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Italy to join tourist cluster project in North Caucasus

July 23, 2012, 14:39 UTC+3 Alexandrova Lyudmila

Italy will participate in the ambitious North Caucasus tourist cluster project. The Russian state-run company North Caucasus Resorts (KSK) and Italy’s Rizzani de Eccher have signed a protocol of intent to cooperate in the development of the tourist cluster in the North Caucasus Federal District. The document was inked in Moscow on Monday within the framework of Italian Prime Minister Mario Monti’s working visit to Russia, the KSK company said on its official website.

Rizzani de Eccher is going to invest about one billion euros in the cluster’s commercial and hotel infrastructures. Also, it plans to form a consortium of investment, credit, export, import and other businesses, as well as building and developer enterprises.

Rizzani de Eccher will be offered several projects to choose from – Mamison (North Ossetia), Matlas (Dagestan), and Arkhyz (Karachai-Cherkessia).

The main owner of Rizzani de Eccher, Claudio de Eccher, has been doing business in Russia since the mid-1980s. His company Codest was the contractor that built Moscow’s business centers Balchug Plaza and Krylatsky Hills, belonging to Roman Abramovich-owned business entities.

The daily Kommersant quotes a source as saying Rizzani de Eccher’s co-owner is so much interested in the North Caucasus tourist cluster project because the state promises a number of tangible benefits: for instance, investors will be exempt from the property tax for a period of ten years, and from the land tax, for five years. Also, in case of force majeure circumstances the Finance Ministry guarantees the reimbursement of 70 percent of investments.

The project for creating six Alpine skiing resorts in Kabardino-Balkaria, North Ossetia, Adygeya, Karachai-Cherkessia, Dagestan and Ingushetia and a beach resort on the land-locked Caspian Sea was launched back in 2010 at the initiative of the then President Dmitry Medvedev. The KSK company that runs the construction project is 98 percent owned by the Russian Federation. VEB and Sberbank have two percent.

As Dmitry Medvedev, now holding the office of the prime minister, said after a recent discussion of the problem, the resorts of the North Caucasus tourist cluster should be able to accommodate about 10 million vacationers a year. This will require building hotels and cottages for 100,000, over 1,000 kilometers of Alpine skiing tracks, 200 ropeways and also transport infrastructures.

The project is expected to create more than 330,000 jobs in the region.

“Of course, this is not going to be a public-funded project. The government merely encourages investment activities, so it is extremely important to draw foreign investors,” Medvedev said.

Originally, the overall cost of the project was estimated at about 15 billion dollars. In early January the government issued a resolution to double the area of North Caucasus resorts from 150,000 hectares to 300,000 hectares. The organizers plan to put the final touches to the North Caucasus tourist cluster by 2019.

So far the KSK has signed 16 billion euros worth of contracts with investors. China’s Dalian Wanda Group Corporation and China Oceanwide Holdings Group are going to invest up to three billion dollars in the region’s resorts. South Korea’s green energy company, Western Power, is to build one billion euros worth of energy facilities in the region. France’s state bank Caisse des Depots et Consignations (CDC) and Suprema Associates also feature on the list of investors. Several companies from Austria have agreed to participate.

So far none of the contractors has got down to business. Construction work will begin when the land documents have been formalized. The organizers promise this procedure will be over soon.

The North Caucasus tourist cluster may repay itself in five to ten years, KSK CEO Akhmed Bilalov told the Russia Today television channel recently. He estimates the project’s profitability rate at 10-15 percent.

Bilalov said that each project had its own “anchor investor,” uniting a group of medium and small companies owned by local residents.

The Russian government will extend 100 billion rubles worth of guarantees to the investors who will agree to develop North Caucasus health resorts, deputy Prime Minister, presidential representative in the North Caucasus Federal District Alexander Khloponin said earlier, adding that the money had been reserved in the federal budget. Last year the government guarantees to investors in the North Caucasus projects stood at 50 billion rubles.

MOSCOW, July 23