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First Arctic advance-development territory in Arkhangelsk to focus on sports, tourism

The first Arctic territory for advance development in the Onega mono-industrial city will focus on development of sports and tourism

ARKHANGELSK, March 22. /TASS/. The first Arctic territory for advance development (TOR), organized in the Onega mono-industrial city in the Arkhangelsk Region, at the first stage would focus on development of sports and tourism. The TOR is organized under an order inked by Prime Minister Dmitry Medvedev.

"The application for TOR contained five investment projects, and implementation of those projects would mean attracting investments over 265 million rubles ($4.6 million) and organization of more than 90 new jobs. Onega is not only the first TOR in the Arkhangelsk Region, it is the first territory in the region, which enjoys a special legal status and beneficial economic conditions to forum more comfortable and attractive conditions for doing business there," the region’s Minister of Economic Development Semen Muimenkov told TASS on Thursday.

The projects in the application are: a biathlon complex, an aqua center, a tourist-hotel complex, organization of production and processing of wild plants, and a factory to bottle water. "I would like to stress, Onega’s development is not limited to those projects, as we still welcome new suggestions," the minister told TASS. "Now that the application has passed the federal level, that the key benefits are clear and guaranteed, the business activity will grow and the number of residents will increase."

The Onega Region has big deposits of basalts, more than 110,000 cubic meters, as well as about 40 million tonnes of peat. "With the beneficial regime in TOR, implementation of the investment projects on processing those resources looks very promising," the minister added.

Mono industrial forestry city

Onega is a city with population of about 20,000. The city is on the White Sea. The only plants working there are a sawmill and the Onegales company - they employ about 20% of the labor force. "They are the main tax payers," the city’s head Ivan Grishin said. "They are connected and depend on each other, as Onegales cuts the wood and supplies it to the sawmill."

The city has organized 19 areas for development of tourism and sports, the city administrator continued. Another area of about 10 hectares could be used for a big factory, which will have access to the sea. "This area, for example, has attracted a company, which produces cables," he added.

Tourism and clean water

The investment project Center for Family Water Leisure will cost 50 million rubles ($874,000) and includes construction in Onega of a hotel complex and two pools with aquapark elements and attractions. The complex will be ready in 2019. "We rely on tourists and on the locals, as living comfortable should be not only in the capital, but in a small city like this, like our Onega," the project’s author Elena Panchina, born in Onega, told TASS.

"We are expanding the production capacity, we plan taking additional area of 600 square meters, where the base is ready now," head of the Talitsa water-bottling company Andrei Popov, the employer of ten people as yet, told TASS. "We are estimating the required additional electricity capacities, a new road, and we shall offer more jobs."

According to him, the company relies on the tax preferences. "Every month, we pay much money in taxes. With the benefits, which we shall have as the TOR residents, we shall redistribute that amount for development, for raising the wages," he said.

Development of sports

Head of the Onega biathlon complex Alexander Chaiko says the city has a very good transport accessibility. "An hour flight from Moscow and then three hours along a good road, which will be very good soon," he said. "And athletes could come here for, say, 20 days of training, not to go to Khanty-Nansi, where the climate is cold, while in Onega winters are mild."

The new biathlon complex with all the equipment and infrastructures will cost 600 million rubles ($10.5 million). "The ski route is planned so that athletes go along it and enjoy views of the sea," the official said.

The project authors now consider two variants: either to apply for the federal sports construction program, or to have a private-public partnership. "We have an investor, he says: give me conditions and I shall invest money," Chaiko said. "Now, we are discussing conditions, and will work on with the city."

Mono-industrial cities in Arkhangelsk Region

The Arkhangelsk Region has seven mono-industrial cities and towns. The most complex social and economic conditions are in Onega and Kizema; the cities and towns with risks of declining social and economic positions are Koryazhma, Novodvinsk and Oktyabrskyi; and in Severodvinsk and Severoonezhsk the situation is stable. In those cities and towns live almost 300,000 - about every fourth resident in the region.

"Onega’s receiving the status of TOR would be an impetus for development of the entire region, as we have at least six more mono-industrial cities and the Mirnyi (closed administrative territory - TASS), where a similar economic regime could be organized," the minister said. "Moreover, there is another instrument, which we have not considered yet - special economic zones."


At the federal level, TOR residents enjoy preferences, including lower social insurance payments (7.6% against regular 34%), a zero revenue tax payable to the federal budget. The TOR residents pay to local budgets not more than 5% of the revenue tax over first five tax periods, and not less than 10% over next five tax periods, and other tax benefits.