Project "Phoenix". How to Give People Jobs and Ensure Industrial Development for the Country

Throughout the war, at all meetings with foreign donors, Ukraine faced one key problem: namely, the lack of quality projects that can be offered to investors. Is it possible to solve this problem at the system level?

Economic fog of war

In the near future, Ukraine will have to solve a systemic problem related to the employment and social adaptation of approximately 2 million internally displaced persons (the specified number of internally displaced persons (IDPs) may fluctuate significantly depending on the dynamics of military operations).

Task No. 1. To find a model of economic and social transformation of the specified human capital in the new post-war conditions. Here there is a risk of falling into the trap of mistakes of 2014-2015, when approximately 1.5 million internally displaced persons (IDPs) were either resettled in temporary "block" towns in a kind of ghetto-like conditions or were completely forgotten by political figures and were forced to live in rented accommodation.

As a result, this human capital acquired the character of "scattered Ukrainianism", and scattered, paradoxically as it sounds, in its own Motherland. Part of this population emigrated abroad, and some even returned to their homes in the temporarily occupied territories.

Task No. 2. New industrial policy, which consists in creating enterprises with a high level of added value and attracting appropriate investments, in particular, in energy-intensivу industries. Change in export structure: from raw to more complex.

Task No. 3. Modernization of the energy industry, which requires the availability of not only new power generation capacities, but also solvent consumers of generated energy, who can stably pay for electricity..

So, the key task is how to combine tasks No.1, No.2 and No.3. The Phoenix project provides an answer to this.

Internally displaced persons (IDPs) from the east are people who were formed in an industrial way of life, so when they get to other less industrialized regions of the country, they gradually lose their skills and competencies. The task of the state is to help such communities preserve their socio-cultural identity during displacement.

We are even talking about entire labor groups that need to be relocated together with production from the east to the center of the country and to the west.

In fact, Ukraine needs to reassemble a new model of the allocation of productive forces of the economy, based on the presence of key factors of production: material, natural, human, energy, transport and logistics.

Today, within the framework of the model of the new placement of productive forces, it is necessary to pay attention to energy sources. After all, the access of industries to the necessary energy resources in terms of volume and price is now a key factor in global competitiveness.

The points of connection to energy sources in Ukraine can become industrial platforms near three nuclear power plants that are under our control. We are talking about the Khmelnytskyi, Rivne and South Ukrainian Nuclear Power Plants (NPPs).

Let's briefly analyze their parameters.

1. The industrial site of the Khmelnytskyi Nuclear Power Plant (NPP) is located in the north of the Khmelnytskyi region (140 km from Khmelnytskyi), the center of a potential industrial and energy platform is the city of Netishyn.

The industrial and energy platform has convenient transport and logistics communications: the Shepetivka-Zdolbuniv-Lviv railway line runs 9 km north of the Nuclear Power Plant (NPP) (Kryvyn station with an access railway track from the Nuclear Power Plant).

In addition, this industrial-energy automobile platform also has such a transport-logistics communication as the road of state importance Berdychiv—Shepetivka—Ostrog, with a separate entrance to the Nuclear Power Plant (NPP).

The capacity of the Khmelnytskyi Nuclear Power Plant (NPP) is 2,000 MW, the population of the city of Netishyn is 35,000 people.

2. Rivne Nuclear Power Plant (NPP) with the center of the industrial and energy cluster in the city of Varash with a population of 42,000 people. The power of this Nuclear Power Plant (NPP) is 2800 MW. The power plant is connected to the power grid using 2x750kV transmission lines, 4x330kV transmission lines and 5x110kV transmission lines.
3. Yuzhnoukrainsk Nuclear Power Plant (NPP), which is located in the Mykolaiv region with the center of the industrial and energy platform in the city of Yuzhnoukrainsk with a population of more than 40,000 people. The capacity of this Nuclear Power Plant (NPP) is 3000 MW. The Odesa railway passes near the city of Yuzhnoukrain. Thus, this industrial and energy platform has a developed network of highways.

The principle of the development of industrial and energy platforms is a guarantee to investors of the supply of the necessary amount of electric energy at a preferential night rate, provided that energy-intensive industries with a high level of added value are placed on the territory of the platforms and the creation of a significant number of jobs.

This involves the placement of plants that could work, including during the night shift, when energy consumption in the system drops and the base nuclear generation remains consistently high. In this context, on three industrial and energy platforms, it is possible to place industrial productions with a total energy consumption at the level of approximately 20% of electricity generation at the Nuclear Power Plant (NPP).

Satellite cities of Nuclear Power Plants (NPP) (Varash, Netishyn, Yuzhnoukrainian), which already have initial social and transport infrastructure, should become urban centers for the placement of new employees of such industrial and energy platforms.

And the industrial and energy platforms themselves should become the industrial cores of two new key clusters of the country's industrial development: Podilsk and Black Sea Region.

Within the latest taxonomy of territorial and economic regions of Ukraine, nine cluster formations are distinguished. Some of them are located under conditions of destruction due to military actions or are partially occupied.

At the same time, the Podilsk Economic District, which includes the Vinnytsia, Ternopil, and Khmelnytskyi regions, can become a new base for industrial development. In addition, the Rivne region, which used to be part of the North-Western Economic Region together with the Volyn Region (the prospects for its development in the context of the threat from Belarus are not yet positive) should also be included in this cluster.

So, in this format, the new Podil cluster can become a new center of industrial development based on two nuclear power plants (NPPs), namely the Rivne and Khmelnytskyi Nuclear Power Plant (NPPs).

The second cluster of development can be the Black Sea Economic District (Odesa and Mykolaiv regions) based on the South Ukrainian Nuclear Power Plant (NPP). Development within the framework of such a cluster will have to be carried out without the involvement of industrial platforms in the temporarily occupied territories (part of the Kherson region and the Autonomous Republic of Crimea).

Three success factors of the mentioned projects

1. Creation of industrial platforms for investors and introduction of free electricity connection and preferential tariff for 5-10 years. Location of energy-intensive and labor-intensive productions.

So, we get the first, production, sphere of the project, that is, we will create jobs and attract investments. Preservation of socio-cultural communities of internally displaced persons (IDPs), their traditional way of life (employment in industry, social environment).

2. The second area of ​​the project is the creation of quality living space: schools, kindergartens, parks, sports facilities, etc. After all, the conditions and amenities offered to internally displaced persons (IDPs) now resemble ghettos in the form of modular towns, without social infrastructure, jobs, or quality of life.
3. The third area is open space in such towns for small business and micro-entrepreneurship. This is the format of charter cities, which Nobel laureate Paul Romer wrote about.

Quality deregulated business environment. Simplified land use and connection to basic infrastructure. Application principle of conducting business. This can become a prototype of a broader urban trend in Ukraine, that is, it can lead to the emergence of large charter cities, where business develops on the basis of self-regulation, special councils of entrepreneurs.

The "Phoenix" project can be started on the basis of already existing cities, which are the basis for operating Nuclear Power Plants (NPP):

—  Yuzhnoukrainsk City — Yuzhnoukrainsk Nuclear Power Plant (NPP);

— City of Netishyn — Khmelnytskyi Nuclear Power Plant (NPP);

— City of Varash — Rivne Nuclear Power Plant (NPP).

Each of these investment projects will have a capital contribution of 1–2 billion dollars.

And for such real projects, it is possible to attract financing from Western partners.

Why is this so? There are a number of reasons

1. The factor of access to cheap sources of electricity becomes a basic indicator of the competitiveness of both individual businesses and the country as a whole.
2. Investors are interested in such projects, let's recall the "complaint" from "Bayraktar" about the extortion of 10 million dollars. for connecting to networks. And here access and tariff will be guaranteed.
3. Soviet nuclear power plants (NPPs) were built as industrial sites. That is, there is a colossal reserve in terms of network capacity, convenient transport communications, approach branches of railways, territories under the industrial zone, where only industrial production can be located.
4. Satellite cities of Nuclear Power Plants (NPP) were created with well-developed basic social infrastructure.
5. The project systematically solves the problem of Ukrainian internally displaced persons (IDPs), i.e. it is potentially beneficial to Europe.
6. The project preserves the potential and integrity of social capital, the unity of labor collectives, as well as destroyed and stopped factories in the east of our country.
7. Investments in production will pay off the costs of housing and social infrastructure of internally displaced persons (IDPs). And in the projects of modular towns, this will never happen.
8. Three projects, three industrial and energy platforms, three charter cities within the framework of two regional clusters (economic territorial districts) are additional generation of Gross domestic product (GDP) with a high level of added value and strengthening of export potential.
9. Such projects are an incentive for the development of nuclear energy. Otherwise, for whom will we build capacity, given the country's deindustrialization?
10. This is a good testing ground for the concept of free charter cities in the modern economic system.

All that remains is to reach the people who make decisions. In the conditions of Ukraine, this can be the most difficult task.

Read this article in Ukrainian and russian.