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 1 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 10 industrial park. 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 11 boundaries of the industrial park. 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 12 andelectronics). 3.3.1.4 Sector 4 – «EcoLife» (reserve sector). 12 3.3.1.5 Sector 5 – «Еnergetics» (alternative energy and 12 engineering) 3.3.2 Business-city. 12 3.4 Organization of the industrial park "CENTRAL" 13 functioning. 3.4.1 Procedure for the industrial park creation. 13 3.4.2 Sources of funding for creation and functioning of the 14 industrial park. 4.Industrial and economic potential of Kremenchuk. Location and 17 land parcel size. 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 2 4.2.6 Industrial potential. 18 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. Term of the industrial park “CENTRAL” creation. 24 6. Requirements for the industrial park members. 24 6.1 Organization of the industrial park "CENTRAL" 24 functioning. 6.2 . Requirements for the industrial park members. 25 7. Planned consumption of energy and communal services by 26 the industrial park members. 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 32 park, expected sources of attraction. 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’ 38 functioning after its construction. 11.4. Investment project estimation. 40 3 THE INDUSTRIAL PARK CONCEPT 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. 4 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.).. 5 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. 1.2.3 Kremenchuk district as a part of Poltava oblast. 6 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. 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 an administrative center of Kremenchuk district. City population was 225,9thousand people as of February 1, 2013. The city is on 28 place of State Rating of Ukraine. The city is divided into two districts: Avtozavodskiy (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 7 2. The initiator of the industrial park creation 2.1 General Provisions According to Article 1 Law of Ukraine “On Industrial Parks”: «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 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 exercise 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.