Land is often a problem for an investment project. Often in this country the land suited to an investment project is public. It is very difficult to involve public land into investment projects. Especially that is true for greenfield projects.
In Russia if an investor wants to obtain a parcel of public land for construction, probably it will need to be purchased through a tender or auction. Alternatively, an investor can go through a complicated procedure of the approval by the authorities of a precise location of the future facility. They're the only real available options. Smart investors have tried to obtain public land by exchanging it for other land they owned, but courts ruled that only the first two alternatives might be used.
In line with the Land Code of the Russian Federation, public land may be made readily available for construction purposes through the process of a prior approval of the location of a facility-to-be-built or without this kind of approval.
Obtaining of a prior approval of the precise location of the future facility is just a long and difficult process without guaranteed success. However the first option also implies difficulties, because the Land Code requires a tender or auction in case the land is made available to an investor without a prior approval of the precise location of the future facility.
Certain investors believed this rule doesn't connect with cases where the investor owns a similar parcel of land (i.e. with similar area Dmitry Volkov, zoning and permitted use requirements).
In a recent court case that was tried by the Superior State Arbitration Court of Russia a parcel of land owned by an exclusive investor was exchanged with the local authorities for the parcel the investor wants, i.e. no tender or approval procedures were involved.
However based on the decree of the Superior State Arbitration Court of Russia, an agreement for a trade of parcels that violates the process stipulated in the Land Code (tender or auction) is invalid (Decree No.18545/10 of the Presidium of the Superior State Arbitration Court of the Russian Federation dated June 21, 2011).
Therefore it is still difficult to involve public land in the investment process despite statements of local authorities concerning the improvement of the investment climate and their assist with potential investors.