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P 160724Z FEB 10
FM AMCONSUL VLADIVOSTOK
TO SECSTATE WASHDC PRIORITY 1260
INFO CIS COLLECTIVE
ASIAN PACIFIC ECONOMIC COOPERATION
AMCONSUL VLADIVOSTOK

UNCLAS VLADIVOSTOK 000011 
 
 
E.O. 12958: N/A 
TAGS: PGOV ECON SENV RS
SUBJECT: RUSSKIY ISLAND -- THEY WILL BUILD IT, THEY WILL COME, THEN 
WHAT? 
 
REF: 2009 Vladivostok 0087 
 
¶1.  Summary: Many were surprised when in 2007, then President 
Vladimir Putin announced that the 2012 APEC summit would be held 
on Russkiy Island, an empty, undeveloped island just South of 
Vladivostok.  On February 5, 2010, Consular Officer and USAID 
Representative visited the island, taking the ferry from 
Vladivostok.  Construction has commenced, and due to the work we 
saw, and the construction standards they are building to, we 
believe that the construction on the island will be completed in 
time for the APEC summit in autumn 2012 (Note that there is 
discussion about moving up the date of the summit two months 
from November to September due to the harsh winter weather). 
 
They Will Build It and They Will Come 
 
¶2.  Russkiy Island was a closed, military island, little more 
than a place for camping or a good picnic in summer or ice 
fishing in winter.  When it was announced that the 2012 APEC 
summit would be held on Russkiy Island, there was a lot of 
concern about the cost of the project, especially since Russkiy 
Island had no infrastructure.  Everything for APEC would have 
had to have been built from scratch.  The island lacked water 
and power, and the roads were only gravel.  Actually, the roads 
were so treacherous and impassable at places that we were forced 
to turn around at one point and even assisted another car stuck 
in the snow. 
 
¶3.  On our drive around the island we were struck by the 
enduring aesthetic beauty of the well constructed brick and 
stone buildings dating from the czarist times.  The island is 
also home to several distinctly unattractive Soviet era 
officers' residential apartment buildings that are the common 
concrete panel construction.  There are two old forts and large 
artillery batteries that attest to the significant defensive 
role the island played in protecting Vladivostok during WWII. 
Governor Darkin maintains an impressive dacha on the island as 
does the President of Russia.  There are no stores, gas 
stations, restaurants, or other amenities on the island.  The 
few year-round residents rely on the ferry to the mainland for 
all their shopping needs. 
 
¶4.  Even though the weather was below freezing (-20 C), the 
construction was ongoing and a great deal of progress has 
already been made.  The site preparations are being accomplished 
quickly as hundreds of hectares of forests are being or have 
already been clear-cut.  The felled trees are being pushed aside 
into enormous piles by bulldozers.  As there are no remaining 
obstacles to land leveling for foundation slabs, massive earth 
moving equipment is able to rapidly carve and reshape the 
natural rolling hills to accelerate construction.  We did not 
see any evidence of erosion mitigation barriers in place, 
raising doubts about how well protected the marine environment 
will be around the island.  Roads to and from the work sites 
from the dock yards have been constructed and several have 
already been paved with asphalt. The road substrates are typical 
for Russia - a mixture of course, ungraded, slate, rock, and 
dirt.  No compression is applied to the substrates and only a 
thin layer of gravel is spread prior to paving. 
 
¶5.  The contractor is using relatively simple construction 
techniques for the buildings.  The superstructure of all the 
buildings is steel I-beams with floors being poured in place on 
galvanized steel.  Exterior walls are concrete blocks and 
mortar.  The use of drop ceilings will permit the quick interior 
fit outs with ventilation and electrical wiring.  This is 
essentially the construction form used for parking garages and 
shopping centers and is typical of the Tvoi Dom and Crokus City, 
and the Crocus-Expo International Exposition Center; Moscow 
facilities built, owned and operated by the billionaire Aras 
Agalarov, President of the Crokus Group and the general 
contractor for the Russkiy Island development project.  This 
construction facades will be formed from glass, tile, metal or 
glass panels providing architectural detail and variety to the 
otherwise uninspired uniform rectangular blocks. 
 
¶6.  The water and sewage infrastructure seems to be being built 
to a higher standard than many other facets of the project. 
The contractor is using advanced double walled PVC pipes (not 
steel) and poured-in-place juncture housing for manhole access. 
Vladivostok itself has no sewage treatment facilities.  We 
noticed that of the several manufacturers of excavation and land 
moving equipment are represented at the site; the vast majority 
of the equipment was Hitachi.  We saw only one Caterpillar 
bulldozer and no Liebherr equipment so common on Sakhalin.  A 
very large and elaborate "oceanarium" (ocean aquarium) is also 
under construction and should become an attractive tourist 
destination.  Unfortunately, access to the aquarium construction 
site is restricted so we were unable to inspect it or get a 
close-up view. 
 
¶7.  Most of the thousands of construction workers appeared to be 
from Central Asia, although we heard that many nationalities are 
represented, including laborers from Mexico.  There are several 
large camps for the laborers who are bussed to and from the 
construction sites on busses with Moscow license plates series 
`199 RUS', presumably because they are registered to Crocus, the 
Moscow based general contractor. 
 
¶8.  While we took a ferry, construction on the two large bridges 
that will connect the island to the mainland appears to be 
proceeding apace.  Since the bridge is the most important part 
of the project (and at US$1.5 billion, the most expensive), the 
public believes that it is being constructed to international 
standards.  As safety and quality are being taken into 
consideration for the bridge, this part of the project will 
likely pose the greatest challenge in meeting the deadline for 
the APEC summit.  The general contractor for the bridge 
construction is a local company from Ussurisk that has no 
previous experience building bridges.  We learned that the sand 
for the bridge's massive concrete trusses is being shipped by 
barges from North Korea. 
 
¶9.  While impressive progress is being made on the island's 
construction projects, it is apparent that speed is the top 
priority and environmental concerns, aesthetics, and perhaps 
quality are all to be sacrificed in order to ensure that the 
ambitious deadline is met. 
 
Then What? 
 
¶10.  The 2012 APEC summit is meant to be the core of the greater 
Far East Development Program that will help develop the Russian 
Far East (RFE).  Federal funding for numerous projects 
associated with APEC preparations is estimated to be $10 
billion.  One optimistic economist, specializing in municipal 
and regional strategic planning, expressed the opinion that that 
figure will be matched by private investment.  However, a random 
survey of Vladivostok's taxi drivers reflected a more 
pessimistic belief that the project will attract no private 
investment and that at least half of the $10 billion from the 
GOR will be stolen.  It is said that seven percent of all 
contracts will be given to the President's Office and the 
consensus seems to be that the entire project was conceived to 
facilitate the misappropriation of "budget" funds. 
 
¶11.  The plan is to locate a new Far Eastern Federal University 
(FEFU), a combination of all universities in the Vladivostok 
area, at the APEC site on Russkiy Island.  The inconvenient 
location is creating a lot of concern among university students. 
 FEFU will create a strong knowledge base and there is talk 
about creating an investment zone on Russkiy Island complete 
with business incubators for high-tech start-ups.  However, 
while the recently adopted federal strategic plan for the 
development of the RFE through the year 2025 emphasizes the need 
to diversify the region's economy through the commercialization 
of innovative technologies, doubts remain about the ability of 
the region to compete in the technology sphere with its Asian 
neighbors. 
 
¶12.  If all goes well, preparations for the 2012 APEC summit 
will leave the Vladivostok area with a developed island, new 
bridges, an updated transportation system, renovated airport, 
opera house, "oceanarium", sports stadium, and many improvements 
to the city itself.  There will be a residual effect for the 
citizens of Vladivostok as the city is expected to receive a new 
sewage treatment facility, installation of natural gas 
connections to residents throughout the city, and moving oil 
tanks from the downtown area.  But the real test is whether 
Russia decides, and makes clear to its neighbors, that it is 
indeed open for business and welcomes new investment and joint 
ventures.  That "improvement" could account for more foreign 
investment than all the shiny new projects combined. 
 
 
ARMBRUSTER