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Yalta Mayor, Crimea, predicts an influx of tourists and investors
Yalta, a marvellously beautiful place and a wonderful resort town, is often referred to as the epitome of a Crimean resort. Yalta has a potential to become a resort that meets all the world standard requirements. Its health-improvement potential is no lower than that of the well-known resort and recreation centres of Spain, Italy, Switzerland and of the southern coast of France.
The tourist services provided in Yalta and its tourist infrastructure are being constantly improved. By the end of last year, Yalta was ahead of all the other Crimean cities in practically all the social and economic indices. Yalta attracted about 60 percent of all the investments that were put into the development of Crimea. The number of tourists and investors keeps steadily growing.
A large-scale reconstruction that is being carried out in Yalta aims at creating conditions which would be able to attract at least six million tourists and holiday makers a year. In order to provide an appropriate infrastructure for that, Yalta needs more than 2.5 billion of investments. That is why one of the top priorities of the city authorities is to attract as many investors as possible.
In an interview, given to the Welcome to Ukraine Magazine, Mr Serhiy Brayko, mayor of Yalta, speaks about these and other topical issues.
Mr Brayko, what is the total of investments that have already been put into the development of Yalta?
As of today, it’s over 200 million dollars. By Ukrainian standards, it’s quite a lot of money. In the fall of 2003 we held a tender for investment projects and their original value increased by one and a half times, and this year these projects have begun to be implemented.
Have there been any investment projects offered this year?
Yes, this year’s session of the city council has considered several investment projects. Some of them deal with housing construction, others with such things as construction of a trade centre, reconstruction of Yalta’s central food market, reconstruction of a technical service centre, construction of hotel facilities, construction of a road, and construction of two motels. Some of them have been accepted and soon will begin to be carried out. A tender will be held for the rest of investment projects. All the projects are carried out in correspondence with the general plan of Yalta’s reconstruction. Yalta wants to renovate its tourist infrastructure, and create most comfortable conditions for the inhabitants of the city and for those who come to our town any time of the year. You see, Yalta’s weather is such that it could be attractive as a resort all the year round. Some of the investment projects will have to deal with a problem of having to move people out of the houses they live in now and provide them with new apartments. Construction of roads that will provide an easy access to the newly built facilities may also face some problems. There is a project to reconstruct Yalta’s central food market into a modern trade centre and it will require two and a half million dollars of investments. The new trade centre is planned to have two or three stories with the floor space of about 8,000 square metres. It should have enough counters to provide places for all those who want to come to the centre and sell their products. Such a centre should have a corresponding parking lot. There should be enough greenery at and around the centre. We plan to have the reconstruction completed in two years. Our experts estimate that there will be about 400,000 potential customers coming to the centre every year and that the revenues will be to the tune of 1,200,000 dollars a year. The recoupment of the project should take no longer than five years. If any of the readers find it an interesting idea, they may get further information at the website of Yalta’s executive committee www.yalta-invest.org
What is the biggest project?
It will cost more than 20 million dollars and will involve construction of a trade complex at the place where five non-food markets are presently situated, which is right in the central part of the city. The ground space they occupy is 9,000 square metres. The new large trade complex with the total floor space of about 40,000 square metres, will also have a hotel. Construction of an underground parking lot is an obligatory condition. The annual revenue is estimated to total 8 million dollars.
Who are the major investors now?
Mostly Russians and Ukrainians. Also, we have Swiss, Italian, British and German investors, but their share is not a large one. The big western capital is still assessing the situation, but we hope that soon things will soon change radically in our favour. Americans seem to be in the lead — we have already received a grant for the construction of a garbage disposal plant. It will be situated in the vicinity of Gaspra, a small township about thirty kilometres away from Yalta, and will have more capacity that Yalta actually needs now, but we plan to also use it for processing all that garbage that has accumulated in the past thirty years in many places. The grant constitutes 300,000 dollars and we will not have to pay it back.
Was it difficult to get this grant?
Little is known about Ukraine and its potential abroad, and we do our best to inform potential investors all around the world about advantages of investments into our economy. In 2002, our delegation went to Istanbul to study the work of an investment exchange which had been set up by a trade and development agency from the USA. We met there several US businessmen who found an idea of building a garbage disposal plant interesting enough, and we began negotiations which lasted for about eighteen months. Americans wanted us to provide more detailed information. There were several other proposals dealing with construction of a garbage disposal plant but they did not seem to be well substantiated, and so eventually we brought that project backed up by Americans to a stage of signing an agreement, and now we have the dates and the details all figured out. The plant is estimated to cost 25 million dollars to build.
The plant, in addition to dealing with garbage, will produce methane, the gas that can be of great use. I saw similar plants in other cities of the world, in Baden-Baden for example, and was impressed by their efficiency and usefulness. We’ll be able, thanks to the methane produced, to provide heating and hot water for all the small towns in the vicinity of Gaspra. Processing of garbage all around the world is a lucrative business, and mostly thanks to the energy of the gas that is produced as a result of garbage processing. Recoupment of this project should take no more than five to seven years.
How much does land cost within the boundaries of Bigger Yalta?
One square metre of the land that is situated closer to the sea is estimated to cost at the primary market from 200 to 500 hryvnyas.
How much land has already been occupied by recent projects?
In the past two and a half years, we gave 55 hectares of land to be used for investment projects. Four and a half hectares were given for the construction of private houses. It is about one percent of the whole territory of the city of Yalta proper. The rest of the land went to businesses and corresponding buildings. We still have only 40 hectares of land that can be used for housing construction. It is not that much land, really, but we have over four thousand people waiting to obtain decent housing, and to provide them with private houses would take a territory of 120 hectares. That is why we give preference to the construction of blocks of flats, encouraging construction companies to engage in such construction projects. We offer a company a plot of land to build a block of flats on, on condition that 20 percent of all the floor space in the house will be apartments that will go to those of Yalta’s inhabitants who need them. These houses will not have expensive, chic apartments but will be good and modern enough, and thus the housing problem will start being solved. Using such policy, we’ll have one “social benefits” house for every five blocks of flats built.
In 2002, 14,400 square metres of apartments were built in Yalta, and in 2003, 15,500 square metres of housing were built. The general amount of investments into the basic capital of all businesses, state-run and private, was 125 million hryvnyas.
We build both expensive and ordinary blocks of flats, and those that are situated closest to the centre of town bring the highest profits.
The primary market targets mostly the newcomers, since the secondary market can offer but little in the sector of good-quality housing.
In the past three years, the prices for houses and apartments on the southern coast of Crimea have been constantly going up, from one and a half to two and a half times a year on average. And this tendency continues, with the prices at the primary market ranging from 700 dollars to 2,000 dollars a square metre of living space. In Yalta, in the house closest to the waterfront, the prices go up to 3,000 dollars a square metre. In satellite towns within the boundaries of Bigger Yalta these prices can vary from 400 to 800 dollars. The prime cost of construction of a square metre is on average between 300 to 500 dollars, which makes housing construction a very lucrative business.
But what about the quality of this newly built housing?
Frankly, we do not always find it satisfactory. There are three major construction companies working in Yalta now. We do our best to involve other construction companies — the more companies we have, the bigger is the competition, and consequently the better the quality of the housing built.
We invite all the interested parties to take part in the tender for an investment project which has been recently prepared for the construction of several blocks of flats. They will be situated about a mile from the waterfront at a place with a territory of 0.4 hectare. The land will be given to the investor on a long lease term. The project will require no less than 2 million dollars of investments, and it should be carried out in two or three years, with the recoupment of the investment estimated to take three years. The obligatory condition — to provide land improvement and greenery around the houses, and build a children’s playground.
What kind of advice could you give to those who would like to build a private house somewhere on the southern coast of Crimea?
Unfortunately, such individual construction on the coast is getting to be increasingly problematic because there’s not enough land available. That is why I would advise to start construction somewhere beyond the by-pass road around Yalta, or still further beyond Route Yalta-Sevastopol or Route Yalta-Symferopol. It will be about three kilometres away from the sea, and there is a growing demand for land there. That land has a lot of advantages — bonus territories will allow to have larger plots; coniferous forests are in close proximity, and consequently they provide a cleaner environment and excellent views from the windows.
Where do you live?
I, like many other people in Crimea, prefer the mountains, and not the seacoast. I live in a small town quite a long way from the sea. It takes me about forty minutes to get to work to Yalta by car.
Can you name any other directions in the development of Bigger Yalta?
We are planning to start producing our own mineral water. Back in the fifties some of the mineral water sources were found in the territory of Bigger Yalta and further exploration has revealed that there are quite considerable amounts of good mineral water concentrated there.
We shall be developing the tourist infrastructure that will include hotels with indoor swimming pools, conference halls with medical and health improvement services and centres. At present such hotels and rest homes as Oreanda, Vremena Goda, Bristol, Levant, Dnepr and others have them. We’ll build diving centres, aquaparks and large dolphinariums.
The Crimean Natural Preserve will have a greater number of routes for tourists and a greater number of tourists will be allowed to visit.
We shall provide additional services in the off-season period as well. The tourist infrastructure at the section of the Plateau Ai-Petri situated near the cable road station has been improved and reconstruction work will soon be completed.
How many tourists and holiday makers are expected to visit Bigger Yalta this year?
Our estimate is — about two million people. Most of them will be, as usual, Ukrainians and Russians, but the number of tourists coming from Europe will increase one and a half times. There have been agreements to that effect concluded with foreign tourist companies. Some of such agreements were negotiated at the ITB International Exhibition held in Berlin in March this year. One of the biggest German tourist companies Dertour Reiseburo showed interest, and at the end of April 2004 120 German tourist agents and about a dozen correspondents came to Yalta to have a look. They were shown the best hotels in Yalta and then they were taken for a short sea voayage along the coast. The Germans were quite fascinated with the beauty of the landscape and were pleasantly surprised by the tourist infrastructure that they found to be at a European level. They liked not only Oreanda but other hotels and rest homes as well, including Bristol, Vremena Goda, Levant, Leto, and Pribrezhny which provide services and prices that meet requirements of the average Dertour tourist. Hopefully, we shall be having quite a few German tourists this summer. And there’s no doubt that the air will be as salubrious as ever, the sea as warm and the sun as hot as always. Come and see for yourselves. It’s better to see it once than to hear about it a hundred times.
Mr Brayko was interviewed by Valeriya Bondarenko