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Slide 2 2 Structure of the City Government City Assembly Mayor 19 city administrative bodies 336 city institutions 17 city precincts, 218 community councils Slide 3 3 Quality management system under the ISO 9001:2008 standard The City Office for Economy, Labour and Entrepreneurship is the first administrative office of the City of Zagreb which established and certified, on 12 April 2005, a quality management system for it operations in compliance with the ISO 9001: 2000 standard. The quality management system which has been certified and is maintained and developed, is the first step toward a more efficient, accountable and professional city government. The application, maintenance and further development of the quality management control system in compliance with ISO 9001:2008 requirements is ascertained by regular annual audits. A commitment to the needs of citizens and other users of our services and their satisfaction with services rendered are the most important values according to which the City Office for Economy, Labour and Entrepreneurship measures and ascertains its overall performance. ISO 9001 Q-722 Slide 4 4 City statistical profile Dominant economic, financial and political status in the Republic of Croatia Population: 790,017 - 18% of Croatias total population FDI in 2012 / Q1, Q2 i Q3 2012. (in millions of euros) Croatia 452,7 Zagreb 211,9 Average net salary above the national average, November 2012 (Zagreb: 890; Croatia 755) Slide 5 5 397.365 employed persons (March 2011) In Zagreb at December 2012th were registered 45 388 unemployed persons, which is an increase of 16.7 % compared to the previous month last year Accounts for roughly 37,4 % of Croatias total exports (EUR 2.631 million) Accounts for roughly 60,1 % of Croatias total imports (EUR 7,326 million) 31.147 companies, or 33 % of Croatias total, operate in the City of Zagreb The City of Zagreb participates in Croatian free enterprise: 53,4 % of total revenues; 54,8 % total fixed assets investment; 33 % of the number of businesses; 40,3 % of the total number of employed in free enterprise Source:Economic trends in the City of Zagreb and Zagreb County, I-IX 2012, CCE Zagreb Chamber Slide 6 6 In 2010 CROATIAS GDP: 44.4 billion per capita: 10.057 ZAGREBS GDP: 14.7 billion per capita: 18.645 Source: City Office for the Strategic Planning and Development of the City Statistics Department In 2010, the share of the City of Zagreb in the overall GDP of the Republic of Croatia was 33,3 %, which is an increase of 1,9 % in comparison to 2009. The initial estimate indicates that the quarterly GDP for the Republic of Croatia in the fourth quarter of 2012 decreased in real terms by 2,3 % in comparison to the same quarter of 2011 (National Statistics Bureau) Slide 7 7 Source:Economic trends in the City of Zagreb and Zagreb County, I-IX 2012, CCE Zagreb Chamber Structure of Zagreb` s economy based on total revenues (I-IX 2012) Slide 8 8 EMPLOYED according to the National Classification of Activities Source : Economic trends in the City of Zagreb and Zagreb County, I-IX 2012., CCE Zagreb Chamber Slide 9 9 City of Zagreb Budget for 2013 881 million (HRK 6,67 billion) Structure of 2013 Budget revenues Slide 10 10 Structure of 2013 Budget expenses and outlays Source: City Finance Office Slide 11 11 Investments Investment policy Allocation of considerable funds for construction of utilities infrastructure and equipment Funding sources: Budget, funds from City- owned companies and institutions, international capital market, public-private partnerships and concessions Slide 12 12 C redit rating Standard&Poors* : - local currency issuer rating BB+/stable/ - foreign currency issuer rating BB+/stable/ - * updated 18.12.2012. Moodys**: - foreign currency issuer rating Ba1/negative - ** updated 1.2.2013. Slide 13 13 DESIGNATION m. m.DESIGNATION 1. Central Wastewater Treatment Plant 304 7. Zagreb Sports and Recreation Zone 50 2. Solid Waste Incineration Plant - SWIP 170 8. Conference Centre Project 52 3. The third phase of wastewater treatment Project 40 9. Sole Trades Centre Project 40 4. The contract governing rendering of principal works and management of installations at the Jakuevec 56 10. Project to construct underground parking garages with additional facilities at the secondary school playground site designated as Savska- Kaieva-Klaieva-Krnjavoga 40 5. Sljeme Cable car Project 40 11. Zagreb Airport Project 250 6. ZET (public transit company) Mass transit system renewal 272 12. Project Aquarium in Zagreb 9 Investment projects of the City of Zagreb Slide 14 14 Central Wastewater Treatment Plant The CUPOVZ Project: one of the largest and most challenging environmental undertakings in Europe, which will resolve the problems of pollution and threats to the water table, and safeguard existing and potential water pumping sites in the City of Zagreb and the area along the course of the Sava River downstream from Zagreb. Slide 15 Financing model BOT model The concession granted to ZOV d.o.o. (in December 2000) encompasses: planning and construction of the Plant and infrastructure facilities, Project financing and management of the Plant until 2028, when it will be turned over to the City of management The Project consists of: 1. The central plant building for the mechanical and biological treatment of sludge 1.2 mil. ERU (equivalent resident unit); in the final construction phase 1.5 mil. ERU 2. Management building, plant and servicing premises 3. Main wastewater input pipeline from New Zagreb to the Plant over a length of 10 km and the Mievac pump station 4. Closure and additional construction of the Main Drainage Canal over a length of 5.5 km 5. Domovinski Bridge (transit/installation structure) 6. Construction of ulineka road from Slavonska avenue to Radnika road (3 km) The mechanical portion of the treatment plant has been operational since March 2004, while the final (fourth) phase of biological sludge treatment and processing has been operational since September 2007. Approximately 98% of investments have been implemented completion depends on remaining property rights issues The search for a technical solution to the thermal treatment of waste sludge is under way There is an obligation to chemically treat wastewater The estimated investment value is 304 mil. Slide 16 16 The third phase of wastewater treatment Project The Croatian Government issued the Decision on Designation of Sensitive Areas (as published in Croatias official journal, Narodne novine, no. 81/10) on which basis the Danube Rivers entire drainage basin was proclaimed a sensitive area. The revised Water Utility Directive Implementation Plan of November 2010 adopted by the Croatian Government stipulates a transition period for the fulfilment of the commitments specified by the Community Wastewater Treatment Directive, which requires the collection of wastewater for facilities in the Black Sea drainage basin a sensitive zone for installations above 150,000 ERU with more advanced treatment by the deadline of 31 December 2018. The third phase of wastewater treatment entails, in addition to the second treatment phase, removal of phosphorus by 80% and/or nitrogen by 70-80 %. The national water management company Hrvatske vode has granted a water management license for the release of wastewater from the public sewage system in the City of Zagreb with treatment at the Central Treatment Plant (CUPOVZ), whereby Zagrebake otpadne vode is obliged to undertake activities for the construction of the third treatment phase at the Plant, to be completed by 31 December 2016, for the purpose of protecting water management interests in compliance with the Program of Water Pollution Prevention Measures with target deadlines. The Project is nominated for funding from the EU's Structural Funds The value of this investment has been estimated at 40 million. Slide 17 17 Jakuevec Landfill Rehabilitation Programme On 18 November 1998, a Loan Agreement was concluded between the European Bank for Reconstruction and Development (EBRD) and ZGOS, a City-owned company, to facilitate the rehabilitation of the Prudinec / Jakuevec Landfill. Investment value: 56 million The Prudinec waste disposal site rehabilitation project at Jakuevec is complete. All works broken down into packets have been assumed by the Investor. Currently, within the framework of the Jakuevec/Prudinec landfill, besides the waste disposal site there are: Construction waste recycling installation (350,000 t/yr.), Scrap metal yard (over 3,000 t/yr.), Discarded tyre yard (over 1,000 t/yr.). Slide 18 18 The proposal of Zagreb Holding d.o.o., ZGOS Branch, is for the existing deadline (31 December 2012) for waste disposal at the Prudinec Landfill in Jakuevec in the City of Zagreb Physical Plan be substituted with a deadline of 31 December 2018. The previous deadline was set under the assumption that a thermal waste treatment plant would be built. However, thus far waste disposal is the only long-term waste treatment measure. The quantity of waste collected within the limits of the City of Zagreb is showing a continual growth trend. The capacity of the Prudinec Landfill and its technical potential ensure the conditions for waste disposal at the newly organized operational surfaces at the site up to 31 December 2018. Depending on implementation of comprehensive waste management measures, this deadline may also be extended. Slide 19 19 Solid Waste Incineration Plant - SWIP The purpose of constructing the SWIP is to treat municipal waste by incineration, including the recycling of energy and sludge from the Central Waste Water Treatment Plant. The City of Zagreb Physical Plan (SGGZ 02/06) specified itnjak-East as the construction site for the SWIP, right next to the CWWTP. The relevant Ministry issued a ruling whereby the intended WIP Project was assessed as environment-friendly, subject to the application of environmental protection measures and the environment status monitoring programme. The documentation required to secure a location permit has been drafted. Efforts are being made to align the existing documents with new legislative requirements, in particular, with the new Physical Planning and Construction Act (Narodne novine, no. 76/07). The Project is nominated for funding from the EU's Structural Funds The City of Zagreb and the European Bank for Reconstruction and Development (EBRD) are planing cooperation on this project The total investment value is estimated at 170 million. Slide 20 20 The Zagreb Waste Treatment and Management Model The Strategic Environmental Impact Study on the Draft City of Zagreb Waste Management Plan to 2015 has been assessed. The Strategic Environmental Impact Study on the Draft City of Zagreb Waste Management Plan to 2015 and the Draft City of Zagreb Waste Management Plan to 2015 have been submitted for public debate, which will proceed from 24 January to 22 February 2013. The City of Zagreb Waste Management Plan to 2015 will be adopted by the Zagreb City Assembly as a separate waste management planning document. Slide 21 21 ZET Mass Tranit System Renewal Programme The City of Zagreb Tramcar Fleet Renewal Programme provides for the following projects : - Procurement of 70 low-floor tramcars; - Overhaul and modernisation of 50 tramcar TMK 301 - Reconstruction and modernisation of the tram depot at Blato in Zagreb; - New fare system - Transit control and management system. 70 tramcars have been procured from and supplied by the CROTRAM consortium. The production of 70 new low-floor tramcars was contracted on 18 July 2007, and a total of 70 tramcars has already been delivered. The new public transit control and management system was launched on 5 September 2008. Two short low-floor tram TKM 2300 were put into service since 2009. The value of this investment has been estimated at 272 million. Slide 22 22 Blato Thermal Spa Project in Zagreb A site west of the unfinished Zagreb University Hospital in New Zagreb, Blato, has been chosen for implementation and development of this project The Mayor of Zagreb has issued a Conclusion establishing the Physical Planning/Architectural Tender for Developing the Preliminary Design for the Blato Thermal Spa in Zagreb (as published in Zagrebs official bulletin, Slubeni glasnik GZ, no. 18/2011) The Physical Planning/Architectural Tender should be held in 2013. The Zagreb Spa is a strategic project of the City of Zagreb according to ZAGREBPLAN, the City of Zagreb Developmental Strategy, Strategic Developmental Objectives to the end of 2013. The investment has an estimated value of 50 mil. Slide 23 23 Conference Centre Project A multi-purpose centre would greatly spur the development of conference tourism. In mid-2005, a general survey-based competition was announced for a conceptual urban and architectural design for the site between Pierottijeva, Jukieva, Savska and Izidora Krnjavoga streets The jury proclaimed the tender a success. The award-winning works were purchased and can be used as a basis for further study and elaboration of the project at this site. The drafting of project documentation is in progress The Project is nominated for funding from the EU's Structural Funds Estimated investment value:52 million. Slide 24 24 Sole Trades Centre Project The project has been planned in the Kajzerica district next to the URIHO site. A competition is underway to develop an urban and architectural design for small business, municipal and accompanying facilities in the Small-Business Centre (small business learning centre with facilities for theoretical studies and practical learning, business premises, a multi- purpuse hall and parking garage). The Agreement on Cooperation in Construction of the Sole Trades Centre with Academy between the City of Zagreb and the Sole Trades Chamber of Zagreb City of Zagreb Sole Traders Association was signed (in January 2013) Activities are under way for implementation of an open, single-phase physical planning/architectural Tender to Draft the Preliminary Design with invited bidders The Project is nominated for funding from the EU's Structural Funds Estimated investment value: 40 million Slide 25 25 Project to construct underground parking garages with additional facilities at the secondary school playground site designated as Savska-Kaieva-Klaieva-Krnjavoga The project is being implemented through a concession of public-private partnership (PPP), in compliance with the Public-Private Partnership Act The project foresees the landscaping of the secondary school playground, construction of a basement garage with service facilities and a connection to the Childrens Hospital in Klaieva street by underground corridor, and construction of a gymnasium, youth centre, transformer station and tramway rectifier station. The estimated construction cost is 40 million Slide 26 26 Zagreb Airport Project A joint project by the RoC Government and the City of Zagreb. The RoCs share in Zagreb Airport Ltd. accounts for 55% of its capital, with the City of Zagreb holding 35%, and the City of Velika Gorica and the Zagreb County 5% of the companys capital each. On 14th February 2011 the Agency has issued approval to the Ministry of the Sea, Transport and Infrastructure for implementation of the project for construction of the New Zagreb Airport Terminal The Ministry of the Sea, Transportation and Infrastructure opened a tender on 18 February 2011 for Construction of the New Passenger Terminal at the Zagreb Airport, which also entails management of the existing and newly- constructed terminals at the Zagreb Airport and the accompanying infrastructure The government has decided to give the 30 - year concession to build a new passenger terminal at Zagreb airport French consortium Zagreb Airport International Company (ZAIC) The value of this investment has been estimated at 250 million. Slide 27 Aquarium Project in Zagreb Planned construction site for the Aquarium: Old City Bathing Zone on the Sava River The Zagreb Aquarium would be a great boon to Zagrebs tourism and overall economy, but its greatest importance would be the enrichment of everyday life for citizens of all ages. The primary purpose of the public aquarium would be educational, but it would also play a broader social role, and contribute to the economy, the hospitality industry, tourism and commerce. The Aquarium in Zagreb would serve as a window into the underwater world and an opportunity to teach and inform citizens of all generations. This has been defined as a city project, and a public survey physical planning/architectural tender will be conducted for it pursuant to the Programme to Draft the Physical Planning/Architectural Tender The estimated value of the investment is 9 mil. Slide 28 28 Sljeme Cable Car Project The projects objective is to link the city of Zagreb with Medvednica Nature Park and the Sljeme zone so that citizens and tourists in Zagreb can take advantage of the recreational, sporting and tourism amenities on Sljeme. The capital investment consists of 4 preliminary projects: Construction of a new lower station at the Dolje site with a public parking garage that can accommodate ca. 500 vehicles; A bus terminal with a capacity of ca. 10 buses; Construction beneath the tramcar terminal with public parking garage for ca. 460 vehicles and an overpass above Graanska road to transfer passengers to the area of cable cars initial station; A single-cable linewith a length of 4,907.49 m, suspended from 27 supporting towers with a maximum of 125 transport gondolas for 8 persons and a capacity of 1,500 passengers/h. Based on the technical documentation, the investment has been broken down into 4 preliminary projects for securing the site permit; besides the technical documentation, an environmental impact study has also been compiled The investment has an estimated value of 40 mil. Slide 29 29 City-owned companies The basic purpose of City-owned companies is to permanently provide quality vital public services of interest to natural and legal persons. Performance January June 2012 Zagrebaki holding d.o.o.: Total revenues 252.946.207 Total revenues 252.946.207 Total expenses 261.433.732 Total expenses 261.433.732 Loss 8.487.525 Loss 8.487.525 Slide 30 30 Holdings subsidiaries: 1.AGM (publishing and bookshops) 2.Autobusni kolodvor (bus terminal) 3.istoa (public sanitation) 4.Gradska groblja (municipal cemeteries) 5.Gradsko stambeno komunalno gospodarstvo (housing and utilities management) 6.Robni terminali Zagreb (commodity terminals) 7.Stanogradnja (housing construction) 8.Trnice Zagreb (green markets) 9.Upravljanje sportskim objektima (sports facility management) 10.Vladimir Nazor (youth holidays) 11.Vodoopskrba i odvodnja (water supply and sewage) 12.Zagrebparking 13.Zagrebake ceste (road management) 14.Zagrebaki digitalni grad (IT) 15.Zagrebaki elektrini tramvaj (mass transit) 16.Zagrebaki velesajam (trade fair) 17.ZGOS (waste management) 18.Zrinjevac (landscaping) 1.Gradska plinara Zagreb d.o.o. (Municipal Gas Co. Ltd.) - 100% 2.Gradska plinara Zagreb opskrba d.o.o. (Gas Supply Ltd.) - 100% 3.Zagreb Arena d.o.o. za usluge (Event Services Ltd.) - 100% 4.Zagreb plakat d.o.o. (Zagreb Billboard Ltd.) - 51% 1.TERME ZAGREB d.o.o. (Thermal Spa Ltd. - 50%) 2.APIS IT d.o.o. (IT Support Agency Ltd. - 49%) 3.VODOPRIVREDA ZAGREB d.d. (Water Mgmt. Inc. 36.13%) 4.ZRANA LUKA ZAGREB d.o.o. (ZG Airport Ltd. - 35%) 5.BICRO BIOCENTAR d.o.o. (13%) Holds founders rights in the following institution: Gradska ljekarna Zagreb (Municipal Pharmacies) Manages: Sports facilities owned by the City of Zagreb 1. RAZVOJNA AGENCIJA ZAGREB - TPZ d.o.o. (Zagreb Development Agency Ltd.) City of Zagreb holds 100% shares in following companies: City of Zagreb holds 100% shares in following companies : City of Zagreb holds certain shares in the following companes: Companies in which Holding has shares 2. ZAGREBAKI HOLDING d.o.o. (Zagreb Holding Ltd.) Slide 31 31 Organisational chart ADMINISTRATIVE AND LEGAL DEPARTMENT SOLE TRADERSHIP REGISTER UNIT UNIT IN CHARGE OF SETTING MINIMUM TECHNICAL AND OTHER CRITERIA FOR ECONOMIC ACTIVITY SESVETE LOCAL ADMINISTRATIVE-LEGAL UNIT SUSEDGRAD LOCAL ADMINISTRATIVE-LEGAL UNIT Slide 32 32 Roughly 14.103 sole trades, or 16.84% of the national total, operate in the City Sole trades in the City of Zagreb Source: Ministry of Entrepreneurship and crafts Central Sole Tradership Register Slide 33 33 Structure of sole trades based on National Classification in 2007 ACTIVITY No. of sole traders % INDEX INDEKS 31.12.2011./ 31.12.2012. Retail commerce 2.90320,695,4 Hospitality 1.66611,892,8 Construction 1.3159,392,8 Transportation 1.59011,3109,2 Hair, cosmetic and pedicure salons 1.2018,598,6 Textile and garment manufacturing 3522,590,9 IT 3882,7107,2 Accounting and bookkeeping 3342,4101,2 Other 4.35430,9 TOTAL 14.103100,094,8 Status: as at Decembar 2012 Slide 34 34 STRUCTURE OF SOLE TRADES based on National Classification of Activities, 2007 Source: Sole Tradership Register of the City Office of the Economy, Labour and Entrepreneurship Sole Tradership Register Unit and Sesvete and Susedgrad Local Administrative-Legal Units Slide 35 35 Development incentives for crafts, trades and SMEs The Crafts, Trades and SMEs Development Incentive Programme was adopted in September 2000. Incentive measures and activities include: Allocation of incentive funds; Development of business infrastructure through institutional development incentive networks. Slide 36 36 1. Allocation of incentive funds (2000 - 2012) Implemented through: 1.1 Loans to businesses 1.2 Subsidizing a portion of interest on business loans 1.3 Supports to sole traders 1.4 Supports to innovator 1.5 Other supports Slide 37 37 2. Development of business infrastructure 2.1 Development Agency Zagreb - TPZ Ltd. Projects and activities: Technical and technological processing and preparation of inventions for use by businesses; Education of already established businesses and start-ups at organized seminars; Development of operating and investment plans for businesses; Consulting services for introduction of systems of quality and/or environmental management - ISO 9001 and 14001; Issuing guarantees for small business loans; Development of economic projects and studies, development and management of projects financed by EU funds, etc. Slide 38 38 2.2 Business zones The City of Zagreb Business Zone Development Programme was adopted in 2005. 2.3 Clusters Launch of the Clusters for Competitive Products project; Preparation of a study for the Vehicles, Machine-Tools and Tools Cluster; To date, a total of 109.845,45 has been spent for the implementation of the project. Slide 39 39 Structure of funds spent to implement Programme incentive measures and activities ( September 2000 December 2012) 34.592.340.14 34.592.340.14 Slide 40 40 TOTAL FUNDS EXPENDED TO IMPLEMENT PROGRAMME INCENTIVE MEASURES AND ACTIVITIES (September 2000 December 2012) In Slide 41 41 Zagreb as a tourist destination as a business and administrative hub, Zagreb accounts for approximately 6% of tourist arrivals and 2% tourist bednights in Croatia the total number of tourist arrivals in Zagreb in 2012 was 767.366 and 590.538 (77%) were foreign guests. The total number of recorded bednights is 1.245.669, of which 963,863 (77%) accounted for foreign visitors. COMPARISON OF RESULTS RECORDED IN I. - XII. 2011 and I. XII. 2012 PERIODS: I. XII.2011. No. of tourist arrivals730.945 (+9 % in comparison to 2010.) - of these foreign 551.043 (+13 % in comparison to 2010.) No. of tourist bednights 1.183.125 (+8% in comparison to 2010.) - of these foreign 884.055 (+10% in comparison to 2010.) I. XII.2012. No. of tourist arrivals767.366 (+5 % in comparison to 2011.) - of these foreign 590.538 (+6 % in comparison to 2011.) No. of tourist bednights 1.245.669 (+5% in comparison to 2011.) - of these foreign 963.863 (+8% in comparison to 2011.) Source: City Strategic Planning and Urban Development Office Statistics Department Slide 42 42 Tourists arrivals and bednights 20022010 Year 2010. - in 2010 in comparison to 2009,growth in tourist arrivals of 5% and bednights of 3% was noted. During the period under observation, growth in the number of foreign tourist arrivals was recorded (8%). Source: City Strategic Planning and Urban Development Office Statistics Department Slide 43 43 Tourists arrivals and bednights 2010. 2011. Year 2011. In the year 2011. growth in tourists arrivals of 9 % and bednights of 8 % was noted. During the period under observation, significant growth in the number of foreign tourists arrivals was recorded (13%). Izvor: Gradski ured za strategijsko planiranje i razvoj Grada - Odjel za statistiku Slide 44 44 44 Accommodation capacity in the City of Zagreb IX. 2012. period: 1.6 Structure of hotel accommodation capacity of the City of Zagreb by category (number of beds) Source: City Strategic Planning and Urban Development Office Statistics Department The City of Zagreb has a total of 84 accommodation units, of which 48 are hotels The total number of beds is 10.131 and they are distributed according to the following types of accommodation capacity: - hotels 6.922 - hostels 1.119 - rooms for rent 299 - private accommodation 808 - other types of collective accomodation 983 average number of bednights per arrival in the I.- IX. 2012. period: 1.6 Since approximately 60% of hotel beds are in higher- category hotels (4* and 5*), Zagreb is characterized as a city with a predominantly high-quality hotel product. Slide 45 45 45 Estimated tourist spending in the City of Zagreb in 2009, Tourism Institute Context for the development of the City of Zagreb as a tourist destination Tourist spending in the City of Zagreb in 2009 TOURIST SPENDING IN ZAGREB IN 2009 307,307 million Foreign tourist spending 207,578 million National tourist spending 99,729 Context for the development of the City of Zagreb as a tourist destination The City of Zagreb investment policy directly impacts the development of tourism through implementation of the following capital projects: Zagreb Airport Project Conference Center Project Zagreb Sports and Recreation Zone Paromlin Hotel/Residential Complex Strategic recommendations for tourism development in the City of Zagreb*: The focus of tourism development will be based on 3 key products: 1). Business and Culture, with events 2). Tours and Brief Vacations 3). Cuisine/Shopping and Special Interests Slide 46 46 Republic of Croatia City of Zagreb City Office for Economy, Labour and Entrepreneurship Trg S. Radia 1 Phone: +385 1 610 1194, 610 1102 Fax: +385 1 610 1499, 610 1077 E-mail: gospodarstvo@zagreb.hr URL: http://www. zagreb.hr