Participants of investment projects with government means will not escape from import substitution

The White House is embeding a government commission on import substitution in a system of giving of preferences to foreground investment projects. According to amendments of the Ministry of Economy to a not yet accepted new wording of the law of purchases of government companies, the commission will be able to select important investment projects itself. They will get access to the government financing, but even private companies will have to reveal information about purchases ans use deliveries of domestic producers.

The Ministry of Economy has prepared a new package of amendments to the law of purchases of government companies (223-F3). It will add government amendments, taken by the State Duma in the first reading on September 15th,  in the second reading. “The amendments to amendments” widen plenary powers of the commission of the government on import substitution. Now there are investment projects more expensive than 10 billion rubles and after taking of the amendments the commission will be able to select foreground projects despite the cost and include in the register of foreground ones. As «РЄ» deputy the head of the Ministry of Economy Evgeniy Elin explained, the order was given by Prime Minister Dmitriy Medvedev during the first session of the commission.

The amendments enter a number of restrictions for participants of investment projects with the government support. According to the bill, among them are addressees of government guarantees ( including those on credits and within the bounds of the project financing), or executors of the project, more than 10% of them are financed with the budget (investments and subsidies), the Russian National Wealth Fund and VEB. The credits of the last one are a form of government support, as “РЄ» explained in the Ministry.

Means of the Russian National Wealth Fund can be represented for reconstruction of BAM and TSR and electric grids for them (OJSC Russian Railways, the Federal grid company). Subsidies are given for numerous projects in Crimea, including building of a bridge on the peninsula and roads, and the Far East. The largest project in metallurgy, that has already been realizing with attraction of 50 billion rubles of the means of VEB, is parity “Rusal” and “RusGidro” Boguchanskoe electric and metallurgy association. ChTPZ uses government guarantees: the group has restructured debts at the expense of two syndicated credits for 86,46 billion rubles under government guarantees for 43 billion rubles and in June 2015 it got regional government guarantees for 8 billion rubles.

For participation in such projects and state companies which are customers (such as “Rosneft” and “Gazprom”), and private companies (such as LUKOIL) will have to buy products which belong to mechanical engineering, according to criteria of the law of purchases of state companies, including duty to get agreement on these purchases with the government and publish their lists and requirements, that are not a state secret, to customers. To avoid publication of of datum of purchases, a company will have to get agreement on this question with the commission on import substitution. The commission will also “coordinate activity of the authorities” with the aim of “creation of conditions for timely and full satisfaction of customers' needs” in products of mechanical engineering. According to the bill, before creating lists of controlled products (they must include assortment, prices, quantity, characteristics, planned volume of purchases, datum of expected suppliers, including the foreign ones, and recommendations for transference of production to the RF) customers “mustn't include products of mechanical engineering in the plans of purchases” more expensive than it was stated by the government.

According to the words of Mr. Elin, this part of amendments is directed not only to support of large business, which usually realize such projects, but also to support of domestic producers. “Purchases of expensive mechanical engineering products must be coordinated with the state commission on import substitution. It will allow to limit foreign deliveries indirectly by making executors of such projects support domestic producers”, he said.