participant can become the winner of auction, and accordingly obtaining of the land plot by the investor is not guaranteed.
    • (2.3) Complex procedure of obtaining of the land plot starts, and as a result of realization of which the land plot goes to the investor free of charge, but with a certain special-purpose designation, for example: “Construction a factory for production of kitchen stoves”. The given scheme does not assume direct budgetary recharge and is applied in case of realization of investment projects having big social and economic value to development of the Novgorod region.
    • (2.1.1), (2.1.2) The role of the investor is insignificant, and procedure is defined by the current legislation.
    • (2.3.1-2.3.5) The procedure is defined by the current legislation. But here it is necessary to notice that legal responsibility for gathering technical specifications (block diagram, item 2.3.2) is laid on local government bodies, but the investor as interested party, should not avoid this process. Since at the given stage there is a possibility to influence the volume of the future expenses connected with construction of the engineering infrastructure and costs of connections to communications.
  3. (3.1), (3.2) The procedure of obtaining of the building license is specified by the current legislation. It is necessary to note the importance of strict observation of this procedure especially regarding to informing of the population and carrying out of ecological expertise.
  4. Construction of buildings and structures and objects handover for commissioning is performed according to the current legislation.
    • (4.1) It is necessary to notice that after input of objects of real estate in operation, the investor has right to redeem the land plot at standard price. In the Novgorod region it is the 10-fold rate of the land tax.
    • The investment phase of realization of the investment project in Veliky Novgorod is similar. Characteristics of granting of the land plot are considered in sections 4.1.2 and 4.3.

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