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building of the new passenger terminal at the International terminal is also associated with 2012, with the total sum of works put at UAH 1.9 bn.

“Also we cannot ignore the question of check points on the Ukrainian-Polish border. So there is also ongoing reconstruction at the existing check points at Rava Ruska-Hrebine, Krakovets-Korchova, Shehani-Meduka.

“As to hotels being built, all the requirements of UEFA regarding providing the requisite quantity and quality of room numbers, is practically complete.”

UBI: Are there any long-term benefits expected for the region from these projects? VH: “The priority put before Lviv region state administration by the President of Ukraine, is attracting investment. We understand that without an appropriate infrastructure serious investment is impossible.

“We understand perfectly that life does not come to an end after Euro 2012. Only someone without vision could ask the question – why invest so much money in putting on football matches when much of the country lacks more basic facilities? When Euro 2012 comes to the end, the participating teams and the fans will go home, but the roads, hotels, medical facilities and airport remains. These facilities will supplement and update the infrastructure of area which has not been significantly updated for decades.

“Hosting Euro 2012 will give Lviv Region the opportunity not only to update its infrastructure, but also provides the opportunity to introduce itself as significant tourist centre and to increase the flow of

tourists to the Lviv region.

“On May, 27th, 2010 in Lviv the Council of Regions the president of Ukraine initiated a bid for hosting the Winter Olympic Games 2022 in the Carpathians. So carrying out Euro 2012 will give the region the chance to advertise itself, and its significantly improves infrastructure, giving it a better opportunity to win the bid for the Winter Olympic Games 2022.”

UBI: What other plans does the regional or national government have for the region? VH: “According to the Ukraine Cabinet of Ministers order from August, 1st 2006 No.447-r ‘Approval of the industrial parks creation concept’ the Lviv region is to be the pilot region for the implementation of industrial parks development projects in

Ukraine. Lviv region state administration is gathering information to define the territories (the sites available, territories for the enterprises, etc.) suitable for creation of industrial parks which meet the interests of local communities. In order to create Industrial Park Cherlyany, a plot of 510 ha has been prepared and is ready to be transferred to potential investors. Under the scheme the project entails building of the centre for management, technology, science, educational services, commercial and business innovation centres.

“The industrial and production zone of the project entails building and operating of the chemical, metallurgical, machine-building, and metal-working industry enterprises from processing of timber to the building industry and the food-processing industry. The business plan for this development entails a projected cost of US $ 475 m.

The inadequate infrastructure, absence of opportunities for highly paid work, the reduced regional development and increased decline are to be tackled by substantial development of industrial parks which international experience has shown, can provide give a major stimulus for the national economy development as a whole.

UBI: What are the main foreign investments in the region? Are there any significant recent or planned investments (eg PKM Duda’s sale of unprofitable assets including planned purchases by Sweden’s Alpcot Agro AB)? Are there any regionally owned assets that are likely to be sold, in line with the National government sell-off of state assets. VH: “Up to July, 1st, 2010 the volume of direct foreign investments in the Lviv region is US $ 1151.8 m. During the period January to June, 2010 the biggest volumes direct foreign investment has been directed at the financial (47.8 % of total revenues). Considerable investments have been made in trading enterprises (19.9 %), and there has also been investment in real estate, rental sector, engineering and granting of services to businessmen (8.4 %). In industry direct foreign investments account for 16.1 % of total investments, of which two thirds are in mechanical engineering.

“Lviv state regional administration has also been heavily involved in the building of a mine for the extraction of coking coal in Lubela village, Zhovkva_district; the investor is Lubel Coal Company through Stelex LLC (USA), building a new factory OJSC

40 UkraineBusiness insight October/November 2010

Mykolaivcement, establishment of the firm Lafarge (France, dry cement manufacture), completion of the Dobrotvir thermal power station-2 OJSC Zahidenerho, development of the wholesale market for agricultural production at Shuvar in Lviv.”

“The executive periodically conducts monitoring of investment activity, collecting data about innovative investment and infrastructural projects, which are achieved with help of private investment, including foreign investment.”

UBI: Ukraine is keen to attract foreign investment, so the decision of Hewlett Packard to abandon plans to build a resource centre for counties in the region here in Lviv must have been a painful blow. Can you elaborate on exactly why they decided to withdraw, and what is being done to avoid any repetition? VH: “As a result of close cooperation between the Lviv regional state administration, the Cabinet of Ministers of Ukraine, the Ministry of Economics of Ukraine, the Lviv city council and other enforcement authorities, all steps possible have been made to support the investment project, opening the Hewlett- Packard Global Business-centre in Lviv. This project would entail operation of outsourced business-processes, granting of general services to customers in different parts of the world.

“The company has not rejected the possibility of opening of such a Centre in Lviv, and Lviv regional state administration will provide every assistance to the establishment of this project.

“I can also inform UBI readers that Nestle

has decided that before the end of 2010 it will open a Global Business-centre in Lviv to handle outsourced services.“

UBI: How do you think that the new proposed Public/Private partnership will affect investment in the Lviv region? VH: “In the first half of 2010 this investment was involved in more than 1000 enterprises in the Lviv region. The largest investment projects, which were successfully and effectively developed are: the garment factory Danish textiles (Denmark); Odv-elektrik (Germany); Agro Limited (Netherlands); Volksbank (Austria), among others. Some projects are still under implementation. Lviv region was and remains the one of the most №nvestment- attractive regions in Ukraine, it is a market with dynamic development, rich potential resources and highly qualified labour.” UBi

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