Industrial park concept

Appendix 3 to City
Council Resolution
from 25.12.2013 in redaction
approved by City Council
Resolution from 30.07.2013
CONCEPT OF THE INDUSTRIAL PARK “CENTRAL” IN KREMENCHUK
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CONTENT
page
1. Industrial park “CENTRAL” in Kremenchuk. 4
1.1 Introduction. 4
1.2 Industrial park “CENTRAL” in Kremenchuk. 5
1.2.1 Poltava oblast in the East Europe. 5
1.2.2 Poltava oblast as a part of Ukraine. 5
1.2.3 Kremenchuk district as a part of Poltava oblast. 6
1.2.4 Kremenchuk on the map of Ukraine. 7
2. The initiator of the industrial park creation 8
2.1 General provisions. 8
2.2 Kremenchuk City Council. 9
3. The aim and task of creation and functioning of the
industrial park.
10
3.1 The aim of the industrial park creation. 10
3.2 The task of the industrial park creation. 10
3.3.The functioning of the industrial park 11
3.3.1 Priority economic industries for development within the
boundaries of the industrial park.
11
3.3.1.1 Sector 1 – «Hi-Tech» (mechanic engineering). 12
3.3.1.2 Sector 2 – «Logistics» (logistics). 12
3.3.1.3 Sector 3 – «TechnoPolis» (ІТ- technologies and
electronics).
12
3.3.1.4 Sector 4 – «EcoLife» (reserve sector). 12
3.3.1.5 Sector 5 – «Еnergetics» (alternative energy and
engineering)
12
3.3.2 Business-city. 12
3.4 Organization of the industrial park "CENTRAL"
functioning.
13
3.4.1 Procedure for the industrial park creation. 13
3.4.2 Sources of funding for creation and functioning of the
industrial park.
14
4.Industrial and economic potential of Kremenchuk. Location and
land parcel size.
17
4.1 Poltava oblast. 17
4.2 Industrial and economic potential of Kremenchuk. 17
4.2.1 Location. 17
4.2.2 Total area. 17
4.2.3 Population. 18
4.2.4 Administrative structure. 18
4.2.5 Agglomeration. 18
4.2.6 Industrial potential. 18
2

4.2.7 Service sector. 19
4.2.8 Communal service. 20
4.3 Transport. 20
4.3.1 Public transport. 20
4.3.2 Inter-cities transport. 20
4.3.3 Railway transport. 21
4.3.4 River transport. 21
4.3.5 Air connection. 21
4.4 Ecological situation. 21
4.5 Industrial park location. 21
5. Period of the industrial park “CENTRAL” creation. 24
6. Requirements for the industrial park members. 24
6.1 Organization of the industrial park "CENTRAL"
functioning.
24
6.2 . Requirements for the industrial park members. 25
7. Planned consumption of energy and communal services by
the industrial park members.
26
8. Plan of the industrial park development. 28
8.1. Infrastructure development of the industrial park. 28
8.2. Constraction of the industrial park. 30
8.3. Service delivery. 30
9. Needed resources for creation and functioning of the industrial
park, expected sources of attraction.
32
10. Organizational model of the industrial park functioning. 36
11. Expected results of the industrial park functioning. 37
11.1 General tendencies. 37
11.2 Expected results of the industrial park functioning. 37
11.3 Expected advantages of the industrial park ‘CENTRAL’
functioning after its construction.
38
11.4. Investment project estimation. 40
THE INDUSTRIAL PARK CONCEPT
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1. The industrial park “CENTRAL”
1.1 Introduction
The concept of creation and functioning of the industrial park" CENTRAL " in
Kremenchuk, hereinafter referred to as Concept, reflects the basic legal, organizational
and economic conditions of creation and functioning of the industrial park in
Kremenchuk, Poltava oblast.
The concept was developed in accordance with current legislation and regulations
of Ukraine. The creation of the industrial park “CENTRAL” is supported by the Poltava
Regional State Administration.
The Ukraine President Mandate from March 22, 2012 “On Acceleration of
National Projects Implementation, Definition of New Priorities and Extension of National
Projects taking into account actual problems relating to restoration of economic
growth and modernization of the national economy” is one of the strategic documents,
which influenced the development of the Concept.
Legislation about the industrial park concept:
- the Constitution of Ukraine;
- the Land Code of Ukraine;
- the Tax Code of Ukraine;
- the Commercial Code of Ukraine;
- the Law of Ukraine “On Industrial Parks”;
- the Law of Ukraine “On Regulation of Town-Planning Activities”.
The relevant statistics published on the website of the State Statistics Service of
Ukraine were used to conduct analytical research and calculations. Development of the
concept of the industrial park "CENTRAL" in Kremenchuk was done by consulting
support of Poltava Regional Center for Investment and Development and Regional expert
consulting center "Poltavakonsaltynh" Ltd.
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1.2 Industrial park “CENTRAL”
1.2.1 Poltava oblast in the East Europe
1.2.2 Poltava oblast as a part of Ukraine
Poltava oblast is an administrative unit of Ukraine with the center in Poltava. It
was founded in September 22, 1937. It is located in the middle part of the left-bank
Ukraine. Most of the area lies within the Dnipro lowland and Poltava flat.
Total Area - 28,748 km ² (4, 76% of Ukraine territory), population - 1,466,786
people (February 1, 2013, 3.22% of the population of Ukraine). The region has 25 districts
and 15 cities, five of which - Kremenchuk and Komsomolsk, Lubny, Myrgorod and
Poltava - regional subordination.
The most important industries of the oblast are agriculture and industry (including
food, light industry, machinery, etc.)..
Poltava oblast is located in the central part of Ukraine. Poltava oblast borders
Chernihiv oblast and Sumy oblast in the north, Kharkiv oblast in the east, Dnipropetrovsk
oblast and Kirovohrad oblast in the south, Kyiv oblast and Cherkasy oblast in the west.
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1.2.3 Kremenchuk district as a part of Poltava oblast.
Kremenchuk district is an administrative unit of Poltava oblast with center in
Kremenchuk. Kremenchuk district is located in the southwestern part of the oblast, mainly
on the left bank and only a small part on the right bank. It was formed on May 17, 1939.
The population of the district is 41.9 thousand people. Total area is 1.02 thousand km ².
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Kremenchuk district borders Globyno, Kozelschyna, Kobeliaky districts of Poltava
oblast and Onufrievka, Svetlovodsk districts of Kirovohrad oblast.
1.2.4 Kremenchuk on the map of Ukraine
Kremenchuk is a city of regional subordinance in Poltava oblast and the
administrative center of Kremenchuk district. City population was 225,9 thousand people
as of February 1, 2013. The city is on 28 place of the State Rating of Ukraine. The city is
divided into two districts: Avtozavodskyi (Left Bank) and Kriukov (mostly Right-Bank
and Left-Bank part of the city). Kremenchuk is located in the temperate continental
climate in the Dnipro lowland and middle stream of the Dnipro River, on its left and right
banks in central Ukraine. The city is situated on the territory of 9600 hectares.
The city is located in the central part of the Left-Bank Ukraine, which
significantly influences the development of its economy, rail, road and water connections,
social and economic relations.
The favorable location of Kremenchuk and the level of its economic influence on
the economy of the whole region became the main factors of making decision on creation
of the industrial park within the boundaries of the city.
The main aim of industrial park creation is to attract not only investment but also
modern technology, world experience of industrial production organization. That’s why
industrial park should become the center of industrial standards, engineering science and
the leader of industrial production in the region.
Kremenchuk on the map of Ukraine
2. The initiator of the industrial park creation
2.1 General Provisions
According to Article 1 of the Law of Ukraine “On Industrial Parks”:
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«3) industrial (production) park (hereinafter referred to as‘industrialpark’) means a
territory identified by the initiator of the industrial park creation according to the town-
planning documents and equipped with the appropriate infrastructure where the
participants of the industrial park may perform their economic activities in the sphere of
industrial production, research activities, activities in the sphere of information and
telecommunication on the conditions specified by the laws of Ukraine and the agreement
on economic activities within the boundaries of the industrial park;
4) initiator of the industrial park creation (hereinafter referred to as ‘initiator’) means the
public authorities, the local government bodies, which in compliance with the Constitution
of Ukraine shall enjoy the rights of the land owner on behalf of the Ukrainian people and
which according to the law shall be vested with the authority to dispose of land, as well as
a legal or a physical person - the owner or the lease holder of the land parcel, which may
be used and proposed by him for creation of the industrial park;»
After analyzing feasibility of the industrial park creation within the boundaries of
Kremenchuk and its influence on the economy of the district and the region, Kremenchuk
City Council came out with an initiative to create the industrial park "CENTRAL".
According to Article 5 of the Law of Ukraine “On Industrial Parks”: «1. The state
power bodies, the local government authorities, legal or physical persons who have the
right for creation of the industrial parks in the state and communal lands according to this
Law may be the initiators of creation of the industrial parks».
Kremenchuk City Council as initiator of the industrial park “CENTRAL” creation
exercises the land title on behalf of the Ukrainian nation and has the right to administer the
land in accordance with the Law. Kremenchuk City Council allocated land for the
industrial park creation in the northern industrial center of Kremenchuk with total
area of 168.55 ha. and cadastral number 5310436100:01:003:0000.
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2.2 Kremenchuk City Council
Kremenchuk City Council of Poltava oblast is an initiator of the industrial
park "CENTRAL" creation.
Symbols of Kremenchuk - city arms and flag.
State power body
Mayor OLEH BABAYEV
Telephone:
+380 (0536) 73-00-34, 73-00-44,
fax: 73-00-54
e-mail gor@kremen.gov.ua
First Vice Mayor ANDRIY POHRIBNYY
Telephone: +380 ( 0536) 74-30-20
e-mail pogrebnoy@me.com
www www.kremen.gov.ua
address : Victory square 2, Kremenchuk, Poltava oblast,
Ukraine, 39600
"Program on investment and economic development of Kremenchuk for 2012-
2015" was adopted by Kremenchuk City Council on session from June 26, 2012. Public
Enterprise “Kremenchuk Center for International Relations and Economic Development
“Kremenchuk Invest” was created for implementation of program objectives. This
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enterprise is responsible for attracting investment in the city with the aim of new
enterprises creation and promotion of Kremenchuk.
On June 26, 2013 XXXIII session of Kremenchuk City Council adopted a decision
"On creation of the industrial park " CENTRAL " in Kremenchuk."
3. The aim and task of creation and functioning of the industrial park.
3.1 The aim of the industrial park creation.
The industrial park is creating with the aim of:
- investment attraction;
- world experience of industrial production introduction;
- modern technologies implementation;
- creation of the center of industrial standards, engineering science and the leader
of industrial production in the region.
Industrial Park "Central" is to create by means of formation of a single equipped
territory to accommodate new facilities in industrial production, innovation, logistics
aimed at providing economic development, increase its competitiveness, and stimulate
investment and innovation, improving social standards for residents.
3.2 The task of the industrial park creation.
The industrial park is created with the aim to solve following tasks:
1. Improving Kremenchuk image and its promotion in the country and abroad.
2. Improving the investment climate in the city and in the region.
3. Strengthening the investor confidence in the state of Ukraine.
4. Improving the business activity in the business environment.
5. Supporting the development of small and medium business.
6. Improving the social standards for city population:
- increasing the budget receipt on all levels;
- creation of new jobs;
- payment of the rent for land usage within the boundaries of the industrial park;
- creation of ecologically clean industrial enterprises;
- increasing the salary average level in the city;
- activation of the inter-industries cooperation;
- upgrading the workers professional skills;
- decreasing the education and labor migration;
- improving the demographic situation by stimulating the labor migration in the city;
- employment of the energy suppliers and other service providers, which will
guarantee the functioning of the industrial park;
7. Implementation of modern innovation solutions in production industries.
8. Creation of favorable condition to develop small and medium business.
9. Implementation of energy-savings technologies.
10. Increase of economic activities volume.
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3.3 The functional purpose of the industrial park.
3.3.1 Priority economic industries for development within the boundaries of
the industrial park.
The priority economic industries for development within the boundaries of the
industrial park were determined after economic analysis:
- mechanic engineering;
- logistics;
- IT-technologies and electronics;
- small and medium business;
- alternative energy and engineering.
Scheme of the territory allocation within the boundaries of the industrial park
"CENTRAL" in Kremenchuk.
Industrial Park area is 168.55 ha.
The industrial park is divided into five sectors:
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3.3.1.1 Sector 1 – «Hi-Tech» (mechanic engineering).
Sector 1 is to provide the instrument making industry, engineering and other areas
of production, created through the implementation of new technologies.
The approximate size of the expected investment is 150 million dollars.
Estimated number of created jobs is 1250 people.
Total area is 50,05 ha.
3.3.1.2 Sector 2 – «Logistics» (logistics).
Sector 2 is to provide the warehousing and packing buildings, automobile
companies and customs warehouses.
3.3.1.3 Sector 3 – «Techno Polis»(IT-technologies and electronics).
Sector 3 is to provide the platform for development of advanced information and
telecommunication technologies, nanotechnology, electronics manufacturing.
Estimated number of created jobs is680people.
3.3.1.4 Sector 4 – «EcoLife»(reserve sector).
3.3.1.5 Sector 5 – «Energetics» (alternative energy and engineering).
Sector 5 is to provide the companies working in the field of energy efficiency and
energy saving technologies, production tool, equipment and agricultural machinery
manufacture.
3.3.2 Business-city.
Business-city is to created with the aim of providing services for all industrial park
members, clients.
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It will be a complex which includes offices with open planning, conference halls,
press centers, negotiation rooms, data centers, banking centers, cafes, polygraphic center,
business hotels, outdoor and underground parking.
The current concept can be changed during the design estimates development of the
industrial park if there are factors that contribute to change forecasted zoning of its
territory.
3.4 Organization of the industrial park "CENTRAL" functioning.
3.4.1 The procedure for the industrial park creation:
- approval of the concept by the initiator of the industrial park creation;
- selection of the land for the industrial park location;
- reception of the copy of the State Land Cadaster statement on the land;
- creation of the working group to conduct the tender on the selection of the
management company;
- decision making on the industrial park "CENTRAL" creation;
- conducting the tender on selection of the management company;
- submission to the authorized state body of copy of the decision on industrial park
creation and industrial park concept;
- decision on inclusion of the industrial park to the register of industrial parks;
- conclusion of the contract with management company;
- transfer the land parcels into lease to the management company;
- development of the estimate documentation on necessary infrastructure creation
to provide the industrial park with energy products and transportation routes;
- creation of necessary infrastructure to provide the industrial park with energy
products and transportation routes;
- conducting the advertising company through media to inform all target groups of
potential industrial park members,
- holding the roundtable discussions, seminars and other events to assist attracting
investment in the development of the park;
- transfer the land parcels into sublease from management company to industrial
park members for creation and functioning of their enterprises;
- providing all members of the industrial park with services.
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3.4.2 Sources of funding for creation and functioning of the industrial park
№ Expenses Source of funding
Sum,
thousand/
UAH
1. Preparation:
Transfer of agricultural lands into the lands
of industry, transport, communications,
energy, defense and other purposes for the
industrial park creation.
Municipal budget 46,56
Training of specialists on attracting
investment in the city economy.
Distribution of the industrial park
"CENTRAL" concept among potential
investors and management companies.
Preparation of technical and juridical
documentation.
Conducting of target business trip, focus
groups and seminars.
Designing of presentations, informational
materials and stands.
Municipal budget 207
Presentation of investment attractiveness
and Kremenchuk industrial capacity abroad
and in the international forums in Ukraine.
Registration of the industrial park
“CENTRAL” trademark.
Municipal budget 8
Expenses on the reception of copy of the
State Land Cadaster statement for the land.
Expenses on preparation of technical
documentation.
Municipal budget 80
Expenses on land parcel analysis. Municipal budget 10
2.
The selection and work with the
management company:
Expenses on tender documentation creation
and conducting the tender on selection of
the management company.
Municipal budget *
Preparation of contracts with the
management company about land lease,
Municipal budget *
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administration and usage of the industrial
park “CENTRAL” trade mark.
Loss compensation of transfer of
agricultural lands into the lands of
industry, transport, communications,
energy, defense and other purposes for the
industrial park creation.
Municipal budget
Management
company
*
Development of estimate documentation
on necessary infrastructure creation to
provide the industrial park with energy
products and transportation routes
Municipal budget *
3.
Construction and development of the
industrial park, cooperation between
management company and investors:
Сreation of infrastructure to provide
industrial park with energy and transport.
Municipal budget
State Budget of
Ukraine
Management
company
*
Lease of the industrial park land parcel.
Management
company
*
Promotion of the industrial park with the
aim of attracting investment in the
development of the park.
Municipal budget,
Management
company
*
Preparation of contracts with members of
the industrial park.
Management
company
*
Transfer the land into sublease to the
industrial park members.
Management
company
*
Development of general layout of building
of the industrial park.
Management
company
*
Development of the territory.
Management
company
Industrial park
members
*
Provision of services by management
company.
Industrial park
members
*
Other costs.
Municipal budget
State Budget of
Ukraine
Management
company
Industrial park
members
*
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* The volume of financing will be determined in the business plan prepared by the
management company.
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4. Industrial and economic potential of Kremenchuk. Location and land parcels size.
4.1 Poltava oblast.
Poltava oblast is one of the regions of Ukraine with an average level of industrial
production development. Most industries were created in 50-60s of the twentieth century:
• oil production;
• iron-ore;
• steel industry;
• oil refinery;
• automobile;
• engineering tools;
• electrical engineering;
• production of technological equipment for chemical, food and light industry.
4.2 Industrial and economic potential of Kremenchuk.
Kremenchuk is a city of regional subordination in the Poltava oblast of Ukraine,
and the administrative center of the Kremenchuk district.
4.2.1 Location.
Kremenchuk is located in the temperate continental climate in the Dnipro lowland
and the middle stream of the Dnipro River, on its left and right banks in central Ukraine.
Distance from Kremenchuk to (highways):
Warsaw~ 1084 км
Kyiv ~ 302 км
Cherkasy ~ 178 км
St-Petersburg ~ 1481 км
Moscow ~ 985 км
Minsk~ 822 км
Sumy~ 289 км
Kharkiv ~ 263 км
Poltava ~ 116 км
Paris ~ 2610 км
Vienna ~ 1625 км
Lviv~ 842 км
Luhansk~ 558 км
Volgograd ~ 1023 км
Astana~ 3396 км
Kirovohrad ~ 131 км
Odesa~ 457 км
Chisinau~ 467 км
Kherson~ 337 км
Simferopol ~ 542 км
Istambul~980 км
Dnipropetrovsk ~ 163 км
Zaporizhia ~ 249 км
Donetsk ~ 415 км
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4.2.2 Total area.
The city is situated on the territory of 9600 hectares.
4.2.3 Population.
City population was 225,9 thousand people as of February 1, 2013. The city is on
28 place of the State Rating of Ukraine.
Graph of population change ( thousandspeople)
4.2.4 Administrative structure.
The city is divided into two districts: Avtozavodskyi (Left Bank) and Kriukov
(mostly Right-Bank and Left-Bank part of the city).
4.2.5 Agglomeration.
Kremenchuk is a center with half a million people agglomeration. Many people
from the surrounding villages, towns and cities work and study in Kremenchuk.
Kremenchuk has close connection with neighboring cities – Komsomolsk and
Svetlovodsk. They were built in 1961 for workers of Poltava Mining and Processing
Plant(GOK) and Kremenchuk Hydroelectricity.
The villages of Kremenchuk agglomeration are
- VilnaTereshkivka;
- Kryvushi;
- Mala Kohnivka;
- Pischane;
- Sadky;
- Checheleve;
- Chervona Znamianka.
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4.2.6.Industrial potential
Kremenchuk is a big industrial center of Poltava. There are 86 big industrial
enterprises, 58 building companies and about 14,000 businesses companies in
Kremenchuk.
4.2.7 Service sector.
Kremenchuk provides more than 500 types of consumer services with tendency to
expand them.
There are about 2400 businesses companies of trade and domestic purposes:
- Shops (986 stores), including:
- grocery stores (365);
- non-food stores (585);
- mixed assortment (360);
- retail stores (84).
There are national and local stores of different activity profile in the city: universal
hypermarkets "Velmart", "METRO Cash and Karry" "Fozzy," "Furshet" and "Amstore";
building supermarket "NovayLinia", shopping centers ("Mega", "Galaktika ""
Proletarskiy"etc).
Aslo there are national and local networks: food network("ATB-Market", "EKO-
market", "Sudar", "Optovychok", "Silpo», «Billa»), furniture network ("World of
Furniture"), electronics stores ("Foxtrot", "Eldorado", "Brain", "Technopolis", "Allo»”,
«Comfy»).
There are many local shops and networks:
- Restaurant business - 320 institutions.
- Network of restaurant business of the city has 12,800 seats.
-Markets. There are 14 markets without special profile. Pridneprovskiy,
Novoivanivskyi, Central and Auto Markets are the most popular.
- There are 450 service companies.
- Cinema: "KinoPalace" of "Zebra", "Naftokhimik" of "Naftokhimik"palace."
There are several night clubs: "Jose", "Zebra", "Orekh", "Vanil" (Shopping mall
"Europe").
- Hotels: four-star hotel "Europe" and three-star "Dnipro stars", "Kremin",
"Ontario", "Pantagruel", "Grace".
- Banks:
- International Bank (OTP Bank);
- National (PryvatBank, IndustrialBank, Sberbank);
- Local (AvtoKrazBank, PoltavaBank).
Health Network. Kremenchuk consists of 14 hospitals, local government bodies
and 12 regional establishments. Also the medical services are offered by many private
clinics.
4.2.8 Communal service.
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Kremenchuk housing and communal services has 40 companies and employs
2,300 people.
The leaders:
- Public Enterprise “Kremenchuk transport enterprise-1628”
- PE “ Misksvitlo”
- PE “Kremenchuk contractor specialized road repair and construction
management”
- PE “Kremenchuk trolleybus management”
- PE “ Kremenchukvodokanal”
- PE “ Teploenergo”
- PE “Special funeral services”
- Management company of LLC "Zhytlorembudservis";
- Management company of LLC "Dobrobyt."
These enterprises provide greening, lighting the city, its sanitation and capital and
current repairs of roads, accomplishment of territories, repair and routine maintenance of
housing, etc.
Housing stock, which belong to the local community of the city, is 65584 m ².
57670 (90%) apartments are privatized.
1239 houses are owned by the city. There are 244 houses up to 25 years after
construction, 712 buildings aged from 25 to 50 years, 175 buildings aged from 50 to 75
years, 67 buildings aged over 75 and 41 inthepoor house condition.
4.3 Transport.
4.3.1 Public transport.
The main public transport are bus service (АО АТП-15307), trolleybus service
(PE «Trolleybus management») and 13 private carriers enterprises.
Trolleybus routes length is 54 km. Trolley park consists of 40 old and 7 new
machines. The ticket price is 1.50 UAH and free travel for pensioners as of July 1, 2013.
Bus service has more than 34 routes. The total length of the bus route network of
the city is 311.7 km. There are about 28 taxi services in Kremenchuk.
4.3.2 Inter-cities transport.
The city has a bus station, which is the center of inter-city bus transportation.
There are also inter state routes (eg, Kharkiv, Chisinau). Buses and taxis are also sent from
the train station to Kyiv, Kharkiv, Dnipropetrovsk, Poltava, Svitlovodsk, Vlasovka and
Komsomolsk Central Market.
4.3.3 Railway transport.
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There is a railway station. Also there are Kriukov railway station and several
others railway stations.
Currently there is a railway connection to Kyiv, Kharkiv, Dnipropetrovsk,
Simferopol, Minsk, Moscow, St. Petersburg.
4.3.4 River transport.
There are river port and passenger terminal in the city.
4.3.5 Air connection.
Nearest international airports are:
• Boryspil - 254 km.
• Kyiv - 293 km.
• Dnepropetrovsk - 166 km.
• Kharkiv - 250 km.
• Kremenchuk - the helicopter platform of Kremenchuk Flight College of National
Aviation University, which can take different forms and helicopters. It is situated just 500
meters from the industrial park.
4.4 Ecological situation.
Kremenchuk industry is a center of urbanization of the region. It has a significant
impact on the environment pollution. There are about 100 companies registered in public
health department as harmful for the environment. PJSC “Ukrtatnafta”, PJSC “Carbon
Black Plant”, Kremenchuk TEC, PJSC "Kremenchug Wheel Plant" , PJSC “AvtoKrAZ”,
PJSC “Kremenchuk Steel Works”, PJSC “Kremenchuk road-building machinery plant”
PJSC “Kriukov Car Building Works” obtain 95% of all polluting emissions.
Kremenchuk air pollution level is the largest among the city of Poltava region
(97% of all industrial and domestic waste).
4.5 Industrial park location.
Kremenchuk City Council, as the initiator of the industrial park "CENTRAL"
creation, gave the land parcel for its location with a total area of 168.55 hectares, cadastral
number 5310436100:01:003:0003 in northern industrial center of the city.
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- - - - - - - Railway
Highways
Water connection
According to extract from the State Land Registry on the land parcel:
Extract number НВ-5300404842013
Cadastral number 5310436100:01:003:0003
Location
Poltava oblast, Kremenchuk, Northern
industrial hub
Specialization Enterprises of other industry
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Land category
Land parcels of industry, transport,
communications, energy, defense and other
purposes
Type of land use
Industrial park “CENTRAL” creation
Total area 168,55 hа
Information about limitation of land use No record
Additional information:
Building development Territory free from construction
Form of land Polygon
Relief of land Flat
Fence without fence
Normative land charge during the
construction
79,6 million/UAH
Market price of the land 337,1 million/UAH
Rent payment for land use during
construction
2,4 million/UAH
Cadastral plan of the land
Description of boundaries of the land:
From А to Б – Kremenchuk City Council;
From Б to В – Subsidiary Enterprise “Ukrtransnaftaproduct”;
From В to Г – Kremenchuk City Council;
From Г to Д – Subsidiary Enterprise “Ukrtransnaftaproduct”;
From Д to Е – Kremenchuk City Council;
From Е to Є – Subsidiary Enterprise «Southern Railway»;
From Є to Ж – Kremenchuk City Council;
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5. Period of the industrial park “CENTRAL” creation.
Extract to art. 9 of the Law of Ukraine "On Industrial Parks", "term of the land use
within the industrial park must be at least 30 years from the date of making decision on
industrial park creation."
Industrial Park "CENTRAL" in Kremenchuk is to establish for a period of 50
years according to Kremenchuk City Council Decision.
6. Requirements for the industrial park members.
6.1 Organization of the industrial park "CENTRAL" functioning.
Kremenchug City Council, as the initiator of the industrial park “CENTRAL”
creation, is conducting the tender on selection of the management company to ensure the
industrial park functioning.
According to the Law of Ukraine “On Industrial Parks”:
“management company of the industrial park (hereinafter referred to as
‘management company’) means a legal person irrespective of its organizational form
created according to the laws of Ukraine and selected in compliance with the Law of
Ukraine "On Іndustrial Parks", with which the initiator concluded an agreement on
creation and functioning of the industrial park”
The main task of the management company is filling the industrial park with
members and providing comfort for their economic activity in the industrial park.
Basic requirements for the management company:
1. Management company must be a legal entity, irrespective of its legal form
created according to the laws of Ukraine and selected according to the Law of Ukraine
"On industrial parks."
2. Implementing the business plan approved by the industrial park initiator and
developed by the management company.
3. Implementing the provisions set out in the Industrial Park concept.
4. Concluding the agreement with Kremenchuk City Council on a lease of land
with cadastral number 5310436100:01:003:0003.
5. Paying rent for land use with cadastral number 5310436100:01:003:0003.
6. Ensuring the industrial park filling by the members in accordance with the
agreed scheme of industrial park building development.
7. Transferring the land of the industrial park into sublease.
8. Concluding the contracts for the provision of services to members of the
industrial park.
9. Providing the quota for the workers employment of Kremenchuk region is not
less 89% of the total number of involved employees within the boundaries of the industrial
park.
10. Giving the preference to materials produced in the territory of Ukraine.
11. Giving the preference to Ukrainian commercial entities to provide services to
the industrial park members.
12. Rendering the report to the industrial park initiator.
24

6.2 Requirements to the industrial park members.
1. The industrial park members must be a legal entity irrespective of its legal form,
registered within the territory of the administrative-territorial unit of Ukraine where
the industrial park is situated.
2. The enterprises of the industrial park members must be profitable.
3. The industrial park members must create new job places, i.e. at least 20 job places
per hectare of the general square and hire at least 89 % of workers, who live in
Kremenchuk and Kremenchuk district of Poltava oblast.
4. The industrial park members must carry on business within the frameworks of the
current legislation of Ukraine.
5. The industrial park members must have a program of their development and
carrying on business in the park territory at least for 5 years.
6. They must timely pay up a lease for the land use within the territory of the industrial
park.
7. Planned consumption of energy and communal services by the industrial
park members.
25

According to information, provided by potential energy source and communal
services suppliers, there are no restrictions for the industrial park members in the amount
and terms of supplying their services. The management company receives authorized
documents, established by the Law, and carries out all necessary building and installation
work by order of the industrial park members to get these services.
Planned indexes estimation of energy materials and communal services usage
necessary for industrial park functioning*.
№
Energy materials and communal services Expected indexes*
1.
Natural gas supply
9000 thousand
m3/year
2.
Electricity supply 6 MW
3.
Water supply 250 thousand m3/year
4.
Sewage 250 thousand m3/year
Tacking:
* Planned indexes estimation was held on the basis of energy materials actual
expenses by the Kremenchuk enterprises. The stated indexes will be corrected at the stage
of the industrial park project development.
26

Planned indexes estimation of energy materials and communal services usage necessary for industrial park
functioning*
Sector
Energy materials and communal services
Natural gas,
thousands
m3/year
Electrical
energy,
MW
Water supply,
thousands
m3/year
Sewage,
Thousands
m3/year
Sector 1 – «Hi-Tech» (machic engineering). 3030 2,5 84,16 84,16
Sector 2 – «Logistics» (logistics). 1412 0,5 39,22 39,22
Sector 3 - «TechnoPolis»
(ІТ technologies and electronics).
1817 1 50,49 50,49
Sector 4 - «EcoLife»
(reserve sector).
- - - -
Sector 5-«Еnergetics» (alternative energetics and
machinery).
2741 2 76,13 76,13
Total amount 9000 6 250 250
Tacking:
* Determining the required level of energy materials and communal services usage by the industrial park members is
possible only in the designing process of enterprises and approval of the industrial park building master plan.
27

8. Plan of the industrial park development
Plan of the industrial park development includes:
1. Infrastructure development of the
industrial park.
2. Industrial park construction.
3. Providing industrial park members
with services.
8.1 Infrastructure development of the industrial park.
According to the Law of Ukraine “On Industrial Parks”: infrastructure
development of the industrial park means implementation of a set of measures and
services on preparation of the land plots, designing, construction, reconstruction,
refurbishment and arrangement of the objects of engineering and transport
infrastructure and other objects by the management company and/or the creation
initiator according to the conditions of the Agreement on creation and functioning
of the industrial parks and the Law of Ukraine On Regulation of Town-Planning
Activities with the aim of creating appropriate conditions for performing economic
activities;
The land parcel for the creation and functioning of the industrial park
“CENTRAL” is situated in the northern industrial hub. There are lands of north
industrial hub enterprises, Kahamlytska station and railway track Kriukiv-
Kremenchuk on the borders with the park territory.
Surrounding engineering infrastructure:
Highways:
Ernst Telman st. is lying from the west side of the land area with a distance of 100
meters. Its widening is worked on Kremenchuk general schedule of the city.
The industrial park territory is limited by urban area: Svishtovska st., 50-richchia
Zhovtnia and Haluzevyi Side Street.
A drop-off to the industrial park territory can be organized from different
sides and now-existing drop-offs also can be used. Absolutely, creation of new
highways or reconstruction of already existed must be held within the frameworks of
agreed general plan of the city, fulfilling all requirements of the regulatory approval
system of Ukraine.
Railway service:
Kremenchuk is a large industrial center the work of which is provided by the
railway work. There are passenger railway station and freight station.
The industrial park territory is situated for 2,3 km from the railway station
(Kremenchuk station) and for a 200 m from Kahamlytska station.
The railway usage in economic activity by the industrial park members is possible
in two ways:
- Combined – the freight delivery to the Kahamlytska or any other station and
further automobile transportation;
- Direct – the building of their own railway.
The procedures of railway usage are determined by the management
company according to the industrial park members’ requirements.
28

Inland waterway:
Kremenchuk is situated on both banks of the Dnipro river – one of the main
river transport arteries of the country.
According to information of specialists, river and marine shipments are the
most suitable due to their cost.
There are river port and marina. The river port is situated on Flotska st., and
marina is situated on Pershotravneva st.
The usage of river transportations by the industrial park members is possible only
in combined way.
Air connection:
There is no airport in Kremenchuk, but it is possible to get Kremenchuk
using airports in Kyiv, Boryspil, Dnipropetrovs’k and Kharkiv, which are situated
in short distance with Kremenchuk.
There is a helicopter platform in Kremenchuk, which is situated on the territory of
Kremenchuk Flight College of National Aviation University and also at a distance
of 500 m from the industrial park. It is possible to receipt helicopters of different
grades there.
External utility lines:
According to the “Principles of Kremenchuk development”, agreed on the
session of Kremenchuk City Council from 28.12.2010, the territory of the
industrial park relates to the zone of advanced, ecologically safe, industrial and
producing objects of small and middle business, scientific and industrial objects,
storage facilities and bases, communal facilities (according to town-planning
reasons or some other town-planning documents).
The area partly caught sanitary-protection zone of the industrial enterprises
and also it got to the soundproof railway zone. The quarters of the area lying in
connection net from the south-east and west sides (from the side of Telman st.).
The available networks partly caught the borders of land property (from the side of
Telman st.).
According to information of potential energy suppliers, the distance to the
utility networks, which can be connected to the industrial park network, is*:
Energy source Distance Tacking
Water supply 405 m Heroes Stalingrad str., pipe network
29

DN=400 mm
405 m
Heroes Stalingrad str., pipe network
DN=200 mm
Sewage 405 m
Heroes Stalingrad str., sewage net
DN=300 mm
Natural gas 1000 m
Halusevyi side street, gas pipe line
DN=200 mm
Power supply 2900 m Halusevyi side street
Telecommunications
The net is lying inside the industrial
park territory
* Tacking:
The industrial park territory is situated at the industrial area, the place of
which is defined by position of Kremenchuk combined heat and power station.
Large industrial enterprises are situated in the territory of industrial hub. In the
process of industrial hub territory building, utility lines were designed with the
perspective of new enterprises production startup and already-existing enterprises
development. The economic situation in the country influenced the production
sphere development. The analysis of the current situation gives the reasons to think
that amount of industrial enterprises production, which are placed in the territory
of the industrial hub, decreased. It led to decreasing of energy supplies usage. That
is why, during industrial park building, its members will be able to use available
capacities of already-existing utility networks and also to create their own ones.
The utility interface and the terms of their laying can be changed during the
process of the general plan creation on the industrial park building.
8.2 The construction of the industrial park.
The construction of the industrial park is one of the main tasks of the
management company, which must agree the relevant plan with Kremenchuk City
Council.
Considering the city priorities of the production branches development,
Kremenchuk City Council admits a phased building of the industrial park territory:
Stage Period of
construction*
Expected
investment
amount,
Industrial park sectors
30

million
$ USD
Stage №1 2013-2015 170,0 Sector 1 – «Hi-Tech» (machical engineering).
Stage №2 2014-2016 80,0 Sector 2 – «Logistics» (logistics).
Stage №3 2014-2017 102,0
Sector 3 – «TechnoPolis»
Stage №4 2015-2018 -
Sector 4 – «EcoLife»
(reserved sector).
Stage №5 2014-2018 150,0
Sector р 5 – «Еnergetics» (alternative
energetics and machinery).
502,0 TOTAL AMOUNT
Tacking:
* The period of the industrial park construction depends on next factors:
- prompt financing and work performance on the industrial park territory
outfitting;
- executive management of the management company which must attract
industrial park participants;
- authorities and management company cooperation in consent documents
execution;
- domestic and foreign economic situation;
- availability of the body which will accompany the industrial park
participants.
Terms of the park construction may be changed during its development on the
basis of agreed issues of both parties.
8.3. Service Delivery.
Attracted by the management company, industrial park participants
conclude contracts about land sublease and services, which are provided by the
management company. The list of services and their conditions are set by the
management company of the industrial park and members of the industrial park.
9. Needed resources for the creation and functioning of the industrial
park and expected sources of their attraction.
31

№ The list of expenses Financing sources
Expenses,
thousands
UAH
1
Preparatory period of industrial
park "CENTRAL" creation
Municipal budget 1015
2
Development of design
specifications and estimates of
infrastructure creation for
providing the industrial park with
energy supply and transport
Municipal budget 768*
3
Performance of work oriented at
infrastructure creation for
providing the industrial park with
energy supply and transport
Municipal budget, State
Budget of Ukraine
25600
4 Forecasted amount of investment Management company
4016000 (502,0
million $ USD)
Tacking:
* The analyses of information, given by specialists in the sphere of industrial
facilities design, the amount of design specifications and estimates of industrial
objects designing is 3% to a quota. The preliminary cost of works on provision of
the necessary facilities of the industrial park can be 25.6 million. (3.2 million
USD), i.e. the size of the design work and preparation of estimates can be 0.768
million UAH.
Extract from Article 34 of the Law of Ukraine "On industrial parks": “State
support of works on provision of the necessary facilities of the industrial park can
be carried out by state and local budgets costs or by costs of any other authorized
sources.
The authorized state body, the Council of Ministers of the Autonomous
Republic of Crimea, local state administrations and executive bodies of local
councils in the manner provided by law, annually submit proposals to the State
Budget of Ukraine project and to the draft decisions of relevant local budgets on
financial support works on provision of the necessary facilities of the industrial
park.
On purpose of creation and functioning of the industrial parks the authority
supports management companies and initiators of their creation, providing them
with non-interest loans and non-refundable target financing of works on provision
of the necessary facilities of the industrial park. Management companies are
business entities and they receive costs provided by The Law on the State Budget
of Ukraine for the relevant year.
32

The cost works on provision of the necessary facilities of the industrial
park provided through co-financing budgets of Kremenchug City Council, Poltava
region budget and the State budget of Ukraine.
№
Kinds of works
The cost of
designing
(thousand,
UAH)
The cost of
building,
(thousand,
UAH)
The total
cost,
(thousand,
UAH)
The sources of financing
The state
budget
(thousand
/UAH)
The city
budget
(thousand
UAH)
Other
sources
(thousand /
UAH)
1.
Connecting to a power
line
500 22770 23270 5800 1860 15610
Cable line with total
length …meters
Building of transformer
substation
Switchgear installation
Internal supply line
Receiving of capacities
2
Connecting the water
supply
230 450 680 170 50 460
Laying the water supply
line with total length …
meters
Hydraulic unit building
Partitioning device
installation
Internal water supply
net
3
Connecting to the
sewage net
200 550 750 190 60 500
Lying the sewage line
with total length …
meters
Sewage pump station
building
Partitioning device
installation
Internal sewage net
4 Connecting to the gas-
supply net
150 750 900 230 70 600
Lying the gas-supply net
with total length …
meters
33

Gas regulating points
building
Partitioning device
installation
Internal gas-supply net
TOTAL SUM 1080 24520 25600 6390 2040 17170
Pro forma estimation:
Exact figures will be given during design estimate documentation.
Kinds of works
The cost
of one
running
meter,
UAH
Approximate
length, meter
Installation of
additional
devices,
substations,
thousand
UAH
The total
cost,
(thousand,
UAH)
Connecting to a
power line net
1200 2900 19290 22770
Connecting the
water supply net
1112 405 - 450
Connecting to the
sewage net
1112 405 100 550
Connecting to the
gas-supply net
500 1000 250 750
The scheme of communications laying
34

Connecting to a power line net
Connecting to the gas-supply net
Connecting the water supply net
Connecting to the sewage net
Connecting to the telecommunications
10. The organizational model of the industrial park functioning:
35

The initiator of the industrial park creation makes a decision on industrial
park creation.
The initiator conducts the tender on the management company selection.
The management company works out the industrial park building
development.
The management company concludes contracts with the industrial park
members. The management company is accountable to the industrial park initiator
and his authorized representative.
The decision to liquidate the industrial park is under jurisdiction of the
initiator of its creation.
The initiator of the industrial park creation independently determines
procedure for interaction with the management company.
11. Expected results of the industrial park functioning.
11.1 General tendencies.
36

- Implementation of the Kremenchuk City Council resolution on the industrial
park creation.
- Cash flow increasing to the budgets of all levels.
- New job places creation for Kremenchuk citizens and Kremenchuk district.
- Increasing the business activity level in Kremenchuk.
- Support of the small and medium business development.
- Increasing the Kremenchuk, Poltava oblast and Ukraine image.
- Implementation of the state Programs on investment secure, business
activity and social programs support.
- Investments increasing, secured to the real sector of economy.
- Attraction of the new technologies of goods and services production.
- Development of the partnership between members of the industrial park and
enterprises of the city, and also partnership with small and medium business
representatives.
- Increasing the social standards of life of Kremenchuk and its district
citizens.
- Activating the work of Kremenchuk northern industrial hub.
11.2 Expected results of the industrial park functioning.
Tacking:
* The amount of secured investments may be changed according to
management company work on the industrial park building development.
** The number of job places may be changed due to producibility of
enterprises, which will placed on the territory of the industrial park.
11.3 Expected advantages of the industrial park “CENTRAL”
functioning after its building development.
37
№ Index Amount Tacking
1 Expected investments amount, total* 502,0 million $ USD
1.1 Sector 1 – «Hi-Tech» (machanic endineering). 170,0 million $ USD
1.2 Sector 2 – «Logistics» (logistics). 80,0 million $ USD
1.3 Sector 3 - «TechnoPolis»
102,0 million $ USD
1.4 Sector 4 - «EcoLife»
(reserve sector).
-
1.5 Sector 5-«Еnergetics» (alternative energetics and
machinery).
150,0 million $ USD
2 Creation of new job places, total amount 4225 workers
2.1 Sector №1 1417 workers
2.4 Sector №4 -

№ Expected advantages
Sum,
thousands,
UAH
Tacking
1 Local budget (rent for land use) 2400
2 Taxes and fees:
2.1
Pension Fund of Ukraine*
64800
40% social due of enterprise
3,6% social tax of worker
2.2
Municipal budget (income tax)**
22300
15% on the part of worker’s
salary
2.3 Budget of Ukraine (VAT-20%) *** 88400
2.4 Budget of Ukraine (income
tax)****
10100
2.5 Multidisciplinary cooperation
impact
Will be clarified after
conclusion of appropriate
agreements
Tacking:
* The Pension Fund of Ukraine approved the average salary (income) per one
insured person in the amount of 2,932 hryvnia 06 kopecks which will be used in
determining the rate of wages for April 2013 setting the pension according to the
Law of Ukraine on “Obligatory state pension insurance”.
№ Index Amount
Investment, thousands,
UAH per year
Salary,
thousands
, UAH
per year
Investment,
thousands,
UAH3,6% 40%
1 Creation of new job places 4225 1794,806 19942,291 2,932 21737,097
1.1
Sector 1 – «Hi-Tech»
(machic engineering ).
1417 853,705 9485,606 2,932 10339,311
1.2
Sector 2 – «Logistics»
(logistics).
674 1079,164 11990,707 2,932 13069,871
1.3
(ІТ technologies and
electronics).
852 1623,812 18042,355 2,932 19666,167
1.4
(reserved sector).
- - - - -
1.5
Sector 5 – «Еnergetics»
(alternative energy and
machinery).
1282 1794,806 19942,291 2,932 21737,097
** Local budget
38

№ Index Amount
Salary,
thousands,
UAH per
month
Tax income
15%,
thousands
per year
2 Creation of new job places 4225 2,932 22297,860
2.1
Sector 1 – «Hi-Tech» (machic
engineering).
1417 2,932 7478,359
2.2 Sector 2 – «Logistics» (logistics). 674 2,932 3557,102
2.3
852 2,932 4496,515
2.4
(reserved sector).
- - -
2.5
Sector 5 – «Еnergetics»
(alternative energy and
machinery).
1282 2,932 6765,883
*** State budget VAT-20%.
According to information provided by the site http://finance.ua/, the
average amount of services, focused on saving the costs on the deposit accounts
with a charged interest in the end of the deposit year (in terms of dollars USA) for
legal bodies, is accounted by banks and is:
LEGAL ENTITIES DEPOSITS PER MONTH
1 month 3 months 6 months 12 months
UAH 13.50% 17.00% 18.00% 17.00%
USD 3.50% 5.00% 6.00 7.00%
EUR 3.50% 4.00% 5.00% 6.00%
Considering the fact that investment in production is more risky than
cooperation with the banking sector, the rate of capital return should exceed the
risk-free rate by the level of predicted risk.
In Ukraine it is thought that the level of the risk-free rate is adequate
according to the level of currency deposits of legal entities and the sum is paid
within 12 months since the opening of the deposit.
During calculations, the rate of return of the capital is set at 10% per
annum. Taking into account that expected investment amount is to be 502 million
$ USA, the rate of capital return will be 50,2 million $ USA.
One of the requirements for participants of the industrial park is that their
businesses must be profitable.
Considering the objecting reality, the level of the minimal profitability is
set at 10% level.
39

A minimum level of revenue from economic activities of the industrial
park participants can be 441, 8 million UAH per year.
As the practice shows, manufacturing companies choose general taxation
system, i.e. VAT.
In this case, the level of 20% VAT can reach 88.4 million UAH per year.
**** Income tax
The minimum income is set at the level of the minimal profitability of the
enterprise, which is 10 %, i.e. 40, 2 million UAH per year.
The income tax is 25 %, i.e. 10, 1 million UAH per year.
11.4. Invest project estimation
The investment project estimation on creation and functioning of the
industrial park will be held on the basis of agreed business plan of the management
company, which will win the tender on management company selection of the
industrial park “CENTRAL” in Kremenchuk.
40

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