Building Elabuga automobile plant - ELAZ

In 1985 in Elabuga city construction of plant producing tractors-cultivators was started, and in 1988 the Soviet government decided to convert the complex being in construction into production of small cars. It was originally supposed to create capacities for production of 600,000 cars per year.

By early 1991 on construction of Elabuga automobile plant large amounts of capital investments were made, which were factually frozen due to lack of funding. Thanks to the efforts of leaders of Russian Federation and Republic of Tatarstan the construction of buildings was in progress.

In order to create conditions for successful implementation of the program of capacities utilization of Elabuga automobile factory it was decided to establish a free economic zone on the territory of its industrial sites.

The basis for the establishment of free economic zone “Alabuga” was Presidential Edict “About state support of creation by production association “Elabuga Automobile Plant” the capacities for production passenger cars” dated on April1, 1996 and Decree of Russian Government adopted to fulfillment of Edict “About establishment in Elabuga capacities for production of passenger cars” dated on May 14, 1996.

April 22, 1998, Law of Republic of Tatarstan “About free economic zone “Alabuga” was adopted. To fulfill this Law, the Cabinet of Ministers of Republic of Tatarstan decided to establish a free economic zone “Alabuga” by Decree dated on November 10, 1998. The Decree defined the borders of FEZ, approved a package of documents regulating the mechanism of zone functioning. Its area is 16,5 km².

Free economic zone is established in the area that has a developed transport and production infrastructure. Aviation communication is made through international airport “Kazan” and “Begishevo”. Railway communication of industrial area of the plant with large railway junctions of Russian federation is enabled. Through a network of roads FEZ “Alabuga” has access to federal highway “Moscow-Kazan-Ufa”. Through deepwater transport system access to Black Sea and Baltic Sea is provided since April till November.

FEZ “Alabuga” was established to achieve the most favorable legal, investment and tax regimes that promote solving of following objectives:

•  investments mobilization to create modern automobile production;
• production of import-substituting products, including those used in automotive industry;
  
• creation of export-oriented industries.

The main specialization of enterprises planned to be created on the territory of FEZ “Alabuga” is automobile industry. It is supposed to create a series of joint ventures with participation of world leading companies within the framework of the program of creation a production of components for vehicle assembly. In 2002-2003 on the territory of FEZ is supposed to master production of car seats, high-voltage wires for ignition systems, air compressors of brake systems, shock absorbers and other spare parts for automotive industry. Construction of objects of zonal infrastructure (energy supply, water supply, transport and communication arrangement of the zone) will be linked to created enterprises.

Besides automobile industry, the zone is open to any high-performance and fast payback investment projects with participation of foreign and domestic investors, aimed at organizing the production of competitive goods and services for industrial and consumer purposes.

Start investments for organization of new industries on the territory of FEZ are supposed to be financed by mobilization the funds of outside investors, including foreign ones. In subsequent years investment sources will expand due to own funds of enterprises - participants of FEZ, as well as reinvestment of amount of tax benefits remaining at their disposal.

Free Economic Zone “Alabuga” is called to facilitate integration of Russian economy in the system of international relations, inflow of foreign investment into the region, modern foreign technologies.