City Projects Focus on Investment and Development
Published: June 22, 2012 (Issue # 1714)
ALEXANDER BELENKY / SPT
St. Petersburg’s automobile cluster has earned it the moniker of the Russian Detroit.
With all eyes on the city during the
St. Petersburg International Economic Forum, The St. Petersburg Times presents an overview of the biggest current investment and development projects in the city.
While the ongoing economic crisis and more cautious new local government have combined to bring about the cancelation of some of the city’s major investment projects such as the Orlov Tunnel under the Neva and the Novo-Admiralteisky Bridge, the majority of planned projects continue to take shape.
St. Petersburg’s modern investment policy is currently focused on developing transport and logistics, automobiles and pharmaceuticals.
The development catalyst in transport and logistics consists of large local projects such as the expansion of the city’s Pulkovo Airport and its neighboring areas along with the construction of the Western High-Speed Diameter toll road.
St. Petersburg’s automobile cluster, which already includes four major car-making plants — General Motors, Nissan, Toyota and Hyundai — and has given rise to the city’s moniker of the Russian Detroit, continues to grow.
Other leading investment and development projects, both private and public, include the redevelopment of the historical New Holland district, the construction of the European Embankment project on the Petrograd Side of the city and the development of the out-of-town Baltic Pearl complex and Yuzhny satellite town residential areas, as well as the Morozova Industrial Park, also located outside of the city. Land reclamation projects on Vasilyevsky Island and near the town of Sestroretsk, the building of the new Zenit soccer stadium and a second stage for the Mariinsky Theater are also on the list.
The city accepted that Pulkovo Airport needed to be expanded when the airport could no longer accommodate travelers during peak times. Pulkovo Airport is expected to process more than 17.3 million passengers by 2025 and has the potential to reach 40 million passengers by 2039.
The existing terminal setup, however, serves as an obstacle for long-term growth. This is due to a lack of a physical connection between Terminals 1 and 2, as Pulkovo 1 serves domestic flights some six kilometers away from the international terminal, Pulkovo 2.
A new combined international and domestic terminal is now under construction in between the two separate runways. The development will see the integration of the existing Pulkovo 1 terminal into the new terminal complex, so that sufficient facilities for all domestic and international operations can be accessed under one roof. The existing international terminal is expected to become a private airport.
Pulkovo’s management says that having separate operations between the two terminals is inefficient. Currently, neither of the existing Pulkovo terminals are able to accommodate the increasing demands regarding aviation security and handling procedures due to their outdated design. In addition, the current apron layout provides only 47 operating aircraft stands, as opposed to the 100 stands that are required for future operations. Terminal capacity is limited by having 43 registration desks in both terminals as opposed to the 98 required.
As the only international airport in northwest Russia, Pulkovo Airport hopes to become an international hub by 2025, capable of competing with the Moscow airports.
The strategy to achieve hub status involves attracting new airlines able to operate regular long-haul flights to St. Petersburg from the U.S., Japan, Asia Pacific and the Middle East.
The project’s budget totals 47 billion rubles ($1.5 billion), and the construction of the new terminal is planned to be completed by 2014, according to the city’s Investment and Strategic
Another transport project planned in connection with Pulkovo is the launching of a direct railway connection from the airport to the city’s Baltiiskaya metro station. The railway is expected to start running in 2015. The project will cost about 10 billion rubles ($308 million), Delovoi Peterburg newspaper reported.
WESTERN HIGH-SPEED DIAMETER
Other ongoing transport projects include the Western High-Speed Diameter, a 47-kilometer toll highway currently under construction and due to be completed in 2013 or 2014. The road will connect different sections of the city to the Ring Road to ease the traffic flow. A small section of the highway is already open to traffic.
Meanwhile, the city’s car cluster shows no sign of falling back. GM, Toyota and Nissan plan to expand their existing facilities, and next year another car-making plant is due to open to produce the Russian-made Yo-mobile hybrid electric car. The vehicle is a joint venture between Yarovit, a St. Petersburg based truck producer, and Onexim Group, headed by oligarch Mikhail Prokhorov, the project’s financer. Prokhorov plans to invest about 150 million euros ($190 million) in a venture he hopes will “break the stereotype saying Russia can’t produce good cars.”
ALEXANDER BELENKY / SPT
New Holland island is undergoing a seven-year redevelopment project.
Fiat-Chrysler is also planning to build a plant in St. Petersburg’s Pushkinsky district. Its investment could total up to 32 billion rubles ($985 million), according to Regnum information agency.
New Holland, an eight-hectare triangular island bordered by two canals and a river in the heart of St. Petersburg, is undergoing a seven-year redevelopment project that will turn the historical island into a multifunctional center. Located within a 20-minute walk from the Hermitage and other major cultural city sites, the island was conceived by Peter the Great in 1719, and became Russia’s first military port in 1721. Until recently the island belonged to the military, and was closed to the general public for almost 300 years.
The winner of the competition to design the architectural concept was American architectural firm WORKac, which presented a proposal to create “a city within the city,” with three zones of activity: One for art, another for film and fashion and the last one for food. According to the architects’ concept, New Holland should become a microcosm of the big city, a cultural center that will support a wide variety of programs and public space.
A new project is now underway, under the control of oligarch Roman Abramovich. Abramovich’s Millhouse investment company is ploughing $400 million into the revitalization of the island.
THE EUROPEAN EMBANKMENT
The European Embankment project, which is being realized between the Birzhevoi and Tuchkov bridges on the Petrograd Side, will include a pedestrian area, a complex including a dance theater, residential buildings, a retail and office center and a five-star hotel.
VTB Bank, the main investor and company in charge of the European Embankment development project, claims to be constructing a new attractive area in the city in place of the chemically contaminated lands that used to house the State Institute of Applied Chemistry and now require huge recultivation.
VTB plans to invest 47 billion rubles ($1.5 billion) in the project. It is estimated to be completed by 2017. The Boris Eifman Dance Palace is to be finished by 2016.
The Baltic Pearl, St. Petersburg’s Chinese-built urban zone, is another major city project. The housing development project boasts some of the most modern apartments in the city. The million-square-meter project, once fully developed, will provide housing for 35,000 people, as well as several schools, a mall and two hospitals. The ambitious plan was financed by a Chinese consortium.
Shanghai Industry Group has invested five years and $1.3 billion in the Baltic Pearl development project. Along the way they have faced local protest and regulation, but completed the first phase at the end of last year with support from both the Russian and Chinese governments.
Yuzhny Satellite City development project was launched as the largest-scale integrated land use project in St. Petersburg right now. Upon its completion it will be a self-sufficient city conglomerate with a social infrastructure, workplaces and recreation areas.
According to Andrei Nazarov, general director of the Start Development Management company, which is in charge of the project, the city will be home to up to 170,000 people and will have a social infrastructure (58 kindergartens, 27 schools, 10 sports and entertainment centers and 12 medical clinics). The total volume of investment during the period of the project’s realization will total no less than 179 billion rubles ($5.5 billion).
Construction of the city, to be located in the Pushkinsky district on both sides of the recently-widened M20 federal highway, will start in 2013.
Morozova Industrial Park
Morozova Industrial Park, to be constructed by Finnish company Industry Park East Management, is designed to house small and medium-sized Finnish companies that work in metal processing and other types of production.
At the end of May, the company and the administration of the Leningrad Oblast’s Vsevolozhsk district signed a lease agreement on 20.5 hectares of land to be used for the project in the village of Morozova, 35 kilometers from St. Petersburg.
In addition to their manufacturing capacities and infrastructure development, the companies will provide clients with services ranging from helping people open businesses in Russia to providing support for projects that have already been launched.
Industry Park East Management will invest about 15 million euros ($18.8 million) in the park, whose first stage is scheduled to be completed in 2014 and the second in 2015.