Founded: 1703

Governor: Valentina Ivanovna Matviyenko  (elected October 5, 2003б reappointed 2006)

Federation Council Representatives: Sergei Mikhailovich Mironov; Vitaly Leontevich Mutko (executive, term expires October 2007)

Duma deputies: Andrey Aleksandrovich Benin (Admiralty district) (United Russia); Oksana Genrikhovna Dmitrieva (Southern district)(Independent); Valentina Nikolayevna Ivanova (West district)(United Russia); Alexander Vladimirovich Morozov (East district)(United Russia); Sergey Alekseevich Popov (Southwest district)(Independent); Gennady Nikolayevich Seleznyev (North district)(Independent); Peter Borisovich Shelishch (Central district)(United Russia); Andrey Vladimirovich Shevelev (Northwest district)(United Russia)

Population: 4,669,400 (2002 census)

Territory: 1,439 square kilometers
Distance from Moscow: 664 km
Federal district: Northwestern
Economic region: Northwest
Time zone: Moscow, GMT +3, EST +8 

Geography: St. Petersburg is located in the northwestern part of Russia in the Neva River delta on the Eastern coast of the Gulf of Finland.  The city is located on 44 islands formed by the Neva River and 90 additional rivers and canals.

Economy: Although the leading industry in St. Petersburg is machine-building and metalworking, St. Petersburg remains Russia's primary shipbuilding center. St. Petersburg's historical significance as well as its well-preserved architectural center has made it a center for tourism, which helps bolster the city's economy. Under the governorship of Valentina Matvienko, the city has undergone an investment boom, necessitating the construction of a new ring-road to facilitate technology campus' funded by Toyota, Ford, Heinz, and other multi-national producers. St Petersburg's educated labour market and proximity to European markets makes it an attractive assembly site for multi-nationals, happy to take advantage of cheaper costs and tax breaks, but retain some contact with EU markets.

Russian business is also relocating to the former imperial capital. The decision to build a the 400 meter Gazprom tower has caused some consternation among architectural critics, though perhaps Gazprom's decison to locate its head office in St Petersburg instead of Moscow more profoundly reflects the strong association between Governor Matvienko, President Putin and the St Petersburg team Putin brought with him to Moscow (including presidential possibility and Prime Minister Dimitry Medvedev). Other architectural projects of note completed or underway in St Petersburg include the exptraordinary refurbishment of the Konstantinovsky Palace, scene of June 2006's G8 Summt, and Norman Foster's renovation of New Holland Island in the city centre.

Private investment in the construction of a Sea Passenger Terminal in the western part of Vasilyevsky Island totalled some Rbs2 bln ($75.24 mln), though more than matched by federal investment of Rbs2.7 bln ($101.58 mln). A further Rbs2.6 bln ($97.82 mln)have been made available for 2007, with dredging and construction of the Sea Terminal accomplished. The property of the facility will belong to the Marine Facade Passenger Port of St Petersburg, whose sole owner is the City of St Petersburg.The investor’s equity funds and attracted funds will total Rbs6.147 bln ($231.26 mln) in 2006-2012. The facility will have a capacity of 1.2 mln passengers a year.

Ski Resort At Igora: A $50 mln investment will be enough to finish the second pahse of the Igora mountain ski resort in Leningrad region. Investors in the project are the St Petersburg based bank Rossiya, the Sogaz insurance company, the center for strategic research North-West and Severstal Group. Phase 1 opened in January 2006, costing $25 mln, comprising 9 downhill skiing tracks with a level difference of 120 m and a length of 1,210 m and 6 elevators, a 51 double-room hotel and a village with 28 two-storey cottages. The second sector, for which another $25 mln has been secured will have a skating rink, a restaurant, an indoor swimming-pool and a spa resort.

Transnefteprodukt’s Investment in Projects in Leningrad Region to Reach $330 mln in 2007 Investment in the construction of a new petrochemical pipeline through Kstovo, Yaroslavl, Kirishi and Primorsk and a terminal for the trans-shipment of light oil in the Vyborg District of the Leningrad Region will be $330 mln in 2007, according to Grigory Davas, vice governor of the Leningrad Region. The new petrochemical pipeline is expected to yield $200 mln to the Russian budget annually.

Conference Center: A new large exhibition centre will be built in southern St Petersburg, following the municipal administration’s negotiations with top officials from Russian energy giant Gazprom and its oil subsidiary Gazprom Neft. The project is estimated at $300 mln. Governor Matviyenko said the project would be implemented "exclusively at the expense of investors" on an area of 590,000 sq m near the town of Pushkin. There are plans to build a modern European-class centre with exhibition halls, hotels and large congress halls.

Infra-structure Investment: St Petersburg Governor Valentina Matviyenko and World Bank’s Managing Director Graham Wheeler signed a co-operation agreement aimed at developing infrastructure. "We need, first and foremost, technical assistance, consultations on investment projects, access to new financial mechanisms and international experience for developing St Petersburg’s infrastructure and economy," Ms Matviyenko said. Mr Wheeler confirmed that World Bank’s governors had considered a new strategy of relations with Russia based on the experience of cooperation with St Petersburg, including this cooperation agreement.
Milos Budin, Italy’s Vice-Minister of International Commerce, in a meeting with Leningrad Region’s governor Valery Serdyukov confirmed Italian firms would participate in constructing port facilities and logistics complexes in the Leningrad region. Italy already has a strong presence in the region, Budin cited the Merloni Termo Sanitari company, the world’s leading manufacturer of water and air heaters, in Vsevolozhsk.

Terminal/Port Hub: The Vistino Oil Terminal in Leningrad has been approved to receive over $400 million in investement through the Severo-Zapadny (North Western) Alliance Company. The terminal’s annual projected capacity is 10 mln metric tons of oil and petroleum products, to be later increased to 18 mln metric tons. Project expenditure will be recouped within seven to eight years. The number of port calls is planned at 240 a year, 200 of them by tankers. The terminal will start oil and petrochemicals trans-hipment in 2009.
At end 2006, Standard & Poor’s assigned international credit rating BB+/B and national rating ruAA+ with a stable outlook to St Petersburg’s Vodokanal water supply and sewerage company as the company is effectively an instrument of state policy. Support by its 100% owner, St Petersburg (BBB-/Stable/-), and a possibility of extending financial aid in an emergency have a positive effect on its solvency. “S&P expects direct financial support for Vodokanal SPB to grow in the middle term, ensuring funds for a greater part of the company’s investment programme. Combined with the expected rise in tariffs, this will allow Vodokanal to maintain financial performance on a level adequate to its rating and to improve its production in the middle term” said S&P credit analyst Yevgeny Korovin. "Unless something changes in the system of state support, the company’s ratings will most likely be changing together with changes in the rating of St Petersburg, although not automatically. In each case it will be an object of individual revision.”

Power-gen: At end 2006, 1.5 mln KW of new generating capacity had been commissioned in Russia, 650 mln KW of which was commissioned in St Petersburg, according to Valery Rodin, director general of the TGK-1 territorial generating company. A new South-Western territorial power generation facility would be funded through PPP, sourcing exclusively Russian capital. Total investment in the project is estimated at Rbs18 bln ($687.55 mln).

Petro-Chem: Vagit Alekperov, president of LUKoil confimed the company will develop its subsidiaries registered in the city, which, under the current tax legislation, will bring the St Petersburg budget Rbs3 bln ($114.07 mln) in taxes in 2007.

SEZs: A Special Economic Zone with a 20 yr life-span at the Neudorf industrial site in St Petersburg has been turned over to intended SEZ residents for office and production facility construction. St Petersburg’s Vice Governor, Mikhail Oseyevsky, chairs the supervisory board of the Neudorf technical and innovation special economic zone. The zone reduces profit tax to 20% and creates a special regime for import and exports and will effectively reduce the unified social tax by 12%, exempting zone residents from land and transport taxes.

Wood/Paper/Pulp: Svetogorsk, part of the International Paper holding, plans to commission a paper pulp factory worth $150 mln in mid-2007 producing paper and cardboard, Its capacity will be 200 tons of pulp per annum, facilitating an increase in wood processing from 1.4 mln cu m to 2.1 mln cu m a year.
The new facility will help to increase the processing of hardwood (aspen), which grows in abundance in the Leningrad Region but is nowadays rarely used in the timber industry. The Svetogorsk mill produces and sells printing paper, packaging and products of timber processing. It is one of Russia’s top 10 timber enterprises.

Gazprom: An agreement signed by Gazprom CEO Alexei Miller and Valery Serdyukov, governor of the Leningrad Region will ensure that budget-financed consumers pay 100% for current gas supplies, and will see the fixing of “economically substantiated gas consumption norms” for the population. The regional government will also finance the general gas supply development scheme of the Leningrad Region until 2015.

St Petersburg Exchange: Established in 1991 the St. Petersburg Stock Exchange is the third largest in Russia, after the RTS & MICEX. It has historically traded Gazprom stock, and held a monopoly on the trade until 2005, since which the exchange’s profitability has declined sharply. In April 2007 a St Petersburg International Exchange was launched on the basis of a partnership between RX, a British JV group and the North European OMX group, an international group working on more than 60 exchanges in 50 countries with a capitalization of over $770 billion (source: Kommersant).
At the launch Alexey Sergeev, Dep Gen Dir of the St. Petersburg Exchange, said that the biggest advantage the new exchange will offer investors is the ability to trade on foreign exchanges without undergoing listing procedures outside of Russia. Niklas Lilja, OMX head of information, said that trading will take place on the electronic Sucses system, an analog of the NASDAQ terminal. The Exchange made a net profit in Q1/2/3 of 25.8 million rubles ($1 million) compared to 48.6 million rubles in the same period in 2005.
 

Official website: http://www.gov.spb.ru

Contact information
Valentina Ivanova Matviyenko
Smolny
St. Petersburg 193060
Tel.: +7 (812) 276-45-01, 315-98-83
Fax: +7 (812) 276-18-27
E-mail: gov@gov.spb.ru

Press service contact
Boris Alexandrovich Ostrovsky
Tel.: +7 (812) 276 19 40
Fax: +7 (812) 276 10 67
Email: press-centre@gov.spb.ru

Chairman of Media and Press Committee:
Manilova, Alla Yuryevna
Tel.: +7 (812) 276-19-83
Fax: +7 (812) 276-62-61
E-mail: kpress@gov.spb.ru

Related articles:

Local Leaders the Key to Attracting Investment, Comment by Irina Aervitz, Special to Russia Profile, March 26th 2007 

Breaking New Ground For The Middle Class, By Shaun Walker, Russia Profile, June 14th 2006 

Redesigning the Power Vertical, By Paul Abelsky, Russia Profile, Feb 13th 2007 

Russia's Regions-to-Riches Success Story, By Ben Aris, Russia Profile & BNE, Dec 4th 2006 

New Faces, But No Dissidents, By Dmitry Babich, Russia Profile, Feb 121st 2007 

The Case for Domestic Reform, Comment by Luke McInerney, Special to Russia Profile, July 31st 2006 

Regional Laws of Attraction, Tatyana Danielyants, Russia Profile, Jan 26th 2005

The Economics of Doing Good,(Endowments in St Petersburg), By Anton Shirikov, Special to Russia Profile, Jan 25th 2007 

Сity Urged to Spruce Up Its Unwelcoming Image  The St. Petersburg Times  (Nov. 16, 2004)