RFNY-2013 - Invest In Moscow - Social Sector

Development of Moscow Social Sector

Leonid Kostroma

MOSCOW CITY INVESTMENT AGENCY

October 2013

2 | Development of Moscow Social Sector | 2013

Priorities in Social Sector

Education Sport

Healthcare Culture & Urban environment

2012 2013 2014 2015 2016


Moscow Budget is Society Oriented

5%

1,841

7%

Culture& Tourism

6,156

24%

Healthcare

Social Sector Budget Financing, M USD

30,000

20,000

0

10,000

Sport

1,183

Education

6,156

24%

Social support

8,030

40%

Total

25,378

100%

Moscow Budget for 2014

Other investment

Social sector*

49.4 49.2 49.4 48.6 47.9

44%

56%

44%

56%

49%

51%

45%

55%

44%

56%

Budget financing, B USD

*Social sector include: Social support, Healthcare, Education, Culture, Tourism & Entertainment, Sport

Healthcare

#63 City Hospital

Cardiology Center

Doctor is Nearby

1st PPP project in healthcare sector

29k sq.m. of reconstruction area

$145m of investments

$32m concession fee

20-30% of services provided to patients with mandatory health insurance

4.5-year lease

1.5 hectares of land

$80m of investments

130 beds

3 operating rooms

4 laboratories

25-30% of service by compulsory health insurance

Leasing benefits for 20 years

1 Rub per 1 sq.m.

Reconstruction and equipping medical offices

11 premises were conveyed to investors

18 premises are ready for auction

Overall 100 facilities

Developing private health care including public-private partnerships

Import substitution of medical services

Increasing accessibility to public and specialized medical facilities

Medical care within walking distance

23 polyclinics with $650m of investments

6 fixed facilities with $200m of investments

+46 units constructed with private investments

2014- 2016


Sports

Improving accessibility and attractiveness of the city’s sports infrastructure

Hosting the 2018 football World Cup

Constructing sports infrastructure

Developing tourist infrastructure


Luzhniki Spartak CSKA Dynamo

Size of the stadium, kilo seats 81 44 30 45

Investments, billion of USD 3,6 0,5 0,35 1,5

Football arenas with sport, hotel and other complexes

City Program for Sport, 2013-2016 years

Sport and recreation centers

Auctions were held to rent 15 land plots following the construction of sport and recreation centers. Auction is announced for 10 units. 60 land plots is going to be auctioned

11 football fields

7 cycle tracks

1 skiing resort

~80

Libraries – $350m

Cultural centers - $65m

Theatres and concert halls – $1,2b

Exterior lightening - $625m

Footpath area - $110m (2014y only)

Cinema – 2 lots with 10 theatres and $154m initial price till the end of 2013

Culture & Urban Environment

Nagatinsk Poyma Park

All-Russia Exhibition

Center

Park Zaryadye

300 meters from Kremlin

13 hectares of land

hotel with 340 rooms

$429m of investments, including $146m for hotel

Largest exhibition complex in Russia

237 hectares of total area

480k sq. m. of constructed area

361 hectares botanical garden

615 buildings

45 architectural landmarks

Peninsula park

94.8 hectares

298,6k sq. m. of commercial real estate

$900m of investment

Developing of public areas

Architecture and historic preservation

Balanced city-planning

Walking accessibility


Moscow river

The project covers embankments with 10% of territory of old Moscow

It includes construction of roads, bridges, developing recreation zones

Out-standing projects

2014-2016 program

for developing

Culture sector

Education in Moscow

1. Substantial market for education: 15m people in Greater Moscow. Annual wage rate $19.6k per capita

2. Highly educated families with high expectations regarding their children’s level of education

3. 96% of educational services are offered by public sector

4. Insufficient selection and availability/affordability of services by private organizations (sociological poll of foreign specialists)

5. High cost of services of private organizations

6. Low competition and weak satisfaction of demand


1Moscow Department of Education

Moscow education system1

No. of institutions No. of students, thous.

Kindergartens 1 851 423

General schools 1 457 825

Colleges 101 104

Universities 256 1 068

Priorities in Moscow Education

Guiding Principles City Program for Education, 2014-2016 years


$983m of investments:

60 preschools 16 schools 23 outbuilding of elementary school +56 preschools & 29 schools constructed with private investments

Reducing the deficit of educational services

Developing the private sector of the education system

Promoting competition in the industry

Increasing the quality of, and demand for, education

Building and remodeling schools, kindergartens and other institutions, including via public-private partnerships

Creating full-cycle educational facilities

Arranging schools in accordance with international standards

Preschool Education: Mechanisms

Mechanisms for developing pre-school education

Concession

3

Land Plot Rent

2

Preferential Premises

Rent

1


Preschool Education: Facilities Rent

Rental of premises for 49 years

Annual rent rate: 1 ruble per sq m

Opportunities

• Enrollment of children on a commercial basis

• $1.3k in budget financing per child (5-7 year) annually

• Receipt of secured loan under lease contract at MIA bank (special program)

Terms:

• Reconstruction in no more than 6 months

• Capital repair in no more than 3 years

Auctions held

Auctions announced

Preparation for auction

9 13 18

Current situation, 2013


Preschool Education: Land Rent

Lease of a land plot to construct an educational facility

Opportunities

• Enrollment of children on a commercial basis

• Preparation of urban land development plan at time of auction

• $1.3k in budget financing per child (5-7 year) annually

• Annual rent rate: 0.05% of cadastral value

Terms:

• Completion of construction within 5 years

Auctions held

Preparation for auction

3 2

Current situation


Preschool Education: Build-operate-transfer PPP

City:

• Provides land plot

• Licenses investor

• Buys service for people on waiting list

Investor:

• Constructs building

• Renders pre-school services, including for people on waiting list

• Transfers building to the city

$5.2k in public financing per child sent by the city from the waiting list

$1.3k in public financing per child enrolling on a commercial basis

1.5 years of construction

15 years of operation

>25% of children sent by the city


Schools

91.2% of general educational services are offered by state institutions

30% of students pursue extra-curricular activities

30% of school students visit sports clubs or practice fitness

50% of high school students take paid courses or study with tutors

$2k per student in budget financing for accredited private schools


Schools: Mechanisms

Rental of premises

• A similar program as for preschools is being developed for schools:

• Rental of premises for 49 years at rate of 1 ruble per sq m

• 4 facilities are being prepared for auctions

Demand from foreign communities and Russian families for education provided in line with global standards is growing. It’s recognized by many international universities. Average student fee is $20k per year. Currently 10 schools provided International Baccalaureate in Moscow.


New Moscow

• Creation of 1m jobs planned

• 9,700 children are in queue for pre-school in 2013

• +100 kindergartens will be built in the next 3 years, 50% by

private investors

• Large-scale plan to create educational clusters,

including placement of facilities for Moscow Institute

of Steel and Alloys on 60 hectares in Kommunarka

Resource: Moscow City Government


Thank you!

Leonid Kostroma

Moscow City Government

Moscow City Investment Agency

Strategy Deputy CEO

[email protected]

www.mosinvest.mos.ru


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RFNY-2013 - Invest In Moscow - Social Sector

Investor Relations