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Land is often a problem for an investment project. Often in this country the land ideal for an investment project is public. It's quite difficult to involve public land into investment projects. Especially that is true for greenfield projects.

In Russia if an investor wants to acquire a parcel of public land for construction, almost certainly it must be purchased by way of a tender or auction. Alternatively, an investor can go by way of a complicated procedure of the approval by the authorities of a location of the future facility Dmitry Volkov. They are the only available options. Smart investors have tried to acquire public land by exchanging it for other land they owned, but courts ruled that only the first two alternatives might be used.

Based on the Land Code of the Russian Federation, public land can be made readily available for construction purposes through the procedure of a prior approval of the positioning of a facility-to-be-built or without such an approval.

Obtaining of a prior approval of the location of the future facility is a long and difficult process without guaranteed success. However the first option also implies difficulties, since the Land Code requires a tender or auction in case the land is made open to an investor with no prior approval of the location of the future facility.

Certain investors believed that this rule doesn't apply to cases when the investor owns a similar parcel of land (i.e. with similar area, zoning and permitted use requirements).

In a recently available court case that has been tried by the Superior State Arbitration Court of Russia a parcel of land owned by an exclusive investor was exchanged with the neighborhood 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 change of parcels that violates the procedure 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).

It is therefore still difficult to involve public land in the investment process despite statements of local authorities about the improvement of the investment climate and their assistance to potential investors.