Murmansk gains status as a special economic zone

The new status comes with tax incentives and other economic benefits.

By Atle Staalesen, The Independent Barents Observer - May 18, 2020
Murmansk has a new designation as a special economic area. (Atle Staalesen / The Independent Barents Observer)

The federal Ministry of the Far East and Arctic last week officially approved Murmansk as a region of prioritized development. The new status includes a series of tax benefits and economic incentives meant to prepare the ground for a major hike in regional investments.

Special priority will be given to four projects, Deputy Minister Andrey Tyrtsev explained in an online ministry conference. Among them is the large Kola Yard that natural gas company Novatek is in the process of building in Belokamenka, straight across the bay from the city of Murmansk.

Lavna, a new coal terminal currently under construction, will be among beneficiaries, along with the Tuloma Sea Terminal, a seaport project developed by mineral fertilizers company Phosagro.

The four projects could generate up to 127 billion rubles of investment and create 1,500 new jobs, the ministry argues.

Another two projects are likely to be added to the priority list. A port at Liinakhamari is set to be developed by mining and metallurgy company Nornickel and includes major investments in a tourism complex and cruise ship terminal in the Pechenga border area near Norway and Finland.

And fishery company NOREBO will build a major refrigerating complex on the coast of the Kola Bay.

The latter two projects will include up to 16 billion rubles of investment and create 465 new jobs, developers say.

According to Murmansk Governor Andrey Chibis, the region will have major benefits from the new arrangement. The special projects will alone provide up to 40 billion rubles of regional tax revenues by year 2035, Chibis says in a comment.

The Murmansk regional government has named its initiative the “Capital of the Arctic.” Governor Chibis says the liberalized trade and investment conditions create the basis needed for the region to create “a new quality level of life for people in the Arctic.”

The decision to establish the special economic zone in Murmansk was taken in a meeting in Russia’s Arctic Commision in December 2019.