Nakhodka -- Free Economic Zone

Nakhodka FEZ is a hilly area with the average heights of 600-700 meters (2,000-2,300 feet) above sea level. Maximum heights are 1,300-1,600 meters (4,250-5,250 feet). Seven rivers cross the FEZ territory, the largest of them is the Partizanskaya with a basin area of 4,140 sq. km (1,591 sq. miles). The Zolotaya Dolina (Golden Valley) stretches along the river which is protected by the hills from the West and the East. Agriculture is well-developed in the Zolotaya Dolina (Golden Valley). The FEZ territory possesses mineral reserves of granite, colored marble, limestone, gold, and coal. The unique flora and fauna of the Ussury Taiga may allow for commercial collection and processing of eleutherococcus, ginseng, fern, Schizandra Chinensis. The coastal zone of the Sea of Japan is a rich source of seafood such as shrimp, trepang, and scallop.

The Administrative Committee has come to the decision to develop the local territories of FEZ. This does not involve great financial investment or any complicated procedure of coordination with the government of the country. Among the various ways for such a development is to establish zones for export production, and a free port zone for processing products under customs control. The work of establishing a Free Customs Zone has begun as the first step of the program. Importation of the technical equipment to the FCZ will be duty free. There already exists a discount system for enterprises exporting their products, or for enterprises producing previously imported merchandise.

Among the list of FEZ major projects the most attrative for the foreign investors are:

• Heat and Power Plant with the power of 250 MW. The first stage: the plant must provide energy to the Vostochny (Eastern) Port, the American Industrial Park, and the Korean Industrial Complex. When it attains its design capacity the plant will also supply the city of Nakhodka and the Partizansky Region. The cost of the project totals $370 million. Payback time is 4-5 years.
• Reconstruction of the Military Aerodrome, Zolotaya Dolina (Golden Valley), situated 25 km (16 miles) from Nakhodka. It is expected that the volume of Airport traffic may be a total of 300,000 tons of freight and 100,000 passengers per year. Currently only local freight operations are available. The cost of the project, including the reconstruction, totals $150 million. Payback time is 7 years.
• The Russian-American Industrial Park is the name of the complex of customs and distributory storehouses in combination with enterprises of light industry and assembly industry, and also enterprises specializing in processing timber, metal, and food.
• The Russian-Korean Industrial Complex - 100-150 enterprises are designed to be located in an area of 330 hectares (815 acres), 6 km (4 miles) from the Vostochny (Eastern) Port, and 12 km (7 miles) from Nakhodka. It is expected that the output of these enterprises will total $1 billion per year, two thirds of which will be exported.
• Reconstruction of the timber-exporting joint stock company NakhodkaLes is planned. Freight turnover is estimated at 2 million cubic meters (71 million cubic feet) of timber. A volume of investents is expected to be $120 million dollars. Payback time is 9 years. A construction of a new specialized timber port is planned as a part of this project.
• The construction of a grain-storage complex in the Vostochny (Eastern) Port will involve a volume of investments totaling $210 million. Turnover capacity is estimated at 6 million tons per year. Payback time is 6 years.

The Committee develops cooperation with such organizations as OPIK (USA), which is ready to finance American companies working in the Russian Far East. Contacts with EBRD (European Bank of Reconstruction and Development) have begun. Nakhodka FEZ is a member of the Worlwide Association of Export Zones.

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