Sino-Russian firm to build 5-star hotel in Vladivostok free port

The container terminal in the commercial port of Vladivostok

The container terminal in the commercial port of Vladivostok

Lori / Legion-Media
A Sino-Russian joint venture will invest $78.2 million in the construction of a five-star hotel. Russian officials expect a flurry of investments in the new free port zone.

The Free Port of Vladivostok, a zone with special economic and fiscal conditions in Russia's Far Eastern Primorye Territory, has attracted its first investor. The Sino-Russian Tikhookeanskaya Invetitsionaya Kompaniya (Pacific Ocean Investment Company) will build a five-star hotel in the Slavyanka settlement, 170 kilometers south of Vladivostok, Vladimir Miklushevsky, Governor of the Primorye Territory said.

The corporation, a joint venture between the Russian Transit-DB Holding and two Chinese companies: Zhun Gun Sin, which manages Chinese state assets, and the High Way construction firm.

The joint venture will invest 5 billion roubles  ($78.2 million) in the construction of the 182-room hotel.

"The investors are sure that the hotel will start operating in two years,” Russian Deputy Prime Minister Yuri Trutnev said. He added that a project for the construction of the Zarubino port has also been approved, but said the investor was still looking to obtain finances.

“But the investor (for the port project) has still not completely determined the financing sources, which is why the decision about the entity's status has still not been made,” Trutnev, who also heads of the free port’s observation committee said.

An important project

Vladimir Miklushevsky said the new hotel is the first step in a large-scale project to create a multimodal transportation-logistics complex and bunker hub in Slavyanka.

The Slavyanka Port is one of the pivots of the Primoriye-2 international transportation corridor running from the Chinese city of Changchun to the Russian port of Zarubino, which will be designated as a territory of accelerated development.

Miklushevsky said fiscal and customs benefits in the free port will reduce the costs of projects by 30 to 40 percent.

Investors' interest

“Both Russians and foreigners are demonstrating enormous interest in the free port," Miklushevsky said. During a recent expo in Harbin, a Chinese investor voiced his interest in the free port regime, he added.

“A large South Korean company also stated that it would like to create a fish processing plant in the zone,” Miklushevsky said.  The First Deputy President of Dubai Port World, one of the largest port operators in the world, visited Vladivostok, and said that the company intends to invest in the development of Primorye's transportation infrastructure.

A law on the Vladivostok Free Port went into effect on October 12, 2015, introducing special rules on doing business in the region, including the establishment of duty-free import of goods and tax holidays on property and land.

The Russian government believes the free port regime will help double the Primorye Territory's gross domestic product by 2025. It also expects 84,700 new jobs to be created by 2021, and 108,000 by 2025.

The overall size of the territory that the free port regime covers is 28,400 square kilometers, which includes a population of 1.4 million people.

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