OREANDA-NEWS. September 20, 2010. Head of Karelia Andrei Nelidov was working in Kostomuksha where a session of the Council of the Republic devoted to development of the four northern territories Kostomuksha district, Byelomorsk, Kalevala and Louhi regions was held.

Before the beginning of the session Andrei Nelidov has held a meeting in the administration of the town, visited a number of the leading enterprises of Kostomuksha: Karelsky Okatysh, Inc., mining enterprise, AEK, Ltd., enterprise producing electrical elements for cars and SwedWood Karelia, Ltd., forestry enterprise, met with their management. All conversations concerned short-range plans for teamwork and involvement of new investments in Kostomuksha's industry.

Kostomuksha district inhabited by 4.4% of the population of Karelia currently provides 35% of total production of goods and services in the republic. Though the crisis phenomena have affected local economy just the same as any another, it became possible to overcome consequences of crisis there. Industrial and small enterprises gradually restore their positions. Results of seven months of the year is 98.6% to the level of the pre-crisis 2008 having 2.2-fold exceeded the level of the 2009 year of crisis.

Count one of the trip was visiting Karelsky Okatysh, Inc. The enterprise largest in town and one of the republic's primary taxpayer has almost restored its pre-crisis level of production. The program of further modernization assumes to increase productivity considerably and to lower production costs.

Andrei Nelidov and Director General of Karelsky Okatysh, Inc., Maxim Vorobiev have discussed results of performance of the quadripartite agreement between the Government of the republic, Karelsky Okatysh, Inc., iron ore mining complex, Severstal Resources corporation which part the mining enterprise is and the local government of Kostomuksha urban district.

According to this document, if the enterprise pays taxes in excess of the plan, the republic channels some funds for the needs of the borough. The mining complex has assumed obligations to transfer surtaxes to the budget, preserve workplaces, pay wages without undue delay, continue social programs and provide uninterrupted heat and hot water supply for the townspeople. In turn, the Government of Karelia renders the iron ore mining complex and the town various kinds of the state support. One of results of performance of the quadrilateral agreement was opening of a new swimming pool for the townspeople last October which Andrei Nelidov has visited. Head of Karelia has express high opinion of quality of the object and stated a wish that objects of this kind appear in other towns of Karelia. The following steps of the agreement performance should become formation of sites for housing construction in Kostomuksha and construction of a modern biathlon run able to host world-class competitions.

Another object which Head of Karelia visited in Kostomuksha was the local airport. As a result of planned reconstruction and extension of the runway, the airport which basicly serves the needs of Severstal company will be able to receive not only the Antonov An-2 and An-28 aircrafts, but also larger planes and, thus, renew its active work. In the furture it is necessary to make it international, and then the Kostomuksha's 'air gateway' will open for tourists from Nordic and other countries. Andrei Nelidov has closely discussed opportunities of organization of additional flights through the airport of Kostomuksha by means of airline which belongs to Severstal with the management of the town, Karelsky Okatysh, Inc., and Severstal company. It will allow, in view of mutual interests, to extend the number of flights through the territory of the republic, to establish regular connection with Moscow, St.-Petersburg and Helsinki through Petrozavodsk, having stimulated development of tourism and business contacts.

Another example of successful partnership between authorities and manufacturers is cooperation between the government of Karelia and AEK, Ltd. This enterprise producing wire bundles for Volvo and Scania has more than 800 employees, mostly women. With the crisis began proceeds of the enterprise have become 80% less, owing to joint efforts of the authorities and management the situation was stabilized. The enterprise started to work full time, pays wages which on the average makes 16,000 roubles and taxes in due time. It was possible to avoid mass personnel reduction, on the contrary, now the enterprise opens new vacancies. One of the problems is staff recruitment, as inhabitants of the nearby settlements do not want to travel to work every day by commuter buses. Head of Karelia has offered the management a joint mechanism of construction of service housing for workers here, in Kostomuksha. He has mentioned that the government is ready to render all-round support to such project. Andrei Nelidov has taken a look over the shops of the enterprise, has closely familiarized with its products, talked to workers.

Head of Karelia has also visited SwedWood Karelia, Ltd., wood processing complex, subsidiary company of the Swedish IKEA concern. In August, 2006 there has been launched a saw-mill, in a year – glueing shops of the plant producing furniture boards. Implementation of the third stage of the investment project which is construction of a factory producing solid wood furniture is currently considered. According to the business-plan there will be 650 employees engaged in logging in Kalevala region of Karelia and in wood-working in Kostomuksha.

Having got acquainted with social and economic situation in Kostomuksha in detail, Andrei Nelidov has noted:

– It was no mere chance that this town was chosen a venue for the session of the Council of the Republic devoted to investments. Kostomuksha may set the example for the whole Karelia. There are reasonable attitude towards nature, a strong economic component, modern technologies here. Thus, future of the town is created not only due to Karelsky Okatysh, Inc. It has many other investors, including foreign, all of them make a profit. If our republic could consist of such municipal districts, life in Karelia would become much better. First of all, everything depends on people, proprietors, their conscience, their attitude towards the population of the area, towards their native land. Therefore, we want other people learn the experience gained here, to have more towns like this in Karelia.

During the trip Head of Karelia was accompanied by the deputy of the State Duma Valentina Pivnenko, Chief Federal Inspector in the Republic of Karelia Alexander Hynninen, heads of ministries and agencies of Karelia.