“Kommersant”: “Finnish ebb tide”
Valentina Matviyenko will add land to her city.
Prime Minister Vladimir Putin has asked the Federation Council to approve a change of the boundaries of St Petersburg by adding new land (more than 370 hectares) to be reclaimed from the Gulf of Finland. The authorities are planning to build housing on the new land and investors will be attracted by tender. One of the potential bidders for the project, estimated at nearly $760 million, is OOO Severozapadinvest controlled by Novatek gas company chairman Leonid Mikhelson.
The news that Vladimir Putin has signed an executive order expanding the boundaries of St Petersburg by reclaiming 376.92 hectares from the Finnish Gulf, was broken by Interfax. The new site, most of which will be occupied by new housing and social infrastructure, will be owned by the city. The document also notes that the proposal to change the boundaries of St Petersburg will be submitted to the Federation Council. The Council senators will manage to approve the new city boundaries before the end of the year, Rafgat Altynbayev, the head of the FC Committee on Federation Affairs and Regional Policy told Kommersant.
Back in September, governor Valentina Matviyenko presented to the Federation Council the city's Novy Bereg investment project, that envisages reclaiming between 350 and 400 hectares of the Gulf of Finland in the Lisyi Nos District. The project will be implemented by investors, Vice governor Yuri Molchanov told Kommersant yesterday. The procedure of including the territory transferred to St Petersburg in the register of city government property will take about two months. Thereafter City Hall will choose investors by announcing a tender.
Severozapadinvest has already evinced interest in expanding the city's territory (70% of that company is owned through OOO Levit by Novatek CEO Leonid Mikhelson), Kommersant was told by several Petersburg developers. The information was also confirmed by deputy director general of Severozapadinvest Vladimir Zhuikov. The company paid 36 million roubles in September for 15 sites with a total area of 144.2 hectares on the gulf shore that had been put up for auction by the city. Severozapadinvest will join other bidders for developing the Novy Bereg project.
This will be St Petersburg's second major project creating artificial land. Morskoy Fasad (Seafront) is implementing a project of that name to reclaim about 440 hectares of the Gulf of Finland on the Western tip of Vasilyevsky Ostrov. Total investment for the first stage of the project is estimated to be about $650 million, with part of the money to be put up by city and federal authorities. The Federal Budget allocated 6 billion roubles and the city budget 11 billion roubles for building of a new port as part of the Morskoy Fasad project. Molchanov believes that the Novy Bereg project will cost about the same amount as Morskoy Fasad.
The representatives of UK Morskoy Fasad, a management company, have declined to disclose the amount of investment in the creation of new territories in the Gulf of Finland. A source close to the company claims the cost of reclamation per hectare is $2 million. Thus, the investor will have to spend $759.84 million on the Novy Bereg project.
One can hardly see economic benefits accruing from this project, says Sergey Fyodorov, managing director of Praktis CB. The cost of one hectare of "old" land on the Gulf coast is between 500,000 and 1 million dollars. There will not be many bidders because creating new territories on what used to be part of the gulf is a complicated technological process, says Vice President of UK Morskoy Fasad, Lev Pushkansky. "The commercial success of the project would depend on the overall real estate market," he says. The city government says new land is needed because the city has no vacant lots left for housing construction. At the same time, because of the crisis 70-80% of construction projects in the city have been suspended, says Lemeshko and Partners director-general, Dmitry Lemeshko. He believes that 23% of the land in the city centre currently occupied by industrial enterprises could be redeveloped.
Khalil Aminov, Anna Pushkarskaya
