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Agt on Russian-French JV provides for direct investments in N Caucasus

September 20, 2011, 13:26 UTC+3

The agreement between the OJSC Resorts of the North Caucasus (KSK) and France-Caucase, signed at the investment forum Sochi-2011

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MOSCOW, September 20 (Itar-Tass) —— The agreement between the OJSC Resorts of the North Caucasus (KSK) and France-Caucase, signed at the investment forum Sochi-2011, does not provide for any loans for the construction of a tourist cluster, but contains an agreement on direct investment in the project, the deputy general director of the KSK company, Rostislav Murzagulov, told Itar-Tass, commenting on publications in the media.

"Speculations by some experts to the effect Russia has borrowed heavily for the construction of the tourist cluster are probably a result of the fact that they are have not studied the issue properly," he said.

The representative of the KSK recalled that the initiative for the development of the North Caucasus tourism businesses was pioneered by Russian President Dmitry Medvedev, and joint efforts with France to develop North Caucasus resorts were identified by the two countries’ leaders as a priority in bilateral strategic partnership.

France-Caucase - a subsidiary of the corporation Caisse des Depots et Consignations - and the KSK entered into an agreement on a joint venture through which French investors will be able to participate in the construction of resorts, said Murzagulov. "No loans or credits have ever been on the agenda. The French partners believe this project is a profitable and promising investment of capital, and they undertake to build the tourist cluster in order to profit from the resorts in the future," he said.

"Any curious expert could easily see that the French delegation to Sochi included representatives from over 50 companies - construction, infrastructure, transport, equipment manufacturers, etc. It is the joint venture, created by the KSK and France-Caucase, that will pool and coordinate this potential of investors," said Murzagulov.

The agreement stipulates that in the first phase of the project the joint venture will attract private investments about one billion dollars worth. As the chairman of the Board of Directors, Ahmed Bilalov, explained to journalists after the signing ceremony, the French side estimated the total investment capacity of the project at 15 billion dollars, and on the condition of transparent, understandable and attractive conditions their real investment might well reach that amount.

"Perhaps it is worth mentioning to some experts that the concept “investment” included capital investment in facilities and processes with a view to extracting profit," said Murzagulov. He added that the KSK was open to the media to the maximum extent, and "any journalist can get all the necessary first-hand information about progress in the development and prospects of the tourism cluster instead of presenting somebody else’s unprofessional assumptions as the reality."

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