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Developed by Business
Consulting Institute
January, 2011
Feasibility Study
for establishing
Edinet Industrial Park
Feasibility Study for establishing the Edinet Industrial Park


Feasibility Study on creation of Edinet Industrial Park
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Contents
Tables ................................................................................................................................................ 3
Abbreviations ................................................................................................................................... 7
Terms................................................................................................................................................. 8
1. Analysis of the IP region ........................................................................................................... 12
1.1. General overview .................................................................................................................................12
1.2. Social and cultural development ...........................................................................................................12
1.2.1. Human Capital ............................................................................................................................12
1.2.2. Labour force ................................................................................................................................15
1.2.3. Social infrastructure ....................................................................................................................16
1.3. Economic profile ..................................................................................................................................17
1.3.1. Industry .......................................................................................................................................21
1.3.2. Agriculture ..................................................................................................................................23
1.3.3. Services ........................................................................................................................................23
1.3.4. Entrepreneurship .........................................................................................................................24
1.3.5. Investments ..................................................................................................................................26
1.3.6. Infrastructure ..............................................................................................................................27
1.4. Reasoning the need for the IP ...............................................................................................................28
2. Description of the Industrial Parks Concept ......................................................................... 31
2.1. IP concept ............................................................................................................................................31
2.2. Analysis of the opportunity for creation of a Business Incubator within the IP .....................................33
2.2.1. Estimation of the demand for production areas and services for businesses hosted by BI .............34
2.2.2. Concept of creation of BI within the IP ........................................................................................35
2.3. Reasoning the technical option for IP establishment .............................................................................36
3. Description of the Industrial Park ........................................................................................... 40
3.1. IP organization and operation ..............................................................................................................40
3.2. Land ....................................................................................................................................................44
3.2.1. Legal nature of the land ...............................................................................................................45
3.2.2. Land characteristics .....................................................................................................................45
3.3. Utilities and infrastructure ...................................................................................................................45
3.3.1. IP land development ....................................................................................................................45
3.3.2. Necessary utilities .........................................................................................................................46
3.3.3. Internal infrastructure .................................................................................................................48
3.3.4. External infrastructure ................................................................................................................50
3.3.5. Buildings ......................................................................................................................................51
3.3.6. Labour force required for the Industrial Park activities ...............................................................52
4. Assessment of investments in the IP ........................................................................................ 53
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4.1. Land ....................................................................................................................................................53
4.2. IP land arrangements ...........................................................................................................................53
4.3. Internal infrastructure .........................................................................................................................54
4.3.1. Investments in internal infrastructure ..........................................................................................55
4.4. External infrastructure ........................................................................................................................56
4.4.1. Investments in external infrastructure .........................................................................................56
4.5. Buildings ..............................................................................................................................................57
4.6. Assessment of costs for training labour force ........................................................................................57
4.7. Total investments .................................................................................................................................57
5. Project feasibility analysis ........................................................................................................ 59
5.1. Introduction .........................................................................................................................................59
5.2. General work assumptions ...................................................................................................................61
5.3. Basic model of the Public Sector Comparator.......................................................................................61
5.3.1. Cost estimation and their assumptions .........................................................................................61
5.3.2. Income estimation and their assumptions .....................................................................................66
5.3.3. Results of the basic PSC model .....................................................................................................68
5.3.4. Risk-adjusted PSC model .............................................................................................................69
5.4. Reference model of Public-Private Partnership ....................................................................................72
5.4.1. Options for project implementation through PPP ........................................................................72
5.4.2. Type and structure of PPP project ...............................................................................................75
5.4.3. Payment mechanisms ...................................................................................................................76
5.4.4. Costs of PPP reference model .......................................................................................................77
5.4.5. Income estimation and their assumptions .....................................................................................79
5.4.6. Results of PPP reference model ....................................................................................................80
5.4.7. Risk-adjusted PPP reference model ..............................................................................................80
6. Economic and financial forecast of Managing Company activity ........................................ 83
6.1. Sensitivity analysis of the Managing Company .....................................................................................88
7. Plan of IP implementation ........................................................................................................ 90
7.1. Institutional forms of IP establishment .................................................................................................90
7.2. Stages of IP establishment ....................................................................................................................93
8. Industrial Park impact over the zone ...................................................................................... 96
8.1. Economic impact ..................................................................................................................................96
8.2. Social impact ........................................................................................................................................97
8.3. Environmental impact ..........................................................................................................................97

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TABLES
Table 1. Resident population of Edinet district, thousand inhabitants ........................................................... 12
Table 2. Population by sex and age groups .................................................................................................... 14
Table 3. Main indicators of labour force, persons .......................................................................................... 15
Table 4. Distribution of employed population by main types of activity, persons ......................................... 16
Table 5. Infrastructure of educational institutions, 2005-2009 ....................................................................... 16
Table 6. Cultural and healthcare infrastructure .............................................................................................. 17
Table 7. Distribution of economic entities by types of activity, 2005-2009 .................................................. 18
Table 8. Annual average number of employees, thousand persons ................................................................ 20
Table 9. Top 10 economic entities (by sales volume) as of 01.01.2009 ......................................................... 20
Table 10. Main indicators of the industrial activity of Edinet within 2005-2009 .......................................... 21
Table 11. Evolution of the number of industrial enterprise within 2005-2009 .............................................. 21
Table 12. Industrial-production staff, 2006-2008 ........................................................................................... 23
Table 13. Indicators of activity of SMEs from Edinet district ....................................................................... 25
Table 14. SWOT analysis of Edinet Industrial Park....................................................................................... 29
Table 15. Operational plan of the Business Incubator (Q - quarter ) ............................................................. 36
Table 16. Incubation schedule of BI Residents .............................................................................................. 36
Table 17. Structure of the Industrial Parks lands .......................................................................................... 38
Table 18. Structure of Residents zone ........................................................................................................... 39
Table 19. Needs of enterprises of Edinet IP in public utilities ....................................................................... 47
Table 20. Structure of the land occupied by production premises of Edinet IP ............................................. 52
Table 21. Amount of investments needed for development of Edinet IP land ............................................... 54
Table 22. Summary volume of investments required for creation of internal IP infrastructure, thousand
MDL ............................................................................................................................................................... 55
Table 23. Summary volume of investments required for creation of external IP infrastructure, thousand
MDL ............................................................................................................................................................... 56
Table 24 Investments required to build production premises, thousand MDL .............................................. 57
Table 25. Capital costs of the project ............................................................................................................. 58
Table 26. Sources of financing capital costs of the IP created through traditional public procurement
mechanisms .................................................................................................................................................... 62
Table 27. Distribution of costs for Edinet IP project, thousand MDL............................................................ 64
Table 28. Maintenance cost assumptions ....................................................................................................... 64
Table 29. Assumptions of management costs ................................................................................................ 65
Table 30. Maintenance and administration costs, MDL ................................................................................. 65
Table 31. Assumptions on income from lease and services ........................................................................... 66
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Table 32. Prices for consulting services and lease of conference and protocol halls ..................................... 68
Table 33. Estimated income, MDL ................................................................................................................ 68
Table 34. Project costs and incomes according to the basic PSC model, thousand MDL.............................. 68
Table 35. Risks and assumptions .................................................................................................................... 71
Table 36. Project performance indicator realized according to the PSC model ............................................. 72
Table 37. Structure of Industrial Park land ..................................................................................................... 72
Table 38. Structure of the Industrial Park, option 1 ....................................................................................... 74
Table 39. Structure of the Industrial Park, option 2 ....................................................................................... 75
Table 40. Structure of the Industrial Park, option 3 ....................................................................................... 75
Table 41. Sources of income for the IP Managing Company ......................................................................... 77
Table 42. Capital costs of the project for the 3options, thousand MDL ......................................................... 78
Table 43. Sources of funding IP project for the 3options, thousand MDL ..................................................... 78
Table 44. Investment costs of the project of Edinet IP implemented through PPP contract, thousand MDL 79
Table 45. Main performance indicators of the PPP reference model ............................................................. 80
Table 46. Risk Allocation ............................................................................................................................... 81
Table 47. Risks retained, calculated for PPP reference model, option 1, MDL ............................................. 81
Table 48. Main indicators of the risk-adjusted PPP reference model ............................................................. 82
Table 49. Present value of flows of the private partner according to option 1, thousand MDL ..................... 84
Table 50. Present value of flows of the private partner according to option 2a, thousand MDL ................... 84
Table 51. Present value of flows of the private partner according to option 2b, thousand MDL ................... 85
Table 52. Present value of flows of the private partner according to option 3, thousand MDL ..................... 86
Table 53. Results of financial analysis of the private partner within PPP ...................................................... 86
Table 54.Results of financial analysis in case when the technical and production infrastructure is funded by
the private partner ........................................................................................................................................... 87
Table 55. Amount of administration fee in both cases of PPP establishment ................................................ 87
Table 56. Main stages in establishment of Edinet Industrial Park ................................................................. 93
FIGURES
Figure 1 Structure of the population by areas (%), Edinet district during 2007-2009 ................................... 13
Figure 2. Structure of the population by age, Edinet (2009) .......................................................................... 13
Figure 3. Population by age categories ........................................................................................................... 14
Figure 4. Population by sex and age categories .............................................................................................. 14
Figure 5. Evolution of the number of economic entities within 2005-2009 ................................................... 18
Figure 6. Structure of economic entities sales by types of activity, 2009 ..................................................... 19
Figure 7. Evolution of the volume of sales by the economic entities from Edinet, thousand MDL. ............. 19
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Figure 8. Dynamics of industry structure in Edinet, enterprises, 2005-2009 ................................................. 21
Figure 9. Evolution of industrial production, 2005=100% ............................................................................. 22
Figure 10. Fabricated production, 2007-2009 (mln. MDL) ............................................................................ 22
Figure 11. Evolution of the volume of paid services provided to population (thousand MDL) ..................... 24
Figure 12. Evolution of enterprises and employees within 2005-2009 (2005=100%) ................................... 24
Figure 13. Evolution of enterprises and employees within 2005-2009 (2005=100%) ................................... 25
Figure 14. Structure of investments by types of ownership, 2009 ................................................................. 26
Figure 15. Distribution of private investments by types of activity ............................................................... 27
Figure 16. Some measures that will be included in the IP Regulations on Environmental Protection .......... 98
ANNEXES
Annex 1. Basic economic indices of enterprises that may be located in Edinet IP ........................................ 99
Annex 2. Capital costs of the project, MDL ................................................................................................. 100
Annex 3. Distribution of project capital costs, thousand MDL .................................................................... 104
Annex 4. List of IP Managing Company staff .............................................................................................. 105
Annex 5. Maintenance and administration costs, MDL ............................................................................... 106
Annex 6. Matrix of Risks ............................................................................................................................. 107
Annex 7. Risk value in case of establishing IP through the traditional mechanism of goods and services
procurement .................................................................................................................................................. 112
Annex 8. Present value of risks in case of establishing IP through the traditional mechanism of goods and
services procurement .................................................................................................................................... 114
Annex 9. Structure and equipment of the administrative building ............................................................... 115
Annex 10. Schedule of funding IP creation, option 1, MDL ........................................................................ 116
Annex 11. Schedule of funding IP creation, option 2 a), MDL .................................................................... 117
Annex 12. Schedule of funding IP creation, option 2 b), MDL ................................................................... 118
Annex 13. Schedule of funding IP creation, option 3, MDL ........................................................................ 119
Annex 14. Estimated income from the PPP reference model, option 2, MDL ............................................. 120
Annex 15. Estimated income from the PPP reference model, option 3, MDL ............................................. 120
Annex 16 Calculated retained risks for the PPP reference model, option 2, MDL ..................................... 121
Annex 17. Calculated retained risks for the PPP reference model, option 3, MDL ..................................... 121
Annex 18 Results of financial analysis for the Managing Company according to the option 1 .................. 122
Annex 19 Results of financial analysis for the Managing Company according to the option 2a) .............. 122
Annex 20 Results of financial analysis for the Managing Company according to the option 2b) ............... 123
Annex 21 Results of financial analysis for the Managing Company according to the option 3 .................. 123
Annex 22. Analysis of sensitivity in terms of degree of occupancy of lands and production premises of the
zone of Residents .......................................................................................................................................... 124
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Annex 23. Analysis of sensitivity in terms of lease and administration fee ................................................. 124
Annex 24. Analysis of sensitivity in terms of amount of investments ......................................................... 125
Annex 25. Analysis of sensitivity in terms of costs of maintenance and administration ............................. 125
Annex 26. Schedule of activities within the project of IP creation .............................................................. 126
Annex 27. Description of environmental factors and some measures of environmental protection ............ 129
SKETCHES
Annex A. Plan of Edinet IP land location, scale 1 : 25 000
Annex B. General plan of Edinet IP, scale 1 : 1 000
























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ABBREVIATIONS
BI Business Incubator
CDMA Code Division Multiple Access
CIS Commonwealth of Independent States
GDP Gross Domestic Product
GSMC Global System for Mobile Communications
IE Individual Enterprise
IP Industrial Park
IRR Internal Rate of Return
ISO International Organization for Standardization
LLC Limited Liability Company
LPA Local Public Administration
LVSLI Low-Value Short-Life Items
ME Municipal Enterprise
NBS National Bureau of Statistics
NERA National Energy Regulatory Agency
NGO Non-governmental organization
NPV Net Present Value
NRDF National Regional Development Fund
PPP Public-Private Partnership
PSC Public Sector Comparator
R
B/C
Benefit Cost Ratio
RIPR Regional Investment Performance Rating
SME Small and Medium Enterprises
VAT Value Added Tax










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TERMS
Industrial park limited territory that has technical and production infrastructure, in which
economic activities are carried out, mainly manufacturing, service provision, use of scientific
research and / or technological development in an environment of specific facilities aiming to use the
human and material potential of the region;
Managing company company, whose main activity is focused on management of the Industrial
Park and provision of services to residents of the park having the title of legal entity and
state/municipal enterprise legal form of organization or state owned, public-private or private
commercial company;
Resident of industrial park economic entity registered according to the law, doing economic
business under contract concluded with the managing company, including manufacturing, service
provision, application of scientific research and / or technological development in the industrial park;
Industrial park established upon public-private partnership principles industrial park created on
the basis of public property assets, fully or partially of financial resources of a private investor or of
financial resources attracted by it, using various cooperation and association models provided by the
Law on public-private partnership;
Public property assets - real estate (lands, buildings, etc.) owned by state or administrative-territorial
units, including Gagauz autonomous territorial unit;
Regulation and control institutions public authority vested with regulatory and control functions
involved in issuing authorization documents necessary for creation and operation of the Industrial
Park;
Technical and production infrastructure buildings and facilities, electricity supply systems,
telecommunications networks, gas and water supply networks, sewerage systems, including rain
ones, transport roads, public lighting etc.;
Holders of public utility networks providers of water, electricity and heat, gas, sewerage and
treatment, telecommunications and other municipal public services;
Industrial park title right granted to the managing company to benefit from facilities of creation
and operation of the Industrial Park, provided that obligations stipulated in the Law on industrial
parks No. 182 of July 15, 2010 are fulfilled;
Industrial park resident title right granted to resident to benefit from facilities to launch and carry
out the activity within the Industrial Park, provided that the obligations stipulated in the present law
and in the contract concluded with the managing company are fulfilled;
Investment project project designed for creation of new fixed assets as well as completion and / or
modernization of existing funds.
Public-private partnership long-term contract concluded between public and private partner to
carry out activities of public interest, based on capabilities of each partner to properly distribute
resources, risks and benefits;
Public partner any public legal entity or an association of this entity who establishes a public-
private partnership relation;
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Private partner any private legal entity or individual and / or their association, which have become,
under the law, party to a public-private partnership;
Public interest any benefit, the form and value of which is determined by decision of the public
partner, obtained to the benefit of the public partner, of people living and / or working on the territory
of the Republic of Moldova;
Business incubator institution designed to create a favourable and sustainable environment for
start-ups and innovative companies with growth potential;
Resident of business incubator beneficiary of the incubation program; potential entrepreneurs
intending to start a business in compliance with the national legislation or already established
businesses with at most 3 types of activities as of the date of registration of the application to join the
incubator.
Feasibility analysis conceptual framework applied to any quantitative, systematic evaluation, or
evaluation of a public or private project to determine whether or to what extent this project is
worthwhile from a public or social perspective. The results of this analysis can be expressed in
several ways, including internal rate of return on investment, net present value and benefit cost ratio.
Sensitivity analysis analytical techniques to systematically assess (by simulation) the effects on
profitability of a project, if events differ from estimates made at the planning stage. It is carried out
by changing an element or a combination of elements as well as by determining the effect of change
on the outcome (usually on the internal rate of return or net present value).
Financial sustainability analysis analysis carried out in order to check whether financial resources
are sufficient to cover all outgoing financial flows, year after year for the entire term of the project.
The financial sustainability is checked if the cumulative cash flow is never negative over all the years
considered.
Discount rate rate at which future values are currently updated.
Internal rate of return - interest rate at which a stream of costs and benefits has the net present value
of zero. The internal rate of return should be compared to a standard in order to assess the
performance of the proposed project (usually, the discount rate stands for standard). It expresses
financial profitability of the project.
Net present value - amount resulting when the net present value of expected costs of an investment is
deducted from the discounted value of expected benefits.
Benefit/cost ratio present value of benefits divided by the current cost flow. When the Benefit/Cost
Ratio is used, the selection criterion is to accept all independent projects with a Benefit / Cost Ratio
greater than 1.
Residual value - the net present value of goods in the final year of the period selected for evaluation
analysis.
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EXECUTIVE SUMMARY
The goal of the present feasibility study is to analyze the opportunity and conditions to create a
greenfield Industrial Park in Edinet on a state-owned land. Given that the administrative boundaries
of Edinet run relatively at a distance of 20 km from the land designed for the Industrial Park
(hereinafter referred to as the IP), Edinet District was considered as a zone of direct IP influence.
Edinet District is situated in the northern part of the country at the border with Romania and has an
area of 933 km
2
and a population of 83 600 inhabitants.
The land, intended for the location of the Edinet Industrial Park is owned by Edinet LPA. It has an
area of 18.6 ha and is situated in the north-western part of Edinet, with direct exit to M14
international road Chisinau Cernauti and exit to E583 European road. Also, it is located at the
distance of 63 km to the railroad from Otaci and at a distance of about 98 km from the Free
International Airport Marculesti near Floresti. The distance from the land, designed for the
Industrial Park to the Giurgiulesti Free International Port makes up 463 kilometres.
Edinet has an industrial potential and of qualified labour force of a higher level compared to other
districts from the northern part of the republic. Qualified labour force is specialized in industry of
agricultural product processing and in some fields of machinery processing industry. The total
number of economically active but unemployed population is about 24 thousand persons. A great
number of them (about 14 thousand persons) are left for abroad, the other part is unemployed and the
rest work occasionally (at home or abroad).
Given the conditions, provided by the location of the land designed for the IP, and the specifics of
development of Edinet, the activities of IP are (a) textile and clothing industry; (b) leather processing
and footwear manufacturing; (c) furniture production; (d) machinery and equipment manufacturing;
(e) production of electrical and electrotechnical equipment; (f) automotive industry; (g) transport and
communications (storage, processing, packaging).
In order to stimulate new businesses in Edinet and in the region it is proposed to establish within the
IP a Business Incubator (hereinafter - BI) in the field of industrial production, including agro-food
industry and other activities associated with the IP profile. Advantages of location of the BI on the
territory of the IP are related, first of all, to the fact that Business Incubator Residents will be able to
enjoy facilities offered by the title of IP Resident. As a result, after the incubation period, the BI
Resident will be able to continue the activity as the IP Resident. Thus, additional conditions for
increasing sustainability of created businesses are created. Business Incubator will be managed by the
Managing Company of the IP, however, the BI activity will be organized separately from that of the
IP.
IP consists of three zones: (i) Zone of Residents; (ii) administrative zone and (iii) land occupied by
infrastructure. The area occupied by the zone of Residents makes up 16.74 ha and is consists of 2
zones: (i) subzone of leased production premises of 4.52 ha and (ii) subzone of land parcels of 12.22
ha. 20 Residents of BI and 10 Residents of IP will operate within the subzone of leased production
premises by the Managing Company, within the subzone of land parcels 24 parcels (0.5l ha each)
will be made available to Residents for the construction of production facilities. Residents of this
subzone can be also BI Residents who will benefit from a special package of incubation services,
which can include only consulting and support services.
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At the same time, besides the main option, presented above, where subzone of leased production
premises consists of BI production premises (12% of the total area of Zone of Residents) and
production premises for the IP residents (15%) in terms of the structure of the Zone of Residents, 2
more options have been analyzed: option 2 subzone of leased production premises consists only of
production premises of the Business Incubator (12%) and, respectively, the subzone of parcels makes
up 88% of the area of the Zone of Residents (16.74 ha) and, option 3 the Resident zone consists
only of the subzone for leased production premises (100%), in other words on the whole territory of
the IP, land parcels will be leased by IP Residents allowing them to build their own production
premises.
According to the options, defined above, capital costs of the project by PPP without investments of
IP Residents in their own production premises make up 120.2 mln. MDL in case of option 1; 71.3
mln.MDL in case of option 2 and, respectively, 27.2 mln. MDL in case of option 3.
Since this IP project can be implemented by public administration (or LPA with central authorities)
and by public private partnership, an analysis of the project cost for both these approaches was
carried out. This analysis was made on the basis of estimates of the total project costs, including its
risks, replacement, administration and maintenance costs, decreasing them by financial incomes
generated by the IP Managing Company for the entire period of IP existence of 30 years. Based on
this analysis it was concluded that the IP implemented through public-private partnership, has a lower
cost than if being implemented under own management by public authorities.
As a result, it is recommended to implement this project through public private partnership, where the
Managing Company will be selected through tender. The PPP contract term will be equal to the 30-
year period of activity provided to the Industrial Park.
Creation of the Edinet Industrial Park will have many positive effects on economy at local, as well as
regional and national levels. It is estimated that about 2036 direct jobs will be created in the IP, plus
about 100 indirect jobs in the field of services, as well as about 400-500 during the IP construction
period. At the same time, an increase of the level of survival of small and medium enterprise
resulting from the operation of the BI, contributing to economic stability of the locality and region, is
estimated.
Positive social impact on the population living within a 20 km radius from the Industrial Park will be
reflected by the fact that some jobs will be also provided for the unemployed, as well as about 10%
of those left for abroad. Labour remuneration fund will be increased by about 102.5 mln. MDL
annually thus increasing incomes of the population from the region. At the same time, local
community will benefit from infrastructure development, including by improving water supply,
sewerage and telecommunications services.
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1. ANALYSIS OF THE IP REGION
Ensuring sustainable economic growth is a strategic priority of the Republic of Moldova, which is
possible only in case of implementation of some efficient policies of stimulating investment activity
and industrial development. Range of tools, used to implement these policies, has grown with the
approval of the new Law on industrial parks, which has created new opportunities for establishing
Industrial Parks through public private partnerships.
With the view to identifying opportunities for creation of an Industrial Park in Edinet, resources and
costs required for its creation and its impact on the development of the region, an analysis on Edinet
district, representing a defined area within the radius of about 20 km from the land, designed for the
IP, has been carried out.
1.1. General overview
Edinet district is located in the Northern Region of the Republic of Moldova and borders on Romania
on the west, on Donduseni district in the east, on Briceni and Ocnita districts in the north and on
Riscani district in the south. The area of Edinet is 933 km2, making up 2.77% of the territory of the
Republic of Moldova.
The district is composed of 49 localities with a population of 83 600 inhabitants. There are 2 cities in
the district: Edinet and Cupcini. Edinet is district residence and is located at the distance of 201 km
from the capital of the country.
Localities of the district has a moderately continental climate, with cold and short winters, warm and
dry summers. Sudden changes of climate produce undesirable phenomena: droughts, pouring rains,
storms, thunderstorms, rains with hail and floods.
1.2. Social and cultural development
1.2.1. Human Capital
In 2009, the population of the district made up 83 600 inhabitants on a total area of 933 square
kilometres, denoting a density of 89.6 persons/km
2
.
Table 1. Resident population of Edinet district, thousand inhabitants
Year 2005 2006 2007 2008 2009 2010
No. of
inhabitants
85.4 84.8 84.4 83.9 83.6 83.3
Source: Statistical yearbook of the Republic of Moldova
At the same time, the population of Edinet makes up 20 024 persons or 24% of the total population of
the district.
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Figure 1 Structure of the population by areas (%), Edinet district during 2007-2009

Source: National Bureau of Statistics
Out of the total number of inhabitants of the district, 26 000 is represented by urban population, while
rural population exceeds the double of this figure making up 57 600 inhabitants. In percentage terms
as compared to total population, urban population makes up 31.10% while rural population is
68.90%. Thus, we can say that the population of the district is mostly rural.
The structure of the population of the district by sex in early 2009 was represented as follows: 39 506
men (47.3%) and 44 094 women (52.7%). There are 100 men per 112 women, the number of women
exceeding that of men.
Figure 2 shows the structure by population age groups in Edinet. It can be observed that the largest
share of the population is young, both male and female.
Figure 2. Structure of the population by age, Edinet (2009)

Source: National Bureau of Statistics
Red women
Blue- men
Statistical data regarding the structure of the population by sex and age categories are reflected in the
table below.

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Table 2. Population by sex and age groups
Age groups Total Men Women
0-15 14 330 7 321 7 009
16-61(56) 50 448 26 108 24 340
62(57) - over 18 546 5 943 12 603
Total 83 324 39 372 43 952
Source: National Bureau of Statistics
Out of the total population of Edinet, 60.54% are persons of working age (16-61 (56) years old),
17.20% - under working age (0-15 years old) and 22.26% - are people over working age (65 (57)
years old).
Figure 3. Population by age categories

Source: Database, National Bureau of Statistics
Over working age 15.09%
Under working age 18.59%
Of working age 66.31%

The figures below shows that 66.31% of men are of working age as compared to 55.38% of women.
Women under working age make up 15.95% as compared to 18.59% of men. On the other hand,
women over working age have a share of 28.68% as compared to 15.09% in case of men.
Figure 4. Population by sex and age categories
Men Women

Source:National Bureau of Statistics
Men: Over working age 15.09%
Under working age 18.59%
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Of working age 66.31%
Women: Over working age 28.67%
Under working age 15.95%
Of working age 55.38%

1.2.2. Labour force
According to the data of 2009, out of the total population of the district, 40.72% is represented by
economically active population out of which 3.16% are unemployed and 37.56% are employed in
economy.
Of the total economically active population, 92.23% are employed in economy
1
and 7.77% are
unemployed, this unemployment level being higher than the average level in the country of 6.4%.
Taking into account that the data refer only to the unemployed registered by the National
Employment Agency, the actual number of the unemployed is much higher than the mentioned one.
Number of unemployed women is lower than that of men, a trend which continues within the
last few years. This is due to the fact that job offer is higher for women, expectations
(particularly wages) of women are lower and there are many part-time job offers for them.
Mostly, unemployment duration makes up 3-5 months.
Population employed in economy is composed of constant employees and persons engaged in a
certain seasonal/temporary activity. Thus, analyzing the structure of the employed population at the
level of 2009 we may state that only 9.9 thousand persons have a permanent job out of total
employed population of 31.4 thousand persons. On the other hand, the number of officially registered
unemployed in the same reference period made up only 2.6 thousand persons. These data indicate
that the total number of available economically active population is about 24 thousand persons.
Table 3. Main indicators of labour force, persons
Nr. Indicators 2005 2006 2007 2008 2009
1 Total population 85 400 84 800 84 400 83 900 83 600
2 Total population of working age (r.3. + r.6.) 66 777 69 737 69 408 68 973 68 749
3 Economically active population (r.4.+r.5.) 33 073 34 539 34 376 34 166 34 050
4 Population employed in economy 30 974 32 995 33 050 32 958 31 404

out of which:
permanent employees
persons that do not have a stable job
13 000
17 974
12 700
20 295
11 000
21 950
10 600
22 358
9 900
21 504
5 Unemployed 2 099 1 544 1 326 1 208 2 646
6 Inactive population 33 704 35 198 35 032 34 817 34 699
7 Unemployment rate 6,35% 4,47% 3,86% 3,54% 7,77%
Source: Edinet District Council, Statistical yearbook of the Republic of Moldova

1
Employed persons include all persons of 15 years old and above who have carried out an economic or social activity of
goods and services production at least an hour in the reference period (a week) in order to obtain incomes in the form of
salary, payments in-kind or other benefits.

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Out of the total employed population, 27.69% work in the field of agriculture, 22.09% in
education, and 20% in industry (see Table 4).
At the level of 2009, there were 11 156 employees in the district, which decreased by 6.2% as
compared to 2008 and by 13.11% as compared to 2007.
The average salary for 2009 made up 2 021 MDL, increased by 9.4% as compared to 2008 and
by 31.06% as compared to 2007. Moreover, we can say that labour force in Edinet is relatively
cheap, since the average salary for 2009 is by 35.97% lower than the average salary in the
republic of 2748 MDL.
Table 4. Distribution of employed population by main types of activity, persons
Year 2005 2006 2007 2008 2009
Agriculture 8 577 8 054 9 152 9 127 8 696
Industry 6 195 7 534 6 610 6 592 6 281
Constructions 477 520 509 508 484
Trade 953 1 299 1 017 1 014 966
Transport and communications 1 191 1 299 1 271 1 267 1 227
Public administration 2 116 2 359 2 395 2 448 2 333
Education 7 017 7 602 7 493 7 279 6 937
Healthcare and social assistance 3 257 3 649 3 332 3 456 3 293
Other types of activity 1 191 779 1 271 1 267 1 187
Total 30 974 32 995 33 050 32 958 31 404
Source: Edinet District Council
At the same time, low incomes and unattractive job offer have determined many people to work
abroad, thus, initiating a strong migration (to the Russian Federation, Italy, Portugal, Greece
etc.) particularly of well-qualified persons. Thus, about 20% of the working population of the
district or about 14 thousand of persons work outside the country. The problem is also worsened
by the fact that many leaving families take their children, their returning to the native locality
being uncertain. Low birth rate complements this phenomenon.
1.2.3. Social infrastructure
Edinet has 44 educational institutions within which during 2009-2010 academic years 8 913
students were enrolled, which decreased as compared to previous years.
At the district level there is only one college, where 98 persons were enrolled in 2009. At the
level of 2009-2010, the number of college students is 263 persons, being continuously
increasing as compared to previous years. However, the number of graduates (29 persons) is
decreasing by 30.95 percentage points as compared to 2008 and 6.45 percentage points as
compared to 2007.

Table 5. Infrastructure of educational institutions, 2005-2009
Region Number of institutions Number of students
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Year of
study
2005
2006
2006
2007
2007
2008
2008
2009
2009
2010
2005
2006
2006
2007
2007
2008
2008
2009
2009
2010
Edinet 44 44 44 44 44 10777 10259 9761 9376 8913
North 497 495 494 493 491 137838 131963 123969 117571 111946
Total in the
republic
1551 1539 1534 1519 1505 517029 491482 460951 434320 413657
Source: Statistical yearbook of the Republic of Moldova
There are also 2 secondary vocational educational institutions where during 2009-2010
academic years 857 persons were enrolled and 278 students graduated.
The mentioned data show that although students are eager to attend an educational institution,
not all of them have the opportunity to graduate from them, since the majority is forced to
abandon studies for working and financially supporting their family.
Although Edinet does not have university educational institutions or research institutions,
persons who wish to continue their studies can choose one of the 3 institutions of higher
educational institutions in Balti and those 30 universities in the capital.
Cultural and healthcare infrastructure is represented in the district by libraries, cultural centres, gyms,
museums and functional medical institutions (see Table 6).
Table 6. Cultural and healthcare infrastructure
Infrastructure Edinet district Edinet
Libraries 45 2
Cultural centres 41 1
Gyms 13 1
Museums 2 2
Medical institutions 40 3
Source: Edinet District Council
Number of infrastructure objects in the field of culture, sport and health is relatively small. Moreover,
libraries and gyms are in an unsatisfactory condition, and most cultural centres do not function. There
is only one hospital, 8 medical centres, 14 healthcare centres and 17 family doctors' offices in the
district.
1.3. Economic profile
Within the complex of national development of the Republic of Moldova Edinet is an agrarian and
industrial district. At present, about 22 000 economic entities are working on the territory of the
district, 86% of them work in agriculture under the form of farms
2
.


2
In 2009 18 937 farms were already registered.
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Figure 5. Evolution of the number of economic entities within 2005-2009

Source: Statistical Direction of Edinet District Council
Buniness entities (excluding peasant households and NGOs)
Within 2005-2009, the total number of economic entities registered a growing trend, especially due
to the development of agriculture, forestry, wholesale and retail trade (see Table 7).
Table 7. Distribution of economic entities by types of activity, 2005-2009
Field of activity 2005 2006 2007 2008 2009
Agriculture, forestry, hunting, fishery 18 036 18 474 18 683 18 851 18 966
Extractive, processing industry 20 20 24 28 32
Constructions and real estate transactions 12 12 13 13 13
Wholesale and retail trade, Hotels and restaurants 548 603 733 801 897
Transport and communications 40 42 48 54 68
Public administration; education; health and social
assistance
118 118 118 118 118
Other types of activity 1 419 1 576 1 667 1 792 1 817
Total 20 193 20 845 21 286 21 657 21 911
Source: Statistical direction of Edinet District Council
Economic entities with the right of individuals constitute 94.5% of all enterprises from the district
due to a large number of farms while enterprises with the right of legal entity constitute 5.5%, the
largest share among them being held by limited liability companies.
The total volume of sales by local economic entities made up 1 192.3 millions MDL in 2009. About
50.56% of them belong to wholesale and retail trade, 12.36% - the business in the field of hotels and
restaurants (see Figure 6).
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Figure 6. Structure of economic entities sales by types of activity, 2009

Source: Statistical direction of Edinet District Council
Wholesale and retail trade. Hotels and restaurants Other types of activity
Agriculture, forestry, hunting, fishery LPA; education; healthcare and social assistance
Extractive, processing industry Constructions
Transport and communications

During recent years an increase in the total sales volume (see Figure 7) is observed. The only
deviation is observed at the level of 2008 when farmers and enterprises from processing industry
were affected by natural disasters.
Figure 7. Evolution of the volume of sales by the economic entities from Edinet, thousand MDL.

Source: Statistical direction of Edinet District Council
About 10 thousand employees were engaged in 2009 in the activity of those 22 00 economic entities
(see Table 8). Half of labour force employed in Edinet economy works in the public sector, 1300
persons work in agriculture and about 1 900 persons in industry. Other sectors include about 1 700
persons.


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Table 8. Annual average number of employees, thousand persons
Field of activity 2005 2006 2007 2008 2009
Agriculture, forestry, hunting, fishery 3.6 3.1 1.6 1.3 1.3
Extractive, processing industry 2.6 2.9 2.6 2.2 1.9
Constructions and real estate transactions 0.2 0.2 0.1 0.2 0.2
Wholesale and retail trade, Hotels and restaurants 0.4 0.5 0.7 0.8 0.6
Transport and communications 0.5 0.5 0.5 0.4 0.5
LPA; education; healthcare and social assistance 5.2 5.2 5.0 5.1 5.0
Other types of activity 0.5 0.3 0.5 0.6 0.4
Total 13 12.7 11 10.6 9.9
Source: Statistical direction of Edinet District Council
Within the past five years, there has been a downward trend in the number of employees by 3 100
persons or 23.85%. This fact is determined by migration of population to work abroad. This
phenomenon mainly affected agricultural sector where the number of employees decreased by almost
3 times and industrial sector where in 2009 the number of employees decreased by 700 persons as
compared to 2005.
Top 10 economic entities from the locality recorded a total sales volume of 512 millions MDL, of
which abt. 39.4% belong to a single economic entity (Rusagroprim LLC). Annual local budget is
substituted with 2 millions MDL in the form of taxes paid by these economic entities. Also, 1 281
persons are engaged in these enterprises.
Table 9. Top 10 economic entities (by sales volume) as of 01.01.2009
Name Field
Type of
ownership
Sales
volume,
thousand
MDL
Number of
employees
Profit/
loss,
thousand
MDL
Taxes in
local
budget,
thousand
MDL
"Rusagroprim" LLC Trade Collective 201 737 21 3 4378 155.5
"Gloria Qvarc" LLC Trade Collective 123 450 116 5 347 265.3
"Inlac" LLC Agro-food industry Collective 100 542 392 366 656
"Mavicom Nord" LLC Agro-food industry Collective 21 026 214 6 419 128.7
"Astra" IE Agro-food industry Private 18 561 96 515 105.7
"Mina Cupcini" LLC
Extraction of sand and
gravel
Collective 14 417 187 1 291 366.2
"Vilora" LLC
Oil-bearing crops and
seeds
Collective 10 996 64 2 982 222.7
"Chetro - Prim" LLC
Oil-bearing crops and
seeds
Collective 8 830 52 517 169.5
"Maconrut" LLC
Extraction of sand and
gravel
Mixed 7 103 65 1 260 70.7
"Ascesiune" LLC
Oil-bearing crops and
seeds
Collective 5 917 74 2 655 151.5
Total 512 579 1 281 55 730 2 291.8
Source: Statistical direction of Edinet District Council
Below we present a brief analysis of the main sectors of the districts economy.
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1.3.1. Industry
Edinet economy has a agrarian and industrial nature, as other regions of the country actually, but
unlike those it has a relatively more developed industry.
In 2009, 21 industrial enterprises activated in Edinet district, most of them are in Cupcini and to a
lesser extent in Edinet. Although their number has changed during recent years, the share of
industrial enterprises which work efficiently and record profits remains to be abt. 1/3 (see Table 10).
Table 10. Main indicators of the industrial activity of Edinet within 2005-2009
Indicators 2005 2006 2007 2008 2009
Number of industrial enterprises 20 20 24 28 21
out of which:
recorded profits 5 5 6 7 5
recorded losses 15 15 18 21 16
Volume of production at current prices, thousand
MDL
310 623 383 428 442 804 573 787 262 158
Number of employees 2634 2874 2567 2224 1856
Nominal average salary in extractive industry,
MDL
1260 1580 2070 2507 2474
Monthly average salary in processing industry,
MDL
1701 1890 2385 2718 2538
Source: Statistical direction of Edinet District Council
The main industries developed in the district over time are extractive and manufacturing
industries, with a significant share of the latter (see Table 11).
Table 11. Evolution of the number of industrial enterprise within 2005-2009
Field 2005 2006 2007 2008 2009
Extractive industry 2 3 3 4 3
Processing industry 11 10 10 10 9
Electric energy, gas, water 2 2 2 2 2
Other enterprises 5 5 9 12 7
Total 20 20 24 28 21
Source: Statistical direction of Edinet District Council
The dynamics of structure of the districts industrial sector has not registered substantial changes,
about 40% of enterprises still working in processing industry.
Figure 8. Dynamics of industry structure in Edinet, enterprises, 2005-2009

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Source: Statistical direction of Edinet District Council
Blue- Extractive industry
Red - Processing of fruits and vegetables
Green - Precessing of dairy products
Violet - Other processing enterprises
Turquoise - Electrical power, gas, water
Orange - Other enterprises

Agro-food industry has a significant importance for the districts economy, while the production
volume is twice higher compared to the regional average. Processing enterprises are specialized in
canning, sugar, dairy industry (see Figure 8).
Volume of production of this industry per capita makes up 91.7% of the regional average if Balti
municipality is included (5647.5 MDL compared to 6161.9 MDL). If we exclude Balti municipality
from calculations, then this index of Edinet will be approximately twice higher than the regional
average
3
.
Figure 9. Evolution of industrial production,
2005=100%
Figure 10. Fabricated production, 2007-2009 (mln.
MDL)

Source: National Bureau of Statistics
During 2005-2009, trends of development of Edinet industries were positive and where higher
by 33% than the national trends, with the exception of 2009 when the volume of industrial
output of Edinet has reached back to the level of the basic year (2005) unlike overall trends in
the country which exceeded by 12% the level of the same year (see Figure 9).
Industrial output of Edinet in 2009 made up 322.4 mln. MDL, representing 14.3% of regional
industrial production (with the exception of Balti municipality) of 4 923.4 mln. MDL and 1.42%
of the national one of 22 643.8 mln. MDL (see Figure 10).
Industrial enterprises in the district are relatively large as compared to regional: annual
industrial output per enterprise in 2008 made up 5.29 mln. MDL as compared to 3.57 mln. MDL
- a regional average with Balti municipality or 2.46 mln. MDL without Balti municipality. As
compared to regional, this figure is higher only in Balti municipality
4
.

3
Analytical Center Expert-Grup, Problems and investment solutions in the Northern Development Region

4
Analytical Center Expert-Grup, Problems and investment solutions in the Northern Development Region
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During the past years about 2 400 persons are employed in the industry, representing 8.33% of
the total number of employees involved in the industrial sector of the Northern region. Number
of employees in the field has remained relatively constant during this period (see Table 12).
Table 12. Industrial-production staff, 2006-2008
Region
Number of employees (thousand
persons)
2006 2007 2008
Total in the
Republic
122.2 120.1 115
North 28.3 28.8 28.8
Edinet 2.2 2.4 2.4
Source: Statistical yearbook of the Republic of Moldova, National Bureau of Statistics

At the same time, Edinet has the advantage of proximity to the market of Balti municipality.
Having a high outlet potential, it facilitates sales of industrial output.
1.3.2. Agriculture
The agricultural sector has a significant share in the economic activity of Edinet, which has
important advantages: soil productivity mark is higher in the region (78) while share of eroded
soils is very low (23.1%). These advantages are increased by the high level of mechanization,
there are 13.5 tractors for 1000 ha of land, as compared to the average of 9.3 in the region. Also,
the district has water resources for irrigation in some localities, located in Prut river valley.
At present, 18 966 economic entities are employed in agriculture. Most of them are farms or
individual enterprises. In 2009 their turnover reached the level of 147.3 mln. MDL, which is by
31.9% higher than in 2008. According to statistics, at present about 1 300 persons are annually
engaged in agriculture. Their unofficial number is obviously higher, however, due to the
increase in the mechanization level of agriculture, a decreasing trend of using human factor is
observed.
1.3.3. Services
The service sector is continuously growing not only in absolute terms but also of shares of regional
and national levels. Service demand exceeds the regional average and stimulates sales of services
within the district. Within the last five years, the volume of paid services provided to the population
has doubled (see Figure 11).
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Figure 11. Evolution of the volume of paid services provided to population (thousand MDL)

Source: Statistical direction of Edinet District Council
In 2009 the volume of paid services made up 127.3 million MDL (or 1523 MDL per person), by
5.6% more than in 2008, of which 63% of the service volume are rendered by public enterprises
while 28% by private enterprises from the region.
1.3.4. Entrepreneurship
Edinet ranks 3rd place in the northern region by carried out entrepreneurial activity since the
turnover of economic entities increased by 41.7% in 2009 as compared to 2005 even though the
number of enterprises and their staff in the same period decreased by 21% and respectively, 28% (see
Figure 12).
Figure 12. Evolution of enterprises and employees within 2005-2009 (2005=100%)

Source: Statistical yearbook of the Republic of Moldova, NBS
Blue Number of enterprises
Red Average number of employees
In 2009, the SME sector was composed of 97% of the total number of enterprises and employed
62.9% of employees, achieving a turnover of 640 mln. MDL. Currently micro enterprises have a
share of 57% of the total number of SMEs.
In 2009, 295 small and medium enterprises worked in the district. Even though their number
decreased as compared to 2005, the share of SMEs in the economic sphere has remained the same
(see Table 13). Within the last five years there have been recorded changes in the structure of SME
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sector. Thus, we can observe an increasing trend in the number and share of small enterprises, a
balanced trend of decrease in the number and share of micro and medium enterprises.
Figure 13. Evolution of enterprises and employees within 2005-2009 (2005=100%)

Source: Statistical yearbook of the Republic of Moldova, NBS
Blue Number of enterprises
Red Average number of employees
Although within the last five years there has been an average reduction in the number of employees
engaged in SME sector of 28.3%, turnover has increased from 475 mln. MDL in 2005 to 640 mln.
MDL in 2009.
Table 13. Indicators of activity of SMEs
5
from Edinet district
Type of the
enterprise
Enterprises Employees Turnover, thousand MDL
2005 2009 2005 2009 2005 2009
No. % No. % No. % No. % No. % No. %
Medium enterprises 38 10% 28 9% 3615 40% 1838 28% 202 24% 302 25%
Small enterprises 84 22% 95 31% 1795 20% 1574 24% 227 27% 266 22%
Micro enterprises 253 66% 172 57% 738 8% 713 11% 46 6% 72 6%
Total SME 375 97.6% 295 97.0% 6148 67.2% 4125 62.9% 475 46.5% 640 53.7%
Large enterprises 9 2% 9 3% 3000 33% 2434 37% 365 43% 552 46%
Total 384 100% 304 100% 9148 100% 6559 100% 841 100% 1192 100%
Source: Statistical yearbook of the Republic of Moldova, NBS
The major contribution to total turnover is made by large enterprises, of about 46%, registering
constant increases.
In 2009, the share of private companies is higher than that of public companies, representing 96.8%
as compared to 3.2%, the number of private companies being increased during the last 5 years.
Foreign companies are represented by only 3 agents.
The sector is composed equally of enterprises that provide car and electric domestic appliance
repair, hairdressing, transport and construction services, joinery.

5
Data presented in this table are based on the database of the National Bureau of Statistics. They reflect situation of
enterprises acting in the district and of those directly representing financial and statistical statements.
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There is a relatively large number of commercial banks, micro-finance companies, savings and loan
associations and consulting centres in the district.
1.3.5. Investments
According to the Regional Investment Performance Rating (RIPR) Edinet ranks 9th place of 38
districts, municipalities and regions.
During 2009, a total of 236.9 mln. MDL were invested decreasing by 37.3% as compared to 2008,
and which were lower by 27.3% as compared to 2007. Registered reductions were mainly because of
the lack of foreign investments and reduction of private investments, resulting largely from the
country's political instability and economic crisis.
Out of the total investments in 2009, 48.06% were made by the joint ventures, without foreign
participation, 34.56% by private companies, and only 1.88% by foreign companies (see Figure 14).
Figure 14. Structure of investments by types of ownership, 2009

Source: Statistical direction of Edinet District Council
13.51% - Public
34.56% - Private
48.06% - Joint, without foreign participation
1.99% - Joint, with foreign participation
1.88% - Foreign
In 2008, in Edinet there was the only foreign investor with substantial investments, providing a
balance of foreign investments per company of 3 647.6 thousand MDL, or 60% of the regional
average.
According to a study, carried out by Expert Grup, the majority of private investments are made
in processing industry, transport and communications, agriculture and trade (see Figure 15) .
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Figure 15. Distribution of private investments by types of activity

Source: Analytical Center Expert-Grup, Problems and Investment Solutions in the Northern Development
Region
0% - Education
1% - Public Administration
5% - Real estate transactions
0% - Financial activities
21% - Transportation and communication
12% - Trade
2% - Constructions
9% - Power, gas, and water
33% - Processing industry
16% - agriculture
1% - Other activities
In case of an investment, it should be taken into account that the sectors with the highest potential are
the following: cultivation of ecological production; growing of vegetables in greenhouses and indoor;
berry growing; storage of agricultural production; processing of locally grown fruits; livestock sector
and sausage production; tourism; textiles and construction materials.
1.3.6. Infrastructure
Edinet has a network of public roads with a total length of 326.7 km, of which 62.3 km are national
roads and 264.4 km - local roads.
Public utilities in the region are provided by several providers that operate at local and national
levels.
Natural gas in Edinet is provided by the enterprise Edinet Gas LLC. The delivery price of 1000
m
3
of gas by medium pressure gas pipelines makes up 4 653 MDL excluding VAT for 2010. The rate
of dwellings supplied with gas has been increasing during the last 5 years, and makes up 22.3% of
the total number of dwellings in the district.
Water supply and sewage services are provided by JV Apa Canal . The number of users of
drinking water supply service is being increased, reaching in 2009, the number of 4 477 users, of
which 2 062 are also connected to sewage network.
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Residents and economic entities from Edinet are provided with electricity by Joint-Stock Company
RED Nord Vest, which provides electricity at the rate of 145 MDL / kWh excluding of VAT.
Banking infrastructure is developed by 9 branches of the following banks: Banca de Economii, Banca
Social, Energbank, Mobiasbanca Fincombank, Moldindconbank, Agroindbank Victoribank
ProCreditBank.
Local mass media is represented by 2 radio stations and one TV station. Written media is performed
through newspapers Curierul de Edinet and North Info. Locals have over 100 TV channels by
cable or digital and about 30 of radio channels.
Fixed telephone services are provided by Moldtelecom company while mobile telephone services
are provided by companies Orange, Moldcell and Unite. Moldcell company has been
operating in Edinet since 2000 and has a coverage area of about 96.6%. Since 2007, mobile phone
services have been provided also by companies Orange and Unite with a coverage area of 98%
and 90% respectively. The first 2 mobile telephone providers operate according to GSM standard,
while the last mentioned according to CDMA standard. The extension of the communications
sector allows for the acceleration of the information flow, adoption of new technologies, which
ultimately has a positive impact on the region.
1.4. Reasoning the need for the IP
Although Edinet has a relatively good potential for business development, recently there has been
observed a degradation of the industrial and labour force potential, a decrease in the investment
volume. As a result, about 20% of the working population works outside the country. This is largely
due to the fact that CIS countries do not have capital reserves for investments in Moldova while the
countries from outside CIS space (especially from developed countries such as European Union
countries, USA, Israel, Canada, etc.) invest primarily in economies with high capacity outlets such as
economies of Russia, Ukraine, etc.
Under these conditions, the importance of conditions for creation and functioning of enterprises is
obviously increasing. In this respect, creation of an Industrial Park in Edinet is one of the strategies of
business environment development that aims to reduce production costs by improving access to
productive inputs, especially those that or can be largely influenced by public authorities.
Due to the approval of the Law No. 182 of 15.07.2010 on industrial parks, a number of problems that
currently result in low investment activity in the region can largely be solved by creating the Edinet
Industrial Park. According to the provisions of this law, conditions are created and certain facilities
are provided for solving the following problems:
- Limited access to industrial lands for launching and developing the industrial activity: This
problem is characterized by the shortage of industrial land and difficult procedure of changing the
destination of agricultural land. The Law on industrial parks favours the holder of the title of the
Industrial Park and its residents through exemption from compensation for losses, caused by
exclusion of the land from the category of agricultural lands according to the Law on normative price
and procedure of land purchase and sale;
- High costs and risks related to bureaucratic procedures when launching and carrying out the
industrial activity: Establishment of a special commission under the Local Council which will be
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responsible for providing technical, legal, consultative support and coordinating the acquisition of
permissive documents provided by law
- Higher costs and risks related to state control of business activities. Within the IP, state control
over IP Residents activity is optimized by conducting planned controls according to the annual
schedule approved by Government decision or spot checks made by the Ministry of Economy in
compliance with the legislation in force;
- Higher costs for connection to utilities: According to the Law on industrial parks No. 182 of
15.07.2010 (art. (13), para. (1)) creation of technical and production infrastructure is funded by the
amount, allocated from the state budget and the budgets of administrative-territorial units, reducing
investment costs.
With the view to assessing the need and opportunity to create Edinet IP a SWOT analysis of the
selected location for locating IP has been carried out. The analysis highlights strengths and
weaknesses of the IP site and region as compared to other regions of the country, as well as identifies
possible opportunities and threats coming from the outside of Edinet Industrial Park.

Table 14. SWOT analysis of Edinet Industrial Park
Strengths Weaknesses
- Location at relatively small distances from
crossing points of the border with Romania and
Ukraine
- Insignificant level of foreign investments
in the region
- Road accessibility through international
route M-14 Cernauti Chisinau Odessa and
European route E583 Mogilev - Podolsk
Drochia Ungheni
- Insufficient financial bases of local public
administration
- Access to railway network through Bratuseni
railway station located at a distance of about 7
kilometres from the Industrial Park land.
- Poorly maintained local road infrastructure
- Existence, near the land designed for the
Industrial Park (in Edinet), of sufficient public
utilities for its economic development
- Relative low entrepreneurial spirit of the
population
- Existence of lands in public property for
creation of the IP
- Low local outlet
- Relatively high level of general culture of
the population
- Relatively poorly developed agricultural
sector
- Existence of relative qualified labour force
in the zone of the Industrial Parks activity
- Poorly developed and unattractive social
and cultural services
- Low salaries - Labour force migration
- Knowledge of business culture of
neighbouring countries
- Low level of development of economy in
the zone
- Good climate and land resources for
agriculture development

- Public administration open for cooperation
in order to create the IP

Opportunities Threats
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- Trend to transfer capitals from the EU in
limitrophe zones
- Political instability at national level,
expressed by incoherence of policies in the
field of regional development; frequent
modifications in the normative framework
- Support programs for economic development
of the Republic of Moldova, including by small
income taxes (or exclusion)
- General investment climate of the country
is relatively unattractive, including due to
corruption
- Existence and relatively easy access to EU and
East markets
- Transport, especially car infrastructure, in
the country and neighbouring countries is
poorly developed
- Legal framework of the IP is favourable for
their development

The presented analysis shows that the region also has a number of advantages as compared with other
regions of the country. Within a radius of 20 kilometres of the land destined for Edinet Industrial
Park, the zone has an industrial potential and that of qualified labour force at a higher level as
compared to other districts in the northern part of the republic. Qualified labour force is specialized in
industry of processing of agricultural products and in some fields of mechanical engineering industry.
Edinet, like most northern districts of the country, has a relatively high level of general culture and
production culture, representing a comfortable environment for local and foreign investors. The
majority of the population knows two languages and show aptitude for easy learning of foreign
languages, providing them with additional opportunities for education, employment and retraining.
Edinet has a relatively well developed local infrastructure: electricity supply is stable and can fully
meet the requirements of the industrial sector; water supply and sewage services are functional; there
is an easy access to gas network; there are no problems regarding connection to telecommunications
networks (fixed, mobile telephony, Internet); the region also has a well developed network of local
roads, even if their condition leaves much to be desired. The region also benefits from qualitative
banking services, here there are branches of all important banks of the country.
It should be mentioned that the geographical location in terms of accessibility of the region also
offers them some advantages as compared to other regions of the country. It is located near borders
with Romania and Ukraine, and has direct access to two major international routes (M14 and E583).
Thus, there can be a relatively easy access to important outlets of the EU and Ukraine as well as
materials and raw materials markets of the East.
By selecting the place of location of the land destined for the IP, an optimal access to utilities and
potential employees from Edient and region is provided. Also, the land destined for the Industrial
Park is adjacent to international route M14 Chisinau Chernauti, ensuring a good road access and
mobility to international markets. The land has access to the European road E583, is at a distance of
63 km from the railway in Otaci and 70 km to the railway in Balti.
Edinet Industrial Park with all objects of infrastructure will provide free access to lands required to
locate enterprise within the Park and to utilities necessary for industrial production, under favourable
working conditions, including relatively cheap and qualified labour force existing in the IPs region.
Thus, operation of Edinet IP will have a synergistic effect at the regional level, contributing to
improvement of the basic infrastructure for business as well as to increase of the living standard of
people from the region by increasing the share of permanently employed persons.
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2. DESCRIPTION OF THE INDUSTRIAL PARKS CONCEPT
2.1. IP concept
IP organization. The initiator of the creation of the Industrial Park in Edinet is Local Public
Administration. IP will be created on an agricultural land with an area of 18.6 ha, owned by Edinet
Town Hall. The land is located in the north-western part of the city, adjacent to the international road
M14. Park will have its own infrastructure which will provide facilities required for the operation of
IP Residents.
The Managing Company of the Industrial Park will be responsible for administration of the IP. All
relations between the Managing Company and LPA are stipulated in the contract of establishment,
operation and administration of the IP. The Managing Company of the Park is responsible for
designing and construction of municipal infrastructure of the IP, maintenance of infrastructure and
service provision to Residents, under contract. The Managing Company is responsible before LPA
for achieving goals of IP development, which will be clearly stipulated in the Contract between the
Managing Company and LPA. In compliance with the strategy, chosen by the Managing Company, it
can also erect IP buildings which will be provided for Residents in the form of lease or purchase,
including by instalments. For services, related to costs necessary to maintain and develop the IP, the
Managing Company will collect from Residents administration fee (or rental). Other services
provided by the Managing Company will be paid separately according to the provisions of the
contract with the Resident.
The main document defining the operational obligations and rights of the Managing Company,
Residents and LPA is Regulations of the Industrial Park, approved by LPA. Provisions of the contract
of the Managing Company with LPA and those of the IP Regulations do not exclude or diminish the
rights and benefits offered to Residents by legal framework.
Residents of the Park can only be legally registered economic entities in the Republic of Moldova,
including the IP.
The goal of the IP. The goal of Edinet Industrial Park is to increase the level of human development
of the population by using surplus labour force in the region, to create jobs for making a part of the
population working abroad return in the region, to create industrial production capacities which
would ensure complex processing of local agricultural raw materials, increase in industrial
production exports, especially in EU countries.
Type of activities developed in the IP. Lack of direct access of the Industrial Park to rail and river
roads, as well as to airports, implies reflection on the entire process of ensuring raw materials and of
exporting finished or semi-finished products by large capacity transport means with specifications
regarding dimensions and weight per axle (7.5 tonnes / axle). Thus, it is clear that the goods
manufactured in the Park should be less voluminous, relatively light and quite expensive so as
transportation costs per unit of production would not significantly increase its cost of sales.
At the same time, the location of the Industrial Park directly near the locality imposes certain
restrictions on production technologies of the Industrial Parks enterprises. They should not pollute
the environment and produce strong noises and vibrations.
Specific production of the Park will be adjusted to economic globalization, phenomenon of migration
of resources and industries. Currently, investors are looking for conditions that would ensure a higher
income level and would allow them implementing competition strategies. This phenomenon covers
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industries with a higher degree of mobility where the share of labour force costs is important. At the
present stage, such industries implies: textiles and clothing industry, industry of producing engines
and electrical equipment of various capacities, radio and electronic industry, industry of producing
machinery and equipment, particularly those whose assembly is predominantly manual,
woodworking industry.
Foreign investors are also interested in industries of agricultural raw material and livestock products
processing.
Taking into account the above-mentioned conditions and peculiarities of development of Edinet
district and of neighbouring districts, Edinet Industrial Park land will mainly have the following
fields of production and services in IP specialization: (a) textile and clothing industry; (b) leather
processing and footwear manufacturing; (c) furniture production; (d) machine and equipment
production; (e) production of electrical and electrotechnical equipment; (f) automotive industry; (g)
transports and communications (storage, processing, packaging).
To facilitate the creation and operation of the Industrial Park, the state, represented by central and
local public administrations, grants to the holder of the title of the Industrial Park and its
Residents the following benefits:
a) exemption from compensation of losses, caused by the exclusion of lands from the category of
lands with agricultural destination according to the Law on normative price of land and
procedure of sale and purchase of land;
b) free amortization or transfer in gratuitous use of public assets to the Management Company for
creation and development of the Industrial Park upon the decision of their owner according to
the Law on management and privatization of public property;
c) the right to privatize the land adjacent to constructions in public property at normative price of
the land, established at the moment of its commissioning to the Managing Company or lease to
the Industrial Parks Residents only after purchase and/or commissioning of constructions and
installations with industrial and related destination, according to the Law on normative price of
land and procedure of sale and purchase of land
6
;
d) granting of tax benefits according to the Tax Code;
e) application by the Managing Company of 0.3 discount rate of the fee of annual payment for
state-owned land, established according to the Law on normative price of land and procedure of
sale and purchase of land, or basic fee for annual lease of public assets, established by the Law
of the state budget for the corresponding year;
f) optimization of state controls over the activity of the Industrial Parks Residents by performing
planned inspections according to the annual schedule, approved by the Government Decision or
unscheduled inspections carried out with consent of the Ministry of Economy according to the
legislation in force;
g) allocation, as appropriate, of funds for creating technical and production infrastructure from the
state budget, local budget, National Regional Development Fund and other sources.

6
Facility stipulated in par. (1) let. c) is granted if investments were made in constructions and installations covered by the
project, on which basis the Resident or the Managing Company was selected, and which value is greater than the amount
consisting of three normative prices of land, set at the time of its transfer in use to the Managing Company or leased to
Residents plus the payment for compensation of losses caused by the exclusion of land from the agricultural land
category, estimated as of the date of land purpose change, of it occurred.
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According to the Law on industrial parks, the Managing Company of the IP may also carry out
entrepreneurial activity on the territory of the IP, in other words it may itself be a resident of the IP.

At the same time, a Business Incubator which would support creation of new businesses in the
industry from the fields, allowed within the IP, would operate. It will be established only if there are
some long-term incubation programs. Business Incubator could be a separate Resident of the IP or its
incubation services could be provided by the Managing Company itself of the Park. If the incubation
services are offered by the Managing Company, they will be separately regulated and recorded in
accounts of the Managing Company. Forms and volume of the support, provided by LPA for
incubation activities, regardless of the form of their rendering will be stipulated in a special
Regulation for BI organization and activity. It will also stipulate conditions of eligibility as a BI
Resident (or Resident of the IP in incubation).
Minimal services and utilities, offered by the IP, are:
lease of plot, parcel;
water and sewerage connection;
gas connection;
connection of electric power, telephony, other communications;
roads;
rainwater sewerage system;
public lighting within the Park;
parking for visitors.
The Managing Company maintains internal roads and common green spaces, storm sewage and other
services that are included in the minimum package of services. In addition to the above mentioned
services, the Managing Company may also offer other services to Residents on commercial
principles such as: lease of areas for offices and production, conference and minutes rooms, catering,
consulting services in the field of business planning and development, project development,
marketing and staff recruitment, management and knowledge transfer, audit and accounting, etc. For
this purpose the Managing Company built from its own sources and at its own risk all the necessary
infrastructure.
IP Performance. Main performance indicators of creation and development of the Industrial Park
will be the time of commissioning of the IP, turnover of the IPs Residents, the area occupied by the
IP, the number of jobs created in the IP and in companies outside the IP, the volume of investments
attracted within the IP, revenues to consolidated local and state budget obtained from tax and fee
payments by the Parks Residents and Parks Managing Company.
2.2. Analysis of the opportunity for creation of a Business Incubator within the
IP
In order to create a favourable environment for setting up new businesses in Edinet and only if there
are clearly defined long-term incubation programs, it is proposed to establish within the IP a Business
Incubator in the field of industrial production, including agro-food production, and other activities
associated with the IP profile. Advantages of locating the BI on the IP territory are related, first of all,
to the fact that BI Residents will be also able to benefit from facilities, offered by the title of the IP
Resident. Therefore, after the incubation period the Resident will be able to continue the activity if
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wishing it as the IPs Resident. In such a way, additional conditions for improve sustainability of
founded businesses are created.
Another advantage of BI placement on the territory of the IP is the fact that alongside with
contributions of public authorities, private partners and foreign donors in creation of the Park they
automatically contribute to the creation of the BI as well. From this point of view, public costs related
to activities of stimulating businesses in Edinet and adjacent area are reduced.
Business Incubator located inside the IP can provide areas (i) for lease for the incubation period
under the condition of allocating these areas after the incubation period, (ii) for lease with the
possibility of becoming the Resident of the Park, (iii) the possibility of buying areas and subsequent
privatization of the land, or (iv) will provide parcels for construction of production spaces. In all
these cases, BI Residents will benefit from an adjusted consulting and support package in compliance
with the BI Regulation.
Direct activity of BI can be organized in 2 ways: (i) BI is a Resident of the IP or (ii) BI is integrated
into the IP, in other words it becomes an activity of the Managing Company of the Park. In the first
case, BI Residents become IP residents only after losing the status of BI Resident, while in the
second case, they can become residents of the IP once they have obtained the status of the BI
Resident. These 2 forms of organization have its advantages and disadvantages especially if we refer
to forms of financing.
Business Incubator as the IP Resident can access easier to funding from foreign donors as well as
record of resource use is easier to monitor and verify. At the same time, in case of integrated variant,
there are advantages related to administration costs as well as procedures of transition from BI
Resident to IP Resident become simpler and more flexible. For these reasons it is proposed that BI to
be administered by the Managing Company of the IP. It was this solution that was taken into
consideration regarding the following.
In general, BI activity is an activity that requires support from the public sector. In this regard,
authorities who need and want to create the business incubator must find resources to support BI.
Funding sources of BI can be from local, regional and central public authorities, private partners or
foreign donors.
2.2.1. Estimation of the demand for production areas and services for
businesses hosted by BI
The main tool for determining the demand for business areas of BI is interview, carried out with
companies within SME
7
. 100 economic entities have been interviewed. Based on the interview, a
growing demand for production areas, under conditions more advantageous than those currently
offered by market, has been identified. In addition, most interviewees also requested a range of
consulting services required within BI.
Main findings are:
1. The idea of creating an BI that would provide leased production areas is considered as
especially good by all those interviewed.

7
The total number of SME in 2009 made up 295 enterprises.
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2. 30% of SME wish to start a new business or develop the existing activity inside the BI.
3. 40% of those interviewed have shown their interest in consulting services offered by Business
Incubator. The first place has been taken by consulting services in the field of marketing,
while the second place - by business consulting. The following places are occupied by
consulting services in the field of accounting and taxation, quality management, human
resources consulting.
2.2.2. Concept of creation of BI within the IP
BI will be administered by the IPs Managing Company, which will manage BI as a distinct unit of
activity related to IP management. The Managing Company is responsible for operational issues and
management of the business incubator. Main duties of BI management are the following: to be
responsible for managing the BI; to conclude agreements on lease of areas in the production premises
and of services rendering with the incubators residents; to ensure staff for providing services to
incubatees; to ensure the integrity of BI assets; to carry out activities to attract investments for
incubator development; to establish and maintain relationships with international networks of
technology and business incubators; to create and maintain the database on profile of incubators
activity; to use all legal benefits in favour of incubatees.
BI extension on all lands of the IP will be not taken into account, since this contravenes to the
concept of the Industrial Park. Thus, BI will lease production areas, at prices lower than the market
prices and will provide administrative and consulting services at lower tariffs (see Chapter 5.3.2) as
compared to those offered to the IPs Residents. Tariffs, applied within the BI
8
, will be approved by
the Local Public Administration. If they do not cover the costs related to incubation services, they
will be financed through the incubation programs. After incubation stages enterprises will be able to
become the Parks Residents under equitable conditions or will leave the IP.
BI size and structure. For BI activity, production premises with an area of 12 100 sq.m. on a land of
2.0 ha will be built. BI project will include the costs of connecting production premises to the internal
water supply, sewage networks, electricity and natural gas networks. Also, the project will include
costs of development, including connection of the land to the internal road network. For an enterprise
from BI, a production area of at least 600 sq.m. was established. BI will have production premises as
well as will be able to provide incubation services simultaneously to 20 enterprises.
BI will lease production areas and will provide incubation services for a period of 5 years to
enterprises.
Incubation stages and service portfolio, offered by BI. Stages of incubation process and implied
interventions in incubated enterprises can be viewed in parallel with business cycles of SMEs, as
follows:
Pre-incubation stage. This is the first stage of intervention and it consists in providing assistance to
development of the business idea. This is a stage that can be afforded only by some incubators, if
they have public or foreign support. This type of intervention is often needed in industries, etc.
Duration of this stage is one year. The enterprise is assisted in order to start its own business, develop
business plans, feasibility studies, identify sources and methods of investment financing,

8
Thus, both if BI is created from public sources, as well as if it is financed by the private partner since in the latter case,
losses that will occur between applied tariffs and expenses, incurred by BI, will be recovered by an incubation program or
LPA.
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procurement and installation of equipment, launch the production activity. Pre-incubation activity
implies lease of production areas for a period of up to one year.
Incubation stage. This stage occurs from the moment the enterprise has launched its production
activity. Incubator provides services of a high complexity to support survival and balanced
development of the medium and long-term business. Incubator can assist in the plan refining, team
building, marketing plan implementation, record keeping, cost calculation and result reporting.
Incubation period lasts 3 years.
Post-incubation stage. This stage includes enterprises that have benefit from incubation services for
three years. Enterprises are becoming profitable and no longer need services from the incubator.
Although incubators intervention is not necessary any longer, incubator continues hosting
enterprises found at this development stage for a period of one year, meanwhile the lessee decides
where to go from now on.
Operational plan. Operational plan regarding the launch of BI activities is included in the
operational plan of the IP. From the moment of the commissioning of production premises it will
have an operating cycle which will be repeated with a periodicity of 5 years (pre-incubation
incubation post-incubation).
Table 15. Operational plan of the Business Incubator (Q - quarter )
No. Measures Term
1
Development of the project regarding the construction of the BI
production premises
2012, Q1
2 Obtaining permits, announcement, agreements, etc. 2012, QI
3
Development and filing the funding application for creation of BI and
IP
2012, Q II
4
Construction of production premises of BI and selection of BI
Residents
2012, Q III 2013, Q II
5 Organization of competitions to select BI Residents
Starting from 2012, Q
III
6 Signing contracts with the first residents 2013, Q II
7 Official ceremony of BI launching 2013, Q II
8 Launching of BI production activities 2014
If we suppose that the share of requests for BI buildings has an equal distribution for years, which
will not lead to increase in future incomes, then we will establish an incubation schedule (see Table
16)
Table 16. Incubation schedule of BI Residents
Indicators 2014 2015 2016 2017 2018
2019 2020
Pre-incubation (1 year) 5 5 5 5 0 5 5
Incubation (3 years) 5 10 15 15 10 10
Post-incubation (1 year) 5 5 5
Incubated enterprises 5 10
Thus, within the period of IP functioning, we will obtain 50 incubated enterprises.
2.3. Reasoning the technical option for IP establishment
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In order to achieve the goals of the Industrial Park, many configurations of the Park can be used. The
main elements of this configuration are related to utilities and services provided by the Managing
Company and to delimitation of responsibilities between service providers and utilities, Managing
Company and Residents. All technical solutions regarding this issue can be divided into 3 categories:
(i) The Managing Company provides and ensures all infrastructure elements at the minimum level,
described in the Concept. In this case the amount of investments of the Managing Company is
minimum and more freedom of development is left to Residents. Relations between utility
providers and Residents are one with minimal involvement of Managing Company. The
Managing Company shall provide in compliance with IP Regulation only parcels of land for
business development by the Residents.
(ii) Industrial Park is seen as a unit with a utilities and services infrastructure almost separated,
minimizing the implications of Residents and providers within the Park. The Managing
Company provides Residents within the described technical limitations with necessary utilities
and services.
(iii) In terms of supplying utilities and services the Industrial Park is something intermediate
between the first two solutions. The Managing Company may combine for Residents,
depending on utilities and structure, different approaches on provision of resident with utilities
and services, some may be provided with access to municipal providers, for others Residents
connected themselves to utilities through infrastructure of the Managing Company.

Taking into account the type of the IP, described in the Concept, including the fact that IP will
contain incubation services, a technical solution from the category (iii) is still being proposed. The
main advantages of this approach are to provide an increased flexibility in order to meet the
requirements of utilities of Residents and allow finding an optimum formula in providing utilities,
maintaining IP requirements which will ultimately help to reduce their costs
Another important aspect related the IP is its configuration according to functional structure. In terms
of destination, the IP land is divided into (i) Resident zone, (ii) Administrative zone and (iii) lands,
occupied by infrastructure. According to the IP Concept it is necessary to take into account that the
industrial IP will provide incubation services for a certain type of Residents, as well as wants to cover
a part of the demand of production areas coming from foreign investors for shorter periods of time.
For this purpose, a certain part of the zone of Residents shall be designed for the lease of production
facilities.. As a result, Resident zone is divided into (i) the subzone where the Managing Company
offers production areas by lease and (ii) subzone where plots of land, on which the Resident builds
the required areas with their own resources, are leased. In order to identify the size of Residents
subzones three options were figured out (see Chapter 5.4.1).
The technical solution proposed to built the IP are the following main characteristics:
Offered services:
a) Services, provided by IP:
- lease of land plot, parcel
- lease of production premises / a part of them
- public lighting within the IP
- parking for visitors
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- distributed utilities and facilities at the level of each parcel: access to road, water and
sewerage, gas, rainwater sewerage, connection to electric power, telephony and other
communications networks
- registration of flow of transport units
- maintenance of production premises and BI objects, roads, parking, public lighting,
rainwater sewerage, fence.
b) Additional services, provided by the Managing Company:
- lease of areas for offices, public catering, other areas for services expected to be ensured by
providing companies (banking, courier, mail, health assistance services);
- consulting services, provided by IP development service in the field of business planning
and development, project development, marketing and staff recruitment, management and
knowledge transfer, audit and accounting.
c) Incubation services, provided by the Managing Company:
- lease of production premises built by the Managing Company for the BI Residents
- assistance in business implementation and development, including until business launching
(plan, studies, financing sources, equipment and facilities, supply)
- assistance in balanced medium- and long-term development of the enterprise, in team
building, in marketing plan implementation, in record-keeping, in cost calculation and
optimization
- assistance in preparing to leave the BI
Functional destination of lands will have the following configuration:
According to destinations, the IP land is divided into administrative zone, Resident zone and lands,
occupied by infrastructure (roads, public networks, etc.).
Table 17. Structure of the Industrial Parks lands
Destination Area, ha Share, %
Area, occupied by
buildings and
constructions, ha
Land
share, %
Administrative zone 0.64 3% 0.286 45%
Zone of Residents 16.74 90% 10.044 60%
Lands, occupied by infrastructure 1.22 7% 0.76 62%
Total 18.6 100% 11.09 60%

a) Zone of Residents consists of: (i) subzone of leased production premises and (ii) subzone of land
parcels on which the Resident builds necessary facilities with its own funds.
Subzone of leased production premises is the plot on which production premises are located and are
designed to be leased by IP and BI Residents. The minimum area of production premises for a
Resident makes up 1500 sq.m. For an enterprise of BI, we supposed a lease of a minimum area of
600 sq. m., while 20 enterprises can benefit from BI production premises spaces.

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The subzone of parcels is occupied by production infrastructure, access to internal road and
connections of internal common utilities
9
. Production infrastructure of Residents will include
production premises / industrial buildings for production activities corresponding to the IP profile,
warehouses, platforms. The minimum size of parcels subjected to lease procedures through tender
makes up 0.51 ha. The maximum number of residents in the subzone makes up 24 enterprises. No
limit for the size of Residents plots is established, so residents are able to adjust the size of lands
according to their needs. But it is obvious that this can happen only on land available for this subzone
and in accordance with the management plan of the Managing Company. Residents of this subzone
can also be BI Residents and enjoy a special set of incubation services, which may include only
consulting and support services.

Table 18. Structure of Residents zone
Indicators
Subzone of leased
production premises
Subzone of land
plots
Total
Residents BI Residents BI
Share of the zone of Residents 15% 12% 73% - 100%
Land area, ha 2,51 2,01 12,22 - 16,74
Area designed for constructions, sq. m. 15 100 12 100 73 240 - 100 440
Minimum area per Resident, ha 0,25 0,1 0,51 -
Minimum area designed for
constrictions per Resident, sq.m. 1 500 600 3 050 -
Maximum number of enterprises -
Residents 10 20 24 - 54
Number of employees 230 180 1 100 - 1510
a) Administrative area is occupied by administrative building, car parking and green spaces.
b) The lands occupied by infrastructure include land occupied by roads, public utilities within the
IP, including used water pumping station, transforming substations and waste collection platform.

Proposed technical solution for implementation of the IP with characteristics mentioned above is
shown in Annex B.

9
Except for heat networks, which will be provided by each Resident individually according to its needs.

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3. DESCRIPTION OF THE INDUSTRIAL PARK
3.1. IP organization and operation
According to the Law on industrial parks No. 182 of 15.07.2010, the local public administration of
Edinet will start the creation Edinet Industrial Park. This project is seen by local public
administration as an important tool for social and economic development of the town and
surrounding region. For this reason this project is developed with the participation of local authorities
with the support of regional and central authorities.
After confirming the opportunity of creating an Industrial Park through its feasibility study, the
initiators of Edinet IP creation will develop and approve specifications under which the tender for
selection of the winner partner for IP creation will be held.
In order to support the creation and operation of the Industrial Park, the Local Council of Edinet will
enable the executive body of local public administration to establish the Commission for creation and
operation of Edinet Industrial Park, which will provide the necessary support to contribute to:
a) process of change of land purpose;
b) process of obtaining the decision of the local public administration on land destination;
c) process of obtaining licenses, approvals, coordination and other permissive documents foreseen
by the law required for creation of the industrial park, infrastructure and buildings designed for
the Park, where applicable;
d) performance of other administrative procedures necessary to create the Industrial Park, launch
and conduct of Residents activities.

Commission decisions will aim to support the process of drawing up documents necessary for the
creation and development of Edinet Industrial Park, and to prevent the occurrence and / or to remove
any impediments to solving problems relating to IP creation and development.
This Commission will also have the task of selecting the future applicant of Industrial Park title.
Further, applicants of Industrial Park title will submit to the Local Council of Edinet an application
on creation and operation of Industrial Park, enclosing copies of documents confirming the right of
ownership for at least 30 years of the Industrial Park land provided that it meets the requirements
stipulated in art. 5
10
of the Law on industrial parks.
In order to obtain the title of industrial park, the applicant shall submit to the Ministry of Economy
the application for Industrial Park title, enclosed by the documents specified in art. 8 of the Law on
industrial parks.

10
Land designed for industrial park with buildings and utilities located on it, must meet the following conditions:
a) to make free of any tasks;
b) not to be subject to pending litigation and / or settlement in courts or arbitration;
c) to have access to transport routes;
d) to be accessible to technical and production infrastructure connecting the park to public utilities;
e) to have an area of at least 5 hectares.
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The Ministry of Economy will consider the application and the set of documents for granting the title
of Industrial Park within 30 calendar days since their submission. According to art. 11 of the Law on
industrial parks, the Ministry of Economy may decide to grant the title of Industrial Park for a period
of 30 years to a company, which is entitled to use for at least 30 years, or owns a land designed for
the creation of industrial park meeting the requirements stipulated in art. 5 of the same law.
From the moment the Industrial Park title has been obtained, the Managing Company will have the
following duties:

to coordinate and monitor the process of creating the technical and production infrastructure, as
well as production activity of the Industrial Park;
to organize tenders to select Industrial Park Residents;
to develop and promote strategies and programs to develop the Industrial Park;
to attract investors for the development of production activities and provision of services within
the Industrial Park;
to ensure normal operation of utilities networks according to technical requirements;
to develop technical and production infrastructure, as well as common utilities of the Park
according to the technological needs of the Park;
to conclude contracts with IP Residents and monitor fulfilment of conditions stipulated therein;
to cooperate with specialized bodies of public administration and with local public
administration;
to bear responsibility for the rational use and appropriate to funds allocated from state budget or
from budgets of administrative and territorial units to create technical and production
infrastructure of IP;
to establish and approve
11
the conditions of commissioning / leasing of land, production premises,
buildings (offices in the Managing Companys building) and other owned or used facilities, as
well as amount of payments;
to ensure accounting and statistical accounting of its activity and to submit on a quarter basis
reports on the activity carried out within the IP to the Ministry of Economy;
to submit to specialized central bodies and LPA proposals on development of the managed Park.
Managing Companys main sources of income may include:
Income from the rent / lease of land and production premises (if they are built);
Income from entrepreneurial activity in the Industrial Park;
Payments and fees paid for participation in tenders for obtaining the right of Resident of the
Industrial Park and for registration as Resident;
Income from provision of services of Industrial Park Residents;

11
Amount of payments approved by the LPA where sources of funding buildings / production premises are public.
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Income from lease of rooms of administrative building;
Income from receipt of administration fees;
Donations;
Other income related to its functions.
In order to facilitate the creation and operation of the Industrial Park, the state, represented by central
and local authorities, give to the holder of the title of Industrial Park and Residents the following
facilities:
a) Exempt from compensation of losses caused by exclusion of lands from the category of
agricultural lands according to the Law on normative price of land and procedure of purchase
and sale of land;
b) Free alienation or transfer in gratuitous use of state-owned property to the Managing Company in
order to create and develop the Industrial Park upon its owner's decision under the Law on
administration and privatization of public property;
c) right to privatize state-owned land for construction at normative price of land, established upon
its transfer to the Managing Company or leasing by Industrial Park Residents only after purchase
and / or commissioning of constructions and industrial and related facilities, according to the Law
on normative price of land and procedure of purchase and sale of land
12
;
d) provision of tax incentives according to the Tax Code;
e) application by the Managing Company of the discount rate up to 0.3 of annual fee for lease of
state-owned land, established according to the Law on normative price of land and procedure of
sale and purchase of land, or of the basic fee for annual lease of public property assets,
established by the Law on state budget for the respective year;
f) optimization of state controls over the activity of Residents of Industrial Parks by conducting
planned controls according to the annual schedule approved by the Government Decision or
unscheduled controls carried out with the consent of the Ministry of Economy as required by the
applicable law;

g) allocation, as appropriate, of financial resources for creation of the technical and production
infrastructure from the state budget, local budget, National Regional Development Fund and other
sources;
Residents and investment projects implemented within the IP will be selected through a tender,
organized by the Managing Company. Tender winners will enter into lease contracts regarding land
parcels or production premises built by the Managing Company. Conditions for leasing parcels,

12
Facility stipulated in par. (1). let. c) is granted if investments were made in constructions and facilities covered by the
project, on which basis the Resident or Managing Company was selected, and which value is greater than the amount of
three normative prices of land, set out when commissioning to the Managing Company or when being leased by
Residents, plus payment to compensate losses caused by exclusion of land from the category of agricultural lands,
estimated the day when the purpose of the land was changed, if this occurred.

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production premises, or use of infrastructure owned by the Managing Company are set in the
contracts concluded between the Managing Company and IP Residents.
Parcels of land to be leased, will be used by Residents throughout the contract term under conditions
foreseen by the IP Regulations and contract, and upon the termination of the contract they will to be
left and transferred to the Managing Company. At the same time, Residents will be granted the right
to privatize leased parcels of land according to art. 12 of the Law on IP. After privatization of land,
IP Residents will operate within the Park throughout the duration of activity of IP or will sell their
own investments to other future Residents of the IP. The latter will have to obtain the title of IP
Resident and to comply with the IP Regulations.
The Resident has the following duties:
1. The production activity must have at least a 80% share in all activities of the Resident.
Throughout the entire contractual period it is forbidden to change the destination of premises or
of activity for which the contract was concluded without prior written consent of the Managing
Company, which will not be refused unreasonably.
2. The following types of land occupation and use are forbidden: industrial, storage constructions
or services involving polluting activities; constructions of residential buildings and other than
those listed; waste storage facilities and others.
3. To make appropriate investments and developments, so that within the term established in the
Contract concluded between the Resident and the Managing Company the goal, for which the
land plot was leased, could be achieved. In the event of failure within the term set out in the
investment contract, the contract looses its force, the Residents are obliged to leave the land and
sale their own investment.
4. Any necessary investment or development will be made only upon a Construction Permit with
all approvals required by law.
5. To take all measures required to protect the environment and the conditions under the law in
force relating to environmental protection.
6. To pay monthly fees and payments to the Managing Company established by IP Regulations.
7. To pay the unique fee for obtaining the Resident right.
8. To deposit an amount as guarantee, equivalent to 6 months administration fee set out in the
contract. If necessary, penalties and amounts due to the Managing Company will be levied of
this amount.
9. Upon a possible sale of its investments made on the leased parcel of land, to invite in written
form the Managing Company to participate as a concerned party in signing sale contract,
negotiation and signing of a new lease agreement and obtaining the title of Resident by a new
tenant. The resident is required to complete the sale procedure within the period specified in the
Contract between the Resident and the Managing Company upon contract termination. For the
entire area until the land plot is left, the fee previously agreed is paid. If the above mentioned
terms are exceeded, the Resident shall pay to the Managing Company compensation of
damages calculated for daily loss of the unrealized profit by failure to use the land.
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The Managing Company undertakes:
1. To notify Resident on the occurrence of any circumstances that may damage its rights;
2. To contribute, within its powers, to provision of a business climate suitable for development of
companies located within the IP;
3. To provide and maintain technical and production infrastructure, as well as common utilities in
compliance with the technological needs of the Park;
4. To assist with specialized services in areas of Residents competence in issues of its concern;
5. To ensure issuance of permits and authorizations of their field of competence in emergency
regime;
6. To provide Residents with access to information and documents of public interest and to those
strictly related to the IP, required for development of its activity;
7. Upon the conclusion of contracts with its Residents, the Managing Company will deliver, and
upon termination of the lease / tenancy contract will accept land parcels and / or production
premises being subject of the rent/ lease based on protocol.

IP Residents will be selected by the Managing Company through a tender on obtaining the right to
lease land parcels/ production premises, which will indicate:
The annual level of administration fee in MDL;
Investments that they undertake to make specifying reference indicators (dynamics of planned
construction, building area, usable area, planned amount of investments for commissioning,
planned number of employees and of own or attracted funding sources);
Commitment on technological process necessary for business in terms of used technologies and
manner they meet environmental standards;
Final deadline for making investments;
Specifications on indicators of investment business plan, namely its development by stages,
where applicable (amount of total investment and the breakdown by year / stage, Internal Rate
of Return, Net Present Value);
Data on the amount of monthly consumption of utilities (water, gas, electric power supply,
sewerage, waste collection, etc.)
Other needs related to the need to lease administrative buildings, public catering, conference
halls, consulting services, etc.
3.2. Land
Edinet with an area of 870 hectares is an important commercial centre, located in the northern part of
the Republic of Moldova, at a distance of 201 km from the capital of the country and at 8 km from
the Bratuseni railway station, it has the population of about 20 thousand inhabitants.
The land with an area of 18.6 hectares destined for locating Edinet Industrial Park is located in the
north-western part of the town and is adjacent to the international route M14, Chisinau Cernauti,
ensuring a good road accessibility and mobility to international markets (see Annex A). The land has
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access to European route E583. Also, it is located at a distance of 38 km to the railway of Ocnita, at
70 km to the railway of Balti and at a distance of about 98 km from Marculesti Free International
Airport near Floresti. The distance from the land for the Industrial Park to the Giurgiulesti
International Free Port makes up about 463 kilometres.
3.2.1. Legal nature of the land
The land for Industrial Park location an area of 6 ha is owned by Edinet Town Hall, being situated in
the town plot. It is arable land with an area of 18.6 ha, it has productivity of 82 degrees. The land is
free from any legal burdens (not put in pledge, not leased).
In order to create the Industrial Park, the title of agricultural land requires for the Industrial Park to be
preliminarily transferred from the agricultural category to industrial constructions category. For this
purpose, it is necessary to have the approval of Edinet Town Hall and the Government.
3.2.2. Land characteristics
The territory of the Park is located on a plateau, at a level of 200 meters above the sea level. There
are no slopes with a higher level which would determine flooding of the territory of the Industrial
Park in case of heavy rainfalls or snow melting.
The area of the land designed for Industrial Park location makes up 18.6 ha. The size of the land are
presented in the Annex B. Its longest side passes along M14 route. A part of its other sides (southern
side and a half of western sides) have borders with lands in public property of Edinet Town Hall,
while the rest of sides have borders with private lands.
According to data of the Seismic Zoning Map of the Republic of Moldova (scale 1: 4 000 000, year
2010), approved by the Ministry of Construction and Regional Development by the Order No. 25 of
23.12.2009, Edinet is located in a seismic zone of 6 degrees according to the MSK scale of 12
degrees. This thing imposes some restrictions on the degree of seismic resistance of buildings and
constructions, which will be built within the Industrial Park.
Groundwater flows at a depth of 8-10 meters, therefore, no special problems of foundation and
additional costs occur.
3.3. Utilities and infrastructure
3.3.1. IP land development
In order to ensure the functionality of the IP, the following minimum works of land development will
be carried:
Development of green spaces;
Installation of a road and perimeter lighting systems;
Construction of a platform for the accumulation and disposal of solid waste from the common
area of the IP;
Installation of litter bins;
Construction and development of a parking plot;
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Installation of road and information indicators on internal roads of the IP;
Fencing of the Park land along its entire perimeter

Description and specifications of these works are presented below.
Green spaces. According to the proposed zoning, the land of Edinet IP will be practically split in the
zone of Managing Company (Administrative zone, about 10% of the land) and the zone of Residents
(about 90% of the land). In order to provide freedom of development on Residents areas, we propose
cultivation of decorative trees of common spaces of the IP by the Managing Company. Thus, the
arranged area will make up about 2000 m
2
.
Installation of lighting system. Only internal road of public utility is intended to be installed by the
Managing Company. The lighting system will be ensured by an air power transmission line of 0.4 kV
which will pass along their left side. Air line will be installed on pillars, on which pillars street
lighting LED lamps, 24 units in number, will be installed. The lighting system will have a length of
950 meters plus feed line from the transformation station of 303 m. The distance between line pillars
will make up 40 meters. Overall the line will have 24 pillars.
Perimeter lighting of the Park will be optional. For its installation 2100 m transmission line of 0.4 kV
and 53 pillars will be used.
Platform for accumulation and disposal of solid waste. At the intersection of internal public roads
it is proposed to create two platforms for the accumulation and disposal of solid wastes in the form of
asphalted fenced territory, with an area of 16 sq. m. These platforms will serve for collection of
garbage from the common area. Accumulation and disposal of Residents waste will be carried out on
their expense.
Litter bins will be installed at a distance of 25 meters one from another alongside internal public
roads. Their number will make up 40 units.
Car parking plots. Edinet Industrial Park needs 60 car parking plots of 18 sq.m. each. The total area
of asphalted parking plots will make up about 1080 sq.m., which is equivalent to the carriageway
surface of the road of IVth category with a length of 1080 / 6 = 180 meters.
Road and information indicators will be installed along the external public road. The number of
road indicators and information schemes required in the Park will be about 10 units.
Park land fencing. The perimeter of the IP land has a length of 2100 m. Thus, in order to fence
2100 of fence with a height of 2m of metal bars is required.
3.3.2. Necessary utilities
Edinet has a relatively well-developed local infrastructure: provision of electric power is stable and
can fully meet the need of industrial sector; services, water supply and sewerage are functional and
there is easy access to the gas network; there are no problems with connection to
telecommunications networks (fixed, mobile telephones, internet).
The needs of Industrial Park businesses in electric power, natural gas, drinking water and sewerage
(see Table 19) were assessed based on data about the respective needs of enterprises with capabilities
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similar to those in Annex 1
13
, and based on generalized rules of consumption (per unit of production)
of electricity, natural gas, drinking water (except volume of water used repeatedly for cleaning their
internal systems) and the volume of wastewater to be discharged through the sewerage.
Table 19. Needs of enterprises of Edinet IP in public utilities
14

No. Type of activity
Electric
power,
kVA
Natural
gas,
Drinking
water,
Sewerage, m
3
/hour
m
3
/hour m
3
/hour
1
Fabrication of clothes from woven materials,
leather and furs
1600 18.7 2.9 2.0
2 Footwear production 2000 21.3 9.8 7.9
3
Production of starch from potatoes with
processing capacity of 200 tonnes of potatoes
during 24 hours
750 195.6 39.3 39.3
4 Production of chips and fried potato segments 350 2.1 1.0 1.0
5 Leather and furs tanning 630 4.4 15.7 7.9
6 Assembly of mobile phones 134 17.8 1.0 0.8
7
Production of electric motors with capacities
from 10 to 200 watt
560 9.8 2.4 2.2
8 Production of radio devices 750 30.2 2.9 2.7

Total 7074 300 75 63.6

The land designed for location of Edinet IP is situated at a distance of 115 m from the water and gas
systems and 850 m from sewerage system of the town. Parallel to the M14 route, the power
transmission line of 10 kilovolts passes. Currently unused capacities of these networks can meet the
estimated needs of IP.
From Table 19 it is noted that in order to ensure the operation of enterprises of the Industrial Park, it
is necessary to install within the Park several transformers with total capacity of about 7074 kVA and
their connection to the power transmission line of 10 kV. Since eastern part of the land is intersected
by the power transmission line of 10 kV we consider that is not necessary to build an additional
tension line of 10 kV.
It is also necessary to build within the IP an average pressure natural gas pipeline of 917 meters in
length, which would provide Park enterprises with about 300 m
3
of gas per hour, a drinking water
pipeline of a length of 917 meters, which would provide with drinking water the enterprises of the
Park from the local water pipeline in a volume of about 75 m
3
of water per hour or 20.8 litres per
second.
It is necessary build within the Park a sewage water lift station and waste water pipeline with a
capacity of not less than 63.6 m
3
per hour or about 17.6 litres per second with a length of 850 meters
from the station to the place of its connection with the town sewerage system.

13
Enterprises listed in Annex 1 and Table 19 constitute just a possible configuration of Edinet IP Residents and were
considered for assessment of the need in IP utilities.
14
Except for heat networks, which will be provided to each Resident individually according to their needs.


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Capabilities and configurations of roads and internal and external public utilities networks of the
Industrial Park shall ensure for its residents smaller distances from the place of location of their
enterprises to points connecting with roads and public utilities networks that lead to the minimization
of summary connection costs, while ensuring the lowest possible cost for the construction and
operation of roads and public utilities networks.
3.3.3. Internal infrastructure
Internal road
Internal road will have access to M14 route by two stations: one at the distance of 130 m from the
southern border of the land, another one at the distance of 95 m from the northern boarder of the land
(the first one of 128 m long, the other one of 33 m long). Optionally, it is intended to build the third
route through the middle of the eastern side of the land, perpendicularly to M14 (with the length of
132 m). Within the IP access roads will be jointed by the route of 364 and 285 m long, which will be
extended to the southern side of the IP by 140 m. Total length of the internal road is estimated to be
950 m without optional route or 1082 m with the optional route. In the right part of the internal road
the sidewalk for pedestrians will be built. Access of pedestrians to land parcels of the IP will be
ensured by appropriately marked pedestrian crossings.
Pipelines of water, sewerage, medium pressure gas networks and cables for electric power
supply and telephony will be constructed within the channel along the internal road at the distance
of 3 m. In order to install networks, a channel with steps of 1.4 m height will be dug, so that the
distance between the pipelines and cables could be of 1 m diagonally. The sewerage system will be
installed in the deepest channel. Wells of sewerage systems will be installed perpendicularly on the
surface pipeline at a distance of 40 m. In the wells of the sewerage, branches to the pipeline will be
constructed on Parcels of adjacent lands with a length of 20 m. The next two steps of the channel will
be designed for installation of gas and water pipelines in various parts. In addition, branches will be
constructed to water and gas pipelines with the same intervals and lengths of 20 m from the road,
which initially will be sealed with plugs. On steps of channels, from the third level, electric power
and cables of telephone networks will be mounted. The channel will be covered with soil.
Drinking water
Length of internal drinking water pipelines will be equal to the length of internal roads without
access road with the length of 33 m and will make up 917 meters
The approximate diameter of water pipeline is calculated as follows:


where Q
total
total of consumed water in litres per second,
v speed of water movement though pipes (for large diameters 1.5 2 m/s, and for small
diameter - 0.7 1.2 m/s).
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For the total water consumption of 10.8 litres per second, pipe diameter will be about 82 mm. Given
the universal nature of IP, for IP needs a polyethylene pipeline with a diameter of 110 mm is
required.


Internal sewerage pipelines
As it has been mentioned before, the sewerage system consists of two pipelines, one installed along
the length of the internal road, the other one at the western border of the IP land. Thus, the length of
the internal sewerage pipeline of public utility will be equal to the length of internal roads of 950
meters long plus the distance to the waste water pumping station of 140 m and the length of western
side of the land of 841 m, total 1882 m.
According to normative data, for the estimated volume of discharged water of 10 litres per second,
pipes with a diameter of 200 mm are required.
Rainwater sewerage system
Republic of Moldova may be hit by torrential rains with possible rainfall of about 160 mm water per
a rainfall with an average duration of 120 minutes. Rainfall accumulations shall correspond to 0.08
m
3
per hour or 0.02 litres per second per square meter of land area. The torrents of water accumulated
from asphalted territory and from roofs of buildings of the Park should be evacuated. The area of
these territories makes up around 30% of the Park area, or 55800 square meters. The maximum
capacity of water discharge at critical points of exit from the plot should make up 1116 litres per
second. Rainfall waters will be evacuated through two pipelines, built from pipes of Maxi type 160
ensuring a discharge capacity of 16 m/s. The first will be built alongside the internal road and will
collect water from the internal road and lands, adjacent from the eastern part of the IP land with a
length of 950 m. The second pipeline will be mounted on the western side of the IP land with a length
of 1020 m.
Gas supply
Common internal natural gas pipelines will be constructed jointly with water pipelines, sewerage
system, electric power lines, etc. Their length will make up 917 meters.
The inner diameter of polyethylene gas pipeline able to meet the IP needs is calculated as follows:

,
where Q is gas consumption in cubic meters per hour, t gas temperature 0 (14 degrees), p
m
- gas
medium pressure in pipeline (medium pressure makes up 0.10132 MP), V-gas speed 15 m/s of
medium pressure,

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,
and makes up 65 mm. The standard outer diameter of polyethylene pipeline covering the above
mentioned needs makes up 90 mm with wall thickness of 5.2 mm and will be used for the pipeline
construction.
Electric power supply
Construction of electric power and telephone networks can be made by mounting them in
underground or air channels. We chose the first method of electric power supply, because the
supplier can check at any time consumption and energy thefts from the network are excluded. A
transforming substation will be built for electric power supply. In order to satisfy the needs of
installed transformers, provided in the Table 19, we will choose transformers in order to transform
electricity of 10 kV in electricity of 0.4 kV with a total capacity to cover the Parks needs. Internal
public lighting will be installed in pillars on the edge of the internal road.
3.3.4. External infrastructure
On the area of land designed for the location of the Industrial Park, there is no surface or
underground constructions. In the immediate vicinity there are roads, networks and utilities listed
below.
Access condition to the site
Currently the access road to the Industrial Park is not built. In order to provide access of Edinet
Industrial Park to republican and local road networks, it is necessary to built two access roads of IVth
category from the eastern side of the to the M14 route with a length of 20 meters each. One of the
roads will be built at a distance of 130 meters from the southern side of the Industrial Park land, the
other at a distance of 95 meters from the most northern point of the Park. The total length of
external access roads on the site will make up 40 meters.
Electric power supply
Directly near the land of the Industrial Park, electric power transmission line of 10 kilovolts runs
parallel to the M14 route. Therefore, there is no need for additional costs to ensure access of the
Industrial Park to electric power. Supplier of electric power is Joint-Stock Company "RED Nord -
Vest. According to the decisions of the Board of NARE No. 365 of January 14, 2010 on electricity
fees, JSC RED Nord - Vest provides electricity at a tariff of 145 MDL / kWh excluding VAT.
Water network
The drinking water pipeline in Edinet runs parallel to the M14 route at a distance of about 115 meters
from the IP land. Thus, there is a need to build a pipeline which will connect the local drinking water
network with the Park site. The pipeline will be parallel to the access road to the Park from the
southern part of the Park and extended inside the Park. The pipeline diameter makes up 110 mm.
Town drinking water pipeline has sufficient capacities to supply enterprises, which will be located in
the Industrial Park.
Services of water supply and waste water discharge are provided by ME Apa - Canal.
Tariffs for drinking water are the following:
- for population 12.50 MDL per 1m
3
;
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- for budgetary enterprises 19.15 MDL per 1m
3
(excluding VAT);
- for consumers procuring water in the volume of 15 000 m
3
and more during one calendar
month 21.50 MDL per 1m
3
(excluding VAT);
- for other consumers 25.05 MDL per 1m
3
(excluding VAT).
Sewerage system
The locality has a centralized sewerage system to which the sewerage system of the Industrial Park
can be connected through the construction of a waste water lift station in the most south-western
point of the land of the Park, situated at the lowest level (at the height of 201 m). The waste water lift
station will provide waste water pumping of a volume of 100 m
3
per hour and it lifting up to 27 m. In
order to mount the station, there is a need for a building with an area of 12 m
2
.
The waste water lift station will be connected to the sewerage system of Edinet through a sewerage
pipe with a diameter of 250 mm and a length of 850 meters.
Tariffs of sewerage services practiced by the local operator are the following:
- for population 10.50 MDL per 1m
3
;
- for budgetary enterprises 15.00 MDL per 1m
3
(excluding VAT);
- for consumers procuring water in the volume of 15 000 m
3
and more during one calendar
month 19.00 MDL per 1m
3
(excluding VAT);
- for other consumers 21.80 MDL per 1m
3
(excluding VAT).

Natural gas supply
The natural gas supply pipeline of medium pressure of Edinet runs parallel to the M14 route at a
distance of about 115 meters from the IP land and has sufficient capabilities to meet the IP needs.
The gas pipeline of medium pressure will link the gas pipeline of the locality with gas pipelines from
Park land and will run parallel to the asphalted road running to the Park from the southern part of the
land at a distance of 3 meters of such road from its right side. Pipeline diameter makes up 90 mm.
Supplier of natural gas in Edinet is Edinet - Gaz JSC. The price for 1000 m
3
of gas supplied
through medium pressure gas pipeline according to the provisions of the Decision of the NARE
Board No. 376 of May 14, 2010 makes up 4 653 MDL without VAT.

Also, it is proposed to perform the following works on improvement of the territory within the
IP:
- To install along the M14 route 3 informative billboards about the IP activity;
- To ensure a green zone of nuciferous trees along the M14 route, at the eastern border of the IP
land.
3.3.5. Buildings
In order to ensure the activity of the Manager it is necessary to build an administrative building with
the area occupied by 484 m
2
. Structure and equipment of administrative building is presented in the
Annex 9.

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Table 20. Structure of the land occupied by production premises of Edinet IP
Production premises, warehouses,
destination Area, ha
BI production premises 1.210
Production premises of Residents 7.324
Production premises of the Manager 1.510
Total of production premises (production
infrastructure) 10.044
For the construction of production premises in the zone of Residents, we supposed an area occupied
by buildings and construction of 10.044 ha, including 1.21 ha for BI production premises, 1.51 ha for
production premises built by the Manager and 7.324 ha for production premises built by Residents.
3.3.6. Labour force required for the Industrial Park activities
From the data presented in Annex 1, it is observed that the number of jobs that can be created by the
Residents of the Industrial Park will make up a total of around 1 510 jobs of which about 510 jobs
will require professionals from light industry, 110 jobs from processing industry and 890 jobs from
mechanical engineering.

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4. ASSESSMENT OF INVESTMENTS IN THE IP
4.1. Land
The average market price of lands from the zone of Edinet Industrial Park is 50 926 MDL per 1 ha of
agricultural land and ranges from 1 743 885 MDL (towards centre) and 1 291 767 MDL (towards
periphery) per 1 ha of industrial land. Based on the price situation in the region, the land price of 18.6
ha for location of Edinet Industrial Park as arable land makes up 947.2 thousand MDL, while as land
for constructions from 24 million MDL to 32.4 million MDL.
The land for Industrial Park is arable land. In order to establish the Industrial Park, it should be
preliminarily transferred from the category of agricultural land into the land of industrial
constructions. According to the provisions of the Law on normative price of land and procedure of
sale and purchase of land No. 1308-XIII of 25.07.97 (republished in the Official Gazette No. 141-
149/1161 of 06. 12. 2001), Government Decision on exclusion of arable land from the category of
agricultural land, this can take place only after compensation of losses caused by exclusion.
Compensation is made according to the rates provided in the annex to the aforesaid Law. They make
up 19 873.34 MDL per one hectare degree.
For the arable land of 82 productivity degree, the amount of cash compensation per hectare will make
up 1 629 614 MDL. The amount of compensation for exclusion from category of agricultural land of
18.6 ha of the land for the Industrial Park location will make up about 30.3 million MDL. Law on
Industrial Parks No. 182 of 15.07.2010 (para.(1), art. 12) exempts the holder of the Industrial Park
and its Residents from the compensation of losses caused by the exclusion from the agricultural land.
Therefore, compensation amounting to 30.3 million MDL will not be paid. Subsequently, in case of
privatization of lands adjacent to enterprises located in the Industrial Park, the corresponding
compensations from the above amount will be paid in an amount proportional to privatized land area.
According to provisions of para. (12) of art. 10 of the Law on normative price of land and procedure
of sales and purchase of land when calculating the annual lease fee for state-owned land within
Industrial Parks, created in compliance with the Law on industrial parks No. 182 of 15.07.2010, the
Managing Company will apply a reduction coefficient of up to 0.3 of the annual land lease fee set by
law. For small towns such payment makes up 0.5% of the normative price of land. The fee per 1
leased hectare of land with a productivity of 82 degrees in Edinet will make up 1 629 14 MDL *
0.005 = 8 148 MDL per year, while for economic entities Residents of the Industrial Park it will
make up only 2 444.4 MDL or 24 bans for one square meter per year.

Since the land of the Edinet Industrial Park is arable land free of any constructions, it does not require
levelling works and does not involve additional costs.
4.2. IP land arrangements
Green spaces. The area planted with ornamental trees will make up about 2000 sq. m. Thus,
expenses for development of green spaces incurred by the Managing Company will make up about
100 thousand MDL.
Installation of lighting system. Given the prices of necessary materials and the experience of
performing similar works, the minimum cost of construction of one kilometre of power transmission
line of 0.4 - 10 kilovolts makes up about 206 thousand MDL. For the construction of the line of 1 253
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meters long, about 258.12 thousand MDL will be spent. On each pillar of the line, a LED street
lighting lamp will be installed at a cost of 2000 MDL. The cost of 24 lamps will make up 48
thousand MDL. The total cost of lighting system for internal public roads will make up 306. 12
thousand MDL.
Platforms for the accumulation and disposal of solid waste. Costs for construction of these
platforms are assessed in the amount of 8 thousand MDL.
Litter bins. Given the cost of an 300 MDL for a -5 litter bin, the total cost of 40 litter bins
necessary in the Park will make up around 12.0 thousand MDL.
Car parking plots. The area of 60 parking plots proposed to be created is equivalent to the area of a
road of IVth category with a length of 180 meters. The cost of one kilometre of road of the IVth
category makes up 16.178 million MDL. Expenses for the carriageway of the road will make up 60%
of the road cost. So, the cost for creation of 60 parking plots will make up 16 178 * 0,6* 60 * 18 / 6 =
1 747,26 thousand MDL.
Road and information indicators will be installed along the internal public roads. Their number
will not exceed 10 units. Thus, total expenses for their purchase and installation will make up 20
thousand MDL.
Park land fencing. Costs for the purchase and installation of 100 m of fence of 2 m height of metal
bars type "" make up about 41.2 thousand MDL. The length of IP land perimeter makes up
2100 m. Investments for the purchase and installation of the fence will make up 865.2 thousand
MDL.
The amount of investments needed for development of Edinet Industrial Park is presented in Table
21.
Table 21. Amount of investments needed for development of Edinet IP land
Name of land development objects
Amount of investments,
thousand MDL
Development of green spaces 100
Installation of lighting systems 306.12
Construction of platforms for the accumulation and disposal of
solid waste 8.0
Purchase of street litter bin 12.0
Construction of car parking plots 1 747.26
Creation and installation of road and information indicators 20.0
Park land fencing 865.2
Total 3 058.58
4.3. Internal infrastructure
Internal road. The length of internal road makes up 950 meters. Necessary costs for the construction
of one kilometre of road of IV category makes up 16.178 million MDL. Capital investments for the
construction of the internal road length of 950 meters will make up 15 368.6 thousand MDL.
Water networks. The cost of construction of water pipeline with a standard diameter of 110 mm and
a length of 1 km in the conditions of the given project makes up about 300 thousand MDL. Thus, the
total investment for the construction of 917 m of pipeline will make up about 275.0 thousand MDL.
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Preparation of Residents plots connection to the network makes up 10% of the cost of the network, or
27.5 thousand MDL. Total cost for water internal pipeline will is estimated at 302.61 thousand MDL.
Sewerage pipes. For the construction of sewerage pipeline with location of polyethylene pipes with
diameter of 200 mm at a depth of up to 2 m, expenses of about 300 thousand MDL per 1 km are
required. Investments for the contraction of internal public sewerage pipelines with a length of 1 882
m will make up about 1 505.6 thousand MDL. Preparation for connection of residents plots to the
sewerage system make up 10% of the cost of the system or 150.56 thousand MDL.
Rainwater sewerage system. We previously stated that for the construction of channel for rainwater
sewerage system along the internal road, pipes of the type Maxi 160 will be used. The cost per 1
kilometre of such sewerage system makes up about 500 million MDL, while for the construction of
the channel of 950 meter long 475.0 thousand MDL. For the second pipe, which will be built on the
edge of the land on the western side, with the length of about 1 020 m, the cost is estimated at 510.0
thousand MDL.
Natural gas. According to the experience of the Republic of Moldova for the construction of a
medium pressure gas pipeline from polyethylene pipes at a distance of 1 km, expenses amounting to
250 thousand MDL are necessary. Therefore, the length of 917 m requires capital investment of
about 299.25 thousand MDL. Preparation of plots for connection of residents sites to the network
makes up 10% of the cost of the network, or 29.925 thousand MDL.
Electric power. In order to satisfy IP needs of capacities of installed transformers, there will be need
for 352 thousand MDL for 1 transformer of TM-1600/10 type, 662 thousand MDL for 4 transformers
of TM-1000/10 type, 221 thousand MDL for 2 transformers of TM-630/10 type and 79 thousand
MDL for 1 transformer of TM-400/10 type. The total cost of transformers will make up about 1 314
thousand MDL. The total cost construction and installation works is estimated at about 10% of the
transformers cost and will make up about 131 thousand MDL. Underground electric power
transmission line of 0.4 kV is estimated at 1 560 m with a total cost of 1 248 thousand MDL. So,
required total capital investments will make up about 2 693.4 thousand MDL.
4.3.1. Investments in internal infrastructure
The summary volume of investments required to create the internal infrastructure of the
Industrial Park is presented in Table 22.
Table 22. Summary volume of investments required for creation of internal IP infrastructure,
thousand MDL
Building Name
Amount of investments, thousand
MDL
Construction of internal roads of 950 m without optional road

15 368.60
Construction of public internal pipelines of drinking water
with length of 917 m
302.61
Construction of public sewerage pipelines with length of
1 882 m
1 656.16
Construction of sewerage system for rainfall 985.00
Construction of natural gas internal pipeline of public use
with a length of 917 m
252.18
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Procurement and installation of 8 transformers with total
installed capacity of 7060 kVA and transport line
2 693.40
Industrial Park land development 3058.58
Total 24 316.53
4.4. External infrastructure
Access roads. In order to ensure the access of Edinet Industrial Park to republican and local
highways networks two highways of IVth category with the total length of 40 meters is required.
Capital investments for the construction of these roads will make up 647.1 thousand MDL
Water networks. Capital investments required for the construction of drinking water pipe with a
diameter of 100 mm and a length of 115 meters, which will join the local drinking water network
with the Park site, will constitute 34.5 thousand MDL.
Sewerage systems. Waste water lift station costs about 136 thousand MDL, including the
construction of the building with an area of 12 m
2
with of a necessary pool. Capital investments for
the construction of a pipeline with a diameter of 200 mm and a length of 850 meters that will connect
the waste water lift station with the town sewerage system will make up 255.0 thousand MDL. Total
capital investments for connecting internal sewerage pipelines with the town sewerage system will
make up 391.0 thousand MDL.
Natural gas. Polyethylene gas pipeline of medium pressure with a diameter of 90 mm, which will
connect the gas pipeline of the locality with Park gas pipelines, has a length of 115 meters. Capital
investments for the construction of this pipeline will make up 28.75 thousand MDL.
Land development within the IP. In order to build and mount along the M14 route 3 billboards it is
supposed to spend 60 thousand MDL, while in order to ensure a green zone of nuciferous trees at a
distance of 800 m, funds amounted to 12 thousand MDL will be required.
4.4.1. Investments in external infrastructure
The summary volume of investments required to create the external infrastructure of the Park is
presented in Table 23.
Table 23. Summary volume of investments required for creation of external IP infrastructure,
thousand MDL
Building name
Amount of investments,
thousand MDL
Construction of access roads of IVth category of 40 m 647.10
Construction of polyethylene pipeline with diameter of
100 mm for connection to the external source of drinking
water with length of 115 m
34.50
Construction of sewerage pipeline with diameter of 200
mm and length of 850 m for connection to the town
sewerage system
255.00
Construction of waste waters lift station
136.00
Construction of natural gas pipeline with diameter of 90
mm and length of 115 m
28.75
Improvement of the land within the IP 72.00
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Building name
Amount of investments,
thousand MDL
Total 1 173.35
The total amount of investments in internal and external infrastructure required to build Edinet
Industrial Park will make up about 24.49 million MDL.
4.5. Buildings
Administrative building. As it has been mentioned, in order to ensure the activity of the Manager, it
is necessary to build an administrative building occupying an area of 484 sq.m. The cost of this
construction will make up 4 256 thousand MDL.
Production premises. We estimated the necessary amount of investments supposing that the
construction of a square meter of production premises, warehouses, etc. will make up 3235.5 MDL
(around 200 Euro).
Table 24 Investments required to build production premises, thousand MDL
Production premises Area, m
2

Investments,
thousand MDL
BI Production premises 12 100 39 149.55
Production premises of Residents 73 240 48 856.05
Production premises of the Manager 15 100 236 968.02
Total of production premises (production
infrastructure)
100 440 324 973.62
Funds required for the construction of production premises are presented in Table 24 and make up
about 325 mln. MDL.
4.6. Assessment of costs for training labour force
In order to provide adequate labour force for the IP needs, vocational training and retraining will be
organized. We believe that 75% of the necessary labour force will be trained or 1132 workers will be
employed in IP Residents enterprises. The average duration of training course will make up about 2
months. Thus, the costs for labour force training will be equal to the actual cost of training and the
amount of scholarships offered to future employees for two months. The cost of training per person
makes up about 1 400 MDL, the scholarship for 2 months will cost 800 MDL / month * 2 months = 1
600 MDL. In this way, the cost of training per person will make up around 3 000 MDL. The total
cost of labour force training will make up 3 399 mln. MDL.

4.7. Total investments
Estimated value of investment necessary to establish Edinet Industrial Park are presented in Table 25
and primarily include costs for the construction of common utilities from inside and outside the IP,
interior and exterior IP development, as well as minimum necessary constructions for the IP
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operation
15
. The total amount of investments without Residents investments for creation of IP are
estimated at 120 176 thousand MDL. Capital costs are presented in details in Annexes 2 and 3. The
share of technical infrastructure and common utilities makes up 21.2% of capital costs.
Administrative building with equipment and furniture makes up 4.0% of costs. The most important
are capital costs for construction of production premises, these making up 73.3% of total investments.
Costs for development of studies, projects, etc. make up 1.5%.
Table 25. Capital costs of the project
Capital Costs
Assessment
without
Residents
Investment ,
thousand
MDL
Share,%
Assessment
with
Residents
Investment ,
MDL
Share,
%
Feasibility Study
100.00 0.1% 100.00 0.0%
Projects, studies, funding applications 1 815.28 1.5% 1 815.28 0.5%
Infrastructure and common utilities outside
IP, including:
1 173.35 1.0% 1 173.35 0.3%
Access to the road network from outside of
IP
647.10 0.5% 647.10 0.2%
Common utilities outside the IP 0.00 0.0% 0.00 0.0%
gas 28.75 0.0% 28.75 0.0%
water 34.50 0.0% 34.50 0.0%
sewerage with pumping station 391.00 0.3% 391.00 0.1%
Development outside the IP
72.00 0.1% 72.00 0.0%
Infrastructure and common utilities within
the IP, including:
24 316.52 20.2% 24 316.52 6.8%
Internal road network with sidewalks 15 368.60 12.8% 15 368.60 4.3%
Common utilities within the IP 0.00 0.0% 0.00 0.0%
electric power 2 693.40 2.2% 2 693.40 0.8%
gas 252.18 0.2% 252.18 0.1%
water 302.61 0.3% 302.61 0.1%
sewerage 1 656.16 1.4% 1 656.16 0.5%
rainwater sewerage 985.00 0.8% 985.00 0.3%
Interior development of IP
3 058.58 2.5% 3 058.58 0.9%
Administrative building, equipment and
furniture
4 764.80 4.0% 4 764.80 1.3%
BI production premises
39 149.55 32.6% 39 149.55 11.0%
Production premises constructed by Residents 48 856.05 40.7% 48 856.05 13.7%
Production premises constructed by the
Manager
236 968.02 66.4%
Total capital costs 120 17.55 357 143.57
We estimate investments of Residents in production premises, warehouses, etc. up to 237 mln. MDL,
which are not included in the calculation models.

15
Residents investments were not taken into account in the analysis of financial feasibility of Edinet IP.
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5. PROJECT FEASIBILITY ANALYSIS
5.1. Introduction
In order to determine what is the best way to implement the project of creating the IP, it is necessary
to carry out a comparative assessment of two types of organization, provided that both cases have
identical specifications at output.
In the first case we consider that the Local Public Administration will implement this project through
the traditional mechanism of goods and services procurement. Wherever possible, we suppose that
funding for building IP technical and production infrastructure will be achieved by allocating funds
for this purpose from the state budget and the budgets of administrative - territorial units (district and
local). In addition, in the first years LPA will incur IP management expenses, construction of
administrative building and its equipping and furnishing. Local service providers will fund the
construction outside the IP of water, gas, sewerage pipes and electric power networks, within the IP
the medium pressure gas pipeline, the transformer station and electric power supply network.
Funding of infrastructure and common utilities outside the IP, such as access road, sewerage, outside
development and funding of construction of production premises for lease by BI Residents are
supposed to be made from public foreign sources. Through the Regional Development Agency we
suppose to obtain from NRDF funds for the construction of the internal road, aqueduct and sewerage
within the IP and for the interior planning. Further we believe that IP administration will be carried
out by the Managing Company created or selected through tender by LPA.
n the second case we suppose the funding of technical and production infrastructure with the co-
participation of public-private partnership. Private partner will fund (a) design works, development of
studies and grant applications, (b) construction of internal road, (c) construction of administrative
building and its equipping and furnishing, (d) construction of production premises for the lease; (e)
will bear the cost of administration. We will also research funding options by the private partner of
production premises designed for the BI. The private partner being eligible for funding technical and
production infrastructure of the IP on the expense of NRDF, will demand funding for construction of
aqueduct, sewerage inside the IP, outside development and construction of production premises of
the BI is supposed to be realized from external sources under the form of grants. The tasks of the
Managing Company are described in "IP Organization and Operation. The private partner recovers
its investment, its costs of management and maintenance of IP objects and obtains a reasonable
income from lease of land and production premises, from collection of administration fees, incomes
from providing services to the IP residents, from payments and fees paid by participants in the
tenders for obtaining of the right of Residents and for registration as Residents, as well as from
entrepreneurial activity that may be carried out according to the IP law.
We will also study the financial feasibility of the project in case of establishing Edinet IP based on
public-private partnership principles, cost of technical and production infrastructure of the industrial
park being borne by the private investor, the public partner participating in the project of creation the
IP with the land plot that will be transferred to the Managing Company throughout the period of the
Industrial Park (30 years) activity.
We will develop estimation models which will determine project cost borne by LPA for both cases.
Models comparison will allow LPA to evaluate whether public-private partnership as compared to
traditional implementation of the project (under own management) meets all criteria with the best
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values. The three main criteria for evaluation are related to affordability, risk transfer and value of
money. In order to assess costs, in the first case we will use the Public Sector Comparator
(hereafter referred to as the PSC), while in the second case the reference model of Public-
Private Partnership (hereinafter referred to as PPP).
The essence of the financial analysis is to determine whether or to what extent a project is worthwhile
from a financial, public or social viewpoints. This can be expressed in several ways, the most
meaningful and accurate procedure is the use of performance indicators of investment projects,
namely:
Internal rate of return (IRR);
Net present value of project (NPV);
Benefits/Costs Ratio (R
B/C
).
IRR is defined as interest rate bringing to zero the net present value of investment.
NPV calculates the net present value of investment or capital by using discount rate and a series of
future payments (positive values) and receipts (negative values).
Benefit / Costs Ratio is the ratio of the discounted flow of benefits and the discounted costs flow.
Both for the PSC model and for the PPP model, the results of financial analysis are interpreted taking
into account the following benchmark values:

IRR > r (5%)
NPV < 0
16
Project that worths to be funded
B/C Coefficient > 1

The results of the financial analysis are interpreted taking into account the best result, the lowest cost
of the project.
The key features of PSC and PPP models are as follows:
- net present value (NPV) of the project cost calculated based on cash flow and applicable
discount rate;
- cash flow is determined as the difference between the amount of all project costs and projects
incomes;
- cost estimate based on most recent similar procurements in the field or based on best
estimates;
- identification of all possible incomes related to the project;
- depreciation and amortization is not included in calculations.


16
In case of PSC model and PPP model, condition of NPV <0 is determined by the fact that project cost in these models
= Costs - Revenues, so a negative net present value indicates that the present project costs are lower than updated income
related thereto.
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|
.
|

\
|
=
100
1
u
i
G
V VR
For goods with a duration longer than the duration of the project, by the end of the projected duration
a residual value is taken into account to reflect their potential sales value or value for further use.
The residual value is calculated by the formula:
where,
VR = residual value; Vi = inventory value of asset;
Gu = wear rate of the asset estimated over the proposed time frame.
5.2. General work assumptions
Determination of costs of the IP creation project was performed according to the following basic
assumptions:
1. Inflation rates for future periods can be estimated based on developments of previous
periods or can be used from official forecast sources. Then two approaches to inflation can be
used. The first is separate application of inflation to all types of costs and income. The second
approach consists in forecasting costs and incomes at constant prices. The assumption is that
whatever the future rate of inflation is, the influence will be proportional to both costs and
incomes. For the development of models we will apply the second variant of pricing and
establishing fees.
2. Discount rate. The standard discount rate taken into account in financial analysis is r = 5%
(as recommended by the European Commission).
3. Project currency. All estimates are calculated in constant MDL (project exchange rate of 1
EURO = 16.1775 MDL, 1 USD = 11.7997 MDL).
4. Estimated life of the project is equal to the period of granting the title of Industrial Park (30
years).
5. Since the duration of operation of computers is higher than the term of the project, we
planned to replace this group of assets before the end of the project
6. Assumption of the worst case. We supposed that lease of land and production premises by
Residents at 100% will be reached in 2018, from the seventh project year. All costs were
calculated at the maximum level, while incomes at the minimum level.
5.3. Basic model of the Public Sector Comparator
The basic PSC model represents the full cost of the project of creating Edinet IP, used for the
implementation of the project with traditional public procurement methods. The basic model includes
capital costs, maintenance and administration costs and project incomes.
5.3.1. Cost estimation and their assumptions
Within the PSC model we will estimate capital costs, replacement costs, costs of labour force training
and operational costs of IP organized by LPA through the selected Managing Company.
Assumption of cost estimates. For PSC model building we supposed the following assumptions on
determination of costs for creation and management of IP:
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1. All necessary facilities will be built, purchased through procedures of purchasing goods and
services by the public sector. Constructed or acquired facilities are estimated based on the
latest costs or based on recent offers of construction companies
2. During project implementation, we foresaw computers and equipment of the administrative
building. We plan to replace it each 10 years
3. Operational costs include maintenance costs of IP objects and administration fees.
Costs of Edinet IP project are composed of:
a) Capital costs,
b) Costs necessary for training labour force,
c) Working capital and
d) Replacement costs.
A. Capital costs of the project make up 120 176 thousand MDL (see Table 26). Investments in
common domestic and foreign infrastructure of the IP will be made by municipal suppliers, Residents
and the Managing Company from sources of LPA and/or CPA, NRDF, external grants as follows:
Table 26. Sources of financing capital costs of the IP created through traditional public
procurement mechanisms
Categories of costs, funding sources
Amount of
investments, thousand
MDL
LPA budget, state budget 53 621
Administrative building and equipping 4 256
Computers, printers, etc. 263
Indoor furniture 116
Boiler room 129
Production premises of the Manager 48 856
Local providers 3 009
Infrastructure and common utilities outside the IP (water, gas) 63
Infrastructure and common utilities within the IP (electric power, gas) 2 946
External grants 55 728
Feasibility Study 100
Infrastructure and common utilities outside the IP (road, sewerage system
with pumping station, land development)
1 110
Infrastructure and common utilities within the IP (common road)
BI production premises
39 150
NRDF 7 818
Project, studies, IP funding applications 1 815
Common utilities within IP (water, sewerage, rainfall sewerage) 2 944
Interior development 3 059
TOTAL 120 176


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Main providers will be responsible for:
Construction of average gas pressure network outside and inside the Park will be made by
"Edinet - Gaz by the suppliers resources.
Electric power provider RED Nord Vest builds transformer station and supply network.
Apa Canal Edinet builds only external water system.
Telephone network will be built by Moldtelecom or another provider
As for infrastructure and utilities, Residents will be responsible for the following:
Connection of IP to the electric power network will be made by the Resident based on a
technical project approved upon transfer of the parcel, the maximum distance from the street
front of the parcel being of 20 m. Installations on parcels will be connected underground to
distribution networks. The installed capacity (kW) will be determined depending on demand
and area of the parcel. For larger installed capacities Residents own investments are necessary.
The control of consumption measuring will be installed by the supplier only after payment of
connection.
IP Residents connection to the natural gas network will be made based on technical projects
approved upon transfer of the parcel, the maximum distance from the street front of the parcel
being of 20 m. Installation of the connection point to pressure and meter, connections shall be
performed by Residents
The connection of all buildings to centralized water supply network and sewerage system
(household, technological) is compulsory. Connection to central water and sewerage system
will be made by the Resident on the basis of a technical project approved upon the transfer of
the parcel, maximum distance from the front street of the parcel makes up 20 m. Residents
whose plots are located in the western part of the IP will be connected to the sewerage system
in the western part of the parcel. For sewage disposal from the Parcel, the Resident is obliged to
obtain the Environment Agreement. Connection will be done by Residents
Supply of industrial water will be ensured through drilling and capture from phreatic layer
(within own plot), based on approvals and agreements foreseen by law. If, because of the nature
of carried out activity, a greater amount of fire water is necessary than that provided by existing
network, an additional reservoir will be built on site by Resident
If wastewater discharge exceeds receipt indicators at the treatment plant, the Resident is obliged
to equip the site with pre-treatment facilities.
Collection and disposal in the rainfall sewerage system results from all impervious surfaces
(rooftops, circulations, platforms). To capture and evacuate rainwater, Residents will have a
separate technical project, which will indicate the measures taken during works of parcel
development. It is forbidden to dispose rainwater in the basement of the parcel, as well as
sewage leak on own adjacent land plots.
Connection of Residents to urban telephone networks will be made at the expense of Residents
and will be performed underground
In order to organize selective solid waste collection, each Resident will conclude a service
agreement with the local supplier
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Constructions made by residents will not be commissioned until they are connected to utilities
networks: water supply, household and rainfall sewerage, electric power supply, gas supply and
telephony.
The remaining utilities will be realized of public funds coming from the state budget, local budget,
the National Regional Development Fund or grants of donors.
Detailed distribution of capital costs is presented in the Annex 3. Capital costs intended for creating
infrastructure and common utilities make up 25 490 thousand MDL and are equally distributed for
2012 and 2013.
B. The costs for training labour force were estimated at 3399 thousand MDL.
C. Working capital makes up 2 093 thousand MDL. Working capital is designed for covering cash
shortfalls during first years of activity.
Table 27. Distribution of costs for Edinet IP project, thousand MDL
Costs
2011 2012 2013 2014 2015 2016 2017 Total
Capital costs
1 189 26 066 68 493 14 657 9 771 120 176
Cost of labour
force training
1 290 978 927 102 102 3 399
Working capital
79 432 1 582 2 093
Total project costs 1 269 26 497 71 365 15 635 10 698 102 102 125 668
D. Costs of replacement make up 262.6 thousand MDL and represent the cost of computers,
equipment of administrative building. It is supposed that they shall be updated every 10 years.
Maintenance costs are borne by the Managing Company and include facilities listed below in Table
28. The remaining objects belonging to the common infrastructure will be maintained by service
providers. The calculation basis for these costs is capital costs. Maintenance costs are determined
compared to capital costs.
Table 28. Maintenance cost assumptions
Facilities Description of assumptions Share
Administrative building
Maintenance costs are determined
compared to capital costs
0.8%
Production premises of Business
Incubator
0.4%
Parking plots 0.4%
Green spaces, signs development 4%
Lighting network 2%
Fence 0.5%
Rainwater sewerage system 1%
Administration costs consist of staff remuneration, utility services, procurement services, office
supplies, travel expenses, equipment of SVSTO, local taxes, property tax and other expenses.
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Table 29. Assumptions of management costs
Indicators Description of assumptions
Remuneration of the
Managing Company staff
The list of staff is presented in Annex 4.
Health and social
contributions
26.5% of calculated remuneration
Utility services
Gas
Tariff of 4653 MDL/1000 m
3
, estimated consumption of heating boiler
20 thousand m
3
/year
Electricity
Tariff of 1.45 lei/kW. Estimated consumption of administrative building
21 thousand KW, street lighting 182.938 thousand KW, others 10.197
thousand KW.
Consumption of street lighting = number of pillars x 365 days x 10 hours
x 0,04 KW
Water and sewerage
Water tariff of 25.05 MDL/m
3
, sewerage tariff of 21.81 MDL/m
3
,
consumption estimated at 800 m
3
. Water consumption for canteen is paid
by the tenant.
Solid waste disposal Tariff of 120 MDL/m
3
. 80 m
3
/year of disposal.
Procurement of services
Fixed, mobile telephony,
Internet
Monthly consumption 2 500 MDL
Banking Tariff of 1% for cash collection plus 2000 MDL order of payment
Transport 25 000 MDL/year
Insurance 1.0% of the remaining value (minus depreciation)
Advertising 80 000 MDL/year
Security expenses Tariff of 1.5 MDL/month for 1 sq.m.
Office supplies 10000 MDL/year
Travel expenses 40000 MDL/year
Equipment of SVSTO 10000 MDL/year
Local taxes 20 MDL per employee per quarter
Property tax 0.1% of residual value of buildings
Other contingency 5% of total expenses
Annual costs of maintenance of IP objectives used by the Managing Company were estimated at
208.5 thousand MDL, except for year 2013. The total cost of management and maintenance of IP in
2014 makes up 3 406 thousand MDL. The most significant share of this category of costs is
presented by staff remuneration. The structure of the Managing Companys staff, as well as
remuneration costs is presented in Annex 4.
Table 30. Maintenance and administration costs, MDL
Articles 2011 2012 2013 2014 2015 2035 2041
Maintenance costs
208 532 226 415 226 415 226 415 226 415
Labour remuneration with
contributions
63 440 380 641 1 633 071 1 633 071 1 633 071 1 633 071 1 633 071
Services (gas, electric
power, water, sewerage,
waste disposal)
4 800 450 585 450 585 450 585 450 585 450 585
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Articles 2011 2012 2013 2014 2015 2035 2041
Services
(communications, banking,
transport, insurance,
advertising, security)
2 150 5 209 611 868 602 894 594 101 451 112 418 396
Office supplies
10 000 10 000 10 000 10 000 10 000
Travel expenses
10 000 20 000 40 000 40 000 40 000 40 000 40 000
SVSTO equipping
5 000 10 000 10 000 10 000 10 000
Local Taxes
80 320 1 280 1 280 1 280 1 280 1 280
Property Tax
53 112 52 050 51 009 34 054 30 167
Fee
17
of leased BI
production premises
228 690 800 415 2 058 210 2 058 210
Other expenses
3 784 20 549 150 672 151 315 150 823 142 826 140 996
Total maintenance and
administration costs
79 454 431 519 3 164 120 3 406 300 3 967 699 5 057 553 5 019 120
Maintenance and administration costs are presented in details in Annex 5.
5.3.2. Income estimation and their assumptions
Project income coincides with the income of the Managing Company. They consist of income from
leasing of land and production premises, income from provision of administration services and
income from consulting services. Since fees applied in case of BI Residents are lower, the differences
between related expenses will be covered by identified incubation programs.

Table 31. Assumptions on income from lease and services
Category of income Description of assumptions
1. Lease of land by
Residents
The area of land leased by Residents makes up 12 220 sq.m., the average
area per Resident makes up 3050 sq. m. Applied free - 0.24 MDL / sq.m. /
year. Land productivity has 82 degrees; lease price of one degree of ha
makes up 19 873.34 MDL; applied zone coefficient - 0.5%, discount rate of
established fees - 0.3%.

The occupancy rate of production subzone of Residents was estimated in the
first year at 40%, in the second year at 30%, third year 30%, etc. We
suppose that the maximum capacity will be met from the four year
Production subzone of Residents 1 year 2 year 3 year 4 year
Occupancy rate 40% 30% 30% 0%
Number of Residents 10 7 7 0
Total number of Residents 10 17 24 24

17
Fee is a payment paid periodically at fixed dates in the form of quota for the right to use another's property for
production purposes.
The fee will be paid in to Edinet Town Hall in the amount of 70% of revenues obtained from lease of production premises
of BI, if BI will be built from public funds.
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Category of income Description of assumptions
2. Lease of production
premises by Residents
with adjacent lands
Area of leased lands 15.100 sq.m; lease annual payment rate 360.00
MDL/sq.m. for production premises annually.
Occupancy rate of the subzone of the Managing Companys production
premises was estimated in the first year at 50%, on the second year 30%.
We suppose that the maximum capacity will be met from the three year.
Subzone of the Managing
Companys production premises
1 year 2 year 3 year
Occupancy rate 50% 30% 20%
Number of Residents 5 3 2
Total number of Residents 5 8 10
3. Lease of administrative
and commercial premises
The area of premises to be leased makes up 408 sq.m., fee - 680 MDL /
sq.m. per year
4. Lease of BI production
premises
Share of land occupied by BI - 12%, area of BI production premises 1.21
ha. Pre-incubation fee - 216.00 MDL (60% of the annual lease fee for
production premises), incubation fee - 270.00 MDL (75%), post-incubation
fee - 324.00 MDL (90%). The occupancy rate of the land designed for BI
was estimated in the first year at 25%, 25% second year, 25% third year, etc.
We suppose that from the four year the BI subzone will be occupied to its
maximum capacity.
BI subzone 1 year 2 year 3 year 4 year
Occupancy rate 25% 25% 25% 25%
Number of Residents 5 5 5 5
Total number of Residents 5 10 15 20
5. Unique payments and
fees paid for participation
in tenders for obtaining
the right of Industrial
Park Resident and for
registration as Resident
Fees for participation in the tender - 400 MDL / participant; Registration of
Resident right - 15 MDL / sq.m., registration of BI Resident right 7.5
MDL / sq.m. (of land area)
6. Fee for annual
administration
30.00 MDL / sq.m. annually for IP Residents and 15.00 MDL / sq.m.
annually for BI Residents
Incomes from provision of consulting services. Consulting services are rendered by employees of
the BI and IP Development Service and Audit and Accounting Service. Services will provide the
following categories of services of IP Residents, including small and medium enterprises of BI:
- Services of Business Planning and Development;
- Project Development Services;
- Marketing and Personnel Recruitment Services;
- Services of Management and Knowledge Transfer;
- Audit and Accounting Services.

The BI enterprises will be offered assistance in developing business ideas, business plans, marketing
plans, feasibility studies, identification of funding sources and methods, assistance in equipment
purchase, assistance in launching production business, assistance in refining and implementing plans,
team building, bookkeeping.
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Residents will be offered by leasing two protocol halls and a conference hall.
Table 32. Prices for consulting services and lease of conference and protocol halls
Type of consulting services
Average fee,
euro/unit
Average fee,
MDL/unit
Estimated demand of
2014 (frequency)
Services of Business Planning and
Development
600 9,707 7
Project Development Services
1200 19,413 3
Marketing and Personnel Recruitment
Services
900 14,560 3
Services of Management and
Knowledge Transfer
600 9,707 6
Audit and Accounting Services.
400 6,471 9
Lease of protocol and conference halls
36 MDL/h 120
Maximum income from consulting services and lease of rooms under conditions of occupation
described above are estimated at 377 thousand MDL.
Table 33. Estimated income, MDL
Income categories 2013 2014 2015 2035 2041
Lease of land by Residents 12.220 20.774 29.328 29.328 29.328
Lease of production premises by
Residents with adjacent land
2.721.013 4.353.621 5.442.026 5.442.026 5.442.026
Lease of administrative and
commercial premises
166.464 221.952 277.440 277.440
Lease of BI production premises 327.905 1.145.861 2.945.121 2.945.121
Payments and fees paid for
participation in tenders and for
registration as Resident
964.088 697.294 658.829 41.665 41.665
Administration fee 1.904.175 3.274.763 4.570.020 4.720.680 4.720.680
Consulting services 170.406 268.013 355.643 376.674 376.674
Incomes from recovery of losses
from BI services
18

12.942 33.164 54.195 54.195
Total incomes 5.771.902 9.121.776 12.456.823 13.887.129 13.887.129
5.3.3. Results of the basic PSC model
Costs of basic PSC model is calculated according to the formula:
PSC basis = Costs Income
Table 34. Project costs and incomes according to the basic PSC model, thousand MDL

18
Consulting services offered to BI Residents are at discounted prices. The price difference will be covered from the
account of identified Incubation Programs.
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Categories of cost and
Income
2011 2012 2013 2014 2015 2035 2041
Capital costs 1 189 26 066 68 493 14 657 9 771
Labour force training 1 290 978 927
Working capital 79 432 1 582
Maintenance and
administration costs
79 432 3 164 3 406 3 968 5 058 5 019
Incomes 5 772 9 122 12 457 13 887 13 887
Cost - income 1 348 26 929 67 467 8 941 1 282 -8 830 -8 868
In order to determine the NPV of the project of IP creation, we calculated the residual value for
goods with a lifetime longer than the duration of the project. We established a useful lifetime of the
administrative building for 50 years and 40 years for production premises. Thus, the estimated
residual value of objects at the end of 2041 will make up 30 389 466 MDL.
The present value of the project cost
19
has a negative value,
NPV (PSC model) = -12 251 316,
which is positively appreciated, showing a present value of investment in the amount of 12.25 mln.
MDL.
Analysis of cumulative cash flow on forecast period until 2041 shows that financial sustainability of
the project under condition when it is organized based on the method of LPA public procurement is
checked, so investments will be recovered within the considered time. At the same time, the project
records a rate of return of IRR = 6.0% and a benefit-cost ratio of R
b/c
= 1.09, showing that the
financial benefits of the project within its duration are 9% higher as compared to the costs and
expenses of the project.
The net present value of the PSC model presents the cost of the project under condition when it is
organized on the basis of LPA public procurement, without estimating the risks.
5.3.4. Risk-adjusted PSC model
The risk-adjusted model of Public Sector Comparator consists of the basic PSC model, plus the cost
assessment model for all risks associated with the project of creation of the Industrial Park. It is
necessary to make these calculations in order to determine which is the total cost when the Local
Public Administration organizes traditional creation of IP - through public procurement mechanisms.
Further we will assess the risks associated with the project.
Risk assessment.
The risk is an uncertain event, but it may occur within the process of concrete activity, whose effects
are damaging and irreversible (additional costs, reduction of incomes and / or profits).

19
PSC (Public Sector Comparator ) = Costs Income
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The task is to identify all risks and models of their management in order to reduce their impact. This
process is continuous throughout the project implementation and continuous throughout its course.
Within risk assessment process we made the following steps:
(i) Identification of project-related risks;
(ii) Determination of material consequences of risks (if possible to be materialized);
(iii) Establishment of the way to reduce risk probability and its impact and
(iv) Allocation of risk responsibility to other entities or to a third party.
In order to ensure an effective management for each identified high risk, a mitigation plan will be
developed. There are five major responses to risk: acceptance, monitoring, avoidance, transfer and
reduction.
Detailed description of risks is presented in the risk matrix in Annex 6. Each risk was characterized in
terms of impact and occurrence probability. Risk impact may be very low, low, medium, high and
extra high
20
. The probability is the following: extremely low, very low, low, medium, high and extra
high
21
.
For a more accurate ranking of risks the following matrix can be used:

Impact
P
r
o
b
a
b
i
l
i
t
y


extremely
low
low medium high
extremely
high
very low
1-4 3-8 5-12 7-16 9-20
low
3-8 9-16 15-24 21-32 27-40
medium
5-12 15-24 25-36 35-48 45-60
high
7-16 21-32 35-48 49-64 63-80
very high
9-20 27-40 45-60 63-80 81-100

Risk category
I II III IV

The matrix can be used for determining management strategy as follows:
- Risks of the first category (probability and impact are very or extremely small / both are small
or medium at most) can be covered relatively easily. Techniques of risk retention are
recommended for this type;

20
With 1 is marked the lowest and with 10 the maximum impact. We qualify the impact depending on notification as
follows: very low (1-2), low (3-4), medium (5-6), high (7-8) and very high (9-10)
21
With 1 is marked the lowest and with 10 the maximum likelihood. We qualify the impact depending on notification as
follows: very low (1-2), low (3-4), medium (5-6), high (7-8) and very high (9-10)
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- For risks of the second category mitigation techniques, insurance and transfer are
recommended, because their establishment would have a very strong impact on the project;
- For the third category risks (very high probability, medium or high impact / extremely high
impact, medium or high probability), risk control techniques shall be applied in order to
reduce the frequency of occurrence. Control techniques will be combined with the techniques
of transfer / retention;
- Risks of the latter category (with high and very high probability and external impact and very
high probability with high and extremely high impact) should be avoided and removed.
Risk assumptions were determined based on the expertise of the project team.
Table 35. Risks and assumptions
Category of risk Risk Assumptions
Impact Risk
Consequences
, %
Probability of
occurrence
Location Location risk Low 7,5% 7,5%
Designing and
construction
Designing risk Low 7,5% 7,5%
Risk of increased investment
costs
Low 7,5% 7,5%
Financial

Insolvency risk High 15,0% 2,5%
Risk of unavailable external
co-financing
High 15,0% 7,5%
Operational and
maintenance
Operational input risk Medium 12,5% 12,5%
Maintenance risks Medium 12,5% 12,5%
Market or demand Commercial risks High 15,0% 12,5%
Legal and regulatory Risk of changes in the legal
and regulatory framework
Medium 12,5% 12,5%
Major force Major force risks High 15,0% 2,5%
Calculation basis for determining risk values are initial values of PSC: design costs, construction
costs, operating and maintenance costs, administration costs, anticipated incomes.
Value of risks. Value consequence (in cash) of the risk is the product of percentage consequence and
basic value (initial PSC) of the risk. Risk value is calculated as the product of the scenarios
consequences and probability of their occurence. Approach to project risk assessment was
determined based on the frequency (likelihood of occurrence of event) and the impact it can have on
the project of concerned phenomenon (severeness of consequences). In such case, risk assessment is
subjective and relies on the expertise of the project team. Project risk assessment is presented in
Annex 7.
For the PSC model we calculated the net present value of the risk showed in Annex 8.
Summary of results of the risk-adjusted PSC model.
Risk adjusted Public Sector Comparator is determined according to the following formula:
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risk-adjusted PSC = basic PSC model + risk value
Results of the risk-adjusted PSC model. The present value of cost of the risk-adjusted project has a
negative value, NPV (PSC model) = -5 512 309 IRR = 5.4%, R
b/c
= 1.09. Values of project's
financial performance indicators show that this is a sustainable project.
Table 36. Project performance indicator realized according to the PSC model
Indicators NPV IRR R
b/c

Basic PSC model -12.251.316 6,0 % 1,09
Updated risks 6.748.055
Risk-adjusted PSC model -5.512.309 5,4% 1,09
Values for PSC model NPV < 0 IRR > 5% R
b/c
> 1
In order to compare these values with the case when LPA would establish a public-private
partnership, we will build a reference model of Public - Private Partnership (PPP).
5.4. Reference model of Public-Private Partnership
The project of Edinet Industrial Park can be implemented both by the public administration (or LPA
with central authorities), and through a public private partnership. In the second case, LPA will
initiate a public-private partnership with a partner experienced in the project implementation area.
The local administration demands from a private partner a co-funding in order to build some IP
facilities. Within the project, LAP will provide land for location of the Park, will facilitate the process
of obtaining all authorizations, construction approvals, will require financial support for creation of
infrastructure and common utilities from external sources. We will also study the financial feasibility
of the project in case of creating Edinet IP on public-private partnership principles, cost of production
and technical infrastructure of the industrial park being covered by the private investor, the public
partner will participate in the project of IP creation that will be transferred to the Managing Company
for the term of Industrial Park activity (30 years).
5.4.1. Options for project implementation through PPP
The IP land is divided into three zones: administrative zone, zone of Residents and zone occupied by
infrastructure (roads, engineering networks, etc.).
Table 37. Structure of Industrial Park land
Destination Area, ha
Share,
%
Area occupied by
buildings and
structures, ha
Land share, %
Administrative zone 0,64 3% 0,286 45%
Zone of Residents 16,74 90% 10,044 60%
Land occupied by infrastructure 1,22 7% 0,76 62%
Total 18,6 100% 11,09 60%
The administrative zone will have administrative building with annex for location of thermal
station, parking, green spaces, platform for selective waste collection in the zone, panel with Park
scheme, indicators.
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The administrative building
22
has:
a conference hall and two protocol halls;
premises for public catering;
10 rooms for offices and two furnished spaces for lease services with a total area of about 212
sq.m.;
premises for banking services, primary health care;
premises intended for the Managing Company assuring provision of its support services
necessary for IP activity.
Destinations of administrative building premises are presented in details in Annex 9.
List of services offered within the IP:
Category A:
1. Services included in IP administration fee:
Reception, info-Point;
Support for quick information of local public authorities on Residents wishes
Inclusion of tenants within the IP promotion and PR program;
Consulting and information on issues related to IP activity in relationship with exterior
Facilitation of relationship with Chambers of Industry and Trade;
Facilitation of organization of clearance procedure at home;
Maintenance of common green spaces and cleaning of public space;
Protection of the zone of Residents and Park perimeter;
Parking plot with 60 parking seats;
Access to utilities network of the Park: water, sewerage, gas, electric power, telephony
networks;
Recording of water, gas , electric power consumption and their billing.
2. Services and facilities ensured by the Managing Company directly charged:
Event organization;
Lease of conference and protocol halls;
Lease of offices and of spaces for provision of support services;
Consulting services rendered by the Development Service of BI and IP and Audit and
Accounting Service;
Special initiatives
23
:

22
Will be built in case of options 1 and 2
23
Services will be classified on specific needs of Residents
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Services of support for technological transfer, personnel recruiting;
Consulting in local procurement;
Establishment of health care point, occupational medicine.
Category B:
Services expected to be provided by providing companies
24
:
Services of connection and operation of infrastructure utilities (water and sewerage, gas,
electric power, telephony, sanitation);
Design and construction services;
Specialized consulting: intermediation, marketing promotion, training;
Courier, mail, health care;
Banking services;
Services of public catering;
Other services significantly requested by Residents.
Technical infrastructure and common utilities of IP will have the following possibilities:
electric power supply at a capacity of 7 260 kVA;
natural gas supply at a capacity of 300 m
3
/h;
drinking water supply at a capacity of 75 m
3
/h;
discharge of wastewater into the sewerage system 63.6 m
3
/h.
Detailed description of the technical infrastructure, common utilities, land development inside and
outside the IP are presented in Chapter 3.
Zone of Residents consists of: (i) subzone of leased production premises and (ii) subzone of land
parcels on which the IP Resident builds necessary facilities with its own funds.
Depending on the configuration of the zone of Residents we will further analyze three options:
Option 1. Subzone of leased production premises consists of Business Incubator production premises
(12%) and production premises built by the Managing Company (15%). The subzone of land parcels
makes up 73%.

Table 38. Structure of the Industrial Park, option 1
Indicators
Subzone of leased
production premises
Subzone
of land
parcels
Total
Residents BI Residents
Share of the zone of Residents
15% 12% 73% 100%
Land plot area, ha
2.51 2.01 12/22 16.74
Land plot designed for construction,
15 100 12 100 73 240 100 440

24
Services will be available depending on existing request of Residents
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sq.m.
Minimum area per Resident, ha
0.25 0.1 0/51
Minimum area for construction per
Resident, sq.m.
1 500 600 3 100
Maximum number of Residents
10 20 24 54
Number of employees
230 180 1100 1510
Option 2. Subzone of leased production premises consists only of Business Incubator production
premises (12%), while subzone of land parcels makes up 88% (see Table 39).
a) BI production premises are financed from external sources/grants;
b) BI production premises are financed from private partners sources.
Table 39. Structure of the Industrial Park, option 2
Indicators
Subzone of leased
production premises
Subzone of
parcels/land
Total
Residents BI Residents
Share of the zone of Residents
- 12% 88% 100%
Land plot area, ha
- 2.01 14.73 16.74
Land plot designed for construction,
sq.m.
- 12 100 88340 100440
Minimum area per Resident, ha
- 0.1 0.51
Minimum area for construction per
Resident, sq.m.
- 600 3100
Maximum number of enterprises-
Residents
- 20 28 48
Number of employees
- 180 1330 1510
Option 3. The zone of Residents consists only of the zone of parcels (100%), that is on the entire
territory of the IP parcels/lands will be leased to IP Residents to build their own production premises.
Table 40. Structure of the Industrial Park, option 3
Indicators
Subzone of parcels
Share of the zone of Residents 100%
Land plot area, ha 16.74
Land plot designed for construction, sq.m. 100440
Minimum area per Resident, ha 0.51
Minimum area for construction per Resident, sq.m 3100
Maximum number of enterprises-Residents 32
Number of employees 1510
In all three options the lease of land plots of an area greater than the established by Residents
minimum is allowed, by leasing more adjacent parcels.
5.4.2. Type and structure of PPP project
The solution of implementing the public-private partnership within the project on creation of Edinet
IP consists in authorization by the Town Council of a private partner, selected through tender
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according to the Law on public-private partnership No. 179-XVI of 10.02.2008 for coordination and
monitoring of designing and construction of infrastructure, common utilities, BI production premises,
designing and construction of administration office and of production premises, at the request of
Residents, for administration and maintenance of IP assets, including those transferred in use.
According to the Law on industrial parks in case of funding the creation of technical and production
infrastructure with the co-participation of the private investor, functions and duties of Park
administration shall be fulfilled by the private investor or by created commercial association. We
support fulfilment of administration functions by the private investor.
The public-private partnership can be achieved by way of designing - construction - operation -
transfer by which the private partner, within its responsibility, designs, builds technical and
production infrastructure and operates it in compliance with contractual provisions, while at the end
of the contractual term, the private partner according to the contract will transfer to the public partner
the assets specified in the contract. Besides the assets that can be transmitted to LPA upon the
termination of contract, common utilities, BI production premises or other assets stipulated in the
contract can be transferred as well. It is also necessary to mention that another form of designing -
construction - transfer operation or a combination thereof is possible. These assets are
transferred in ownership of public partner under the form of two facilities stipulated in the contract
immediately after commissioning, and the public partner, in its turn, partially transfers to the private
partner (Managing Company) this infrastructure
25
to be managed within the IP.
The legal form of cooperation between public and private sector is the public-private partnership
contract. The term of PPP contract will be equal to the period of activity given to the Industrial Park
for 30 years.
The public partner is responsible for (a) allocation of land, (b) obtaining all authorizations,
approvals, coordination and other permissive documents required by the law on creation of IP, (c)
gratuitous transfer of assets in public ownership to the Managing Company for creation and
development of IP, (d) allocation, as appropriate, of financial resources for creation of the technical
and production infrastructure, (e) support of projects to donors with the purpose to create technical
and production infrastructure, creation of BI objects by the Managing Company.
The private partner within this project undertakes to coordinate processes of designing,
construction, commissioning, monitoring of transfer of finished objects to the public partner, receives
objects in use, constructs facilities on its own account, manages and maintains the IP activity.
5.4.3. Payment mechanisms
The private partner recovers its investment and covers its maintenance and administration costs, as
well as obtains a reasonable profit from the administration and provision of service within the IP.
In the case of scheme b) of implementation of the option 2, when BI production premises are
financed by the Managing Company, losses of the Managing Company on the account of services,

25
After commissioning of the infrastructure, common utilities, BI premises, some assets, if required, will be transferred to
appropriate enterprises managing services (enterprises Edinet - Gaz, Apa-Canal Edinet, RED Nord - Vest JSC).
Common utilities will be transferred prior the connection of Residents and the Managing Company, with the exception of
the sewerage system, which will be transferred from the line of demarcation of Residents and Managing Company plots
with the pumping station.
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provided to BI Residents, will be recovered from sources of clearly defined incubation programmes
or by Edinet LPA.
The main sources of income of the Managing Company are shown in Table 41.
Table 41. Sources of income for the IP Managing Company
Categories of income Option 1.
Option 2.
Option 3.
Scheme a) Scheme b)
Income from land lease + + + +
Income from lease of BI
production premises
+ + + -
Income from lease of the
Managing Company production
premises
+ - - -
Income from lease of
administrative building
premises
+ + + -
Unique payments and fees paid
for participation in tenders for
obtaining the right of the
Resident and registration as IP
Resident
+ + + +
Income from provision of
services to IP and BI Residents
+ + + -
Income from collection of
administration fees
+ + + +
Subventions from LPA for
recovery of losses recorded by
the Managing Company for
services provided by the BI

+ + + -
Income of entrepreneurial
activity
26

+ + + +
5.4.4. Costs of PPP reference model
Cost categories in the PPP reference model are the same as in the basic PSC model and namely
capital costs, costs of labour force training, working capital, replacement costs, and maintenance and
administration costs. The real difference in costs is expected to come from potential private partners
in the proposed bids.
Assumptions of cost estimates are the same as of the basic PSC model except for management of this
project by a private partner, selected through tender and a PPP contract.

26
Incomes which can be obtained by the Managing Company as a result of carrying out entrepreneurial activity will not
be taken into account in the calculation model.
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Capital costs. According to the options defined above, capital costs of the PPP project make up
120 176 thousand MDL in case of options 1, 71 320 thousand MDL in case of option 2, 27 181
thousand MDL in case of option 3.
Table 42. Capital costs of the project for the 3options, thousand MDL
Capital cost categories Option 1 Option 2 Option 3
Feasibility Study
100 100 100
Projects, studies, funding applications
1 815 1 815 1 533
Technical Infrastructure and utilities common
outside the IP

Access to the road network outside the IP
647 647 647
Common utilities outside the IP
526 526 526
Exterior development of the IP

Technical infrastructure and common utilities
within the IP

Internal road network, sidewalks
15 369 15 369 15 369
Common utilities within the IP
5 889 5 889 5 889
Interior development of the IP
3 059 3 059 3 059
Administrative building, equipment and furniture
4 765 4 765 59
BI production premises
39 150 39 150 0
Production premises of the Managing Company
48 856 0 0
Total capital costs
120 176 71 320 27 181
Funding of project for the creation of Edinet IP is shared by the private partner, local utility
providers, public partners, as well as external grants. If the LPA fails to attract planned external
resources, the Public Administration will have to cover them on its own expense. Their contribution
is shown in Table 43.
Table 43. Sources of funding IP project for the 3options, thousand MDL
Capital cost categories Option 1
Option 2
a)
Option 2
b)
Option 3
Co-participation of the private partner 58.380 9.524 48.673 4.535
Projects, studies, funding applications 1.815 1.815 1.815 1.533
Common utilities within the IP (water, sewerage,
rainwater sewerage system) 2.944 2.944 2.944 2.944
Administrative building, equipment and furniture 4.765 4.765 4.765 59
BI production premises 39.150
Production premises of the Managing Company 48.856
Local Providers 3.009 3.009 3.009 3.009
Common utilities outside the IP (water, gas) 63 63 63 63
Common utilities within the IP (gas, electricity) 2.946 2.946 2.946 2.946
External Grants 40.360 40.360 1.210 1.210
Feasibility study 100 100 100 100
Infrastructure and common utilities outside the IP
(access road, sewerage, land development) 1.110 1.110 1.110 1.110
BI production premises 39.150 39.150
NRDF 18.427 18.427 18.427 18.427
Common utilities within the IP (internal road) 15.369 15.369 15.369 15.369
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Capital cost categories Option 1
Option 2
a)
Option 2
b)
Option 3
Interior development without land preparation 3.059 3.059 3.059 3.059
Total capital costs 120.176 71.320 71.320 27.181
Detailed diagrams of funding for each option are presented in Annexes 10, 11 and 12.
Replacement costs make up 262.6 thousand MDL and represent the cost of computers, equipment
of the administrative building. We suppose to replace them each 10 years.
The working capital makes up 2 093 thousand MDL.
Costs of labour force training were estimated at 3 399 thousand MDL.
Table 44. Investment costs of the project of Edinet IP implemented through PPP contract,
thousand MDL
Capital cost categories Option 1 Option 2 Option 3
Capital costs 120 176 71 320 27 181
Costs of labour force training 3 399 3 399 3 399
Working capital 2 093 2 067 907
Total costs 125 668 74 719 31 487
Maintenance and administration costs in case of option 1 of PPP model are identical to the
maintenance and administration costs of the PSC model.
The lowest costs are recorded for option 3, due to the lack of buildings and production premises,
small number of staff. In the case of this option, it is supposed to lease spaces for Managing
Companys staff.
Costs of option 2 when the Managing Company manages the commissioned BI and built on their
own sources are distinguished by paid fees.
Small differences between options are recorded due to changes in the calculation base of property
tax.
5.4.5. Income estimation and their assumptions
Supposed income from leased land and production premises and income from services in PPP model
are the same as for the PSC model. Changes occur only on calculation basis. In the case of PPP
contract, Managing Companys income in the case of option 1 coincides with the Managing
Companys income from the basic PSC model. They consist of income from land and production
premises lease, income from administration and consulting services. As we already mentioned, the
income realized within the PPP contract is that one from recovery of losses from services provided
by BI Residents services at discounted fees. These incomes will be paid from sources of some clearly
defined incubation programmes or by Edinet LPA.
Income from the project implemented through PPP partnership for options 2 and 3 are different from
income of option 1 by the following:
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- income from land lease for option 2 increases as compared to the options 1 due to extension of
the subzone of land parcels area from 73% to 88%;
- income from land lease for option 3 increases as compared to options 1 and 2 due to extension
of the subzone area to 100%;
- income from lease of production premises built by the Managing Company for IP Residents is
omitted from options 2 and 3;
- income from lease of BI production premises is omitted from option 3;
- in the case of option 3 income from payments and fees paid for participation in tenders for
obtaining the right of Resident and for registration as Resident are reduced;
- in the case of options 1 and 2 income from administration fees are reduced as compared to
option 3, these reductions are due to reductions for BI Residents;
- income from consulting services in case of option 3 is omitted, they are lower in the case of
option 2 as compared to the option 1;
- income from recovery of losses from services provided to BI Residents in case of option 2 b is
larger. In the case of option 3 they lack.
Estimation of income in the case of options 2 and 3 are presented in Annexes 14 and 15.
5.4.6. Results of PPP reference model
Calculation of project cost based on PPP reference model is made according to the formula:
PPP reference model = Costs Incomes
Net present value of the reference model gives us the cost of the project in the option when it is
organized by a public-private partnership contract.
Table 45. Main performance indicators of the PPP reference model
Indicators Option 1 Option 2 a) Option 2 b) Option 3
NPV PPP reference model
-12 251 316 21 221 460 -16 988 901 -31 095 634
IRR
6,0% 2,2% 6,9% 14,4%
Rb/c
1,09 0,85 1,18 1,89
Results of Edinet IP project if it is implemented through a public-private partnership show that the
project has a negative cost and is financially sustainable in any option in the analysis, except for the
option 2 b) when the private partner manages the BI and does not have its own production premises
in the subzone of production premises. From a financial standpoint, the project has the best results in
option 3 when the zone of Residents is consisted only of land plots which are leased by Residents,
with a return of investment of 14.4% and a benefits / costs ratio of 1.89, which means that net
benefits of the project exceed related costs by 89%.
5.4.7. Risk-adjusted PPP reference model
PPP reference model does not include risks associated with the project of IP creation. We will build
the risk-adjusted PPP reference model, which includes the PPP reference model and the model of
assessment of retained risks associated with the project.
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Project-related risks were determined and evaluated in case of PSC model. According to the
classification of risks, they are divided according to the way of their control in retained risks and
transferable risks. Risks are allocated to the party that better controls the risk. Risks controlled by the
Local Public Administration and Town Hall are retained risks and are automatically included in the
risk-adjusted reference model. Transferable risks that are completely controlled by the private partner
are not included in risk-adjusted reference model.
Table 46. Risk Allocation
Risk Transferable risks Retained risks
Location risk 0% 100%
Designing risk 80% 20%
Risk of increased investment costs 100%
Insolvency risk 100%
Risk of unavailable external co-financing 100%
Operational input risk 100%
Maintenance risks 100%
Commercial risks 90% 10%
Risk of changes in the legal and
regulatory framework
66% 34%
Major force risks 100%
Assessment of retained risks in the case of the option 1 when the Managing Company makes
investments in administrative building and production premises at the request of Residents is
reflected in the Table below.
Table 47. Risks retained, calculated for PPP reference model, option 1, MDL
Risk Categories 2011 2012 2013 2014 2015 2035 2041
Location risk
1.225 817
Designing risk
1.225 817
Commercial risks
10.822 17.103 23.357 26.038 26.038
Risk of changes in the legal
and regulatory framework
2 10.533 19.650 30.984 41.315 41.294
Total of retained risks
2.451 1.635 21.355 36.754 54.341 67.353 67.333
Present value of risk
853.326
Calculation of risks in case of options 2 and 3 are presented in Annexes 16 and 17.
The risk-adjusted PPP reference model is determined by the following formula:
Risk-adjusted PPP reference model = PPP reference model + Value of retained risks



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Table 48. Main indicators of the risk-adjusted PPP reference model
Indicators Option 1 Option 2 a) Option 2 b) Option 3
NPV PPP reference model -12.251.316 21.221.460 -16.988.901 -31.095.634
IRR 6.0% 2.2% 6.9% 14.4%
R
b/c

1.09 .85 1.18 1.89
NPV Retained risks 853.326 1.046.724 972.160 1.155.588
NPV risk-adjusted PPP
reference model -11.397.991 22.268.185 -16.016.742 -29.940.045
IRR 5.9% 2.1% 6.8% 14.0%
R
b/c
1.09 .85 1.18 1.89
Conclusion. In case of creating Edinet IP through public-private partnership, the financial
results of the project, taking into account related risks, prove that the project has greater
benefits than when it is implemented by LPA. Since the amount of retained risk is low, the
financial results have suffered big changes, option 3 remains to have the lower costs and
greater benefits.




















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6. ECONOMIC AND FINANCIAL FORECAST OF MANAGING COMPANY
ACTIVITY
We assumed to fund the creation of technical and production infrastructure with the co-participation
of the private investor. LPA will involve a private partner except for the field selected through tender,
which will delegate to its functions and duties of IP managing. This project will be implemented
through a public-private partnership contract. The private partner will fund (a) design works,
development of studies and grant applications, (b) construction of the internal road, (c) construction
of the administrative building and its equipping and furnishing, (d) construction of production
premises to be leased, e) will bear the cost of administration. We will also consider the options of
funding by the private partner of construction of production premises for the BI. The private partner
being eligible for funding the creation of the technical and production infrastructure of the IP at the
expense of NRDF, will demand funding of construction of aqueduct, sewerage system within the IP
and interior development of the IP. As in the first case, funding of the creation of infrastructure and
common utilities outside the IP, exterior development and construction of BI production premises are
assumed to be funded form grants from external sources. The tasks of the Managing Company are
described in "IP Organization and Operation. The private partner recovers its investment, covers its
costs of management and maintenance of IP objects and obtains a reasonable income from lease of
land and production premises, from collection of administration fee, income from providing services
to the IP residents, payments and fees paid by participants in the tenders and Residents. Upon
termination of the contract, public assets are transferred free of charge to the public authority in good
condition and free of any charge or obligation.
We will also study the financial feasibility of the project in case of creating Edinet IP based on
principals of public-private partnership, cost of technical and production infrastructure of the
industrial park being borne by the private investor, the public partner participating in the project of
creating the IP with the land plot that will be transferred to the Managing Company throughout the
period of the Industrial Park (30 years) activity. In this case we supposed that the recovery of
investments will be increased compared to the case of co-financing by the private partner through
increase in the administration fee.
Advantageous of PPP contract for the project of creation an IP in Edinet are the followings:
- the private sector undertakes: (a) to coordinate, monitor and carry out designing and
construction works of technical and production infrastructure of IP, (b) to monitor the transfer
of assets
27
created as ownership of the private partner immediately after completion of the
construction, (c) to design and construct administration office and production premises at the
demand of Residents, (d) to administrate and to maintain IP assets, including those received
for use;
- the private partner participates in project funding;
- risk transfer to the private partner;
- brings innovation and efficiency to the management of the private sector financial efficiency;

27
Public utilities
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- ensures improvement of quality of services operation and maintenance.
We will prove the viability of the project in financial terms for the private partner. We concluded that
the most optimal variant is the implementation of the project through the PPP contract.
In order to recover investments, the private partner provides services of lease of land, production
premises and premises of administrative building; it provides services to Residents including them in
the administration fee and direct payment.
The results of the financial analysis for the managing Company are presented in Tables 49-52.
Table 49. Present value of flows of the private partner according to option 1, thousand MDL
Indicators 2011 2012 2013 2014 2015 2025 2041 RV
Investment costs
1,089,168 6,962,795 25,899,910 14,656,815 9,771,210
-
17,665,86
2
Working capital
79,454 431,519 1,582,060
Maintenance and
administration costs
79,454 431,519 3,164,120 3,406,300 3,967,699 5,133,011 5,019,120
Income
5,771,902 9,121,776 12,456,823 13,887,129 13,887,129
Cash flow
711,240 -9,224,504 -29,353,945 -10,522,309 -1,221,113 8,754,118 8,868,009 17,665,862
NPV
60,912,823
IRR
14.4%
R
b/c
1.51
In the case of option 1, the private partner will provide project co-funding in the amount of 58,380
thousand MDL for capital investments and 2,093 thousand MDL for working capital. Private
partner's capital investment will fund designing, construction of common utilities within IP (water,
sewerage and rainwater sewerage systems), administrative building and production premises to be
leased by IP Residents. The residual value was calculated by assuming that the useful lifetime of the
administrative building makes up 50 years and that of production premises 40 years. Thus, the
residual value of facilities with lifetime longer than the duration of the IP project was estimated at the
end of being 30,389,000 MDL.
Maintenance and administration costs will also include the Fee paid to Edinet Town Hall from the
income of leased BI production premises at previously established 70% rate. We estimated the
average annual fee in the amount of being 2,630,000 MDL (it should be noted that this occurs when
the Managing Company manages BI production premises built from public funds).
At the same time revenues of the Managing Company include recovering of price difference from
services rendered to BI Residents at the expense of identified Incubation Programs.
Detailed results of the financial analysis made for the Managing Company according to option 1 are
presented in Annex 18.
Table 50. Present value of flows of the private partner according to option 2a, thousand MDL
Indicators 2011 2012 2013 2014 2015 2025 2041 RV
Investment costs
1,089,168 6,962,795 1,471,885 -1,787,646
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Indicators 2011 2012 2013 2014 2015 2025 2041 RV
Working capital
79,454 431,519 1,556,411
Maintenance and
administration costs
79,454 431,519 3,112,822 3,356,027 3,918,432 5,092,756 4,989,982
Income
2,927,980 4,794,933 6,988,889 8,451,129 8,451,129
Cash flow
711,240 -9 224,504 -3,375,586 1,924,409 3,991,583 3,358,373 3,461,147 1,787,646
NPV
32,180,562
IRR
23.0%
Rb/c
1.40

In the case of option 2a, the private partner will provide project co-funding in the amount of
9,224,000 MDL for capital investments and 2,067,000 MDL for working capital. Compared to option
1 private partner's capital investment are decreased by the cost of production premises to be leased by
IP Residents. The residual value was calculated only for the administrative building. Thus, the
residual value of facilities with longer lifetime than the duration of the IP project was estimated at the
end of being 1,788, 000 MDL.
Maintenance and administration costs will also include the Fee paid to Edinet Town Hall from the
income of leased BI production premises in the amount established for option 1. In the case of option
2a, the costs are less due to property tax paid only for the administrative building.
Compared to option 1, revenue of the Managing Company does not include the lease fee for
production premises designed to IP Residents.
Detailed results of the financial analysis made for the Managing Company according to option 2a are
presented in Annex 19.
Table 51. Present value of flows of the private partner according to option 2b, thousand MDL
Indicators 2011 2012 2013 2014 2015 2025 2041 RV
Investment costs
1,089,168 14,792,705 32,791,525 -14,511,250
Working capital
79,454 431,519 1,576,964
Maintenance and
administration costs
79,454 431,519 3,153,929 3,167,622 3,157,496 3,066,803 2,955,120
Income
2,927,980 5,125,728 7,667,264 9,661,314 9,661,314
Cash flow
711,240 -18,620,396 -41,021,207 2,443,225 5,430,518 6,594,511 6,706,194 14,511,250
NPV
37, 096,241
IRR
10.2%
Rb/c
1.44

In the case of option 2b, the private partner will provide project co-funding in the amount of
48,673,000 MDL for capital investments and 2,088,000 MDL for working capital. In this case capital
investments compared to option 2a include the cost of BI production premises. The residual value
was calculated supposing that the lifetime of the administrative building makes up 50 years and that
of production premises 40 years. Thus, the residual value of facilities with a lifetime longer than the
duration of the IP project was estimated at the end of being 14,511,000 MDL.
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Costs in option 2b are different from those of option 2a by the inclusion of the property tax for the
production premises of the BI and the exclusion of Fees, because the production premises are built
due to private sources of the Managing Company.
The revenue of the Managing Company includes recovery of difference of fees for leasing BI
production premises and difference of the price for services rendered to BI Residents at the expense
of identified Incubation Programs identified. The recovery of these losses by the Managing Company
will be ensured by the PPP contract.
Detailed results of the financial analysis made for the Managing Company according to option 2b are
presented in Annex 20.
Table 52. Present value of flows of the private partner according to option 3, thousand MDL
Indicators 2011 2012 2013 2014 2015 2025 2041
Investment costs
919,745 2,143,648 1,471,885
Working capital
80,436 428,555 397,705
Maintenance and
administration costs
80,436 428,555 795,410 814,404 814,105 811,489 808,466
Income
2,993,773 4,297,092 5,831,085 5,062,176 5,062,176
Cash flow
573,733 -3,434,624 544,912 3,885,556 5,016,980 4,250,687 4,253,710
NPV
52,854,138
IRR
104.3%
Rb/c
4.09

In the case of option 3, the private partner will provide project co-funding in the amount of 4,535,000
MDL for capital investments and 907,000 MDL for working capital. Private partner's capital
investment will fund designing and construction of common utilities within IP (water, sewerage and
rainwater sewerage systems). This case does not construction of the administrative building. In
option 3 the residual value of is null.
Compared to other cases, maintenance and administration costs are about 4 times less. Chapters of
articles of expenses on property tax, fees lack. In this case, administration expenses are foreseen for
lease of rooms designed for the staff of the Managing Company.
The revenue of the Managing Company includes only three articles: land lease, administration fees,
payments and fees for participation in tenders and for registration as Residents.
Detailed results of the financial analysis made for the Managing Company according to option 3 are
presented in Annex 21.
Table 53. Results of financial analysis of the private partner within PPP
Indicators
Reference
values
PPP Contract,
option 1
PPP Contract,
option 2a
PPP Contract,
option 2b
PPP Contract,
option 3
NPV > 0 64,620,290 32,180,562 37,096,241 52,854,138
IRR > 5% 14.4% 23.0% 10.2% 104.3%
Rb/c > 1 1.56 1.40 1.44 4.09
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Conclusion. In case of all options, the private partner provides maintenance and administration costs.
It recovers its investment and covers maintenance and administration costs, and achieves a
reasonable profit from the administration and provision of IP services.
From a financial standpoint, option 3 and 2a of the project through PPP contract has better indicators,
and thus shows self sustainability and hence viability of the Managers business.
If the case of option 3 the best financial indices of the project of IP creating through PPP contract
were recorded. This allows reduction of the administration fee for IP Residents to 7.6 MDL / sq.m.
with an internal recovery rate of 10%.
Below we present the results of the financial feasibility study of the project of Edinet PI creation
based on public-private partnership when the cost of the technical and production infrastructure of
the industrial park will be borne by the private investor, the public partner will participate in the
project of IP creation on the land that will be transferred to the Managing Company during the
lifetime of the Industrial Park (30 years). In order to compare them with the results obtained in the
case of project co-funding by the private partner, we studied the same options. Exception makes only
option 2a was excluded, because it provides funding of BI construction from state sources.
Table 54.Results of financial analysis in case when the technical and production infrastructure is
funded by the private partner
Indicators
Reference
values
PPP Contract,
option 1
PPP Contract,
option 2b
PPP Contract,
option 3
NPV > 0 47,598,479 15,390,218 32,195,910
IRR > 5% 8.2% 6.6% 14.6%
Rb/c > 1 1.35 1.16 1.85
Conclusion for the case when the technical and production infrastructure is funded by the private
investor. Only in the case of option 3, good financial indices of the project of IP creation through the
PPP contract were recorded.
Table 55. Amount of administration fee in both cases of PPP establishment
Description of Case Condition
PPP
Contract,
option 1
PPP
Contract,
option 2a
PPP
Contract,
option 2b
PPP
Contract,
option 3
Project co-funding by PP
IRR = 5% 17.67 18.46 22.73 6.46
IRR = 10% 24.47 21.45 29.7 7.6
Technical and production
infrastructure is funded by the
PP
IRR = 5% 23.78 - 27.14 15.88
IRR = 10% 33.90 - 36.16 22.75
Report IRR = 10% 1.4 1.2 3.0

For comparison with the case of project co-funding by the private partner, the administration fee for
IP Residents can not exceed 22.75 MDL/ sq.m. for record of internal recovery rate of 10%.
Practically, in this case the administration fee is 3 times higher than for co-financing.
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6.1. Sensitivity analysis of the Managing Company
The sensitivity analysis assesses the impact of changes of input variables on the profitability of the
project.
Methodological approach is based on:
Identification of critical variables
28
of projects parameters
calculation of expected value of return of the Managing Company
develops measures to reduce project risk
Indicators considered for sensitivity analysis are:
Internal Rate of Return (IRR);
Net Present Value (NPV).
In principle, the analysis involves calculating, for each variable of the following indicators:
Sensitivity Index (SI), using the formula:



where, P = studied parameter (NPV or IRR), V = variable, Index 1 = changed values, Index 0 =
initial values.
The sensitivity index is actually an elasticity coefficient which shows the percentages of change of
parameter studied in case if change by a percentage of the variable. If this index is greater than 1, the
respective variable is risk-bearing.
Critical Index (switching value) - SV. This index reflects how we should modify a variable
that NPV takes 0 value (i.e. so that the project becomes unviable).
A small value of SV for a given variable indicates a risk related to that variable: a small deviation
from the medium value threatens investment profitability. The greater the critical index is, lower
risks are.
Identification of critical variables
For this analysis the following variables were taken into account:
Degree of land and premises occupancy of the zone of Residents
Amount of lease and administration fee

28
Critical variables are considered those parameters for which a 1% variation causes an increase by 1% of internal rate of
return or a net present value of 5%
0
0 1
0
0 1
V
V V
P
P P
IS

=
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Amount of investment
Income from consulting services
Maintenance and administration costs.
Buildings assumptions on input variables deviations related to likely values
For each of these variables the assumption of a reasonable deviation from the medium value was
considered being established in the previous sections (financial analysis), deviations expressed in
percents:
For the Degree of occupancy of land and production premises in the zone of Residents, a
decrease by 10%, 20% and 30% was estimated compared to the estimated occupancy rate;
For the Lease and administration fee, a decrease by 5 %, 10% and 15% was estimated
compared to the forecast value;
For the Investment amount, an increase by 10%, 20% and 30% was estimated compared
to the forecast level in the Investment Budget;
For the Income from consulting services a decrease by 20% and 40%, was estimated as a
result of the lack of interest for some development services provided by BI and IP, compared
to forecast value 100%;
For Maintenance and administration costs, an increase by 25% and 50% was estimated
compared to the expected level of expenditure.
Reestimation of the values of performance in the assumption of realization of forecast
deviations
Evolution of indicators depending on variables changes is presented in Annexes 22-25.
The following conclusions are made from the analysis of separated influence on key performance
indicators:
The project presents a high sensitivity to decrease the degree of occupancy of the land and
production premises of the zone of Residents. Sensitivity index in the case of options has
values greater than 1. The critical index in the absolute values for the NPV values has the
lowest value for Option 2a and makes up 31%. This implies that with a decrease of the
forecast degree of occupancy by 31% in the case of Option 1, the project becomes unfeasible.
Critical index value in the case of Option 2a does not differ much and confirms that in case of
a decrease by 37.5% of the occupancy rate and this case is not appropriate. Option 3 is better
compared to others because it has the highest critical indicator. This confirms that upon a
decrease of the occupancy rate by 75%, in case of option 3 the project becomes financially
unprofitable;
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The project shows a high susceptibility upon reduction of the lease and of administration
fees, less high than compared to sensibility upon decrease of the degree of occupancy.
Absolute critical indices has lowest values in the case of option 2a - 24.2% and in case of
option 2a) 38.5%. This implies that a forecast decrease in lease and administration fees by
24.2% in the case of option 2a and respectively by 38.8% in case of option 2a, the project is
no longer financially profitable. Option 3 is the least sensitive both to reduction of
administration fees and payments 78.8% like the sensibility of the degree of occupancy;
In all cases the project has a low sensitivity to increase in the amount of investment.
Absolute critical indices in case of option 1 and 2a shows that upon doubling of investments
volume, the project will be feasible.
The project has a low sensitivity to decrease in Income from consulting services.
Calculations show that in case of all options, the viability of the project does not depend on
the amount income from provision of consultancy services;
The project has a low sensitivity to increase in Maintenance and administration costs in
case of Option 3. At an increase of 4.6 times the project cost in this case the project will
become infeasible. If Option 1 and Option 2b project is relatively low sensitivity. The project
is sensitive to cost increases if the second option.
Conclusion. The sensitivity analysis shows that the project of IP creation through PPP contract for
Option 3 administration of the Managing Company of only parcels of land, is the most feasible.


7. PLAN OF IP IMPLEMENTATION
7.1. Institutional forms of IP establishment
Edinet local public administration under the Law on industrial parks No. 182 of July 15, 2010
launches a project to create an Industrial Park in the locality. In order to operatively initiate
production activities and service provision, to minimize costs related to launching the IP activities,
they will be provided with technical and production infrastructure. We will classify technical and
production infrastructure previously used.
In order to implement the project in this study we proposed to consider several options on possible
finding features in order to create technical and production infrastructure of IP:
1. Full from Edinet town and district budgets, from state budget and the National Regional
Development Fund (NRDF), but only for the groups (a)
29
, (b), partially (c).

a)
29
infrastructure and common utilities outside the Park, external development
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2. Combined. With funding from external sources in the form of grants for groups (a) and (e),
for goods of groups (b) and (c), according to the option indicated in p.1.
#
State Budget and Edinet district
and town budget
External sources,
including grants
Local
Suppliers
NRDF IP Residents
2.1 IP administration costs, (d) (a) and (e) (b) and (c)
Partial (a)
and (b)
(g)
3. Based on the principal of public-private partnership according to the following schemes
30
:
# Private Partner
External sources,
including grants
Local
Suppliers
NRDF
IP
Residents
3.1
Covers IP maintenance, of group (b) -
water, sewerage and rainwater systems,
(d) and (f)
Of group (a) access
road, sewerage,
development, (e)
Of (a) water
and gas
networks, of
(b) gas, electric
power
of group (b)
- internal
road and (c)
(g)
3.2.1
Covers IP maintenance and
administration expenses, group (b)
water, sewerage, rainwater sewerage
systems
Of group (a) access
road, sewerage,
development, (e)
of (a) water and
gas networks,
of (b) gas,
electric power
of group (b)
internal
road and (c)
(g)
3.2.2
Covers IP maintenance and
administration costs, of group(b)
water, sewerage and rainwater systems
(d) and (e)
Of group (a) access
road, sewerage,
development
Of (a) water
and gas
networks, of
(b) gas, electric
power
of group(b)
internal
road and (c) (g)
3.3
Covers IP maintenance and
administration costs, of group(b)
water, sewerage and rainwater systems
Of group (a) access
road, sewerage,
development
Of (a) water
and gas
networks, of
(b) gas, electric
power
of group(b)
internal
road and (c) (g)
In the case of options 1 and 2 the Industrial Park is run by the Managing Company established or
selected through tender by the local public authority. LPA may select an enterprise as Managing
Company, but these services shall be paid. If we suppose that funding of the technical and common

b) infrastructure and common utilities within the Park,
c) interior development,
d) premises necessary to the Managing Company and for provision of services supporting production activities,
optional, if any
e) production premises and facilities for production activities falling within the profile of Park activity, designed for
Residents of BI and IP, if any
f) production premises and facilities for production activities falling within the profile of Park activity, designed for
Residents, built by the Managing Company, if any.
g) production premises and facilities for production activities falling within the profile of Park activity, designed for IP
Residents.
30
In all options the private partner will bear the costs of IP activity administration in the first years of their own sources
that will ensure full means for working capital.
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92
utilities infrastructure will be included in the state and district budget, partially funded from the
account of NRDF, project administration and management is hard to fund during the period of launch
until covering costs of management and maintenances by the income obtained from IP
administration. The LPA budget is austere, with minimum sources for covering current expenditure.
It is difficult to obtain a loan because the LPA has no credit history. Difficult is provision of a
collateral for the loan. Furthermore, LPA can not afford risks, which would lead to suspension of
provision of services or to considerable increase of fees in the locality. However, if the Managing
Company does not participate in covering project risks, it may at any time abandon the project, which
would lead to delays in operating terms.
Possible sources of the district and regional budget are also unlikely because these budgets have
specific purpose, they do not cover this project. NRDF can make only a partial contribution,
however, as applications received from the site are considered and approved depending on
established priorities, project scope, its impact on the community, being in direct tender with other
communities in the country.
As of the participation in various programs with funding in the form of grants, there are different
possibilities, but projects shall be drawn up in written form and tenders shall be won. Edinet Town
Hall does not have enough experience in attracting investments by projects application. Attracting
foreign specialists is questionable, because Town Hall does not have financial resources for this
purpose. So these options make almost impossible project funding.
The analysis presented in the previous chapters shows that option 3 is the most likely solution for
implementation of this project. Edinet Town Council will select through tender under the conditions
of the Law on public-private partnership No. 179-XVI of February 10, 2008 a private partner as
Managing Company. Virtually all functions of IP creating, funding and operation will be assigned to
the private partner.
The public-private partnership can be realized through the method of designing - construction -
operation - transfer on which basis the private partner within its responsibilities designs, builds
technical and production infrastructure and operates it in accordance with contractual provisions, and
at the end of the contractual term the private partner under the contract provision will transfer to the
public partner the assets specified in the contract. Goods that can be transmitted to LPA upon
contract completion BI or other assets indicated in the contract may be assigned. It should me noted
that another form of designing construction transfer operation or o combination thereof is also
possible. Within the second form, facilities stipulated in the contract are transferred in the ownership
of the public partner immediately after commissioning, and the public partner, in its turn, partially
transfers the private partner (Managing Company) this infrastructure
31
to be managed within the IP.
The legal form of collaboration between public and private sector is the public-private
partnership contract. The term of PPP contract will be equal to the period of activity given to the
Industrial Park for 30 years.

31
After commissioning of the infrastructure, common utilities, BI production premises, some assets will be transferred, if
appropriate, to companies that manage services (Edinet Gaz, Apa-Canal Edinet", "RED Nord Vest JSC). Common
utilities will be transferred prior to connection of Residents and Managing Company, except for sewage network that will
be transmitted from the line of demarcation of lands of the Managing Company and of Residents with the pumping
station.

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The private partner within this project undertake to coordinate processes of designing,
construction, commissioning, monitoring of transfer of finished objects to the public partner,
receives facilities for use, constructs facilities on its own account, manages and maintains the IP
activity.
The public partner (LPA) is responsible for: (a) allocation of land, (b) obtaining all
authorizations, approvals, coordination and other permissive documents required by the law
on creation of IP, (c) gratuitous transfer of assets in public ownership to the Managing
Company for creation and development of IP, (d) allocation, as appropriate, of financial
resources for creation of the technical and production infrastructure, (e) support of projects to
donors with the purpose to create technical and production infrastructure, creation of BI
objects by the Managing Company.
The advantageous of this PP modality are: the private partner undertakes to coordinate designing
and construction of the technical and production infrastructure of the IP and to monitor the transfer of
created assets in the ownership immediately after completion of the construction, as appropriate; the
transfer of risks related to designing and construction to the private partner; public assets are
transferred to the private partner to be operated within a determined term; transfer of operation-
related risks brings innovations and efficiency to the management from the private sector and
financial efficiency and ensures attracting businesses to the IP, improvement of quality of operation
and maintenance of utilities and provision of quality IP services.
The private partner recovers its investment and covers operating and maintenance costs, and obtains a
reasonable profit from the administration and provision of services in the IP.
7.2. Stages of IP establishment
We will divide activities of creating and launching the IP in three main stages: stage of preparation
and launch, stage of selecting and launching Residents activities and the stage of IP activity.
Table 56. Main stages in establishment of Edinet Industrial Park
No. Main Stages Period
1 Stage of preparation and launch 2011 2013, quarter I
2
Stage of selection and launch of Residents
activities
2012, quarter II - 2020
3 Stage of IP activity 2012 - 2041 (30 years)
Activities and schedules within the project of IP creation are shown in Annex 26.
Stage of preparation and launch covers the period of 2011-2013, quarter I. This stage includes
selection of the IP Managing Company, designing of technical and production infrastructure,
construction of infrastructure and of common facilities outside and within the Park, construction of
facilities necessary to organize IP administration.
Given the fact that Edinet IP is a greenfield one, this stage consists in the realization of several steps,
and namely:
Step 1: Selection of private partner as IP Manager, (a part of activities is already in progress (or
was carried out)):
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i. First LPA presented the initiative of creating IP and held consultations with central and
regional authorities;
ii. Local public authority identified the land on which it wants to establish the IP;
iii. A feasibility study was developed in order to analyse the opportunity to create IP, on which
basis it will be able to decide on further steps, form and the conditions of realization;
iv. If a decision is taken to create IP through PPP, the requirements of law on PPP will be taken
into account. For this purpose: (a) it will be included by the decision of the Local Council in
the list of projects to be implemented through the PPP, PPP objectives and conditions, as well
as general requirements for selection of the private partner will be approved; (b) the Local
Council will establish a commission for selection of the private partner, will authorize the
executive authority for transmission of the feasibility study to the Public Property Agency
(PPA) and will approve documents required for tender organization; (c) after obtaining the
approval of the PPA, an information release will be published on the tender; (d) the
commission will consider received bids and will select the winner; (e) will prepare the draft
contract with the winning partner on IP creation and will submit it to the Council for approval
and appointment of the person who will sign it;
Step 2: Obtaining of IP title:
i. The Private Company Manager will submit an application to obtain the title of Industrial Park.
It should be noted that obtaining of IP title under the contractual terms (which obviously will
comply with the Law on IP) can be a condition for becoming into force of the PPP contract.
This is natural because the IP title depends on the LPA IP and is the basis for PPP contract
though facilities provided by the IP title. In other words, the lack of this title may lead to
failure to fulfil contractual obligations of both partners,
ii. Town Council empowers the executive body of LPA to form the Commission to grant
technical, legal, consulting support in order to fulfil legal requirements on obtaining the IP
title: change of land purpose, obtaining of decision of local public administration on the
purpose of land, permits, approvals, coordination and other permissive documents required
under the law for the creation of the industrial park, infrastructure and buildings of the Park,
performance of other administrative procedures necessary to create the industrial park, launch
and conduct of its Residents business.
iii. After preparing all necessary documents to obtain the IP title, the applicant files a request to
the Ministry of Economy by attaching all documents required under the IP law (documents of
incorporation of the Managing Company, copies of documents confirming the right of use the
land for at least 30 years, layout of land for IP, land owner's declaration on fulfilment of
conditions foreseen by the art. 5 let. a) and b) of the Law on IP, approvals of holders of public
utilities networks, cadastral records on change of land purpose or approval for the
construction of the facility, the consent of the local council under which jurisdiction the land
for industrial park falls, the feasibility study on establishing the IP);
iv. Examination by the Ministry of Economy of the application of the IP title and preparation of
the draft Government Decision;
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v. Approval by Government Decision of granting the IP title.
Step 3: Designing of technical and production infrastructure:
Designing of internal and external utilities and infrastructure, of other facilities necessary to start
construction and IP activities will be carried out.

Step 4: Construction of infrastructure and of common utilities outside and within the Park, and
of facilities of the Managing Company:
Works to prepare the ground will be carried out, including stripping of the layer of black earth,
preparatory works for starting construction. Some of these works can be carried out along with other
previous works. Utility networks, roads and other facilities within and outside IP will be constructed,
objectives related to IP, buildings and other facilities will be developed necessary to launch IP
activity by the Manager.

Stage of Residents activities selection and launch. The stage of Residents selection comprises the
period from 2012 (quarter II) until 2015, the stage of launching Residents activities starts in 2013 and
finishes in 2020. Selection of Residents lasts 4 years, the duration of launching Residents projects
makes up 5 years from the date of signing contracts on carrying out business within the IP.
The stage of activity of the IP is the period in which Residents and the Managing Company will
operate within the IP under a regime of specific facilities.













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96
8. INDUSTRIAL PARK IMPACT OVER THE ZONE
The project will have a strong socio-economic impact as a result of newly created direct and indirect
jobs, of increase in local economy competitiveness and locally attraction of a direct amount of
investment. Furthermore, the project has little impact on the environment, contributing at the same
time, to land improvement of the area.
8.1. Economic impact
Creation of the Industrial Park in Edinet District will have numerous positive effects on the economy
locally, regionally and nationally.

Based on performed analysis and current reality, we estimate the following quantifiable economic
benefits of the project:
Extension of industrial production areas, around 100,000 sq.m.;
Increase of the rate of enterprises survival (SMEs) by the year 2041 in BI of IP 50
companies will be incubated;
Increase of the level and diversification of consulting services in the region;
Further increase of investments by 418.2 mln. MDL or 25.9 mln. EURO (15.1 mln MDL are
supposed through NRDF), including:

technical and production infrastructure 27.3 mln MDL;
administrative building - 4.8 mln MDL;
production facilities 325.0 mln MDL;
production equipment 61.1 mln MDL.
Creation of job:
2,036 direct jobs, including 1,510 production jobs, 26 administration jobs within 2012
2017, through business incubation - 500 production jobs until 2041;
100 - 150 indirect jobs (usable common services, auto, public catering, etc.);
400 - 500 temporary jobs within construction period 2012-2017.
Unquantifiable benefits are presented as follows:
Provision of qualitative specialized services;
Increase in the amount of additional investment at local level;
Through IP, a local image vector able to act as an promotion anchor for attracting
investments to town and district will be created;
Growth of local economy as a result of income obtained both by the Managing Company and
by tenant companies. These revenues will have an indirect contribution to local GDP growth,
which will result in increased competitiveness of local economy compared to economies of
other territorial units;
Increase in the value of real estate and of land in the area after project implementation
following the development of the respective zone;
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8.2. Social impact
The project will have a positive social impact on the population within 20 km from the Industrial
Park. It will be manifested as follows:
- Some jobs will be filled by employees of region companies, but unemployed people will be
hired too, and many people who will return from abroad as well;
- We suppose that up to 10% of people working abroad will return to the town and neighbouring
villages;
- The labour remuneration fund will increase by about 102.5 mln. MDL annually;
- Water, electric power, natural gas supply, sewerage, telecommunications services will be
improved;
- The local community will also benefit from infrastructure development;
- Local, Property Taxes etc. will also be increased.

8.3. Environmental impact
One of the primary objectives of IP is protection of existing environmental conditions.
Commissioning of lands and facilities if IP to the Managing Company and subsequently to Residents
is determined by compliance with legal environmental requirements. The authorizations issued by
local territorial environmental bodies for Environmental Protection shall be observed for each
building separately. The Managing Company and the residents will sign a joint declaration regarding
environmental issues as part of the lease agreement.
Location of facilities and operation of economic unities will be done by applying all norms in force
on protection of environmental factors. Economic activities likely to pollute air, water and soil will
be forbidden in the area. All activities will take place in an enclosed sites, none of them will produce
noise or vibrations noticeable from outside, within the site limit. Description of the environment
factors and of some environmental protection measures in Annex 27.
Residents will be required to comply with legal conditions (materials with special regime, safe
operating conditions, environmental protection, labour protection, fire protection, etc.). Production
will be done according to standards ISO 9001:2000 and ISO 14001:2000 environmental standards.
Throughout the entire term of the lease contract Residents will be required to take all necessary and
compulsory measures in order to protect the environment under conditions provided by law in force
related to environmental protection. For sewage disposal on the site of the Park, Residents will obtain
the Environmental permit.
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98
Figure 16. Some measures that will be included in the IP Regulations on Environmental
Protection















During the term of lease agreement, Residents will be required to take all necessary measures
required to protect the environment as provided by law in force relating to environmental
protection. Residents shall obtain the Environment permit to be able dispose waste water from the
Park plot.

The unique plan coordinating all distribution networks. The coordination plan will be
completed with all types of networks (connections), and with any type of work that changes or
completes the overall infrastructure that will be leased during IP.
Approval made by state institutions of the following:
- Street lighting within IP (roads, parking plots, etc.).
- Lighting within facilities sites.
- Day and night lighting of the industrial park.
- Day and night lighting of constructions within facilities.
- Technologies susceptible to emit noxious fumes during operation, hence
electromagnetic waves, or disruptive to air traffic control system
The Managing Company of the Park will continually monitor all running works (constructions,
public utilities, etc.), starting with laying out sites, during works, but also during operation, in
accordance with all kinds of approved documentation (urbanism, technical designs and details
of execution), as well as in accordance with IP Operation Regulations.
Applications of potential residents must contain a report-commitment on the technological
process necessary to run the business in terms of used technologies used and the how they
comply with national and European environmental protection norms. The report-commitment
will be reviewed upon assessment of bids by the evaluation committee.


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Annex 1. Basic economic indices of enterprises that may be located in Edinet IP
32

No. Type of activity
Necessary
investments,
mln. MDL
Volume
of net
sales,
mln.
MDL
Number
of job,
persons
Added
value,
mln. MDL
Labour
remuneration
fund, mln.
MDL
Profit,
mln.
MDL
Land area
required for
location, ha
1
Fabrication of clothes from woven
materials, leather and furs
114 95 280 55 17 ,2 18 2,3
2 Footwear production 53 90 160 40 10 ,1 15 1,4
3
Production of starch from potatoes
with processing capacity of 200
tonnes of potatoes (production of 28
tonnes of starch) during 24 hours
70 72 80 24 10 ,3 9 7,8
4
Production of chips and fried potato
segments
1,2 4,6 30 2,6 0 ,8 0,8 0,6
5 Leather and furs tanning 15 30 70 11,2 4 ,2 1,8 0,7
6
Nokia Assembly of Nokia mobile
phones
120 980 280 135 20 ,9 90 1,8
7
Production of electric motors with
capacities from 10 to 200 watt
60 52,8 160 28 10 ,2 6 1,4
8 Production of radio devices 130 280 450 80 28 ,8 18 1,7
Total 562,2 1604,4 1510 445,8 102 ,5 158,6 17,7

32
Enterprises listed in this annex is just one of the possible configurations of Edinet IP Residents were considered to assess the utility needs of the IP.
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Annex 2. Capital costs of the project, MDL
Cost and income categories Description of assumptions
Indicators, parameters,
consumption
Unit of
measurement
Units
Price,
MDL /
units
Amount,
MD
Capital costs

Feasibility study On IP creation Unit 1 100 000 100 000
Projects, studies, IP
funding applications
6% of capital costs, excluding
Residents 6% Unit 1 1 815 280 1 815 280
Land
Infrastructure and
common utilities outside the
Park
Access to the road
network outside IP
Access road to M14 road
Roads of IV class of a width of 6
m, included in the internal road length m 40 16 178 647 100
Common utilities outside
the Industrial Park
gas
connection of D 90 mm
polyethylene pipeline to town
system length m 115 250 28 750
water
connection of D 110 mm
polyethylene pipeline to town
system length m
115 300 34 500
sewerage
connection of D 250 mm
polyethylene pipeline to town
system length m
850 300 255 000
pumping station
Capacity 100 cubic
meter per hour, height
27 meters unit
1 100 000 100 000
pumping station area sq.m.
12 3 000 36 000
IP exterior development
Green spaces development nuciferous trees at the M14 road units m 800 15 12 000
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Cost and income categories Description of assumptions
Indicators, parameters,
consumption
Unit of
measurement
Units
Price,
MDL /
units
Amount,
MD
Installation of indicators
billboard, 3 X 6 at the height of
4.5 m units unit 3 20 000 60 000
Common utilities within IP
Internal road networks,
sidewalks
Road
Roads of IV class of a width of 6
m length m 950 16 178 15 368 600
Optional internal road
Roads of IV class of a width of 6
m length m 0 16 178 0
electric power
power transmission line of a
voltage of 0.4 kV, underground
cable, 120 sq.m. section length m 1560 800 1 248 000
1 TM-1600/10 transformer capacity KVA 1 352 000 352 000
4 TM-1000/10 transformers capacity KVA 4 165 500 662 000
3 TM-630/10 transformers capacity KVA 2 110 500 221 000
1 TM-400/10 transformer capacity KVA 1 79 000 79 000

installation works, line
connection 10kw
10% of the cost of
transformers 131 400
gas D 90 mm polyethylene pipeline length m 917 250 229 250
connections 22 925
water D 110 mm polyethylene pipeline length m 917 300 275 100
connections 27 510
sewerage D 200 mm polyethylene pipeline length m 1882 800 1 505 600
connections 150 560
road rainwater sewerage m 950 500 475 000
fence rainwater sewerage m 1020 500 510 000
Interior development
Green spaces development area sq.m. 2000 50 100 000
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Cost and income categories Description of assumptions
Indicators, parameters,
consumption
Unit of
measurement
Units
Price,
MDL /
units
Amount,
MD
Parking 60 car parking plots of 18 sq.m. area of Parking sq.m. 180 9 707 1 747 170
Installation of Park
scheme, indicators 20 000
Platform of waste disposal area sq.m. 16 500 8 000
Street litter bins unit 40 300 12 000
Interior road lighting
Air line 0.4 kW with pillars (8 m, 2 m soil)
40 m distance between
pillars m.l. 942 206 194 052
LED lamps 3 year warranty, 50000 hours consumption 40 W unit 24 2 000 48 000
Perimeter lighting
Air line 0.4 kW with pillars (8 m, 2 m soil)
40 m distance between
pillars m.l. 1.253 206 258 118
LED lamps 3 year warranty, 50000 hours consumption 40 W unit 24 2 000 48 000
Perimeter fencing fence
Galvanized mesh, installed on
poles length m.l. 2100 412 865 200
Administrative building
and equipment
Designed for IP administration,
services, office leasing (2 floors) Occupied area sq.m. 484
Area of rooms sq.m. 877 4 853 4 256 300
Computers, printers, etc.
Computers unit 18 10 000 180 000
Printers, Copiers unit 16 3 600 57 600
Copier-printer unit 1 15 000 15 000
Projector unit 1 10 000 10 000
Indoor furniture Rooms 24 4 853 116 478
Annex to boiler room Area sq.m. 24 3 236 77 652
Boiler Capacity KW 160 324 51 768
BI production premises
Construction of production
premises, warehouses, etc Area sq.m. 12100 3 236 39 149 550
Production premises built
by the Managing Company
Construction of production
premises,, warehouses, etc. Area sq.m. 15100 3 236 48 856 050
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Cost and income categories Description of assumptions
Indicators, parameters,
consumption
Unit of
measurement
Units
Price,
MDL /
units
Amount,
MD
Total Capital costs 120 574 552
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Annex 3. Distribution of project capital costs, thousand MDL
Object name 2011 2012 2013 2014 2015 2016 2017 Total
Feasibility Study
100 100
Projects, studies, IP funding applications
1 089 726 1 815
Infrastructure and common utilities outside IP

Access to the road network outside IP
324 324 647
Common utilities outside IP
263 263 526
IP exterior development

Infrastructure and common public utilities
within IP
7 684 7 684 15 369
Internal road network, sidewalks
2 945 2 945 5 889
Common utilities within IP
1 529 1 529 3 059
Interior development within IP
4 765 4 765
Administrative building, equipment and furniture
7 830 31 320 39 150
Subzone of BI production premises
24 428 14 657 9 771 48 856
Subzone of the Managing Companys production
premises
236 968
Total capital costs of the project
1 189 26 066 68 493 14 657 9 771 120 176
Share of capital costs
1% 22% 57% 12% 8% 0% 0% 100%
Labour force training
1 290 978 927 102 102 3 399
Working capital
79 432 1 582 2 093
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Annex 4. List of IP Managing Company staff
No
.
Position / Function
Number
of staff
Averag
e gross
salary,
MDL
Remuner
ation
expenses,
MDL
Averag
e gross
salary,
EURO
Remune
ration
expenses
, EURO
Annual
remunera
tion
expenses,
Euro
2011 2012 2011 2012
Administrative staff 5 35591 2200 26400 4 1 3600 26400
1 IP Directory 1 9707 9707 600 600 7200 1 1200 7200
2 Assistant 1 6471 6471 400 400 4800 1 0 4800
3 Lawyer 1 6471 6471 400 400 4800 1 800 4800
4 Accountant 1 6471 6471 400 400 4800 1 800 4800
5 Economist 1 6471 6471 400 400 4800 1 800 4800
Maintenance Staff 4 16176 1000 12000 0 3 0 12000
6 Service staff 2 4044 8088 250 500 6000 1 6000
7 IT responsible 1 4044 4044 250 250 3000 1 3000
8 Receptionist 1 4044 4044 250 250 3000 1 3000
Operational Staff 7 45297 2800 33600 0 5 0 33600

BI and IP Development
Services

9
Business Development
Consultant
2 6471 12942 400 800 9600 1 9600
10
Project Development
Consultant
1 6471 6471 400 400 4800 1 4800
11
Marketing and staff
recruitment Consultant
1 6471 6471 400 400 4800 1 4800
12
Management and Knowledge
Transfer Consultant
1 6471 6471 400 400 4800 1 4800

Auditing and Accounting
Service

13
Accounting Consultant -
Taxation
2 6471 12942 400 800 9600 1 9600
TOTAL 16 97064 6000 72000 4 9 3600 72000
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Annex 5. Maintenance and administration costs, MDL
Articles 2011 2012 2013 2014 2015 2025 2035 2041
Maintenance costs


Administrative building
34 050 34 050 34 050 34 050 34 050 34 050
BI production premises
156 598 156 598 156 598 156 598 156 598 156 598
Parking
3 495 6 989 6 989 6 989 6 989 6 989
Green spaces development, indicators
4 240 8 480 8 480 8 480 8 480 8 480
Lighting Network
3 061 6 122 6 122 6 122 6 122 6 122
Rainwater sewerage system
4 925 9 850 9 850 9 850 9 850 9 850
Site Fencing
2 163 4 326 4 326 4 326 4 326 4 326
Remuneration

basic salary
50 150 300 902 1 290 965 1 290 965 1 290 965
1 290
965
1 290
965
1 290
965
health and social contributions
13 290 79 739 342 106 342 106 342 106 342 106 342 106 342 106
Public services

Gas
93 060 93 060 93 060 93 060 93 060 93 060
Electric power
310 445 310 445 310 445 310 445 310 445 310 445
Water and sewerage
37 480 37 480 37 480 37 480 37 480 37 480
Solid Waste Disposal
4 800 9 600 9 600 9 600 9 600 9 600 9 600
Procurement of services

Fixed, mobile telephony, Internet
30 000 30 000 30 000 30 000 30 000 30 000
Banking
2 150 5 209 15 310 15 310 15 310 15 310 15 310 15 310
Transport
25 000 25 000 25 000 25 000 25 000 25 000
Insurance
445 772 436 798 428 005 349 257 285 016 252 300
Advertising
80 000 80 000 80 000 80 000 80 000 80 000
Security Expenditure
15 786 15 786 15 786 15 786 15 786 15 786
Office Supplies
10 000 10 000 10 000 10 000 10 000 10 000
Travel Expenses
10 000 20 000 40 000 40 000 40 000 40 000 40 000 40 000
SVSTO equipping
5 000 10 000 10 000 10 000 10 000 10 000
Local taxes
80 320 1 280 1 280 1 280 1 280 1 280 1 280
Property Tax
53 112 52 050 51 009 41 678 34 054 30 167
Other expenses
3 784 20 549 150 672 151 315 150 823 146 419 142 826 140 996
TOTAL
79 454 431 519 3 164 120 3 177 610 3 167 284 3 074 801 2 999 343 2 960 910
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Annex 6. Matrix of Risks
No.
Risk Category Description Consequences Attenuation Impact Probability Risk Allocation
1 Location
1.1 Location Risk
The risk of conditions
unforeseen by IP
location. IP location in
the immediate vicinity
of the locality.

Additional costs of
authorization and
partial delay of some
IP activities, leading to
partial reduction of
income.

LPA and district institutions verify
compliance of IP location with the
regulations in force. Determining
the type of IP activities, so that
they do not pollute the
environment and produce noise,
forbidding certain types of
activities within the IP.

Low Low
Risk retain by the
public partner
2 Designing, construction
2.1 Designing Risk
The designing-related
risk consists in failure
to observe some
technical standards,
designing delay.


Increased costs and
delay of designing
and/or additional
increase of capital
costs

Quality of designing can be
ensured through experience of a
designing institution. If the project
complies with the TOR, the
consequences are minor.

Low Low
Managing
Company -
Private partner
Feasibility Study on Creation of Edinet Industrial Park
108
No.
Risk Category Description Consequences Attenuation Impact Probability Risk Allocation
2.2
Risk of increasing
investment costs
The risk of events that
occur during
construction, leading to
failure to comply with
schedule of
commissioning of
facilities and/or to
increase in costs.

Increase in investment
costs, decrease in
income.
This risk can be avoided through a
coherent planning of resources for
execution of works, by
implementing a system of
forecasting and verification of
costs incurred and realized in
future. The Managing Company is
responsible, construction works
will be transferred to an
experienced contractor, so as to
satisfy contractual obligations
Low Low
Managing
Company
Private partner
3 Funding
3.1 Insolvency Risk
The risk that the
Managing Company
becomes insolvent or
later it turns out to be
unsuitable for IP
administration.

Withdrawal of IP title
The private partner will provide
bank guarantee of good
experience, which is automatically
transferred to LPA and losses
amounts already invested in case
of incompleteness. LPA will
launch a new procedure for
obtaining the IP title
High Very low
Managing
Company -
Private partner
Feasibility Study on Creation of Edinet Industrial Park
109
No.
Risk Category Description Consequences Attenuation Impact Probability Risk Allocation
3.2
Risk of external,
unavailable co-
funding
The risk that external
funding and that of
NRDF will delay or
will become ineligible.
Failure to observe
deadlines of
commissioning of IP
utilities, additional
costs for submitting
funding applications,
increase in the amount
of the working capital.

External funding, mainly intended
for external infrastructure,
construction of BI production
premises may be applied at several
sources and can be implemented
through co-funding of external
partners. Managing Companys
commitment regarding the
construction of production
premises for Residents of own
sources will be achieved only
under specific contract signed with
each Resident. Managing
Companys funding by NRDF
depends on its experience. In terms
of future integration into or
association with the EU, the
possibilities of attracting external
resources will increase.
High Low Private partner
4 Operational and maintenance
4.1
Risk of operational
input
The risk that the
necessary inputs cost
more than anticipated
Increase of the cost of
administration
The Managing Company can apply
within its contractual relations
with suppliers long-term
commitments.
Medium Medium
To the private
partner
4.2 Maintenance Risks
.
The risk that
maintenance costs will
increase compared to
what is expected
. Increased cost of
maintenance
Managing Company signs long-
term contracts with suppliers of
materials and services.

Medium Medium
To the private
partner
Feasibility Study on Creation of Edinet Industrial Park
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No.
Risk Category Description Consequences Attenuation Impact Probability Risk Allocation
5 Market or demand
5.1 Commercial Risks
Low level of
applications or
capacities of reduced
payments - below
foreseen limits
Decrease in income
Experienced Managing Company
selected through tender that uses:
advertising, methods to attract
customers and cost reduction,
planning and control
High Medium
Public and
private partner
6 Legal and regulatory
6.1
Risk of change of
the legal and
regulatory
framework
The risk of changes in
legislation and / or in
the regulations, which
can not be expected
upon signing contract,
determining a
reduction of income
and / or cost.





Reduction of income
and / or costs

Amount of fees on facilities built
from external LPA resources and
at the request of LPA and external
at the request of LPA will be
controlled by district and local
LPA. Adjustment of fees will be
requested with arguments
(sufficiently important) and
quantifiable.

Medium Medium
Public and
private partner
7 Force majeure
7.1
Risks of Major
Force
The risk of incapacity
to provide the service
caused by a force
majeure
Loss or damage of
assets, service
(including failure to
provide services), loss
of the possibility to
obtain income, or
BI Managing Company takes
measures to ensure assets and
monitors the repair or replacement
as soon as possible. LPA and
regional suppliers ensure
continuation of provision of
services with IP utilities through
High Very low
Private partner,
regional service
providers. The
private partner
assumes the risk
of loss, damage
Feasibility Study on Creation of Edinet Industrial Park
111
No.
Risk Category Description Consequences Attenuation Impact Probability Risk Allocation
delay of income. alternative measures. of assets
Feasibility Study on Creation of Edinet Industrial Park
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Annex 7. Risk value in case of establishing IP through the traditional mechanism of goods and services procurement
Risk Name 2011 2012 2013 2014 2015 2025 2035 2041
Location Risk

Calculation basis (20% of the cost
of designing)
217
834
145 222
Consequences of risks, MDL
16 338 10 892
Value of risk, MDL
1 225 817
Designing Risk

Calculation basis
1 089
168
726 112
Consequences of risks, MDL
81 688 54 458
Value of risk, MDL
6 127 4 084
Risk of increasing investment
costs

Calculation basis

25 339
645
68 492
602
14 656
815
9 771 210
Consequences of risks, MDL
1 900 473 5 136 945 1 099 261 732 841
Value of risk, MDL
142 536 385 271 82 445 54 963
Risk of Insolvency

Calculation basis (5% of the cost of
designing, etc.)
54 458 36 306
Consequences of risks, MDL
8 169 5 446
Value of risk, MDL
204 136
Risk of unavailable external co-
funding

Calculation basis (10% of the cost
of designing+
Working capital)
188
371
504 130 1 582 060
Consequences of risks, MDL
28 256 75 620 237 309
Value of risk, MDL
2 119 5 671 17 798
Risk of operational input

Feasibility Study on Creation of Edinet Industrial Park
113
Risk Name 2011 2012 2013 2014 2015 2025 2035 2041
Calculation basis
65 590 390 650 2 710 524 2 706 550 2 697 757 2 619 009 2 554 768 2 522 052
Consequences of risks, MDL
8 199 48 831 338 816 338 319 337 220 327 376 319 346 315 257
Value of risk, MDL
1 025 6 104 42 352 42 290 42 152 40 922 39 918 39 407
Maintenance Risks

Calculation basis
208 532 226 415 226 415 226 415 226 415 226 415
Consequences of risks, MDL
26 066 28 302 28 302 28 302 28 302 28 302
Value of risk, MDL
3 258 3 538 3 538 3 538 3 538 3 538
Commercial Risks

Calculation basis
5 771 902 9 121 776
12 456
823
13 887
129
13 887
129
13 887
129
Consequences of risks, MDL
865 785 1 368 266 1 868 523 2 083 069 2 083 069 2 083 069
Value of risk, MDL
108 223 171 033 233 565 260 384 260 384 260 384
Risk of change of the legal and
regulatory framework

Calculation basis
80 320 1 970 787 3 676 772 5 797 498 7 738 088 7 730 464 7 726 577
Consequences of risks, MDL
10 40 246 348 459 597 724 687 967 261 966 308 965 822
Value of risk, MDL
1 5 30 794 57 450 90 586 120 908 120 788 120 728
Force Majeure Risks

Calculation basis
5 771 902 9 121 776
12 456
823
13 887
129
13 887
129
13 887
129
Consequences of risks, MDL
865 785 1 368 266 1 868 523 2 083 069 2 083 069 2 083 069
Value of risk, MDL
21 645 34 207 46 713 52 077 52 077 52 077
Risk Value
10 701 159 353 609 341 390 962 471 518 477 828 476 705 476 133
Feasibility Study on Creation of Edinet Industrial Park
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Annex 8. Present value of risks in case of establishing IP through the traditional mechanism of goods and services procurement
Risk Name 2011 2012 2013 2014 2015 2025 2035 2041
Location Risk 1 225 817
Designing Risk 6 127 4 084
Risk of increasing investment costs
142
536
385
271
82 445 54 963
Risk of Insolvency 204 136
Risk of unavailable external co-funding 2 119 5 671 17 798
Risk of operational input 1 025 6 104 42 352 42 290 42 152 40 922 39 918 39.407
Maintenance Risks 3 258 3 538 3 538 3 538 3 538 3.538
Commercial Risks
108
223
171
033
233
565
260 384
260
384
260.384
Risk of change of the legal and regulatory
framework
1 5 30 794 57 450 90 586 120 908
120
788
120.728
Force Majeure Risks 21 645 34 207 46 713 52 077 52 077 52.077
Risk Value
10
701
159
353
609
341
390
962
471
518
477 828
476
705
476.133
Present Value of Risk 6 748 055
Feasibility Study on Creation of Edinet Industrial Park
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Annex 9. Structure and equipment of the administrative building
Name of space Area, sq.m.
R
o
o
m
s

F
u
r
n
i
t
u
r
e

C
o
m
p
u
t
e
r
s

P
r
i
n
t
e
r
s

C
o
p
i
e
r
-
p
r
i
n
t
e
r


P
r
o
j
e
c
t
o
r

L
e
a
s
e

Area of rooms
designed to
leasing
1st Floor 438 13 8 5 3 1 0 3 196
Main Hall 60 1
Relations Office 10 1 1 1 1
Telephony and IT
Services
10 1 1
Guard and security
service
16 1 1
Manager 20 1 1 1 1
Secretariat 16 1 1 1 1
Accounting 20 1 1 2 1
Protocol hall 20 1 1
Public Catering 160 1 1
Health Care Service 20 1 1
Banking services 16 1 1
Hygiene and toilet rooms 30 2 1
Corridor 40
2nd Floor 439 17 16 13 13 0 1 12 212
Hall 40 1
Support Services 1 16 1 1 1 1 1
Support Services 2 16 1 1 1 1 1
Furnished Office 1 18 1 1 1 1 1
Furnished Office 2 18 1 1 1 1 1
Furnished Office 3 18 1 1 1 1 1
Furnished Office 4 18 1 1 1 1 1
Furnished Office 5 18 1 1 1 1 1
Furnished Office 6 18 1 1 1 1 1
Furnished Office 7 18 1 1 1 1 1
Furnished Office 8 18 1 1 1 1 1
Furnished Office 9 18 1 1 1 1 1
Furnished Office 10 18 1 1 1 1 1
Conference Hall 66 1 1 1
Protocol Hall 24 1 1
Consulting services 24 1 1 1 1
Hygiene and toilet rooms 16 1 1
Corridor 57
Total building 877 30 24 18 16 1 1 15 408
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116
Annex 10. Schedule of funding IP creation, option 1, MDL
Cost Categories 2011 2012 2013 2014 2015 Total
Private partner 1 089 168 6 962 795 25 899 910 14 656 815 9 771 210 58 379 898
Project, studies, IP funding applications 1 089 168 726 112 1 815 280
Common utilities within IP (water, sewerage,
rainfall sewerage) 1 471 885 1 471 885 2 943 770
Administrative building and equipping 4 764 798 4 764 798
BI production premises
Production premises for Residents 24 428 025 14 656 815 9 771 210 48 856 050
Local Providers 1 504 413 1 504 413 3 008 825
Infrastructure and common utilities outside IP
(water, gas) 31 625 31 625 63 250
Infrastructure and common utilities within IP
(gas, electric power) 1 472 788 1 472 788 2 945 575
External Grants 100 000 8 384 960 31 874 690 40 359 650
Feasibility Study 100 000 100 000
Infrastructure and common utilities outside IP
(access road, sewerage, development) 555 050 555 050 1 110 100
BI production premises 7 829 910 31 319 640 39 149 550
NRDF 9 213 589 9 213 589 18 427 178
Common utilities within IP (road) 7 684 300 7 684 300 15 368 600
Interior development 1 529 289 1 529 289 3 058 578
Total costs without Residents investments 1 189 168 26 065 757 68 492 602 14 656 815 9 771 210 120 175 551
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Annex 11. Schedule of funding IP creation, option 2 a), MDL
Cost Categories 2011 2012 2013 2014 2015 Total
Private partner 1 089 168 14 792 705 32 791 525 48 673 398
Project, studies, IP funding applications 1 089 168 726 112 1 815 280
Common utilities within IP (water, sewerage,
rainfall sewerage) 1 471 885 1 471 885 2 943 770
Administrative building and equipping 4 764 798 4 764 798
BI production premises
Production premises for Residents
Local Providers 1 504 413 1 504 413 3 008 825
Infrastructure and common utilities outside IP
(water, gas) 31 625 31 625 63 250
Infrastructure and common utilities within IP
(gas, electric power) 1 472 788 1 472 788 2 945 575
External Grants 100 000 555 050 555 050 1 210 100
Feasibility Study 100 000 100 000
Infrastructure and common utilities outside IP
(access road, sewerage, development) 555 050 555 050 1 110 100
BI production premises 7 829 910 31 319 640 39 149 550
NRDF 9 213 589 9 213 589 18 427 178
Common utilities within IP (road) 7 684 300 7 684 300 15 368 600
Interior development 1 529 289 1 529 289 3 058 578
Total costs without Residents investments 1 189 168 26 065 757 44 064 577 71 319 501
Feasibility Study on Creation of Edinet Industrial Park
118
Annex 12. Schedule of funding IP creation, option 2 b), MDL
Cost Categories 2011 2012 2013 2014 2015 Total
Private partner 1 089 168 14 792 705 32 791 525 48 673 398
Project, studies, IP funding applications 1 089 168 726 112 1 815 280
Common utilities within IP (water, sewerage,
rainfall sewerage) 1 471 885 1 471 885 2 943 770
Administrative building and equipping 4 764 798 4 764 798
BI production premises 7 829 910 31 319 640 39 149 550
Production premises for Residents
Local Providers 1 504 413 1 504 413 3 008 825
Infrastructure and common utilities outside IP
(water, gas) 31 625 31 625 63 250
Infrastructure and common utilities within IP
(gas, electric power) 1 472 788 1 472 788 2 945 575
External Grants 100 000 555 050 555 050 1 210 100
Feasibility Study 100 000 100 000
Infrastructure and common utilities outside IP
(access road, sewerage, development) 555 050 555 050 1 110 100
BI production premises
NRDF 9 213 589 9 213 589 18 427 178
Common utilities within IP (road) 7 684 300 7 684 300 15 368 600
Interior development 1 529 289 1 529 289 3 058 578
Total costs without Residents investments 1 189 168 26 065 757 44 064 577 71 319 501


Feasibility Study on Creation of Edinet Industrial Park
119
Annex 13. Schedule of funding IP creation, option 3, MDL
Cost Categories 2011 2012 2013 2014 Total
Private partner 919 745 2 143 648 1 471 885 4 535 278
Project, studies, IP funding applications 919 745 613 163 1 532 908
Common utilities within IP (water, sewerage, rainfall sewerage) 1 471 885 1 471 885 2 943 770
Administrative building and equipping 58 600 58 600
BI production premises
Production premises for Residents
Local Providers 1 504 413 1 504 413 3 008 825
Infrastructure and common utilities outside IP (water, gas) 31 625 31 625 63 250
Infrastructure and common utilities within IP (gas, electric power) 1 472 788 1 472 788 2 945 575
External Grants 100 000 555 050 555 050 1 210 100
Feasibility Study 100 000 100 000
Infrastructure and common utilities outside IP (access road,
sewerage, development) 555 050 555 050 1 110 100
BI production premises
NRDF 9 213 589 9 213 589 18 427 178
Common utilities within IP (road) 7 684 300 7 684 300 15 368 600
Interior development 1 529 289 1 529 289 3 058 578
Total costs without Residents investments 1 019 745 13 416 700 12 744 937 27 181 381
Feasibility Study on Creation of Edinet Industrial Park
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Annex 14. Estimated income from the PPP reference model, option 2, MDL
Income Categories 2013 2014 2015 2025 2035 2041
Lease of Residents lands 14 630 25 602 35 355 35 355 35 355 35 355
Lease of Residents production premises with adjacent lands
Lease of administration and commercial premises 166 464 221 952 277 440 277 440 277 440
Lease of BI production premises 327 905 1 145 861 2 945 121 2 945 121 2 945 121
Payments and fees paid for participation in tenders and for
registration as Resident
923 950 734 628 657 632 41 665 41 665 41 665
Administration fee 1 828 701 3 275 556 4 570 020 4 720 680 4 720 680 4 720 680
Consulting services 160 700 251 836 320 052 356 452 356 452 356 452
Income from recovery of losses from BI services 12 942 38 017 74 417 74 417 74 417
Total income 2 927 980 4 794 933 6 988 889 8 451 129 8 451 129 8 451 129
Annex 15. Estimated income from the PPP reference model, option 3, MDL
Income Categories 2013 2014 2015 2025 2035 2041
Lease of Residents lands 15 827 28 001 40 176 40 176 40 176 40 176
Lease of Residents production premises with adjacent lands
Lease of administration and commercial premises
Lease of BI production premises
Payments and fees paid for participation in tenders and for
registration as Resident
999 582 768 909 768 909
Administration fee 1 978 364 3 500 182 5 022 000 5 022 000 5 022 000 5 022 000
Consulting services
Income from recovery of losses from BI services
Total income 2 993 773 4 297 092 5 831 085 5 062 176 5 062 176 5 062 176
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Annex 16 Calculated retained risks for the PPP reference model, option 2, MDL
Risk Categories 2011 2012 2013 2014 2015 2025 2035 2041
Location Risks 1 225 817
Designing Risks 1 225 817
Commercial Risks 5 490 8 990 13 104 15 846 15 846 129 587
Risk of change of the legal and regulatory
framework
1 3 16 258 31 959 50 619 67 754 67 751 37 233
Total retained risks
2 451 1 637 21 748 40 950 63 724 83 599 83 597 166 820
Present value of risk
1 046 724
Annex 17. Calculated retained risks for the PPP reference model, option 3, MDL
Risk Categories 2011 2012 2013 2014 2015 2025 2035 2041
Location Risks 1 035 690
Designing Risks 1 035 690
Commercial Risks 5 613 8 057 10 933 9 492 9 492 89 192
Risk of change of the legal and regulatory
framework
1 5 31 179 55 148 79 117 79 117 79 117 482
Total retained risks 2 071 1 385 36 793 63 205 90 050 88 608 88 608 89 674
Present value of risk
1 155 588

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Annex 18 Results of financial analysis for the Managing Company according to the option 1
Indicators 2011 2012 2013 2014 2015 2020 2025 2030 2041 VR
Investment costs 1 089 168 6 962 795 25 899 910 14 656 815 9 771 210 -17 665 862
Working capital 79 454 431 519 1 582 060
Maintenance and
administration costs
79 454 431 519 3 164 120 3 406 300 3 967 699 5,176,902 5 133 011 5,093,366 5 019 120
Income 5 771 902 9 121 776 12 456 823 13,887,129 13 887 129 13,887,129 13 887 129
Cash flow 711 240 -9 224 504 -29 353 945 -10 522 309 -1 221 113 8,710,227 8 754 118 8,793,763 8 868 009 17 665 862
NPV 60 912 823
IRR 14,4%
R
b/c
1,51

Annex 19 Results of financial analysis for the Managing Company according to the option 2a)
Indicators 2011 2012 2013 2014 2015 2020 2025 2030 2041 VR
Investment costs 1 089 168 6 962 795 1 471 885



-1 787 646
Working capital 79 454 431 519 1 556 411




Maintenance and
administration costs
79 454 431 519 3 112 822 3 356 027 3 918 432 5,132,369 5 092 756 5,056,979 4 989 982
Income 2 927 980 4 794 933 6 988 889 8,451,129 8 451 129 8,451,129 8 451 129
Cash flow 711 240 -9 224 504 -3 375 586 1 924 409 3 991 583 3,318,760 3 358 373 3,394,150 3 461 147 1 787 646
NPV 32 180 562




IRR 23,0%




R
b/c
1,40





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123
Annex 20 Results of financial analysis for the Managing Company according to the option 2b)
Indicators 2011 2012 2013 2014 2015 2020 2025 2030 2041 VR
Investment costs 1 089 168 14 792 705 32 791 525



-14 511 250
Working capital 79 454 431 519 1 576 964




Maintenance and
administration costs
79 454 431 519 3 153 929 3 167 622 3 157 496 5 132 369 3 066 803 5 056 979 2 955 120
Income 2 927 980 5 125 728 7 667 264 8 451 129 9 661 314 8 451 129 9 661 314
Cash flow 711 240 -18 620 396 -41 021 207 2 443 225 5 430 518 3 517 907 6 594 511 3 394 150 6 706 194 14 511 250
NPV 37 096 241





IRR 10,2%




R
b/c
1,44

Annex 21 Results of financial analysis for the Managing Company according to the option 3
Indicators 2011 2012 2013 2014 2015 2020 2025 2030 2041
Investment costs 919 745 2 143 648 1 471 885


Working capital 80 436 428 555 397 705


Maintenance and
administration costs
80 436 428 555 795 410 814 404 814 105 812 715 811 489 810 410 4 989 982
Income 2 993 773 4 297 092 5 831 085 5 062 176 5 062 176 5 062 176 8 451 129
Cash flow 573 733 -3 434 624 544 912 3 885 556 5 016 980 4 249 461 4 250 687 4 251 766 3 461 147
NPV 52 854 138


IRR 104,3%


R
b/c
4,09


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124
Annex 22. Analysis of sensitivity in terms of degree of occupancy of lands and production premises of the zone of Residents
Change
(%)
Option 1. Subzone of Residents: lands &
production premises
Option 2. Subzone of Residents: lands & production premises of BI
Option 3. Subzone of Residents: lands Scheme a) Scheme b)
NPV IRR (%)
IS for
NPV SV (%) NPV IRR (%)
IS for
NPV SV (%) NPV IRR (%)
IS for
NPV SV (%) NPV IRR (%)
IS for
NPV SV (%)
70% 27 518 997 9,1% 1,9


49,0%

7 623 383 9,7% 2,5


37,5%

4 065 518 5,6% 3,0


31,0%

32 313 385 61,7% 1,3


75,0%

80% 39 727 584 10,8% 1,9 14 145 047 13,4% 2,8 10 812 686 6,6% 3,5 40 612 788 79,3% 1,2
90% 50 039 514 12,2% 2,3 23 483 373 18,2% 2,7 28 215 912 9,0% 2,4 46 733 463 91,5% 1,2
100% 64 620 290 14,4% 32 180 562 23,0% 37 096 241 10,2% 52 854 138 104,3%

Annex 23. Analysis of sensitivity in terms of lease and administration fee
Change
(%)
Option 1. Subzone of Residents: lands &
production premises
Option 2. Subzone of Residents: lands & production premises of BI
Option 3. Subzone of Residents: lands Scheme a) Scheme b)
NPV IRR (%)
IS for
NPV SV (%) NPV IRR (%)
IS for
NPV SV (%) NPV IRR (%)
IS for
NPV SV (%) NPV IRR (%)
IS for
NPV SV (%)
85% 40 773 022 11,0% 2,5 19 291 483 16,4% 2,7 13 572 563 7,0% 4,2 42 772 498 82,4% 1,3
90% 48 684 303 12,1% 2,5 23 538 592 18,6% 2,7 21 208 085 8,1% 4,3 46 133 044 89,5% 1,3
95% 56 632 086 13,3% 2,5 41,1% 27 833 855 20,8% 2,7 38,5% 29 046 836 9,1% 4,3 24,2% 49 493 592 96,7% 1,3 78,5%
100% 64 620 290 14,4% 20,7% 32 180 562 23,0% 37 096 241 10,2% 9,5% 52 854 138 104,3% 47,1%


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125
Annex 24. Analysis of sensitivity in terms of amount of investments
Change
(%)
Option 1. Subzone of Residents: lands &
production premises
Option 2. Subzone of Residents: lands & production premises of BI
Option 3. Subzone of Residents: lands Scheme a) Scheme b)
NPV
IRR
(%)
IS for
NPV SV (%) NPV
IRR
(%)
IS for
NPV SV (%) NPV
IRR
(%)
IS for
NPV SV (%) NPV IRR (%)
IS for
NPV SV (%)
130% 47.745.257 10,5% -0,9 27.482.191 18,0% -0,5 21.645.227 7,5% -1,4 51.921.176 86,3% -0,1
120% 53.395.028 11,6% -0,9 29.055.640 19,5% -0,5 26.833.323 8,2% -1,4 52.232.153 91,6% -0,1
110% 59.028.273 12,9% -0,9 212,6% 30.618.365 21,1% -0,5 199,9% 31.983.273 9,1% -1,4 171,0% 52.543.144 97,6% -0,1 1468,0%
100% 64.620.290 14,4% 32.180.562 23,0% 37.096.241 10,2% 52.854.138 104,3%


Annex 25. Analysis of sensitivity in terms of costs of maintenance and administration
Change
(%)
Option 1. Subzone of Residents: lands &
production premises
Option 2. Subzone of Residents: lands & production premises of BI
Option 3. Subzone of Residents: lands Scheme a) Scheme b)
NPV
IRR
(%)
IS for
NPV SV (%) NPV
IRR
(%)
IS for
NPV SV (%) NPV
IRR
(%)
IS for
NPV SV (%) NPV IRR (%)
IS for
NPV SV (%)
150% 31.181.958 9,7% -1,0 -970.360 4,3% -2,1 15.703.473 7,2% -1,2 47.054.189 81,9% -0,2
125% 47.901.124 12,1% -1,0 97,0% 15.605.101 14,3% -2,1 48,5% 26.399.857 8,7% -1,2 86,7% 49.954.164 92,0% -0,2 456,0%
100% 64.620.290 14,4% 32.180.562 23,0% 37.096.241 10,2% 52.854.138 104,3%



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Annex 26. Schedule of activities within the project of IP creation
Name of stages, activities
2011 2012 2013 2014 2015 2016 2017 2018
I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV
Stage of preparation and
launch
Identification of land
necessary for IP creation
Establishment of the
committee to support the
creation and operation of the
IP
Obtaining the consent of the
Local Council to use that
land to create the IP
Development of the
feasibility study on IP
creation
Confirmation of opportunity
to create the IP
Development and approval
of specifications
Publication of press release
Organization and conducting
of the tender to select the
private partner
Signing the PPP contract
with the winner of tender
Establishment of the
Managing Company
Preparation and submission
of the application and of set
of documents to obtain the IP
title
Employment of Managing
Company staff
Program of labour force
training
Organisation of advertising

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Name of stages, activities
2011 2012 2013 2014 2015 2016 2017 2018
I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV
company
Development of IP
Regulations
Development of general
project of IP
Development of projects on
creation of technical and
production infrastructure
Obtaining permits,
approvals, coordination, etc.
necessary for creation of IP
infrastructure and facilities
Development and
submission of applications
for funding the creation of
infrastructure, facilities of
external sources
Organization of training and
retraining courses
Preparation of land

Construction of
infrastructure facilities
Construction of
infrastructure facilities with
partners funding
Construction of
administrative building, etc.
Adoption of amount of
payments to the Managing
Company by LPA
Stage of selection and launch
of Residents businesses
Organization of tenders for
the selection of investors -
future Residents
Signing contracts on running
business within the IP
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Name of stages, activities
2011 2012 2013 2014 2015 2016 2017 2018
I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV
Construction of production
premises of the BI
Construction of production
premises of Residents
Official ceremony of
opening the IP and BI
Launch of Residents
businesses
Organization of a job fair

Monitoring of IP activities

Stage of IP activities
1 year 2 year 3 year 4 year 5 year 6 year
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Annex 27. Description of environmental factors and some measures of environmental protection
ENVIRONMENTAL FACTORS
Protection of existing environmental conditions is one of the primary objectives of the IP. IP will be
developed to the extent that it does not interfere with the property of those who own land plots in their
zone, or those who have already leased land and carry out industrial, commercial activities. Lease of
land plots by Residents implies fulfilment of environmental legal requirements
Environmental
Factors
Measures for environmental protection
Wastewater
Industrial waste water produced by the Managing Company and Residents
must be sewaged in full compliance with the conditions specified in the
environmental permit, which requires wastewater sewage (sewerage system of
the IP);

Disposal of substances resulting in the process of operation, maintenance,
treatment or purification, is prohibited
Waste
Waste will not be removed by burning with open fire.
All residual wastes and products will be collected and stored selectively in a
particular developed area for each Resident and Managing Company.
Waste must be collected for recycling or re-use where possible and feasible.
Waste that can not be re-used, will be managed by the Municipal Company in
contract with the Managing Company and Residents
All chemicals and toxic waste will be disposed in accordance with EU
Regulations on toxic and hazardous waste. Documents which record the type,
quantity, time and manner, in which wastes were removed, will be kept.
Waste disposal will be carried out according to the requirements of sanitary
authorities
Air Emissions
Foul odors from activities carried out within the IP must not be detectable
outside the IP boundaries
Concentration of suspended impurities (in air) in buildings must be kept
below allowed limits
Emissions in air of any kind, which may affect visibility in the zone, shall be
approved by the competent authority. The established conditions will be
included in environmental permits
Conditions set out in environmental permits on air emissions shall be
observed. Provisions of national norms and regulations on air pollution shall
be observed
Deposits
Area for storing chemicals / oil and / or solvents will be sealed or protected so
that surface and underground water is not contaminated by leak, according to
national rules relating to storage
Noise
Provisions of national Regulations on produced noise and EU Regulations
concerning noise protection of the staff shall be observed.
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Electromagnetic
waves
Use of materials or equipment that generates electromagnetic waves will be
forbidden. If, however, electromagnetic waves are produced, measured will be
taken to reduce, mitigate or eliminate them completely.






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Sketches