USAID project helps Ukrainian cities move a step closer to generally-accustomed investment attraction practice
Chanting “investment-attraction-investment-attraction” may well entrance your voters, but not investors. They buy investment products, not good intentions.
It’s good for a city to have a space of greenfield that can be offered for industrial development. Still, it’s not enough to ensure that investors come to stay, not come and go. To become an investment product – in the globally competitive sense – the site needs to come with all necessary infrastructure (or at least a precise technical plan of its development). A feasibility study and concept design of the future site is a step forward to be made first and foremost to develop an industrial site. It is also the most difficult step, since it requires specific expertise.
When the USAID Local Economic Development (LED) project voiced an idea of making conceptual designs / pre-feasibility studies for industrial sites in cities that offer such sites to investors, the mayors of two cities, Komsomolsk and Novohrad-Volynsky, were first to jump at it. The matter was not just that they could obtain a product, made to European standards, for free; Ukraine’s scarcity of urban/industrial planning professionals able to design and calculate proper concepts of a modern industrial facility is the problem.
To perform this task, the project invited Radim Gill, an experienced urban/industrial property planner from Brno, Czech Republic, who has over 15-year experience in industrial property development in Central Europe. In early October 2006, he and his colleague, an experienced architect, came to the two cities to “touch the ground.” They visited the sites and gathered all the necessary information, including very precise data on topography, infrastructure existing nearby, etc. An analysis of this information helped them visualize the future projects. The results – Conceptual Design for each of the cities – were presented on November 27, 2006.
The Conceptual Design comprises description of the site, rationale and concept of its development, calculations for infrastructure development needs, data on the city relative to the country, information on related costs, maps and drawings, and other essential information – everything in a neat folder enclosing a CD.
Minister of Housing and Communal Economy Oleksandr Popov, who was the Komsomolsk Mayor at the time, says it was their “first attempt to make an up-to-date offer to local and foreign investors to come and invest in a reliable place with support from local authorities.” For such a “monoprofile” city as Komsomolsk, which depends heavily on metallurgy, investment attraction is of the utmost importance, as it means local economy diversification and thus risk reduction, he pointed out.
Minister of Housing and Communal Economy Oleksandr Popov was the Komsomolsk Mayor when the USAID LED project was developing a conceptual design for the city’s industrial site. “It was our first attempt to make an up-to-date offer to local and foreign investors,” he says
Commending the Conceptual Design, Mr. Popov also said the collaboration of Komsomolsk with the USAID was positive in all other areas as well. “[This collaboration] has changed attitudes of our people, in the first place local government officers and those actively standing for democracy development,” he said.
According to Novohrad-Volynsky Deputy Mayor Serhiy Kolotov, the approach suggested by LED differs from what Ukrainian cities used before in that it raises the investment attraction to a considerably higher level. He calls it “purposive attraction.”
“Before, we had occasional, situational contacts with potential investors. The documents developed now allow for a complex, strategic approach to investment attraction,” said Mr. Kolotov.
As the next step, using the Conceptual Design as an argument to resolve some controversial issues in favor of the city, Novohrad-Volynsky intends to complete the development of its master plan. And this will further increase investors’ interest in the city, according to the Deputy Mayor.
Now many other mayors lined up to have the same.
Not only municipalities have become interested in the approach. Says Yevhen Samartsev, President of the Kopyliv Socioeconomic Development Fund:
“We are interested in the systematic approach to industrial park development. Right now we’re working out a new model of Kopyliv [a town in the Kyiv Oblast] development involving creation of new businesses and jobs for both the town and the Makariv Raion as a whole. I’ve got a look at the document [Conceptual Design for Komsomolsk]. It looks very professionally done; never seen anything like that in other Ukrainian cities.”
The LED project is going to help other Ukrainian cities develop their conceptual designs. But what will happen after the project is gone?
In the first place, with these two cities and those to follow, the project sets a standard. Municipalities now will know what they have to have in order before investors come, and what the product has to look like. Moreover, to ensure sustainability of its work, the project is about to launch an internship program to train architects in urban planning / industrial property design. An announcement has already been made, and first applications received.
The story as .pdf file
