Feasibility Study Cantemir - English

0
Feasibility Study
for establishing
Cantemir Industrial Park
Industrial Cantemir
Developed by
Business Consulting Institute
January 2011

Feasibility Study for establishing the Cantemir Industrial Park 1

Contents
Abbreviations ............................................................................................................................... 7
Terms ........................................................................................................................................... 8
Executive Summary .................................................................................................................... 10
1. Analysis of the Region ......................................................................................................... 12
1.1 General Data ............................................................................................................................12
1.2 Cultural and Social Development ..............................................................................................12
1.2.1 Human Capital ............................................................................................................................................... 12
1.2.2 Labor Force .................................................................................................................................................... 14
1.2.3 Educational Infrastructure ............................................................................................................................. 16
1.3 Economic Development ............................................................................................................16
1.3.1 Industry .......................................................................................................................................................... 19
1.3.2 Agriculture ..................................................................................................................................................... 20
1.3.3 Services .......................................................................................................................................................... 21
1.3.4 Entrepreneurship ........................................................................................................................................... 22
1.3.5 Investments ................................................................................................................................................... 22
1.3.6 Infrastructure ................................................................................................................................................. 24
1.4 Reasoning the need for the Industrial Park ................................................................................24
2. Description of the Industrial Park Concept ........................................................................... 28
2.1. IP Concept ................................................................................................................................28
2.2. Analysis of the opportunities to create a Business Incubator within the IP .................................31
2.2.1. The Concept for creating a BI within the IP ............................................................................................... 32
2.3. Reasoning the technical option for IP establishment .................................................................33
3. Description of the Industrial Park ......................................................................................... 37
3.1. IP Organization and Operation ..................................................................................................37
3.2. The Land Area ..........................................................................................................................41
3.2.1. The legal nature of the land area .............................................................................................................. 42
3.2.2. The characteristics of the land area .......................................................................................................... 42
3.3. Utilities and Infrastructure ........................................................................................................42
3.3.1. Development of the IP land area ............................................................................................................... 42
3.3.2. Necessary Utilities ..................................................................................................................................... 44
3.3.3. Internal Infrastructure ............................................................................................................................... 46
3.3.4. The External Infrastructure ....................................................................................................................... 48
3.3.5. Buildings .................................................................................................................................................... 49
3.3.6. Labor Force necessary for the IP activities ................................................................................................ 49
4. Assessment of Investments for the IP ................................................................................... 50

4.1. Land Area .................................................................................................................................50
4.2. Land Development ...................................................................................................................50
4.3. Internal Infrastructure ..............................................................................................................52
4.3.1. Utilities ...................................................................................................................................................... 52
4.3.2. Investments for Internal Infrastructure ..................................................................................................... 53
4.4. External Infrastructure .............................................................................................................54
4.4.1. Investments for external infrastructure .................................................................................................... 55
4.5. Buildings ..................................................................................................................................55
4.6. Cost Assessment for Labor Force training ..................................................................................55
4.7. Total Investments .....................................................................................................................56
5. Analysis of Project Feasibility ............................................................................................... 58
5.1. Introduction .............................................................................................................................58
5.2. General work hypotheses .........................................................................................................60
5.3. The basic model of the Public Sector Comparator ......................................................................61
5.3.1. Estimation of costs .................................................................................................................................... 61
5.3.2. Estimation of revenues .............................................................................................................................. 65
5.3.3. Results for the PSC basic model ................................................................................................................ 68
5.3.4. Risk-adjusted PSC model ........................................................................................................................... 69
5.4. The Public-Private Partnership Reference Model .......................................................................72
5.4.1. Options for implementing the project through PPP .................................................................................. 72
5.4.2. Type and structure of PPP project ............................................................................................................. 76
5.4.3. Payment mechanism ................................................................................................................................. 77
5.4.4. Estimation of costs .................................................................................................................................... 78
5.4.5. Estimation of revenues .............................................................................................................................. 80
5.4.6. Results of the PPP reference model .......................................................................................................... 81
5.4.7. Risk-adjusted PPP reference model........................................................................................................... 81
6. Economic and Financial Forecasting of the Managing CompanyActivity ............................... 84
6.1. Analysis of the Administrators sensitivity .................................................................................86
7. IP Implementation Plan ....................................................................................................... 90
7.1. Institutional forms for IP implementation .................................................................................90
7.2. Stages for IP implementation ....................................................................................................93
8. Industrial Park Impact on the Zone ...................................................................................... 96
8.1. Economic Impact ......................................................................................................................96
8.2. Social Impact ............................................................................................................................97
8.3. Environment Impact .................................................................................................................97


Tables
Table 1. Population by sex and age groups, persons as of 01.01.2010 ........................................................... 13
Table 2. Main indicators for labor force, persons ............................................................................................. 14
Table 3. Distribution of the employed population by types of economic activities, persons .......................... 14
Table 4. Dynamics of population migration in the Cantemir District, persons ................................................ 15
Table 5. Educational infrastructure in the Cantemir District ............................................................................ 16
Table 6. Distribution of economic units by types of activities, 2005-2009 ...................................................... 17
Table 7. The annual average number of employees, persons .......................................................................... 18
Table 8. The main economic units of the Cantemir District, 2009 ................................................................... 18
Table 9. Number of industrial enterprises, 2009 .............................................................................................. 19
Table 10. Indicators for SMEs activity in the Cantemir District ....................................................................... 22
Table 11. SWOT Analysis of the Cantemir Industrial Park................................................................................ 25
Table 12. Operational Plan of the Business Incubator ..................................................................................... 33
Table 13. Incubation timeline for BI Residents ................................................................................................. 33
Table 14. Structure of the Industrial Park land ................................................................................................. 35
Table 15. Structure of the Residents Zone ....................................................................................................... 36
Table 16. The needs for public utilities of the enterprises from the Cantemir IP ............................................ 45
Table 17. Volume of necessary investment to develop the Cantemir IP territory ........................................... 52
Table 18. The summary volume of the investments which are necessary for creating the public utilities
within the IP ....................................................................................................................................................... 54
Table 19. The summary volume of the investments which are necessary to create the external
infrastructure of the IP I ..................................................................................................................................... 55
Table 20.Structure of the area occupied by production halls of the Cantemir IP ............................................ 55
Table 21. Projects capital costs ........................................................................................................................ 56
Table 22. Finance sources for the capital costs of the IP created via the traditional mechanism of public
procurements ..................................................................................................................................................... 62
Table 23. Distribution of capital costs and working capital, thousand lei ....................................................... 63
Table 24. Maintenance costs hypotheses ......................................................................................................... 64

Table 25. Administration costs hypotheses ...................................................................................................... 64
Table 26. Maintenances and administration costs, lei ..................................................................................... 65
Table 27. Hypotheses of revenues from lease and services ............................................................................. 66
Table 28. Tariffs for consultancy services and protocol and conference halls rent ......................................... 67
Table 29. Estimation of revenues, lei ................................................................................................................ 68
Table 30. Project costs and revenues according to the PSC basic model, thousand lei ................................... 69
Table 31. Risks and hypotheses ......................................................................................................................... 71
Table 32. Performance indicators of the project fulfilled according to the PSC model ................................... 72
Table 33. Structure of the Cantemir IP site ....................................................................................................... 72
Table 34. Structure of the IP, option 1 ................................................................................................................ 75
Table 37. IP Administrators revenue sources .................................................................................................... 77
Table 38. Capital costs of the project for those 4 options, th lei ...................................................................... 78
Table 39. Financing sources for the IP project for those 4 options, thousand lei ............................................... 79
Table 40. Investment costs for the Cantemir IP project implemented via a PPP contract, th lei .................... 80
Table 41. Performance indicators for the PPP reference model ......................................................................... 81
Table 42. Allocation of risks ................................................................................................................................ 81
Table 43. Retained risks calculated for the PPP reference model, option 1, lei.................................................. 82
Table 44. Performance indicators of the risk-adjusted PPP reference model ................................................. 82
Table 45. Present value of the private partners flows according to option 1, lei ........................................... 85
Table 49. Results of the financial analysis via the PPP contract ...................................................................... 86
Table 50. Amount of the administration fees, lei/m
2
of area .......................................................................... 88
Table 51. The main stages for the Cantemir Industrial Park implementation ................................................ 93

Figures
Figure 1. Dynamics of the Cantemir District Population, persons, 2005 - 2010............................................... 12
Figure 2. Structure of population by areas (%), ................................................................................................ 13
Figure 3. Structure of population by age groups, ............................................................................................. 13
Figure 4. Population by sex and age categories ............................................................................................... 14
Figure 5. Nominal salary in different economy sectors, 2009 .......................................................................... 15
Figure 6. Evolution of the number of economic units during 2005-2009 ......................................................... 16
Figure 7. Structure of economic units sale by types of activities, 2009 .......................................................... 17
Figure 8. Evolution of the economic units sale volume, thousand lei ............................................................. 17
Figure 9. Value of manufactured production, mln lei ....................................................................................... 19
Figure 10. Dynamics of the manufactured production value, 2005=100% ...................................................... 19
Figure 11. Average number of employees in the industrial sector, persons .................................................... 20
Figure 12. Dynamics of the average number of employees in the industrial sector, 2005=100% .................. 20
Figure 13. Structure of the vegetal production of the agricultural enterprises during 2008-2009 ................. 21
Figure 14. Evolution of the volume of the fee-based services offered to the population (thousand lei) ....... 21
Figure 15. Evolution of the investments funded from private sources, lei/inhabitant ................................... 23
Figure 16. Regional investments funded from the local budget, lei/inhabitant ............................................. 23
Figure 17. Regional investments funded from the state budget, lei/inhabitant ............................................ 23
Annexes
Annex 1 Basic economic indicators for the enterprises that may be located in the Cantemir IP ................... 98
Annex 2 Capital cost of the Project, lei ............................................................................................................. 99
Annex 3 Distribution of Projects capital costs, thousand lei ......................................................................... 102
Annex 4 List of the IP Administrators personnel ............................................................................................ 103
Annex 5 Maintenance and administration costs, lei ...................................................................................... 104
Annex 6 Risk matrix ......................................................................................................................................... 105
Annex 7 Risks value in the IP organization option based on the traditional mechanism of goods and
services procurement ...................................................................................................................................... 108

Annex 8 Present value of the risks in the IP organization option based on the traditional mechanism for
procurements, lei ............................................................................................................................................. 110
Annex 9 Structure and equipping of the administrative building .................................................................. 111
Annex 10 Schedule to fund the IP establishment, option 1, lei ...................................................................... 112
Annex 14 Estimating the revenues based on the PPP project model, option 2, lei ....................................... 116
Annex 17 Retained risks calculated for the PPP reference model, option 2, lei ............................................ 119
Annex 20 Sensitivity analysis as related to the level of occupation of land plots and halls from the
Residents zone ................................................................................................................................................ 120
Annex 21. Sensitivity analysis as related to the lease and administration tariff .......................................... 120
Annex 22. Sensitivity analysis as related to the investment volume ............................................................. 121
Annex 23. Sensitivity analysis as related to the revenues generated by the consultancy services .............. 121
Annex 24. Sensitivity analysis as related to the maintenance and administration costs ............................. 122
Annex 25 Schedule of activities within the project for Cantemir IP establishment ....................................... 123
Annex 26 Some measures to be included in the IP Regulation regarding the environment protection ....... 125
Annex 27 Description of environment factors and of some environment protection measures .................. 126
Sketches
Annex A. The location plan for Cantemir IP, scale 1 : 25 000
Annex B. The Cantemir IP General Plan scale 1 : 1 000


Abbreviations
NAER National Agency for Energy Regulation
LPA Local Public Administration
NBS National Bureau of Statistics
CIS Community of Independent States
PSC Public Sector Comparator
CDMA Code Division Multiple Access
NRDP National Regional Development Fund
GSM Global System for Mobile Communications
BI Business Incubator
ISO International Organization for Standardization
IE Individual Enterprise
ME Municipal Enterprise
SME Small and Medium Enterprises
NGO Nongovernmental Organization
SVSDO Small Value and Short Duration Objects
IP Industrial Park
GDP Gross Domestic Product
PPP Public-Private Partnership
R
B/C
Benefit Cost Ratio
IRR Internal Rate of Return
RAPIR Regional Investment Performance Rating
LLC Limited Liability Company
VAT Value Added Tax
NPV Net Present Value


Terms
Industrial park delimited territory with technical and production infrastructure, where economic
activities are being carried out, mainly industrial production, service provision, implementation of the
scientific researches and/or technological development, under a specific facilities regime, for the purpose
of capitalizing human and material potential of the respective region;
Managing company the enterprise which main activity goal is to administrate the industrial park and to
provide services to the residents of the park. It is a legal entity which legal-organization form may be: state
enterprise, municipality enterprise, company with public, public-private, and private capital;
Resident of industrial park economic entity registered in the way established by law, carrying out
economic activity, based on the contract concluded with the administrator-enterprise, including such
activities as industrial production, service provision, implementation of the scientific researches and/or
technological development within the industrial park;
Industrial park established upon public-private principles an industrial park established on public property
assets, integrally or partially, using the financial means of the private investor or the financial means
attracted by the latter, using different models of cooperation and association set forth by the Law on public-
private partnership;
Public property assets real estate (land, buildings etc.) from private domain of the state or administrative-
territorial units, including the Gagauzia autonomous territorial unit;
Regulation and control institution public authority empowered with duties to regulate and control
involved in issuance of necessary permits for the industrial park establishment and operation;
Technical and production infrastructure buildings and installations, energy power supply systems,
telecommunication networks, gas pipelines, water supply and sewerage systems, including pluvial ones,
transportation routes, and public illumination systems, etc.;
Holders of public utility networks providers of water supply services, gas, electricity and heating, sewerage
and filtering, telecommunications, and other public utility services;
Industrial park title right granted to the managing companyto benefit from facilities in establishing and
operating the industrial park, under the condition to respect the obligations stipulated in the Law on
Industrial Parks No. 182, dated 15.07.2010;
Industrial park resident title right granted to the resident to benefit from facilities in an activity launching
and developing within the industrial park, under the condition to respect the obligations stipulated in the
Law on Industrial Parks No. 182 and in the contract concluded with the administrator-enterprise;
Investment project a project meant for creating new fixed assets, re-equipping and/or modernizing the
existing ones.

Public-private partnership - long term contract signed between the public and the private partners, with the
purpose of undertaking activities of public interest, that is concluded on the capacities of each partner to
respectively distribute resources, risks and benefits;
Public partner any legal person under the public right (authorities) or an association of such persons which
are establishing a public private partnership rapport;
Private partner any legal person under the private right or natural person or/and their associations that
have become a part of public-private partnership in accordance with the law conditions;
Public interest any benefit, the form and value of which is determined by the decision of the public partner,
which was obtained for the advantage of the public partner, persons living and/or activating on the territory
of the Republic of Moldova;
Business incubator an institution meant to create an empowering and sustainable environment for the
newly-established companies, as well as the innovational companies with development potential;
Resident of business incubator the beneficiary of the incubating program; potential entrepreneurs who
intend to establish an enterprise in line with the national legislation or enterprises which are already
established, with at most 3 years of activity on the date the incubator signing-up application was registered;
Feasibility analysis conceptual framework applied to any quantitative and systematic assessment of a
public or private project so as to determine if or to what extend the given project is valuable from a public or
social perspective. The results of the respective analysis may be expressed in a number of ways, including the
investment internal rate of return, the net present value and the benefit-cost ratio.
Sensitivity analysis analytical technique to test systematically (through simulation) what is going to happen
to project profitability, if the events differ from the estimates which were made during the planning stage. It
is performed by modifying one element or a combination of elements, as well as by determining the change
effect on the result (usually on the IRR or the NPV).
Financial sustainability analysis the analysis performed to verify if the financial resources are enough to
cover all the financial exit flows, year by year, for the entire timeline of the project. The financial
sustainability is verified is the cumulated cash flow is never negative all over the years which are taken into
consideration.
Discount rate the rate used to update the future values in the present.
Internal rate of return the interest rate when the flow of costs and benefits has the Net Present Value
(NPV) equal to zero. The internal rate of return should be compared with a benchmark so as to assess the
performance of the proposed project (usually, the discout rate serves as a benchmark). It expresses the
financial profitability of the project.
Net present value the amount which results when the net present value of the expected costs of an
investment is subtracted from the estimated value of the expected benefits.
Benefit-cost ratio the present value of the benefits flow divided by the present value of the costs flow.
Whenever the benefit-cost ratio is used, the selection criterion is that to accept all the independent projects
with a benefit-cost ratiohigher than 1.
Residual value the net present value of the assets during the final year of the period selected for analysis
and evaluation.

Executive Summary
The aim of this feasibility study is to analyze the opportunities and conditions for the establishment of a
Greenfield-type Industrial Park in Cantemir on public property land. Taking into account the fact that the
administrative boundaries of the Cantemir District are 20 km from the land intended for the Industrial Park
(hereinafter referred to as IP), the IP would fall under the Cantemir Districts jurisdiction zone. The Cantemir
District is located in the central part of the country, on the border with Romania and has a total area of
867.85 km
2
and a population of 63 thousand inhabitants.
The land at the intended location of the Cantemir Industrial Park is owned by the Cania Mayoralty, has an
area of de 9.4 ha, and is situated within the villages developed area, near the R37 national highway, at a
distance of 760 m from the Prut railway station at Cania village. This location is 125 km from the Chisinau
International Airport and 96 km from the International Free Port Giurgiulesti. The main advantage
benefiting the location for the Cantemir IP (Cania) is the possibility for it to have a direct connection with the
European-gauge railroad, as well as with the CIS. This fact will allow the future Administrator and Residents
of the IP to have access to long-distance markets both in the EU and the CIS.
Currently, the region located within 20 km of the land intended for the IP establishment has an undeveloped
potential of the qualified labor force in such areas as: the food industry, wine-making industry, and garment
industry. The total number of persons in the economically active population who are not employed in the
labor market represents about 28.5 thousand persons. Many of these persons (about 10 thousand) have left
abroad, and the others are unemployed or only have occasional work (in or outside the country).
Based on the conditions offered by the location of the land meant for the IP, as well as deriving from the
development peculiarities of the Cantemir District, the proposed activity areas for the IP are the following:
(a) production of dairy products, (b) oil production, (c) production of leather and leather footwear and
garments, (d) manufacturing of starch and starch products, (e) production, processing, and conservation of
meat and meat products, and (f) transport and communications (storing, processing, and packing).
To foster new businesses in Cantemir and in the region, it is suggested that a Business Incubator (hereinafter
referred to as the BI) be established within the IP in the field of industrial production, including the agro-food
area, as well as other activities related to the IP profile. The advantages of locating a BI in the IP territory are
related, first of all, to the fact that the BI Residents will be able to benefit from facilities offered by the status
of IP Resident. Thus, after the incubation period, the BI resident will be able to continue its activity as an IP
Resident. In this way, additional conditions are created for increasing the sustainability of the established
businesses. The BI will be managed by the IP Managing company(hereinafter referred to as the
Administrator), but the BI activity will be organized separately from that of the IP.
The IP is created from three zones: (i) the Residents zone, (ii) the Administrators zone, and (iii) the zone
occupied by infrastructure. The area occupied by the Residents zone is 8.55 ha and is made up of 2
subzones: (i) the subzone for halls lease of 2.2 ha and (ii) the subzone for land plots of 6.35 ha. About 15 BI
Residents and 6 IP Residents will operate in the halls lease subzone by renting out production spaces from
the Administrator, while the land plots subzone will offer the Residents about 16 plots (0.4 ha each) for
building production areas. The Residents of this subzone may be also BI Residents, who will benefit from a
special package of incubating services, which may include only support and consultancy services.
At the same time, besides the basic option presented above, according to which the halls lease subzone is
established from the BI halls (12% of the total area of the Residents zone) and the production halls for the IP
Residents (14%), funded by the Administrator, three other options were analyzed depending on the

structure. Option 2 in which the halls lease subzone is constituted only from the BI halls (12%) funded by
the Administrator. On the other hand, 88% of the Residents zone remain for the land plots subzone (7.55
ha), with the private partner funding the rehabilitation of the access road and the construction of the
aqueduct from Cantemir through Cania to the IP land area. Option 3 in which the Residents zone is
constituted only from the land plots subzone (100%), meaning that on the entire IP area the land plots are
rented to the IP Residents for them to build their own production halls. And option 4 identical to option 3
from the Residents zone configuration, only in this case the private partner will be the one to fund the
rehabilitation of the access road and the construction of the aqueduct.
According to the options defined above, the projects capital costs through PPP, without IP Resident
investments for their own production space, represent 65.6 mln lei for option 1; 42.3 mln lei for option 2;
and 19.6 mln lei for options 3 and 4.
As the project for this IP may be implemented both, by the public administration (or the LPA with the central
authorities), as well as via a public-private partnership, a project cost analysis was performed for both
approaches. This analysis was carried out based on an estimation of the total costs for the project, including
its risks, replacement, administration, and maintenance costs, reducing them with the financial revenues
generated by the IP Administrator for the whole period of the IP existence of 30 years. As a result of the
analysis, the conclusion was drawn that the IP implemented through a public-private partnership has a lower
cost than the implementation performed only by the public authorities.
Thus, it is recommended that this project be implemented through a private-public partnership, where the
Administrator shall be selected on competitive basis. The duration of the PPP contract will be equal to the
activity period of 30 years granted to the Industrial Park.
The establishment of Cantemir Industrial Park will have numerous positive effects on the economy at the
local level, as well as for the regional and national economies, by increasing the employment rate, creating
conditions for harnessing the agricultural potential, diversifying the industrial businesses, and making the
sector of small and medium enterprises more dynamic, thus increasing the economic potential and business
competitiveness in the region. The IP is not only a modality to offer the necessary infrastructure for business,
but, first of all, it is an agent to attract investments so as to create new businesses in the industry.
It is estimated that about 707 direct work places, plus about 55-100 indirect work places, will be created in
the IP in the services area, as well as about 150 - 200 work places during the IP construction period. At the
same time, it is estimated that the increase in SME survive rate as a result of the BI operation will contribute
to the economic stability of the locality and region.
The positive social impact on the population within 20 km of the IP will be the fact that a part of the jobs will
be taken by the unemployed, as well as by about 10% of persons who have left abroad. The payroll fund will
be increased by 38.4 mln lei annually, thus contributing to increasing the regions revenues. Concurrently,
the local community will benefit from infrastructure development, including from improvement of services
related to water and sewage supply, and transportation.

1. Analysis of the Region
The assurance of sustainable economic growth is a strategic priority for the Republic of Moldova, which is
possible to be fulfilled only by implementing some efficient policies to foster the investment activities and
the industrial development. The range of the tools used to perform these policies has increased together
with the approval of the new Law on Industrial Parks, which creates new opportunities for establishing
Industrial Parks through public-private partnerships.
To identify the opportunities for establishing an Industrial Park in Cania village, Cantemir District, as well as
to estimate the resources and costs which are necessary to create such a park and to assess its impact on
region development, an analysis was performed for Cantemir District area, which represents a surface of 20
km around the land area intended for the IP.
1.1 General Data
Cantemir District is situated on a tableland in the southern part of the republic, nearby the River Prut, on the
Chisinau Leova Cahul road, 120 km to the south-east of Chisinau, 1 km from the Prut railroad station, with
Basarabeasca Cahul direction. In the western part, it borders with Romania, in the southern part with
Cahul District, in the eastern part with the Gagauzia ATU, and in the northern part with Leova District.
The Cantemir District area represents 867,85 km
2
, covering 2.7% of total area of the Republic of Moldova.
The district is composed of 51 localities, of which: one town - Cantemir, 26 communes, and 24 villages,
having a population of about 63 thousand inhabitants.
The localities are situated in the warmest and aridest region of the country, the daily temperature being 2-3
degrees higher than in the North or Center regions. The climate is characterized by a high number of sunny
days about 190 days annually or 2350 light hours per year. The precipitation quantity all over the year is
not uniform, as frequently dry periods occur. These weather conditions influence the development and the
zone specialization of the agriculture.
1.2 Cultural and Social Development
1.2.1 Human Capital
The number of stable population in Cantemir District represents 63 111 inhabitants, as of 01.01.2010, a
decrease with 89 persons as against the same period of the previous year. As compared to 2005, the stable
population of the district has registered an insignificant decrease by 2% (see Figure 1). This phenomenon is
characteristic for the entire country, the main causes being the intensification of the migration process,
decrease of the birth rate, and increase of the mortality rate.
Figure 1. Dynamics of the Cantemir District Population, persons, 2005 - 2010

Source: National Bureau of Statistics

The density of the district population is 73 persons/km
2
, which is lower than the average density in the
region (75 persons/km
2
).
Cantemir District is among the most ruralised districts of the country. The share of the rural population in the
total population of the district has kept the level registered during 2005-2010. At the beginning of 2010 this
share represented 57 114 persons, or 90.50%. This distribution contributed to the employment of the local
population especially in the agricultural sector, and namely subsistence agriculture. The only urban locality
Cantemir town, covers the remaining part, 5 997 persons or 9.5% of the total population (see Figure 2).
Figure 2. Structure of population by areas (%),
as of 01.01.2010
Figure 3. Structure of population by age groups,
as of 01.01.2010

Analyzing the population structure as of January 01, 2010, it may be noted that Cantemir District has the
most balanced distribution of the population by sex in the country. Women represent a share of 50.01%,
while men 49.99% of the total population, represented by 63 111 persons. Thus, in average we have 100
men per 100 women.
Figure 3 presents the structure of the Cantemir district population by age groups. It may be noted that the
largest share goes for the young population, both male and female.
Table 1. Population by sex and age groups, persons as of 01.01.2010
Groups Men Women Total
0 - 15 7 051 6 597 13 648
16 - 61(56) 21 996 19 482 41 478
62(57) - over 2 505 5 480 7 985
Total 31 552 31 559 63 111
About 65.72% out of the total district population represent the able-bodied population (16-61(56) years),
21.63% - persons under the able-bodied age (0-15 years) and 12.65% - persons over the able-bodied age (see
Table 1).
The distribution of these age groups by men/women shows that 69.71% of men are in the able-bodied age
group, as compared to 61.73% of women. In the group of under able-bodied age, women represent 20.9% as
blue men / red women

compared to 22.35% of men, and 17.36% of women are over the able-bodied age, as compared to 7.94% of
men (see Figure 4).
Figure 4. Population by sex and age categories
Men Women

1.2.2 Labor Force
In 2009, the economically active population of the Cantemir District accounted for 20 808 persons, or 32.92%
of the total district population, of which 2.3% are unemployed and 30.7% are employed in economy. In spite
of the increase of the economically active population share, it still remains at a lower level than the one
registered for the country.
Table 2. Main indicators for labor force, persons
Nr. Indicators 2005 2006 2007 2008 2009
1 Total population 64400 64400 63602 63406 63200
1 Economically active population (r.2.+r.3.) 20 290 20 190 20 341 20 492 20 808
2 Population employed in economy 19 247 19 304 19 321 19 343 19 374
3 Unemployed 1 043 886 1 020 1 149 1 434
Source: Data supplied by the Cantemir District Council
Thus, 6.9% out of the total economically active population are unemployed and 93.1% are employed in
economy, in different sectors (see Table 3).
Table 3. Distribution of the employed population by types of economic activities, persons
Year 2005 2006 2007 2008 2009
Agriculture 13 391 13 400 13 622 13 760 13 664
Industry 1 012 1 087 960 870 840
Constructions 144 149 137 124 114
Trade 684 648 604 612 798
Transport and communications 402 409 397 390 378
Public administration 540 540 534 528 521
Education 2 250 2 250 2 250 2 250 2 250
Health and social assistance 621 621 621 621 621
Green over able bodied age;
Blue - under the able bodied age;
Red able bodied age

Year 2005 2006 2007 2008 2009
Other types of activities 203 200 196 188 188
Total 19 247 19 304 19 321 19 343 19 374
A share of 70.53% out of the total employed population are working in agriculture, 11.61% - in education,
and only 4.34% - in industry.
As the majority of the population lives in villages and works in agriculture sector, no major pressures are
registered on the local labor force market, so as to influence negatively the population incomes.
The average salary in 2009 was 1 795 lei, which is 14% higher than in 2008, and 40% higher than in 2007. It is
noted that the labor force in the Cantemir District is relative cheap, as the average salary in 2009 was 34.7%
lower than the average wage in the republic (2 748 lei).
At the same time, there are big discrepancies in the remuneration level for different areas of economy (see
Figure 5).
Figure 5. Nominal salary in different economy sectors, 2009
3290
2837
2584
2509
2396
1788 1769 1760
1555
1501
1164
Transportation
and
communications
Real estate
transactions,
services
Constructions Public
Administration
Health and social
assistance
Agriculture Education Processing
Industry
Financial
activities
Trade Other types of
activity

Moreover, the Cantemir District copes with an intense population emigration process. Over the last years
there is a significant increase of the number of population who has left abroad (see Table 4).
Table 4. Dynamics of population migration in the Cantemir District, persons
Year
Number of persons
who have officially
come
Number of persons
who have officially left
Number of persons
who have unofficially
left
2005 6 93 8 546
2006 4 89 8 760
2007 3 107 9 040
2008 3 96 9 610
2009 7 114 10 044
According to the data supplied by the LPA, in 2009 about 10 044 persons unofficially have left the district,
representing 15.9% of the district total population.

1.2.3 Educational Infrastructure
The educational infrastructure in the Cantemir District is represented by 50 pre-school institutions, 1 school
of general training, 27 gymnasiums, 7 lyceums, 3 primary schools, 1 vocational school (specialized in training
tractor operators and constructors). A number of 11.2 thousand students are trained within these
institutions. This high number of students is due to the high share of young population.
Table 5. Educational infrastructure in the Cantemir District
Type of institution
Numbe
r
Teaching
language
Capacity
Total
pupils/childre
n
Total
classes/
groups
Total
trainin
g halls
Total
teaching
staff
Kindergartens 50 Romanian 40354 2785 132 4205 246
General training school 1 Romanian 640 330 15 32 24
Gymnasiums 27 Romanian 11641 5163 297 467 502
Lyceums 7 Romanian 5287 2740 150 196 251
Primary schools 3 Romanian 165 57 11 10 9
Vocational schools 1 Romanian 168 250
Although the district has no higher education or/and research institutions, the persons who wish to continue
their studies may go to the higher education institutions from the nearby districts (Cahul, Comrat, Taraclia)
or to one of those 30 institutions from the most developed university center of the country Chisinau City.
1.3 Economic Development
In the national development complex of the Republic of Moldova, the Cantemir District is represented as an
agrarian-industrial region. Currently, about 18 291 economic units are active in the territory of the district, of
which 92.9% are active in agriculture, representing mainly farms. The farms were not taken into
consideration in the below analysis. Thus, the number of economic units is reduced down to 1 305,
registering a slow increase during 2005-2009 (see Figure 6).
Figure 6. Evolution of the number of economic units during 2005-2009

Source: Statistical Division of the Cantemir District Council
Analyzing the distribution of the economic units by types of activities (see Table 6), it may be noted that
there is an increasing trend for the number of economic units mainly due to agriculture and forestry
development, as well as based on wholesale and retail sale development.

Table 6. Distribution of economic units by types of activities, 2005-2009
Type of activity 2005 2006 2007 2008 2009
Agriculture, forestry, hunting, fishing 748 773 763 765 769
Mining and processing industry 11 11 11 11 11
Construction and real estate transactions 2 2 2 2 2
Wholesale, retail sale, hotels and
restaurants
31 38 45 53 55
Transport and communications 2 2 2 2 2
Public administration, education, health
and social assistance
4 4 4 4 4
Other types of activity 423 429 419 436 462
Total 1 221 1 259 1 246 1 273 1 305
The volume of sales performed by the economic units from this locality accounted in 2009 for 375.742 mln
lei. About 43.07% of the amount comes from agriculture and forestry, 22.57% - mining industry, and 19.38% -
wholesale and retail sale (see Figure 7).
Figure 7. Structure of economic units sale by types of activities, 2009

The analyzed period of time points out a constant level of sale volume, even though the number of economic
units was increasing (see Figure 8).
Figure 8. Evolution of the economic units sale volume, thousand lei

Dark blue agriculture, forestry, hunting
and fishing

Brown mining and processing industry

Green wholesale, retail sale, hotels and
restaurant

Purple other types of activity

Light blue transport and
communication

During 2009, a total number of 7 097 employees were involved in the activity of those 1 305 economic units
(see Table 7), out of which 40.5% are employed in the public sector, 31.6% - in agriculture, and 9.1% - in
industry. The other sectors employ about 784 employees.
Table 7. The annual average number of employees, persons
Type of activity 2005 2006 2007 2008 2009
Agriculture, forestry, hunting, fishing
2 944 2 742 2 384 2 244 2 245
Mining and processing industry
896 984 954 820 645
Construction and real estate transactions
181 153 156 126 125
Wholesale, retail sale, hotels and restaurants
263 256 249 222 221
Transport and communications
229 224 49 209 206
Public administration, education, health and social
assistance
2 952 2 969 2 857 2 869 2 871
Other types of activity
768 779 685 784 784
Total 8 233 8 101 7 504 7 274 7 097
Over the last 5 years, there is a decreasing trend for the number of employees, which went down by 1 136
persons or 13.8%. This fact is determined especially by population migration to work abroad, as well as by
the occurred economy restructuring. The most affected areas were: constructions and real estate
transactions, mining industry, agriculture, and forestry.
The main 12 economic units from the locality register a total sale volume of 232 million lei, 50% of this
volume go to the JSC Imperial vin and Agricultural Production Cooperative Glia (see Table 8).
Table 8. The main economic units of the Cantemir District, 2009
Name Area
Number of
employees
Volume of sale,
thousand lei
Profit/Loss,
thousand lei
JSC Imperial vin" industry 526 55 981 20 000
APC Glia agriculture 500 55 956 16 240
LLC Ceteronis ST agriculture 420 36 481 21 500
APC Ciobalaccia agriculture 501 26 319 3 556
FPC Podgoreni SRL agriculture 149 12 500 4 226
LLC Covali & Co industry 36 9 349 -842
LLC Snzienele agriculture 110 8 331 658
LLC "Ceba Vin" industry 24 6 410 977
ME Prut JSC agro-food 30 5 749 997
LLCUnivescoop Goteti construction 38 5 379 30
LLC Gazoterm construction 12 5 189 362
APC Breridana agriculture 73 3 802 240
A number of 2 419 persons are employed within these enterprises, representing about 34% of the total number of
people employed in the district, and the local budget is supplied by 1.5 million lei taxes paid by these economic
units annually.

Only 5 enterprises in the district produce with the purpose to sell abroad, exporting wine, agricultural
products, and food products. Three of these companies operate based on foreign capital; two of them in
industry: Covali & Co LLC and Ceba Vin LLC, and one in agriculture Prut JSC.
The analysis of the main sectors in the Cantemir District economy is presented below.
1.3.1 Industry
The Cantemir District industrial sector is represented by 70 enterprises, accounting only for 10.4% of the
total number of the industrial enterprises from the South Region. According to the number of industrial
units, the Cantemir District is ranked on the fifth place in the South Region, following Cahul (141 industrial
units), Causeni (128), Stefan Voda (83), and Cimislia (81). The number of industries in the district has
increased by 5 units as compared to 2009.
Table 9. Number of industrial enterprises, 2009
Category Cantemir South Region
Number of industrial enterprises, of which: 70 672
Enterprises from food and beverages industry, including: 62 616
wine factories 8 62
agricultural production processing centers 5 36
mills 17 155
oil mills 25 221
bakeries 5 61
other 2 81
Enterprises from light industry (textile, woollies, garments,
leather, and footwear)
1 30
Source: Ministry of Economy
The big majority of the industries are involved in the agricultural raw material processing branch. This sector
is complementary to the agricultural sector from the district, because the majority of enterprises are active
in fruits and vegetables processing, seeds fermenting and oil production, bakery products.
Figure 9. Value of manufactured production, mln lei Figure 10. Dynamics of the manufactured
production value, 2005=100%


In 2009, the value of the industrial production accounted for 82.1 million lei, which is 43.03% lower than in
2005, while the same indicator was 12.39% higher at the national level. The drought from 2008 had a
negative impact on the industrial production value increasing trend at the country level, decreasing from 28
540.4 mln lei down to 22 643.8 mln lei. At the same time, the Cantemir District registered an increase of 1.7
mln lei. The value of the industrial production per person is 1299 lei or 346.1 lei lower than the regional
average of 1 614.1 lei.
Figure 11. Average number of employees in the
industrial sector, persons
Figure 12. Dynamics of the average number of
employees in the industrial sector, 2005=100%


In 2009, a number of 400 persons were working in the industrial sector, which is about 30% less than in 2008
and 2007, and 50% less than in 2006 and 2005. The decrease of employees number at the national level was
slower, only by 16.28% or 20500 persons during 2005 2009. At the national level, 18.2% of the employed
population works in the industrial sector. This sector absorbs only 5.6% of the employed population in the
Cantemir District, meaning that this sector is underdeveloped.
1.3.2 Agriculture
All over the years, agriculture remained to be the main occupation for a significant number of inhabitants
from the Cantemir District. The surface of the agricultural land accounts for 49 605 ha or 57% of the district
total area. The land registers a level of 58 degrees for soil bonitation, which is under the regional and
national average level. The structure of the agricultural land is relatively stable, as 83.3% of the land for
agricultural purpose is occupied by arable fields.
In 2009, 32 enterprises with agricultural profile were active in the Cantemir District. An increasing trend for
the number of agricultural economic units is noted over the last years. In spite of this fact, the result of these
enterprises activity has suffered major downturns, especially due to the drought, registering in 2009 a profit
of about 26.4 mln lei, which is lower than the one registered in 2008. It is important to mention that 311
agricultural enterprises existed at the level of the South Region, which all together incurred losses accounting
for 7 million lei.

Figure 13. Structure of the vegetal production of the agricultural enterprises during 2008-2009

The volume of the agricultural production in 2009 accounted for about 46 th tons, which is 21.3% lower than
the volume obtained in 2008. The dynamic analysis of the structure related to the main agricultural crops
shows that cereals (including the vegetables and beans) and grapes account for 77-84.5% of the total
agricultural production, with a share varying depending on the weather conditions. A decreasing trend has
been observed over the last years for the yields of cereals, field vegetables, fruits and berries, and sunflower;
of which the fruits and berries registered the highest level of yield downturn (56%). Potatoes production was
insignificant during this period of time.
The grapes represent about 25-36% of the total agricultural production. Due to this fact, the grape-growing
and wine-making is one of the most important sectors of the district agriculture. In 2010 the volume of grape
production registered an increase of 16% as compared to 2009. The vineyards plantations cover an area of 5
424.21 ha, representing thus a higher extension level than the orchards which cover 2 542.2 ha.
The livestock sector is represented in the Cantemir District by sheep and goat breeding. In 2009, the number
of sheep and goats accounted for 51.1 th heads, registering thus an increase as compared to the 2008 level.
It is important to mention that livestock is entirely covered by the households sector.
The fish breeding sector is represented by about 10 aquatic basins with a total area of 452 ha, and the annual
volume of caught fish of about 50-100 tons per year.
1.3.3 Services
The service sector registers a continuous increase both: as absolute values and as shares of the regional and
national levels. Over the last 5 years, the volume of the fee-based services offered to the population has
increased by 70% (see Figure 14), but it continues to be relatively lower than the regional average.
Figure 14. Evolution of the volume of the fee-based services offered to the population (thousand lei)

Source: Statistical Yearbook of the Republic of Moldova, NBS
Dark blue cereals and vegetables

Brown sunflower

Green tobacco

Purple field vegetables

Light blue fruits and berries

Orange grapes

In 2009, the volume of the fee-based services accounted for over 51 mln lei (or 809 lei per person), which is
2.5% less than in 2008. For the same period of time, 43.9% of the total volume of services is provided by
public enterprises (represented by telecommunications and utility-dwelling services) and 14.6% by the
private enterprises from the region.
1.3.4 Entrepreneurship
According to the NBS data, 94 economic units were active on the territory of the Cantemir District in 2009,
which is 42.4% higher than in 2005. Although the number of economic units has increased, the share of SMEs
remained practically unchanged (88-94%). This increase in number of enterprises was possible due to the
development of more small and micro-enterprises, which currently represent a share of 90% of the total.
Table 10. Indicators for SMEs activity
1
in the Cantemir District
Type of
enterprises
Enterprises Employees Turnover, mil lei
2005 2009 2005 2009 2005 2009
No. % No. % No. % No. % No. % No. %
Medium
enterprises
9 16% 9 10% 746 55% 785 45% 39.44 41% 59.27 39%
Small
enterprises
21 36% 33 38% 517 38% 813 46% 51.35 54% 72.98 49%
Micro-
enterprises
28 48% 46 52% 87 6% 156 9% 4.33 5% 18.03 12%
Total SMEs 58 88% 88 94% 1350 26% 1754 42% 95.12 26% 150.28 40%
Large
enterprises
8 12% 6 6% 3903 74% 2426 58% 269.55 74% 222.64 60%
Total 66 100% 94 100% 5253 100% 4180 100% 364.67 100% 372.92 100%
Source: Statistical Yearbook of the Republic of Moldova, NBS
Currently, the SMEs sector employs 42% of the labor force and has a turnover of 150 mln lei. The number of
small enterprises remained unchanged, registering just an insignificant increase in employees number (5%),
and an increase of the turnover level by 20 mln lei. Being in minority, those 6 large enterprises use about
58% of the labor force and register a sale volume of 223 mln lei, exceeding the level registered by the SMEs.
1.3.5 Investments
According to the Rating of the Regional Investment Performance (RAPIR), the Cantemir District is ranked on
the 37
th
place out of those 38 districts, municipalities, and regions.
A total of 97 mln lei was invested in 2009, which is 20% higher than in 2008, and 49% higher than in 2007.
The registered increases were mainly due to the higher level of investments from the local budget.

1
The data presented in this table come from the National Bureau of Statistics database. They reflect the situation of the
active enterprises in the district and those which submit statistical reports and financial statements.

Figure 15. Evolution of the investments funded from private sources, lei/inhabitant

The volume of private investments per inhabitant has decreased over the last years, accounting in 2009 for
1113.7 lei per person (see Figure 15). The majority of private investments were made in the following areas:
transport and communications (26%), agriculture (22%), financial activities (21%), energy, water, and
sanitation (15%).
Figure 16. Regional investments funded from the
local budget, lei/inhabitant
Figure 17. Regional investments funded from the
state budget, lei/inhabitant

Source: Authors calculations based on the data of the Statistical Yearbook of the Republic of Moldova, NBS
Both, the investments coming from the local budget and those coming from the state budget are lower than
the regional level registered for the period of 2003 - 2008, reaching in 2008 the level of 145, and respectively
71.1 lei/inhabitant. The volume of local-budget investments per capita is two times higher than in 2005,
getting closer to the value of investments registered in the South Development Region. On the other hand,
the level of state-budget investments per capita registered a decrease down to 71 lei/person, which is three
times lower than in 2007 or 13 times lower than the regional level (see Figure 17).
Red South
Blue Cantemir
Red South
Blue Cantemir

1.3.6 Infrastructure
The road infrastructure is moderately developed. The distance of public roads of 267.1 km remained
unchanged over the last 5 years; of which 98.9 km are of national importance with rigid pavement and 168.2
km are of local importance. The length of the railroad lines is 40 km.
The district has two ways for goods transportation: highway and railroad. In 2009, 81.8% of the total volume
of goods were transported by railroad and only 18.2% by road. Another trend is registered for the
passengers transportation year by year, passengers preferences for the railroad transportation decrease
in favor of the road, with 90.7% of passengers using auto-transportation and only 9.3% the railroad one.
The district mass media is represented by the local newspaper Curierul de Cantemir, with an edition of
5800 copies per year.
The bank system is represented in Cantemir town by the three subsidiaries of the following bank networks:
Moldova Agroindbank, Banca de Economii, and Banca sociala.
The public utilities are provided in the region by several suppliers which operate at the local and national
levels.
Only electricity out of all the existing utility services is provided to all the population. The electricity supplier
us the Joint Stock Company RED Union Fenosa, which delivers electricity for a fee of 133 bani / kWh, not
including VAT.
The Moldova-Gaz JSC is the supplier of natural gas in Cantemir town. The delivery cost for 1000 m
3
of gas
through medium-pressure pipeline accounts for 4 653 lei, not including VAT, in compliance with the Decision
of the Administrative Board of the NAER No. 376, dated May 14, 2010.
Only 13.8% of the total number of houses are supplied with drinking water from the centralized systems.
The land-line phone services are provided by the Moldtelecom Company, while the mobile telephony
services are offered by Orange, Moldcell, and Unite companies. The number of houses connected to
the land-line phone services goes up year by year, reaching the level of 72.1% in 2009.
The culture, sport, and health infrastructure remained unchanged over the last 5 years and represents: 46
libraries; 43 cultural clubs; 27 sport halls; 2 museums; and 32 health facilities.
1.4 Reasoning the need for the Industrial Park
Following the industrial changes occurred at the global level, more and more investors analyze the possibility
to relocate or transfer their production units to countries where they can benefit from lower costs. From this
point of view, the Republic of Moldova, and implicitly the Cantemir District, could become a real center of
attraction. The establishment of Industrial Parks is one of the strategies for developing the business
environment aiming to diminish the production costs by improving the access to production factors,
especially to the ones that are and may be influenced largely by the public authorities. Due to the approval of
the Law No. 182, dated 15.07.2010 on Industrial Park, a number of problems which currently determine the
reduced investment activity in the country, and implicitly in the region, may be solved through the
establishment of the Cantemir Industrial Park. In compliance with the provisions of this law, conditions are
created and certain facilities are offered so as to contribute to the settlement of the following problems:

- Limited access to industrial land area for launching and carrying out industrial activities: this problem is
characterized by insufficiency of industrial land area and the difficult procedure for changing the destination
of the agricultural land. The Law on IP facilitates the IP title holder and the IP residents by exempting them
from compensating the losses derived from the exclusion of the land fields from the category of land for
agricultural purpose;
- High costs and risks related to the bureaucratic procedures when launching and carrying out industrial
activities: the establishment of a special commission under the Local Council which will deal with granting
technical, legal, and consultative support and will coordinate the obtaining of the permits set forth in the
law;
- High costs and risks related to the state control over the entrepreneur activities: the state control over
the IP Residents activities shall be optimized within the IP by performing the planned controls according to
an annual timetable approved via a Government Decision and the unplanned controls, performed with the
help of the Ministry of Economy in line with the legislation in force;
- High costs for getting connected to utilities: according to the Law on Industrial Parks No. 182, dated
15.07.2010 (art. (13), par. (1)) the creation of the technical and production infrastructure is funded within
the limit of the amounts allocated from the state budget and the budgets of the administrative-territorial
units, thus reducing the investment costs.
To draw a conclusion regarding the need and the opportunity of establishing the IP in Cantemir, a SWOT
analysis shall be presented for the location selected for the establishment of the IP. The analysis points out
the weaknesses and the strengths for the IP location and region as compared to other regions from the
country, and identifies the opportunities and possible risks deriving from outside the region of the Cantemir
Industrial Park.
Table 11. SWOT Analysis of the Cantemir Industrial Park
Strengths Weaknesses
The location selected for the IP practically has
direct access to the railroad
Region with low level of urbanization and
industrialization
There is a possibility to extend the connection to
the European-type railroad (with European gauge)
up to the IP. Thus, it can be said that direct access
to the EU railroad may be ensured through
Romanian railroad, via the Cantemir crossing
point.
Insufficient budgetary revenues of the local
public administration
Poor condition of the local road network,
access to the customs clearance of goods
through the Customs points in Leuseni, Cahul
Existence of available labor force, maintaining the
ratio between the necessary labor force for the IP
and the size of the region
Lack of local sale market
Low costs for labor force Low entrepreneurship spirit among the
population in the region
Good land resources and climate for agricultural
development
Low level of economic growth in the zone
Existence of public property land for the
establishment of the IP
Reduced development of the social and
cultural services, which are not attractive.
Existence of public utilities nearby the location
intended for the Industrial Park, just enough for
the economic development of the IP
Emigration of labor force

Knowledge about the business culture in the
neighboring countries
Region with low level of industrialization and
urbanization
Public administration open for collaboration so as
to create the IP

Opportunities Risks
Trend to transfer the capitals from the EU to the
bordering zones
Political instability at the national level,
expressed via incoherence of policies in
regional development; frequent modification
of the normative framework.
Programs for supporting the economic
development of the Republic of Moldova,
including through taxes on small incomes (or
exemptions)
The general investment climate of the
country is relatively not so attractive,
including due to corruption
Existence and relatively easy accessibility of the
bordering markets from the EU and CIS through
railroad
Poorly developed transport infrastructure for
accessing the markets from the country and
in the CIS
The legal framework on IP is favorable for the
development of IPs

The above analysis shows that the Cantemir District is one of the lowest developed districts, even the most
under-developed one, and can be attributed to the deprived zones of the country. The low level of incomes
and investments, the extremely low number of enterprises per capita, practically lack of foreign direct
investments, and the unfavorable dynamics over a number of years suggest that besides the objective
problems relevant for the entire country, this district copes with other factors that determine this situation.
The following can be mentioned among these factors:
- The Cantemir District is one of the least urbanized districts in the RM, and this is in comparison to the
rest of the country, when the rest of the country also does not have a sufficient level of urbanization;
- The residence locality of the district, Cantemir town, is:
an urban territory with a low level of public services characteristic for towns, being rather a rural
locality with urban features and not a town;
the population of the Cantemir town is 6.9 thousand, of which 2000 persons are economically
active.
- The location of the Cantemir District at the border with Romania, within a zone without direct access
to the important transportation corridors, with the closest points for customs clearance of goods in
Giurgiulesti, Cahul, and Leuseni represent the factors that contributed to a relatively isolation of the
region;
- The district has no local resources which would be of high interest for investors.
The measures necessary to overcome this situation are determined by (i) how quickly the local and central
authorities will succeed to connect this zone to the main urban centers from its neighborhood, such as
Chisinau, Galati, Braila, Birlad and (ii) to initiate special programs for this regions so as to support the setting
up of new businesses. It may be noted that over a number of years the district cannot overcome this
situation with its own, public, and private resources.

As well, taking into account the fact that the local public authorities do not have their own resources to set
and implement a package of efficient measures to develop this zone, the assistance of the central public
authorities is crucial. The involvement of the central authorities is necessary for the following directions: (i)
to grant support for developing the access infrastructure, including over the border with Romania, (ii) to
grant logistical support for attracting investments, (iii) to mobilize resources for projects intended for
business launch and support, (iv) to grant financial support.
The establishment of an Industrial Park, which will be well adjusted to the needs and the potential of the
zone, accompanied by a well-thought incubation program would be one of the solutions. But it is necessary
to mention that just the establishment of the IP, without solving the problems that relate to the region
access infrastructure and without the involvement of the central authorities in the above-mentioned
difficulties will not lead to the expected results.
The main advantage of the locality intended for the IP from Cantemir (Cania) consists in its possibility to have
a simultaneous direct connection with the railroad with European gauge and that from the CIS. This fact
offers good perspective for the IP development so as to harness the local agricultural potential, as well as to
use the IP only as a production platform making use of raw and other material even from faraway distances.
The establishment of the Industrial Park will offer a number of advantages to the Cantemir town and the
region by increasing the rate of labor force employment, creating conditions for harnessing the agricultural
potential, diversifying the industrial business, and making more dynamic the small and medium enterprises
sector, which finally will lead to an increase of the region business competitiveness and its economic
potential. The development of the Industrial Park in Cantemir (Cania) going hand in hand with the necessary
development of the local infrastructure may serve as a turning point in the development of the economy and
social conditions in the region.


2. Description of the Industrial Park Concept
2.1. IP Concept
IP Organization. The site intended to locate the Cantemir Industrial Park is situated in the western part of the
Cania village, at the entrance into the village, crossing the R37 national highway. The Cania village has a
population of 3 715 inhabitants, being located to the north-east direction of the Cantemir town, 3 km from
the town. The Cantemir town is the district center with a total number of population of 5 136 inhabitants.
The northern part of the location intended for the Industrial Park is situated 80 meters from the village, 60
meters from the railroad, and about 110 meters from the R37 national highway, which connects the
Cantemir town with the Comrat town. The Park will have its own infrastructure, which will ensure the
utilities necessary for the IP Residents operation.
The Managing companyof the Industrial Park (hereinafter referred to as the Administrator) will be
responsible for the IP administration. All the relations between the Administrator and the LPA are stipulated
in the contract for IP creation, operation, and administration. The IP Administrator is responsible for
designing and building the utility infrastructure of the IP, maintaining the infrastructure and offering services
to the Residents on contract basis. The Administrator is accountable to the LPA for achieving the
development objectives of the IP the objectives which will be clearly stipulated in the contract. In line with
the strategy selected by the Administrator, it also may build the IP buildings which will be offered to the
Residents either though leasing or purchase, including in installments. The Administrator shall charge the
Residents an administration fee (or rent fees) for the services afferent to the costs, which are necessary to
maintain and develop the IP. Other services provided by the Administrator will be paid separately, in
compliance with the contract signed with the Resident.
The main document defining the operational obligations and rights of the Administrator, Residents, and LPA
is the Industrial Park Regulation approved by the LPA. The provisions set in the Administrators contract with
the LPA and in the IP Regulation do not exclude or diminish the rights and advantages offered to the
Residents by the legal framework.
Only the economic units legally registered in the Republic of Moldova, including in the IP, may be the
Residents of the Park.
IP Goal. The main goal for creating the Cantemir IP is to foster the start-up of new business in industry, by
creating favorable conditions for the local and foreign investors in the area, which would lead to the best use
and development of the human capital from Cantemir town, Cania village, and the adjacent localities.
Type of activities developed in the IP. The share of the rural population in the Cantemir District accounts for
90.5%. The main economic activities of the district are: agriculture, industry, and services. The agricultural
sector accounts for 61% of the district global production volume, employs about 69.1% of the total number
of persons on the labor market. No higher education institutions exist in the district. Only 12% of inhabitants
benefit from water and sewerage supply services. The population is preponderantly poor, the emigration
rate is high, and the entrepreneurship spirit is not so developed.

As the world experience shows, because of the high costs for labor remuneration, the investors from the
developed countries are looking for possibilities to transfer the most laborious economy branches (light
industry, machinery construction industry, wood processing industry, etc.) to the less developed countries
with lower remuneration requirements, but having a satisfactory investment climate and a sufficient
production culture to manufacture the respective goods of high quality and competitive for the developed
countries.
The Cantemir District has no natural resources which may be used on a large scale for manufacturing
industrial goods. Thats why it is necessary to analyze the possible interests of the investors for processing
the agricultural products. The industrial enterprises for processing grapes for wines and juices, for processing
vegetables and fruits, for producing vegetal oil and flour already operate in the Cantemir District. The
possibilities to extend these enterprises exist, but are limited.
Some agricultural products (maize, wheat, milk, beef, pork, sheep and goat meat, skins of cattle, goat, sheep,
and grapes, etc.) are produced in the district in quantities which are sufficient to organize their processing at
a large scale.
The localization of the Industrial Park directly in the locality imposes some restrictions for the production
technologies of the enterprises from the IP. These enterprises should not pollute the environment and
produce noise.
Based on the IP zone potential and opportunities, as well as deriving from the above-mentioned restrictions,
the existence of some powerful enterprises which would ensure the rather complex processing of the local
raw materials and the development peculiarities of the district, the specialization areas of the Cantemir
Industrial Park will be mainly the following: (a) production of dairy products, (b) production of oils, (c)
production of skins, leather footwear and garments, (d) production of starch and starch products, (e)
production, processing, and conservation of meat and meat products, (f) transport and communications
(storing, processing, packing).
To facilitate the establishment and operation of the Industrial Park, the State, represented by the central and
local public administration authorities, shall grant to the holders of the Industrial Park title and to the IP
Residents the following facilities:
a) payment exemption so as to compensate the losses incurred due to the exclusion of land from
the category of land with agricultural destination, in compliance with the Law on the normative price and the
procedure for sale and purchase of land;
b) free of charge alienation or transfer into commodatum of the administrator-enterprises public
property assets for the establishment and development of the industrial park, upon the decision of the
owner of such assets, in compliance with the Law on administration and deetatization of public property;
c) the right to privatize the public property land associated with constructions, at the land
normative price, set at the moment when such land is transferred into use to the managing companyor is
leased to the residents of the industrial park, only after procuring and/or giving into operation the
constructions and the installation with industrial and related destination, in compliance with the Law on the
normative price and the procedure for sale and purchase of land
2
;

2
The facilitation stipulated in par. (1) let. c) is granted when investments were made in the constructions and
installations which are provided in the project, based on which the Resident or the Administrator were selected, and the
(footnote continued)

d) fiscal facilities in compliance with the provisions of the Tax Code;
e) the possibility for the managing companyto apply the diminution coefficient down to 0.3 of the
tariff set for the calculation of the annual lease payment for the public property land in compliance with the
Law on the normative prices and the procedure for sale and purchase of land or of the basic tariffs for the
annual lease of the public property assets, set by the Law on the State Budget for the respective year;
f) optimization of the state controls over the activity of the industrial park residents by undertaking
planned controls according to an annual timeline, approved via the Government Decision or unplanned
controls carried out in line with the legislation in force, with the approval of the Ministry of Economy;
g) allocation, as the case may be, of financial means for establishing technical and production
infrastructure from the state budget, local budget, National regional Development Fund, and other sources.

According to the Law on Industrial Parks, the IP Administrator may also perform entrepreneurial activity on
the IP territory, meaning it may be an IP Resident itself.
At the same time, a Business Incubator may operate in the IP territory to support the start-up of new
businesses in industry from the areas which are allowed in the IP. The Business Incubator shall be established
only if some long-term incubation programs are provided. The BI could be a separate Resident of the IP, or
the Park Administrator could provide the incubation services of the BI. Whenever the incubation services are
provided by the Administrator, these services should be regulated and emphasized distinctly in the
Administrators bookkeeping. The form and the volume of the support granted by the LPA for the incubation
activities, regardless of the form for such activities provision, shall be stipulated in a special Regulation
meant for the organization and operation of the BI. The respective Regulation shall also stipulate the
eligibility conditions for the BI residents (or IP resident in incubation).
The minimum services provided by the IP are:
land rent, parceled land plots;
connection to water and sanitation;
connection to gas;
connection to electricity, telephone, and other communications;
pluvial drainage;
public lighting within the Park;
parking lots for visitors.
The Administrator shall maintain the common green spaces, pluvial drainage, and the rest of the services
which are part of the minimum package of services. Besides the services mentioned above, the Administrator
may also offer the Residents other services based on commercial principles, such as renting out space for
offices and production facilities, conference halls and protocol rooms, public food services, consultancy
services for business planning and development, project development, marketing, and personnel

value of which is higher than the amount representing 3 normative prices for the land, set at the moment when the
land was given into use to the Administrator or leased to the Residents, plus the payment for the compensation of the
losses caused for excluding the land from the category of land for agricultural purpose, estimated on the day when the
land destination was changed, if such has occurred.

recruitment, management and knowledge transfer, audit and bookkeeping, etc. For the given purpose, the
Administrator shall build the necessary infrastructure from its own resources and based on its own risks.
IP Performance Indicators. The main performance indicators for establishing and developing the Industrial
Park will be: the duration for launching the IP into operation, the turnover of the IP Residents, the area
occupied by the IP, the number of jobs creates in the IP and in the companies outside the IP, the volume of
investments attracted into the IP, the revenues to the local budget and consolidated state budget obtained
from taxes and fees incurred from the IP Residents and Administrator.
2.2. Analysis of the opportunities to create a Business Incubator within the IP
To create an empowering environment for starting up new businesses in Cantemir conditioned by the
existence of some clearly defined long-term incubating programs, it is suggest establishing a Business
Incubator within the IP in the area of industrial production and other activities related to the IPs operation.
The advantages for locating a BI within the PI territory are linked, first of all, to the fact that the BI Residents
will be able to benefit from facilities offered by the IP Resident status. Thus, after the incubation period, the
BI Resident will be able to continue its activity, upon its own wish, as an IP Resident. In this way, additional
conditions are created for increasing the sustainability of the set-up businesses.
Another advantage for locating the BI in the IP territory is the fact that the contributions of the public
authorities, private partners, and foreign donors to the creation of the Park will automatically contribute also
to the BI set-up. From this point of view, the public costs related to fostering business in Cania, Cantemir, and
the adjacent zone shall be reduced.
The Business Incubator located within the IP may offer spaces (i) to be rented during the incubation period,
under the condition to leave these spaces after the expiration of the incubation period, (ii) to be rented with
the possibility to become the IP Resident, (iii) with the possibility to procure these spaces and subsequently
to privatize the land or (iv) will offer land plots for building the necessary spaces. In all these cases, the BI
Residents will benefit from an adjusted consultancy and support package in line with the BI Regulation.
The BI direct activity may be organized in 2 ways: (i) BI is a Resident of the IP or (ii) the BI is integrated within
the IP, meaning it becomes an activity of the IP Administrator. In the first case, the BI residents become the
IP residents only when they lose the status of BI Resident; while in the second case - they may become the IP
residents at the same time when they obtain the status of the BI Resident. These 2 forms of organization
have advantages and disadvantages, especially when referring to the financing forms.
The Business Incubator, as an IP Resident, may access easier the funds from the foreign finance suppliers,
and the record keeping for the usage of resources will be easier to be monitored and verified. At the same
time, in case of an integrated option, there are advantages related to the administration costs, and the
procedures for shifting from a BI Resident to an IP Resident become simpler and more flexible. Based on all
these considerations, it is suggested for the BI to be managed by the IP Administrator. Namely this solution
was taken into consideration in the below analysis.
In general, the BI activity needs some support from the public sector. In this respect, the authorities that
need and wish to create the BI must find resources to support the BI. The sources to fund the BI may come
from the local, regional, or central public authorities, private partners, or external donors.

2.2.1. The Concept for creating a BI within the IP
The BI administration shall be performed by the IP Administrator, but it will administrate the BI as a unit
which is distinct from the activity related to the IP administration. The Administrator shall be responsible for
the aspects related to the BI operation and management. The main duties of the BI management shall be the
following: responsible for the BI administration; concludes the contracts for leasing spaces in the production
halls and those for service provision to the BI residents; provides personnel for provision of services to the BI
residents; establishes and maintains the relations with the international networks of technological and
business incubators; creates and maintains the database for BI activities profile, and harnesses all the legal
facilities for the benefit of the BI residents.
The extension of the BI all over the IP land area shall not be taken into consideration, because this
contravenes the IP concept. Thus, the BI will lease production spaces for lower costs than the market costs,
and will offer lower tariffs for administrative and consultancy services (see Chapter 5.3.2) in comparison to
the ones offered to the IP Residents. The tariffs practices in the BI
3
shall be approved by the Local Public
Administration. In case these tariffs do not cover the costs related to the incubation services, they are to be
funded through incubation programs. After passing through all the incubation stages, the enterprises will
have the possibility to become the IP residents based on equitable conditions or will leave the IP.
BI size and structure. A production hall with a total area of 6 000 m
2
on a piece of land of 10 000 m
2
shall be
built for the BI activity. The BI project will include the costs for connecting the hall to the internal networks of
water, sanitation, electricity, and natural gas supply. The project will also include development costs,
including the costs for connecting this land plot to the internal roads network. A minimum production area of
600 m
2
was established for an enterprise from the BI. The BI will have production halls with the possibility to
offer incubation services simultaneously to 15 enterprises.
The BI will lease production spaces to enterprises and will provide incubation services for a period of 5 years.
Incubation stages and portfolio of services offered by the BI. The stages of the incubation process and the
interventions implied by these stages on the incubated enterprises may be perceived in parallel with the
SMEs business cycles in the following way:
Pre-incubation stage. This is the first stage of intervention and represents assistance provision for
developing the business idea. This is a stage which is affordable only to some incubators, in case they benefit
from public or external support. This type of intervention is frequently necessary in industries, etc. This stage
lasts for one year. The enterprise is assisted with starting-up its own business, drafting the business plans,
carrying out the feasibility studies, identifying the sources and the methods for funding the investments,
procuring and assembling the equipment, and launching the production activity. The pre-incubation activity
provides for production spaces rent for a period of one year.
Incubation stage. This stage occurs when the enterprise launches its production activity. The incubator
provides for very complex services to support the survival and balanced development of the enterprise on

3
Both, in case when the BI is created from public sources, as well as when it is funded by the private partner, because in
this case the losses emerging between the practices tariffs and the costs incurred by the BI shall be recovered by an
incubation program or by the LPA.

medium and long term. The BI may provide assistance for fine-tuning the plan, team building, implementing
the marketing plan, keeping the records, calculating the costs, and reporting the results. The incubation
period lasts for 3 years.
Post-incubation stage. This stage includes the enterprises that have benefited from incubation services for
three years. The enterprises become profitable and do not need anymore the services from the incubator.
Although the incubators intervention is not necessary anymore, the incubator continues to host the
enterprises which are in their development stage for a period of one year, the time when the lessee decides
where to leave further on.
Operational Plan. The operational plan for launching the BI activities is framed within the IP operation plan.
Since the moment when the production hall is launched into operation, it will have an operation cycle which
would repeat itself with a periodicity of 5 years (pre-incubation incubation post-incubation).
Table 12. Operational Plan of the Business Incubator
Nr.
d/o
Measures Deadline
1 Development of the project for building the BI hall 2012, I quarter
2 Obtaining the authorizations, endorsements, coordination, etc. 2012, I quarter
3 Development and submission of the finance application for
creating the BI of the IP
2012, II quarter
4 Building the production halls of the BI 2012, IV q 2013, III q
5 Organization of the tender for selecting the BI Residents Starting with III q of 2012
6 Conclusion of contracts with the first Residents 2013, III quarter
7 The official ceremony for launching the BI 2013, III quarter
8 Launching the production activities in the BI 2014
Assuming that the rate for requesting BI spaces has an equal distribution by years a thing that will not lead
to increasing the future revenues the following incubation timeline may be set (see Table 13).
Table 13. Incubation timeline for BI Residents
Indicators 2014 2015 2016 2017 2018 2019 2020
Pre-incubation (1 year) 6 6 3 0 0 6 6
Incubation (3 years)
0 6 12 15 9 3 6
Post-incubation (1 year)
6 6 3
Incubated enterprises 6 6
Hence, 39 incubated enterprises will be obtained during the IP operation.
2.3. Reasoning the technical option for IP establishment
A number of IP configurations may be used for fulfilling the objectives of the IP. The main elements of this
configuration are related to the utilities and services provided by the Administrator and the delimitation of
responsibilities between the suppliers of services and utilities, Administrator, and Residents. All the technical
solutions related to this subject, may be divided into 3 categories:

(i) The Administrator provides and ensures all the infrastructure elements at the minimal level described
in the Concept. In this situation the volume of investments from the Administrator is minimal and the
Residents are left with a higher level of development freedom. The relations between the utilities
suppliers and the Residents imply a minimum involvement of the Administrator. According to the IP
Regulation, the Administrator makes available land plots for the Residents business development.
(ii) The IP is perceived as a unit with almost a separate service and utility infrastructure, minimizing the
Residents and the suppliers involvement within the Park. The Administrator is the one to ensure the
Residents with the necessary services and utilities within the described technical limits.
(iii) From the point of view of the supply of utilities and services, the IP represents something intermediary
between the first two solutions. Depending on the available utilities and the Residents structure, the
Administrator may combine different approaches for utilities and services provision, for some -
access may be offered to the municipal suppliers, while for the others the residents connect to
utilities through the Administrators infrastructure.
Taking into account the IP type described in the Concept, including the fact that the IP will contain incubation
services, a technical solution from the (iii) category is suggested further on. The main advantages of this
approach involve increased flexibility to meet the utilities requirements of the Residents and allow finding
an optimal formula for offering utilities sticking to the IP requirements a fact that will contribute to
decrease the costs.
Another important aspect related to the IP is the configuration of the IP according to its functional structure.
From the destination point of view, the IP land area is divided in (i) Residents zone, (ii) Administrators zone,
and (iii) land occupied by infrastructure. In line with the IP Concept, it is necessary to take into account the
fact that IP will offer incubation services for a certain type of Residents, and wishes to cover a part of the
demand for production spaces coming from the foreign investors for shorter periods of time (5-10 years)
from such areas as textiles and others. Thus, a certain part of the Residents zone is intended for leasing
production spaces. In this way, the Residents zone is divided in: (i) the subzone in which the Administrator
offers production spaces for lease and (ii) the subzone in which land plots are offered for rent, on which the
Residents from their own resources build the necessary spaces. To identify the dimensions of the Residents
subzones, three options are calculated.
The technical solution suggested for the IP establishment has the following basic characteristics:
Provided services:
a) Services provided by the IP:
- lease of land, parceled land plots;
- lease of halls/part of them;
- public lighting alongside the external road;
- parking for visitors;
- utilities and facilities distributed at the level of every parcel: access to road, water and sewerage,
gas, pluvial drainage, channels for getting connected to electricity, phone, and other
communications;
- maintenance of halls and BI objects, parking lots, public lighting, pluvial drainage, and fence.
b) Additional services provided by the Administrator:

- lease of office space, public food service space, other spaces for services meant to be ensured by
the supplier-companies (bank, courier, mail, medical assistance);
- consultancy services provided by the IP development service in such areas as business planning
and development, project development, marketing, personnel recruitment, management and
transfer of knowledge, audit and bookkeeping.
c) Incubation services provided by the Administrator:
- lease of halls built by the Administrator to the BI Residents;
- assistance for business implementation and development, including until the business launch
(plan, studies, finance sources, equipment and installations, supplies);
- assistance for the balanced development of the enterprise for medium and long-term, for team
building, marketing plan implementation, record keeping, calculation and optimization of costs;
- assistance for getting prepared to leave the BI.
The functional destination of the land plots will have the following configuration:
According to the IP land area destination, the IP is divided into the Administrators zone, Residents zone, and
land plots occupied by infrastructure (roads, engineering networks, etc.).
Table 14. Structure of the Industrial Park land
Destination Area, ha Share, %
Area occupied by
buildings and
constructions, ha
Share of
land, %
Administrators zone 0.2 2% 0.08 40%
Residents zone 8.55 91% 5.15 60%
Land occupied by infrastructure 0.65 7% 0.65 100%
Total 9.4 100% 5.88 63%
The Residents Zone is set up from: (i) the subzone for halls lease and (ii) the subzone of land plots on which
the Resident using its own resources builds the necessary spaces.
The lease subzone represents the land area covered with production halls meant to be rented to the BI and IP
Residents. The minimum hall area for a Resident is 1200 m
2
. An enterprise from the BI may rent a production
space of minimum 400 m
2
; 15 enterprises may benefit simultaneously from the BI hall spaces.
The land plots subzone covers the production infrastructure, as well as the connections with the common
internal utilities (except for the heating networks, which will be ensured separately by every Resident,
depending on its own needs). The Residents production infrastructure will include halls/industrial buildings
for production activities which fit the IP profile, storages, and platforms. The minimum size of the land plots
subject to the tender-based lease procedures represents 0.40 ha. The maximum number of Residents in the
subzone is 16 enterprises. No limit is established for the size of the Residents land area, thus the Residents
may adjust the size of their land in line with their needs. But, it is obvious that this should be only within the
limits of the area available for this subzone and in compliance with the Administrators management plan.
The BI residents may be the Resident of this subzone as well, and they may benefit from a special package of
incubation services, that might include only consultancy and support services.

Table 15. Structure of the Residents Zone
Indicators
Halls lease subzone Land plots subzone
Total
Residents BI Residents BI
Share from the Residents zone
14% 12% 74% - 100%
Land plot area, ha
1.20 1.00 6.35 - 8.55
Area meant for constructions, m
2

7200 6000 38300 - 51500
Minimum area per Resident, ha
0.20 0.07 0.40 -
Minimum area meant for constructions
per Resident, m
2

1200 400 2394 -
Maximum number of enterprises
Residents
6 15 16 - 37
Number of employees
80 60 400 - 540
b) Administrators zone covers: the administrative building (if such is actually built), car parking, and green
spaces.
c) Land occupied by infrastructure includes the land plots occupied by common utilities from within the IP,
including the waste water treatment facility, transformation substations, and the platform for waste
collection.
The technical solutions suggested for establishing the IP with the above-mentioned characteristics is
presented in Annex B.


3. Description of the Industrial Park
3.1. IP Organization and Operation
Based on the Law on Industrial Parks No. 182, dated 15.07.2010, the local public administration from Cania
village, Cantemir District shall initiate the establishment of an Industrial Park in the Cania village, Cantemir
District. This project is perceived by the local public administration as an important tool for the social-
economic development of the town and the adjacent region. Due to these reasons, the project is developed
with the participation of the local authorities and with the support of the regional and central authorities.
After the confirmation of the Industrial Park establishment advisability via the feasibility study, the initiator
of the Cantemir IP establishment shall develop and approve the Terms of Reference to be used for the
organization of the tender for selecting the winning partner for the IP establishment.
To support the establishment and operation of the Industrial Park, the Cania/Cantemir Local Council shall
mandate the executive body of the local public administration authorities to set up a Commission for the
creation and operation of the Cantemir IP, which will offer the necessary support so as to contribute to:
a) the process for changing the destination of the land area;
b) the process related to obtaining the decision of the local public administration authority regarding the
destination of the land;
c) the process related to obtaining the authorizations, endorsements, coordination, and other permits
provided by the law, which are necessary for the creation of the industrial park, infrastructure and
constructions meant for the Park, as the case may be;
d) undertaking other administrative procedures which are necessary for the creation of the Industrial
Park, the launch and operation of its Residents activities.
The Commissions decisions will be focused to support the conclusion of all the documents which are
necessary for the Cantemir Industrial Park creation and development, and will prevent and/or avoid the
eventual impediments for solving the problems related to the IP establishment and development.
This Commission will also have the task to select the future applicants for the IP title.
Afterwards, the applicants for the IP title shall submit to the Cantemir Local Council an application for IP
establishment and operation, annexing the copies of all the documents that confirm the land holding right
for at least 30 years for the land meant for the establishment of the IP, conditioned that it is in line with the
requirements set forth in art. 5
4
of the Law on Industrial Parks.

4
The land meant for the industrial park, together with the buildings and facilities located on it, should cumulatively
meet the following conditions:
(footnote continued)

To obtain the industrial park title, the applicant submits to the Ministry of Economy the application for
obtaining the Industrial Park title, annexed with the documents specified in art. 8 of the Law on Industrial
Parks.
The Ministry of Economy shall revise the application and the set of documents for granting the Industrial
Park title within 30 calendar days from the day the documents were submitted. According to art. 11 of the
Law on Industrial Parks, the Ministry of Economy may decide to grant the IP title for a period of 30 years to
an enterprise that holds, at least for 30 years, or owns the land meant for the establishment of the IP, which
meets the requirements set forth in art. 5 of the same law.
Whenever obtaining the IP title, the Administrators tasks shall be the following:
to coordinate and monitor the process for creating the technical and production infrastructure, as well as
the production activity of the Industrial Park;
to organize the tender for selecting the Residents of the Industrial Park;
to develop and promote strategies and programs for the development of the Industrial Park;
to attract investors for developing the production activities and service provision in the IP;
to ensure the normal operation of the utilities networks according to the technical requirements;
to develop the technical and production infrastructure, as well as the common utilities of the Park in
compliance with the technological requirements within the Park;
to conclude contracts with the IP Residents and to supervise the observance of the conditions set forth in
such contracts;
to collaborate with the central specialized bodies of the public administration with the local public
administration authorities;
to be accountable for the rational use and according to the purpose of the means allocated from the
state budget or from the budgets of the administrative-territorial units for the creation of the technical
and production infrastructure of the IP;
to set and approve
5
the conditions for leasing/renting the land, production halls, premises (offices in the
Administrators building) and other objects which are owned and held, as well as the amount of the fees;
to ensure the bookkeeping and statistical records for its activity and to submit quarterly reports to the
Ministry of Economy regarding the activity carried out within the IP;
to submit to the central specialized bodies and LPA proposals for the development of the Park, it
administrates;

a) to be free of any tasks;
b) not to represent the object of any litigation under examination and/or settlement within the courts or arbitration;
c) to have access to transportation ways;
d) to have the possibility to connect the technical and production infrastructure of the park to the public utilities;
e) to have a surface of at least 5 hectares.
5
The amount of the fees is approved by the LPA when the finance sources for the buildings/halls are public.

The main income sources of the Administrator may include:
revenues from leasing/renting land plots and halls (if these are built);
revenues as a result of the entrepreneurial activity within the Industrial Park;
charges and fees paid for the participation in the tenders organized for obtaining the title of IP Resident
and for getting registered as an IP Resident;
revenues from provision of services to the IP Residents;
revenues from leasing space in the administrative building;
revenues from cashing in the administration fees;
donations;
other revenues related to the performance of its functions.

To facilitate the establishment and operation of the Industrial Park, the State, represented by the central and
local public administration authorities, shall grant to the holders of the Industrial Park Title and to the IP
Residents the following facilities:
a) payment exemption so as to compensate the losses incurred due to the exclusion of land from
the category of land with agricultural destination, in compliance with the Law on the normative
price and the procedure for sale and purchase of land;
b) free of charge alienation or transfer into commodatum of the administrator-enterprises public
property assets for the establishment and development of the industrial park, upon the decision of the
owner of such assets, in compliance with the Law on administration and deetatization of public property;
c) the right to privatize the public property land associated with constructions, at the land
normative price, set at the moment when such land is transferred into use to the managing companyor is
leased to the residents of the industrial park, only after procuring and/or giving into operation the
constructions and the installation with industrial and related destination, in compliance with the Law on the
normative price and the procedure for sale and purchase of land
6
;
d) fiscal facilities in compliance with the provisions of the Tax Code;
e) the possibility for the managing companyto apply the diminution coefficient down to 0.3 of the
tariff set for the calculation of the annual lease payment for the public property land in compliance with the
Law on the normative prices and the procedure for sale and purchase of land or of the basic tariffs for the
annual lease of the public property assets, set by the Law on the State Budget for the respective year;
f) optimization of the state controls over the activity of the industrial park residents by undertaking
planned controls according to an annual timeline, approved via the Government Decision or unplanned
controls carried out in line with the legislation in force, with the approval of the Ministry of Economy;
g) allocation, as the case may be, of financial means for establishing technical and production
infrastructure from the state budget, local budget, National regional Development Fund, and other sources.

6
The facilitation stipulated in par. (1) let. c) is granted when investments were made in the constructions and
installations which are provided in the project, based on which the Resident or the Administrator were selected, and the
value of which is higher than the amount representing 3 normative prices for the land, set at the moment when the
land was given into use to the Administrator or leased to the Residents, plus the payment for the compensation of the
losses caused for excluding the land from the category of land for agricultural purpose, estimated on the day when the
land destination was changed, if such has occurred.

The selection of the Residents and investment projects carried out within the IP is performed on tender
basis, organized by the Administrator. The winner of the tender shall conclude contracts for renting land
plots and leasing production halls built by the Administrator. The conditions for renting the land plots and
leasing the halls and the infrastructure held or owned by the Administrator are set in the contracts
concluded between the Administrator and the IP Residents.
The land plots to be rented shall be used by the Residents all over the duration of the contract, under the
conditions set forth in the IP Regulation and the contract, and by the end of the contract these land plots
shall be cleared and transferred to the Administrator. At the same time, the Residents are granted the right
to privatize the leased land plots in line with art. 12 of the Law on IP. After the privatization of the land, the
IP Residents will be active within the Park all over the duration of the IP activity or will sell their own
investments to other future Residents of the IP. The later will inherit the rights of the initial Residents and
will observe the IP Regulation.
Residents Obligations:
1. The production activity shall represent a minimum share of 80% in all the activities carried out by the
Resident. All over the duration of the contract, it is prohibited to modify the destination of the area or
of the activity for which the contract has been concluded, without the prior written approval of the
Administrator, which will not be refused without any grounds.
2. The following types of land use and tenancy are prohibited: industrial constructions, storage
constructions or services with polluting activities; construction of dwelling and other constructions
than the provided ones; storage of wastes of any type.
3. The investments and the corresponding developments for the objective for which the land plot was
leased shall be fulfilled within the deadlines set in the Contract signed between the Resident and the
Administrator. If investments are not fulfilled within the deadline set in the contract, the contract is
cancelled and the Resident is obliged to remit the land plot or to sell its own investment.
4. Any necessary investment or development shall be undertaken only based on a Construction
Authorization with all the endorsements requested by the law.
5. To undertake all the necessary and binding measures to protect environment under the conditions set
by the legislation in force regarding environment protection.
6. To pay the monthly fees and charges of the Administrator, which are set in the IP Regulation.
7. To pay the one-time charge for obtaining the Residents right.
8. To deposit as a guarantee an amount equivalent with the administration fees for 6 months, which is
provided in the contract. If necessary, the amount will serve as source for paying the penalties and the
amounts due to the Administrator.
9. When selling its own investments fulfilled on the leased land plot, to invite the Administrator in writing
to participate as an interested party at the signature of the sale contract, negotiation, and signature of
the new land lease contract and obtaining of the Residents title by the new lessee. The Resident shall
finalize the sale process within the deadlines set in the Contract between the Resident and
Administrator since the cancellation of the contract. The previously set fee is paid for the entire area
until the land plot is given back. If the above mentioned deadlines are exceeded, the Resident owes the
Administrator some damages which are calculated per every day of delay for the lost benefit due to
the non-use of the land plot.

Administrators Obligations:
1. To notify the Resident about the occurrence of any circumstances which may influence its rights;
2. To contribute, within the limits of its competences, to ensuring an adequate business climate for the
business development of the companies located within the IP;
3. To ensure and to maintain the technical and production infrastructure, as well as the common utilities
in line with the technological needs within the Park;
4. To assist with specialized services in the Residents areas of competence, and in matters which are of
interest for them;
5. To ensure the issuance of endorsements and authorizations from its area of competence under urgent
regime;
6. To ensure the Residents access to the information and documents of public interest, as well as to
those which strictly refer to the IP, which are requested for its activity development;
7. When concluding the contracts with its Residents, the Administrator shall deliver and upon the
rent/lease contract end shall take over the land plots and/or the production halls which represent the
rent/lease object, according to the concluded minutes.
The IP Resident shall be selected by the Administrator based on the tender of bids supplied for obtaining the
right to lease the land plots/rent the halls, which shall include the following:
The annual level of the administration fee in lei;
Investments it commits itself to make, specifying the reference indicators (the regime of the planned
construction, the built area, the useful area, the panned volume of investments when launching into
operation, the planned number of employees, and own or attracted financial sources);
The commitment regarding the technological process which is necessary for business development
from the perspective of the used technologies and of the modality in which they observe the
environment protection norms;
The final deadline to make the investments;
Specifications regarding the indicators of the investment business plan, stage-by-stage development of
the investment, as the case may be (the volume of the total investment and the disbursement by
years/stages, Internal Rate of Return, Net Present Value);
Data regarding the volume of the monthly consumption of utilities (supply of water, gas, electricity,
sewerage, waste collection, etc.);
Other needs regarding the lease of administrative spaces, public food service space, conference halls,
consultancy services, etc.
3.2. The Land Area
The intended site for the Cantemir Industrial Park is situated alongside the 800-m asphalted road, which
ensures access to the enterprises which are located nearby the railroad, as well as access to the land area
intended for the IP to the R37 national highway. The access road is parallel to the railroad. Through this
access road, the intended site for the IP has a connection with the R37 national highway, being situated 60 m
from the Prut railroad station in Cania village, 125 km from the Chisinau International Airport, and 96 km

from the International Free Port Giurgiulesti. Both the highway and the railroad may be used to arrive at
the International Free Port Giurgiulesti.
3.2.1. The legal nature of the land area
The intended site for the Cantemir IP is owned by the Mayoralty of the Cania village, being situated in the
village developed area, and representing agricultural land used as a grazing ground of 9.4 ha, and 51 degrees
of soil bonitation. The land is free of any legal issues (it is not rented, and it does not serve as collateral).
3.2.2. The characteristics of the land area
The longest side of the land area at the intended IP site goes alongside the access road of the enterprises
near the railroad, as well as of the land area itself to the R37 national highway. All the other sides of the land
area border the land under the public property of the Cania village mayoralty.
The site intended for the IP is located on a plateau at an altitude of 150-160 m above sea level. Some very
plain cliffs, which reach an altitude of 200-250 m above sea level, one kilometer away, are located at the
western part of the land area; while some sloping cliffs, which reach an altitude of 250 m above sea level,
300-400 m away, are located at the eastern part of the respective location. The Tigheci Streamlet runs near
the western part of the land area, in a ravine of over 3 m depth. The depth of the ravine gradually decreases
because the plateau on which the land area is located has a small slope to the south. The risk for the land
area to be flooded in is very small because the valley between the ravine and the sloping cliffs is located at a
lower level than the land plot.
According to the data provided by the Republic of Moldova Seismic Zoning Map (scale 1: 4000000, year
2010), approved by the Ministry of Constructions and Regional Development via the order no. 25, dated
23.12.2009, the Cania village is situated in seismic zone of 8 degrees out of a maximum of 12 degrees (MSK).
This factor induces some rather severe restrictions for the anti-seismic resistance of the buildings and
constructions to be built on the territory of the industrial park.
The underground water is 4-6 m below the soil surface.
3.3. Utilities and Infrastructure
3.3.1. Development of the IP land area
To ensure the IP operation, the following minimum works shall be performed to develop the area:
To remove the electricity transportation line of 10 kilovolts from this area;
To remove the anchor for the electricity transportation line of 110 kilovolts from this area;
To uproot about 4 hectares of bushes growing in this area;
To ensure the underground drainage of pluvial water, which may flow on this area from underneath
the culvert of the access road to the Park;
To fortify the right side of the ravine, where the Tigheci Streamlet flows, so as to prevent the spread
of the ravine over the area of the Park;
To develop some green spaces;
To build and equip a parking area;

To install road and information signs alongside the access road to the IP;
To build a platform for accumulating and evacuating solid waste from the IP common area;
To install some garbage cans;
To install a road lighting system;
To fence the area of the Park all along its borders.
The description and specifications set for these works are presented below.
Removal of the electricity transportation line of 10 kilovolts from this area. The length of the electricity
transportation line of 10 kilovolts, which should be dislocated from this area, is 600 m. It will be dismantled
and located outside the respective area, 2 m from the eastern border of the IP.
Removal of the anchor for the electricity transportation line of 110 kilovolts from this area. The anchor will
be dismantled and located 135 m from the initial place, outside the IP, at its north-western side. The removal
of the anchor for the electricity transportation line of 110 kilovolts from the respective area is assessed as
the dismantling and assembling the line for electricity transportation of 110 kilovolts, with a length of 200 m.
Uprooting bushes from the area. About 4 hectares of bushes will be rooted out from the respective area.
Ensuring the underground drainage of the pluvial water that might flow on this area from underneath the
culvert of the access road to the Park. To ensure the underground drainage of the pluvial water that might
flow on the area from underneath the culvert of the access road to the Park (at a distance of 140 m from the
most southern point of the land area), it is suggested that a reinforced concrete pipe with a diameter of 500
mm be installed under the culvert, and to prolong it across the territory of the Park, at a depth of 0.5 m from
the culvert to the ravine where the Tigheci Streamlet flows. The length of the pipe will be 190 m.
Reinforcing the right side of the ravine where the Tigheci Streamlet flows. The shortest distance between
the ravine and the land area intended for the IP is 20 m. The depth of the ravine gradually becomes smaller
and smaller, from 3 to 2 m. To prevent the ravine spread over the land area of the Park, it is necessary to
undertake some works to fortify the right side of the Tigheci Streamlet over a distance of about 490 m. To do
this, it is necessary to plant a band of some hardwood trees on the whole length (about 490 m) of the ravine
bank. The width of this band should be at least 5 m.
Development of green spaces. In line with the proposed zoning, the land area of the Cantemir IP will be
practically divided into the Residents zone (about 91% of the area), the zone covered by infrastructure
(about 7% of the area), and the Administrators zone (about 2% of the area). To offer the Residents the full
freedom to develop their land plots, we suggest that the Administrator develop only the common spaces of
the IP. Thus, the area to be developed is about 1000 m
2
.
Places to park the cars. About 20 parking lots are necessary for the Cantemir IP, about 18 m
2
per each
parking space. The total area for the asphalted parking lots will cover about 360 m
2
, this being equivalent to
60% from the roadbed area of the IVth category road, with a length of 360/6 = 60 m.
Road and information signs will be installed alongside the permanent road of public use. There will be about
4 billboards, and the rest will be just road signs and information schemes.

Platform for accumulating and evacuating solid waste. It is suggested to create a platform for accumulating
and evacuating solid waste. This would be a fenced and asphalted territory of about 10 m
2
. The platform will
be used to collect the garbage from the common spaces. The accumulation and evacuation of the Residents
waste shall be their own responsibility.
Garbage cans. A total number of 16 garbage cans shall be installed in the territory adjacent to the
Administrators building, parking lot, and external road.
Installing the lighting system. The territory of the Cantemir IP does not provide for some internal roads of
public use, as the area represents a rather narrow band, and the access road which is already built runs
alongside the longest side of the Park. Only the external road will be lighted within the Parks limits. The
lighting system will represent an electricity transportation line of 0,4 kV, with a length of 560 m, which will
run alongside the western side of the Park, and LED-type street lamps will be installed on the light pylons.
The distance between the light pylons will be 40 m.
The fence around the Park area. The perimeter of the IP accounts for 1365 m. Thus, 1365 m of fence will be
necessary to fence the Park. The height of the fence will be 2 m, using metal bars.
3.3.2. Necessary Utilities
The Cania village has rather poorly developed infrastructure: although the electricity supply is stable and may
satisfy the requirements of the industrial sector to a full extent; there is easy access to the gas network and
there are no problems with connection to the telecommunication networks (land-line phone, mobile
telephony, internet), but the services for water and sewerage supply are poorly developed.
The land area intended for the Cantemir IP is situated 3 000 m from the water and sewerage system of the
Cantemir town and 90 m from the connection point to the gas network. Currently, the IP territory is crossed
by lines for electricity transportation of 10 and 110 kilovolts. The unused capacities of the electricity, gas, and
telecommunication networks may satisfy the estimated needs of the IP. The needs of the Cantemir IP for
drinking water exceed the capacities of the Cania village networks, and the networks for used water
discharge are missing in the village, while water treatment facilities do not exist even in the Cantemir town.
The needs of the enterprises from the IP for electricity, natural gas, drinking water, and sewerage (see Table
16) were assessed based on the data about the respective needs of enterprises with capacities similar to
those shown in Annex 1
7
, as well as based on the generalized consumption norms (per manufactured
production unit) for electricity, natural gas, drinking water (except for the used water volume repeated based
on this water treatment in the internal systems of the respective enterprises), and the volume of the waste
water which is to be discharged as sewerage.

7
The enterprises presented in Annex 1 and Table 19 constitute only one of the possible configurations of the Cantemir
IP Residents and were taken into consideration for assessing the need for utilities within the IP.


Table 16. The needs for public utilities of the enterprises from the Cantemir IP
8

No.
Type of activity
Electricity,
kVA
Natural gas,
m
3
/h
Drinking
water,
m
3
/h
Sewerage,
m
3
/h
1. Production of Dutch cheese with a
processing capacity of 10 tons of
milk per shift

240

12

8.1

8
2. Manufacturing of meat products
(sausages, delicatessen and
comfort food) with the production
capacity of 8 tons of items per
shift

315

14

4.2

4
3. Production of starch from maize
with a processing capacity of 200
tons of maize (production of 130
tons of starch) in 24 hours

2200

180

40

38
4. Production of oil from grape seeds
with a production capacity of 40
tons of oil per year

400

0.5

1.2

1.2
5. Wholesale trade with table grapes
and fruits based on the use of a
refrigerator with a storage
capacity of 1000 tons

375

0.5

0.4

0.4

Total 3530 207 53.9 51.6
Table 16 shows that for ensuring the operation of the enterprises of the Industrial Park, it is necessary to
install several transformers on the Parks territory, with the total capacity of about 3530 kVA, and their
connection to the electricity transportation line of 10 kV, which will pass outside the IP area, 2 m away from
the eastern side of the Park.
Also, it is necessary to build a new 90-m gas pipeline of average pressure, which would ensure a supply of
207 m
3
of gas per hour to the IP enterprises.
It is necessary to build a 3000-m pipeline for drinking water, which would ensure the supply of drinking water
to the IP enterprises from the water pipeline of the Cantemir town, in a volume of 53.9 m
3
of water per hour,
or 15 liters per second. In addition, a facility for treating the used water should be built in the most southern
part of the IP, with a capacity of at least 51.6 m
3
per hour.
The capacities and configurations of the roads and public utilities within and outside the IP must ensure for
the IP Residents the shortest possible distances from the enterprise locations to the access points to the
roads and public utility networks, so as to minimize the connection costs, also assuring the minimum costs
possible for building and operating the roads and public utility networks.

8
Except for the heating networks, which will be ensured by every Resident separately, based on their own needs.

3.3.3. Internal Infrastructure
Internal road
For the rational use of the Cantemir IP area, because the width of the IP territory is only 119-209 m, there is
no need to build an internal road within the IP. Using their own resources, the IP Residents will build the exit
roads towards the external road of public use, which already exists and runs near the western side of the IP
territory, and thus they will have access to the R37 national highway.
Taking into consideration the proximity to the railroad, if needed, a 760-m segment of railroad may be built
so as to create the necessary conditions for the IP Residents access to the railroad.
The internal network water pipes, medium pressure gas pipes, and cables for electricity supply and phone
service will be built within the Park alongside its western side, at least 2 m from the fence. The method is the
following: a canal shall be dug to install the networks, with steps of 1.4 m height, for the distance between
the pipes and the cables to be 1 m on the diagonal. The water pipeline will be assembled in the deepest
channel. The next two steps of the canal will be intended to assemble the gas pipe and the cable for
electricity supply, in different parts. The canal will be covered with soil. Branches will be built from the water
and gas supply pipes with the same intervals and lengths, which initially will be clogged. The branches from
the pipes and cables towards the adjacent land plots will have a length of 10 m.
Electricity supply
The electricity and telephone supply networks may be built by assembling them in some underground or
open canals. We selected the first electrical supply method because the supplier may verify the consumption
at any moment, thereby preventing the theft of electricity from the network.
To cover the IP needs for electricity (see Table 16), TM-type transformers shall be installed with 1600 kVA
and 630 kVA capacities, and four transformers with 400 kVA capacity, which will transform the voltage from
10 kV to 0.4 kV. To install the transformers, an area of 64 m
2
will be necessary from the territory of the
Industrial Park.
Water pipes
The length of the internal pipes for the drinking water supply will be of 540 m. The approximate diameter of
the water pipe is calculated according to the following formula:

where Q
total
total flow rate in liters per second,
v speed of water flow through the pipes (1.5 2 m/s for large diameters and 0.7 1.2 m/s for small
diameters).
For a total water consumption of 53.9 cubic meters per hour, or 15 liters per second, the diameter of the
pipe will be 98 mm. Taking into account the universal nature of the IP, it is necessary to have a polyethylene
pipe of a standard diameter of 110 mm to meet the IP needs.

Sewerage network
The length of the internal sewerage pipe of public utility will be 490 m. According to the standard data,
polyethylene pipes of 250 mm diameter will be used for the estimated volume of discharged water of 14.3
liters per second.
The Cania village does not have a sewerage system for the wastewater. At the same time, the Cantemir town
has no treatment facility for the used water. Due to these reasons, it is senseless to connect the sewerage
system of the Park to that of the Cantemir town.
It is necessary to install a facility for the biological treatment of the wastewater with a capacity of 1.4 th m
3
in
24 hours, or 58.3 m
3
per hour, on the Parks area. This will cover the needs of the IP. The station may be built
according to the standard project 902-03-13 with a gradual extension, depending on the IP needs and the
facilitys capacity, by increasing the number of the standard blocks of -200 type. This facility will need
an area of about 0.3 ha. The facility will be located at the crossing of the eastern and southern sides of the IP
territory. The clean water from the station will be discharged into the Tigheci Streamlet which runs 40 m
away from this segment of land.
The internal sewerage pipe will be built alongside the eastern side of the Park, one meter from the fence.
The wells of the sewerage network will be installed at a distance of 40 m from one another. Branches of 10 m
towards the adjacent land plots shall be built in the sewerage wells from the main pipe.
Gas supply
The common internal pipes for natural gas supply will be built in the joint canal for water, sewerage, and
electrical supply. The length of these pipes will be 540 m.
The approximate diameter of the gas supply pipe in centimeters will be calculated according to the following
formula:
,
where Q is gas consumption in cubic meters per hour, t temperature of the gas 0 ( 14 grades), p
m

average pressure of the gas in the pipe (the average pressure is 0,10132 MP), V the speed of the gas 15
m/s for the average pressure.
According to this formula, for a gas consumption of 207 m3 per hour, the internal diameter of the
polyethylene pipeline should be 71.4 mm. The standard external diameter of the polyethylene pipe for the
above-mentioned needs is 90 mm, with walls thickness of 5.2 mm namely these parameters shall be used
for the pipe construction.
Pluvial drainage
Torrential rains are possible in the Republic of Moldova. A rain for a medium duration of 150 minutes will
register a total depth of about 160 millimeters. The volume of precipitation will correspond to a water
accumulation of 0.064 m
3
per hour, or 0.018 liters per second, per square meter of land area. These water
flows accumulated from the asphalted territories and the roofs of the building located on the Parks territory
must be evacuated. The area of these territories accounts for about 25% of the Parks area, or 22500 m
2
. The
maximum capacity for water evacuation from the critical exit points must be 405 liters per second. The

configuration of the land area and the adjacency of the Tigheci Streamlet bed makes it unnecessary to build a
system for pluvial water drainage. The evacuation of the pluvial water represents the responsibility of the
Parks Residents. Each of them will evacuate the pluvial water from their own areas by building the
respective system of pluvial water discharge into the ravine through which the Tigheci Streamlet flows.
3.3.4. The External Infrastructure
No ground or underground constructions are placed on the surface of the land area at the intended
Industrial Park site. The roads, networks, and utilities mentioned below are located in the immediate
neighborhood.
Access conditions within the premises
As mentioned above, the western side of the land area intended for locating the Cantemir Industrial Park
runs directly alongside the access road of the enterprises situated nearby the railroad station to the R37
national highway. This access road may also serve as an access road of public utility for the land area at the
intended IP site, thus there is no need for additional costs to build an access road for the IP. The external
road of public utility of 560 m running in parallel to the western side of the land area intended for the IP will
be subject to rehabilitation.
Electricity supply
The line for electricity transportation of 10 kilovolts passes in parallel to the eastern side of the land area
intended for the IP, at a distance of 2 m, and is located in the right side of the Tigheci Streamlet. No
additional constructions are necessary to ensure the Parks access to electricity. The RED Union Fenosa JSC
is the electricity supplier. According to the provisions set in the Decision of the NAER Administration Board
No. 365, dated January 14, 2010 on electricity tariffs, the RED Union Fenosa JSC supplies electricity for a
tariff of 133 bani / kWh, not including VAT.
Water network
The drinking water pipeline in the Cania village runs in parallel to the R37 national highway, 70 m from the
longest side of the land area intended for the IP, in its northern part. The capacity of this pipe is low and may
offer only 4 m
3
of water per hour. The sale price for the drinking water is 9 lei 95 bani per 1 m
3
.
The consumption of drinking water in the IP accounts for 53.9 m
3
per hour and it is much higher than 4 m
3

per hour. Thats why it is necessary to build a new drinking water pipe, which will connect the Parks internal
networks of public utility with the drinking water supply network of the Cantemir town. It will run from the
northern part of the land area, under the access road, towards the border of the R37 national highway (90
m), and afterwards alongside the R37 road towards Cantemir, up to the road circle Cantemir Comrat (2700
m) where it will be connected with the drinking water pipe from the Cantemir town (about 210 m). The total
length of the drinking water pipe from the Cantemir town pipeline up to the border of the IP territory shall
be about 3000 m. The diameter of the pipe shall be established so as to cover not only the needs of the IP for
drinking water, but also the needs of the Cania village. It is suggested that a polyethylene pipe with a
diameter of 250 mm be used, which will ensure a flow for the drinking water of not less than 95 m
3
per hour.
Sewerage network
The Cania village has no sewerage system for wastewater. It is senseless to connect the sewerage system of
the Park with that of the Cantemir town, because the town has no facility to treat the wastewater.

Natural gas supply
The medium pressure gas pipeline towards the Cantemir town runs in parallel to the R37 national highway,
90 m from the intersection of the longest side of the land area with its northern part. The 90-m access pipe
to the natural gas will pass from the land area side, under the access road, as well as under the R37 national
highway, up to the main gas pipeline of the town. The diameter of the pipe is 90 mm.
The natural gas supplier in the Cantemir town is the Moldova - Gaz JSC enterprise. The delivery cost for
1000 m
3
of gas through medium pressure pipes accounts for 4 903 lei, not including VAT (VAT is 6%),
according the provisions set in the Decision of the NAER Administration Board, dated February 1, 2011.
3.3.5. Buildings
To build the production halls in the Residents zone, it is suggested to have a total area covered by buildings
and constructions for about 5.15 ha, including 0.6 ha for the BI halls, 0.72 ha for the BI Residents halls built
by the Administrator, and 3.83 ha for the halls built by the Residents.
3.3.6. Labor Force necessary for the IP activities
Based on the data presented in Annex 1, it is noted that the number of working places which may be created
by the IP Residents will account for about 500 jobs which will need specialists in food industry and 40 jobs
which will need specialists in wholesale and fridge maintenance.


4. Assessment of Investments for the IP
4.1. Land Area
The land area intended to locate the Cantemir IP is owned by the mayoralty of the Cania village, and it is
situated within the village developed area, representing agricultural land used as grazing ground of 9.4 ha
and 51 degrees of soil bonitation. This land area is free of any legal issues (it is not rented, and it is not used
as collateral).
In order to locate the Cantemir Industrial Park on this land area, it is necessary to change the agricultural
destination of the plot. To do this, it is necessary to have the approval of the Cania village mayoralty, the
Executive Committee of the Cantemir District, and that of the Government. According to the provisions set
forth in the Law on the normative price and the procedure for sale and purchase of land No. 1308-XIII, dated
25.07.97 (republished in the Official Gazette No. 141-149/1161 dated 06.12.2001) and the Land Code, the
change of the agricultural land destination from this category to another category may be performed only
after compensating the afferent losses. The compensation is carried out according to the tariffs set in the
annex of the above-mentioned Law. The tariff would be of 19 873.34 lei per one grade-hectare.
For the agricultural land of 51 degrees of soil bonitation, the monetary compensation per hectare would be 1
013 540.34 lei. The volume of the compensation for changing the agricultural destination of a land plot of 9.4
ha intended to locate the Industrial Park will account for about 9.53 million lei. The Law on Industrial Parks
No. 182, dated 15.07.2010 (see paragraph (1) article 12) grants to the IP title holders and IP Residents
exemption from compensating the losses induced by the change of the agricultural destination of the land
area. Thus, the compensation of 9.53 million lei will not be paid. Subsequently, in case of privatization of the
land plots afferent to the enterprises located in the IP, the respective compensations from the above-
mentioned amount will be paid proportionally to the area of the privatized territory.
According to the provisions of paragraph (12) from article 10 under the Law on the normative price and the
procedure for sale and purchase of land, when calculating the annual rent payment for the public property
land plots from the IP, created in compliance with the Law on Industrial Parks No. 182 dated 15.07.2010, the
Administrator shall apply the decreasing coefficient of 0.3 from the annual payment for the land rent, which
is provided by the law. For villages, this payment represents 0.2% of the normative price for the land. The
rent payment for one ha with the level of soil bonitation of 51 degrees in Cania village shall account for
1013540,34 lei * 0.002 = 2027,08 lei per year, while for the economic units the residents of the IP, this
amount shall account only for 608,1 lei, meaning 6,08 bani per one square meter per year.
4.2. Land Development
Uprooting the bushes from the respective land area. About 4 hectares of bushes will be rooted out from the
respective land area. The cost of this work shall account for 400 thousand lei.
Removal of the electricity transportation line of 10 kilovolts from this area. The length of the electricity
transportation line of 10 kilovolts to be removed from the respective land area represents 600 meters. We
admit that the costs for dismantling the electricity transportation line to be removed are equal to the costs

for assembling a new line. The minimum cost for assembling/dismantling one kilometer of electricity
transportation line of 10 kilovolts accounts for about 103 th lei (not including the cost of the materials). Thus,
the total cost for removing the 600 m electricity transportation line of 10 kilovolts will account for 103*1.2 =
123.60 th lei.
Removal of the anchor for the electricity transportation line of 110 kilovolts. The anchor will be dismantled
and located 135 meters away from the initial location, outside the north-western part of the IP. The removal
of the anchor for the electricity transportation line of 110 kilovolts outside the land area intended for the IP
implies the dismantling and assembling of a 200 meters electricity transportation line of 110 kilovolts. The
cost for dismantling / assembling one kilometer of electricity transportation line of 110 kilovolts accounts for
about 265 th lei per km (not including the cost of materials). Thus the cost for removing the anchor is about
265 * 0.4 = 106 th lei.
Ensuring the underground drainage of the pluvial waters that might flow on the respective area from
underneath the culvert of the access road to the Park. The cost of one kilometer of reinforced concrete pipe
with the diameter of 500 mm, which is necessary for the drainage of the pluvial water, accounts for about
500 th lei. In our case, the length of the pipe will be of 190 meters. Thus, the volume of the investment would
be of 95 th lei.
Reinforcing the right side of the ravine through which the Tigheci Streamlet flows. To do this, it is necessary
to plant of the bank of the ravine, alongside all its length of 490 m, a band of hardwood trees. The width of
this band shall be of at least 5 m. The costs for performing this work will account for 36.75 th lei.
Green spaces. The developed area with decorative trees represents about 1000 m
2
. Thus, the costs for
developing the green spaces within the IP will account for about 50 th lei.
Places to park the cars. The area for 20 parking lots to be created shall cover a segment of 60 m, being
equivalent to the area of a road of the IVth category. The cost to build one kilometer of a road of the IVth
category represents 16.178 mln lei. The costs necessary to build the roadbed will represent 60% of the road
cost. Thus, the cost for creating 20 parking lots will account for 16 178 th lei/1km * 0.6* 0.06 km = 582.39 th
lei.
Road and information signs. The total costs necessary to procure and install 4 billboards account for about
80 th lei.
Platform for accumulating and evacuating solid wastes. The costs for building this platform account for
about 5.0 th lei.
Garbage cans. Taking into account the cost of 300 lei per a -5 type can, the total cost for those 16 garbage
cans, which are necessary for the IP, account for about 4.8 th lei.
Installing the lighting system. Based on the prices set for the necessary materials and the experience for
undertaking similar works, the minimum cost to build one kilometer of an electricity transportation line of
0.4 - 10 kilovolts accounts for about 206 th lei. The cost of the electricity transportation line of 0.4 kV,
alongside the western side of the Park, for a distance of 560 meters, will account for about 115.36 th lei. A
LED-type lamp will be installed on every pylon (in total 14) of the line. The cost of this kind of lamp is 2000
lei. Thus, the cost of the lamps would be 28 th lei. In total, the costs for the lighting system will account for
143.36 th lei.

Fencing the territory of the IP. The costs for procuring and installing 100 m of fence from metal bars of 2
meters and type account for about 41.2 th lei. The length of the IP territory is 1365 m. The
investment for procuring and installing the fence will account for 562.38 th lei.
Table 17. Volume of necessary investment to develop the Cantemir IP territory
Items necessary to develop territory Volume of investments, th lei
Uprooting the bushes from the land area 400.0
Removal of the electricity transportation line of 10
kilovolts from the land area
123.6
Removal of anchor for the electricity transportation line
of 110 kilovolts from the land area
106.0
Ensuring the underground drainage of the pluvial waters
which may flow from underneath of the culvert of the
access road to the Park
95.0
Fortifying the right bank of the ravine through which the
Tigheci Streamlet flows
36.75
Developing the green spaces 50.0
Building the parking lots for the cars 582.39
Creating and installing the road and information signs 80.0
Building the platforms for accumulating and evacuating
solid wastes
5.0
Procuring some street garbage cans 4.8
Installing the lighting system 143.36
Fencing the Park territory 562.38
Total 2 189.28
The volume of investments which are necessary to develop the Cantemir IP territory is presented in Table 17
and accounts for 2 189.28 th lei.
4.3. Internal Infrastructure
4.3.1. Utilities
Roads
As it was mentioned in chapter 3.3.3, it is not envisaged to build an internal road of public utility.
At the same time it was mentioned that in case of need, it is possible to build an access road to the railroad
of a total length of 760 meters. The investments for building this road will account for about 9.12 mln lei.
Electricity
To cover the IP needs for electricity, there will be installed 1 transformer with the capacity of 1600 kVA,
another transformer of 630 kVA, and 4 transformers of TM type with the unitary capacity of 400 kVA - the
total costs for these transformers would be 778.5 th lei. The substation for electricity supply will be installed

near the eastern fence, 250 m away from the southern side of the Park. The total cost of the construction
and assembling works is estimated to represent 10% of the transformers cost and will account for about
77.85 th lei. The cost for the underground line for electricity transportation of 0,4 kV with a length of 560 m
is about 448 th lei. Thus, the capital investments necessary for the electricity supply infrastructure will
account for about 1304.35 th lei.
Water supply
The cost for building the water pipeline with the standard diameter of 110 mm and length of 1 km, under the
given project conditions, will account for about 300 th lei. In this way, the total investments for building 540
m of pipeline will account for about 162 th lei. The preparing works for getting connected the Residents land
plots to the network represent 10% of the networks cost, or about 16.2 th lei. The total volume of the
investment will account for 178,2 th lei.
Sewerage network
To build the sewerage polyethylene pipeline with the diameter of 250 mm and the wells at a distance of 40
m, it is necessary to have about 800 th lei per 1 km. The capital investments for building the internal
sewerage pipes of public utility with a length of 490 m will account for about 392 th lei. The costs for getting
connected the Residents land plots to the sewerage network are included in the total cost. The total volume
of the investment will account for 392 th lei.
As there is no sewerage system for waste water in the locality, it is necessary to build a facility for biological
treatment of the waste water on the territory of the Park. The capacity of the facility would be of 1 400 m
3
in
24 hours or 58.3 m
3
per hour parameters that would cover the needs of the Park. The necessary capital
investments for building this treatment facility represent 8.82 mln lei.
Pluvial water drainage
Previously it was mentioned that it is not necessary to build a sewerage system for pluvial water of public
utility. The discharge of the pluvial water represents a responsibility of the Park Residents. Every resident will
organize the discharge of the pluvial water from its own land plot by building the respective system of pluvial
water discharge through the ravine through which the Tigheci Streamlet flows. Thus, there is no need of any
costs for building a public-utility system for pluvial water drainage.
Natural gas
According to the experience accumulated in the Republic of Moldova, an amount of 220 th lei is necessary to
build the medium pressure gas pipeline from polyethylene pipes, with the diameter up to 90 mm, at a
distance of 1 km. Thus, capital investments of about 118.8 th lei are necessary for the pipe length of 540 m.
The preparing works for connecting the Residents land plots to the network represent 10% of the network
cost, or 11.88 th lei. The total volume of investments will account for 130.68 th lei.
4.3.2. Investments for Internal Infrastructure
The summary volume of the investments which are necessary to create the public utilities within the IP is
presented in Table 18.

Table 18. The summary volume of the investments which are necessary for creating the public utilities
within the IP
Name of works
Volume of investments, th
lei
Building the internal road of public utility 0
Procuring and installing 6 transformers of a total capacity of 3830 kVA
and the underground transportation line of 560 m
1 304.35
Building the internal drinking water supply pipes of public utility of 540
m
178.20
Building the sewerage pipes of public utility of 490 m
392.00
Building the facility for biological treatment of the waste water for a
capacity of 1.4 th m
3
per 24 hours
8 820
Building the public utility system for evacuating the pluvial water 0
Building the internal natural gas supply pipes of public utility of 540 m
130.68
Developing the territory of the Industrial Park 2 189.28
Total
13 014.51
4.4. External Infrastructure
Roads
The existing external road of public utility, with the total length of 560 m, which runs in parallel to the
western side of the Park area, shall be subject to capital rehabilitation. An amount of 7.8 mln lei is necessary
for the capital rehabilitation of one km of road of the IVth category. The rehabilitation of the 560 m road will
account for 4.368 mln lei.
Electricity
After its removal, the electricity transportation line of 10 kilovolts will cross the eastern side of the Park. Thus
no additional costs will be necessary for getting connected to the electricity transportation line of 10
kilovolts.
Water networks
The length of the drinking water pipeline with a diameter of 250 mm, from the pipeline of the Cantemir town
to the border of the IP area is about 3000 m. The cost for building such a pipe of 1 km accounts for 300 th lei.
The capital investments which are necessary to build the drinking water pipeline of 3000 m shall account for
900 th lei.
Sewerage network
The Cania village has no sewerage system for waste water, and the Cantemir town has no facility to treat the
waste water, thats why no external sewerage networks will be built.

Natural gas
The medium pressure gas pipeline from polyethylene and with the diameter of 90 mm, which will connect
the gas pipeline from the locality with the gas pipes from the Park area, is 90 m. The capital investments for
building such a pipe will account for 19.8 th lei.
4.4.1. Investments for external infrastructure
The summary volume of the investments which are necessary to create the external infrastructure of
the Park is presented in Table 19.
Table 19. The summary volume of the investments which are necessary to create the external
infrastructure of the IP I
Name of works
Volume of investments, th
lei
Capital reparation of the IVth category access road of 560 m
4 368.0
Building the electricity transportation line for getting connected to
the line of 10 kV
0
Building the polyethylene pipe with the diameter of 250 mm for
getting connected to the external source of drinking water, with a
length of 3000 m
900.0
Building the natural gas access pine with the diameter of 90 mm and
length of 90 m
19.8
Total 5 287.8
The total amount of the necessary investments for the internal and external infrastructure to establish the
Cantemir Industrial Park will account for about 18.302 mln lei.
4.5. Buildings
Production halls. We have estimated the necessary investments, assuming that an amount of 3 235.5 lei
(about 200 Euro) is necessary to build a square meter of halls, storages, etc.
Table 20.Structure of the area occupied by production halls of the Cantemir IP
Production halls Area, ha Investments, th lei
Production halls BI 0.60 19 413
Production halls Administrator 0.72 23 295. 6
Production hall Residents 3.83 123 919. 65
Total halls (production infrastructure) 5.15 166 628.25
The necessary means for building the production halls are presented in Table 20 and account for about 166.6
mln lei.
4.6. Cost Assessment for Labor Force training
To ensure the compliance of the labor force with the IP needs, training and professional recycling courses
shall be organized. We consider that 75% of the necessary volume of labor force will be trained or 405

employees recruited within the enterprises of the IP Residents. The average duration of the training course
shall be 2 months. Thus, the costs for training the labor force will be equal to the cost of the training itself
and the value of the scholarships which will be offered during the two months to the future employees. The
training cost per person accounts for about 1 400 lei, the scholarship for 2 months will be 800 lei/month * 2
months = 1 600 lei. Thus, the training cost per person will be of 3000 lei. The total cost for labor force
training shall account for 1 218 th lei.
4.7. Total Investments
The estimated values of the investments which are necessary to establish the Cantemir IP are presented in
Table 21 and cover the main costs related to the construction of the common utilities within and outside the
IP, internal and external development of the IP, as well as the minimum constructions necessary for the IP
operation
9
. The volume of the total investments, except for the Residents investments for establishing the
IP, is estimated to be 36 756 th lei. The detailed capital costs are presented in Annexes 2 and 3.
Table 21. Projects capital costs
Capital costs
Evaluation
with
investments
Residents, lei
Share,
%
Evaluation
without
investments
Residents, lei
Share,
%
Feasibility study
100,000 0.1% 100,000 0.2%
Designs, studies, funding requests
1,292,041 0.7% 1,292,041 1.9%
Infrastructure and common utilities outside the IP
14,107,800 2.8% 14,107,800 8.0%
Access to the road network outside the IP
4,368,000 2.3% 4,368,000 6.6%
Public utilities outside the IP

electricity

gas
19,800 0.0% 19,800 0.0%
water
900,000 0.5% 900,000 1.4%
sewerage
0.0%
treatment facility
8,820,000 0.0% 8,820,000
Infrastructure and common utilities within the IP
4,194,510 2.2% 4,194,510 6.3%
Public utilities within the IP
0.0%
electricity
1,304,350 0.7% 1,304,350 2.0%
gas
130,680 0.1% 130,680 0.2%
water
178,200 0.1% 178,200 0.3%
sewerage and treatment facility
392,000 0.2% 392,000 0.6%
pluvial drainage

Internal development of the IP
2,189,280 1.2% 2,189,280 3.3%
Administrative building, equipment, and furniture
3,231,704 1.7% 3,231,704 4.9%
Production halls BI
19,413,000 10.2% 19,413,000 29.3%

9
The Residents investments were not taken into account when analyzing the financial feasibility of the Cantemir IP.

Capital costs
Evaluation
with
investments
Residents, lei
Share,
%
Evaluation
without
investments
Residents, lei
Share,
%
Production halls Administrator
23,295,600 12.2% 23,295,600 35.1%
Production halls built by the Residents
123,919,650 65.1%
Total capital costs
189,554,305 100.0% 65,634,655 100.0%
The share of the technical infrastructure and common utilities accounts for 14.3% of the capital costs. The
administrative building with equipment and furniture accounts for 4.9% of the costs, and the capital costs for
building the production halls account for 64.4% of the total investments. The costs for designs, studies, etc.
account for 2.1%. We estimate that the Residents investments for the production halls, storages, etc. will
account for 123.9 mln lei, these being not included in the calculation models.

5. Analysis of Project Feasibility
5.1. Introduction
To determine the best solution to carry out the project for establishing the IP, a comparative analysis should
be performed for the two ways of organization, conditioned that both cases have identical specifications at
the exit.
First of all, lets assume that the Local Public Administration will implement the given project using the
traditional mechanism for procurement of goods and services. To the extent possible, we assume that the
funding for establishing the IP technical and production infrastructure shall be performed via allocation of
state budget means, as well as of resources coming from the administrative-territorial units budgets (district
and local). The own financing means will be focused on covering the expenses for managing the IP during the
first years, constructing the administrative building and fitting it with furniture and equipment. The local
service suppliers will fund the building within and outside the IP of the gas pipelines, electricity supply
network, and internal water supply network. The financing for the rehabilitation of the external access road
and construction of the production halls to be leased to the IP and BI Residents will come from the external
sources, as grants. We envisage obtaining from the Regional Development Agency and the NRDF the financial
means necessary for building the internal water and sewerage pipelines and the waste water biological
treatment facility. We will consider further on that the administration of the IP will be performed by the
Managing companycreated or selected on competition basis by the LPA.
In the second case, we assume the co-participation of the private investor for the establishment of the
Cantemir IP through the public-private partnership. LPA will involve a private partner with experience in the
field, selected on competition basis, to which it will delegate the IP administration functions and duties. This
project will be implemented based on a public-private partnership contract.
In the case of the analyzed options, the private partner: (a) will fund the design work, development of
studies and funding requests, (b) will prepare the area occupied by common infrastructure and its zone, (c)
will build the common utilities within the IP (aqueduct, sewerage), (d) will ensure the development of the
territory, (e) will incur the administration costs. In the case of the first two options, we suggest the private
partner to invest in constructing the administrative building, while in the case of options three and four, the
Administrator will rent administrative spaces for its personnel in the town. In the case of the first option, we
will assume a wider implication of the private partner, via construction of its own production halls meant to
be leased to the IP Residents, while in the case of the second option, it will rehabilitate the external access
road and build the aqueduct from Cantemir to Cania. In option three, we will plan a lower financial
involvement of the private partner. In the last option, we will request the involvement of the private sector
in rehabilitating the external access road and building the aqueduct from Cantemir to Cania, just like in the
case of the second option.
We will also analyze the options involving building of production halls meant for the BI. In the case of the first
two options, the private partner resources shall be used for building the BI production halls. While options
three and four are planned without any BI activity.

LPA, local and regional suppliers from the project will fund the building of electricity networks and gas
supply pipelines within and outside the IP.
In the case of the first and third options, the external sources shall be requested to fund the rehabilitation of
the external access road and construction of the aqueduct from Cantemir to Cania.
The funding for building the waste water biological treatment facility shall be requested from the NRDF, the
private partner being eligible to finance for the creation of the IP technical and production infrastructure.
The Administrators tasks are described in the IP Organization and Operation chapter. The private partner
returns its investment, covers the IP administration and maintenance costs, and obtains a reasonable profit
from the revenues generated by the lease of land plots and halls, cash-in of administrative fees, revenues
from service provision to the IP Residents, from fees and charges paid by the tender participants and
Residents, as well as from the entrepreneurial activity performed within the IP in compliance with the
legislation in force. The Administrator recovers the losses induced by the exemptions from administrative
payments and services provided to the BI Residents from the incubation programs and LPA. If the private
partner funds the rehabilitation of the external access road and construction of the aqueduct, which are
considered to be public assets, we shall plan the investment cost reimbursement for the private partner in
equal installments, during a period of 30 years, at the rated of 5%. When the contract comes to an end, the
public assets will be transferred free-of-charge to the public authority in a good condition and free of any
issue or obligation, according to the contractual provisions.
We will build calculation models which will determine the project cost to be incurred by the LPA in both
cases. By comparing the models, the LPA will assess if the public-private partnership meets all the criteria
with the best values, as against the traditional implementation of the project (managed by itself). To
evaluate the costs, in the first case we will use the model of the Public Sector Comparator (PSC); while in
the second case the Public-Private Partnership (PPP) shall be used as a reference model.
The purpose of the financial analysis is to determine if and to what extent the project is valuable from
financial, public, and social perspectives. This thing may be expressed in a number of ways, the most
accurate and representative being the use of investment projects performance indicators, and namely:
Internal Rate of Return (IRR);
Net Present Value of the Project (NPV);
Benefit Cost Ratio (R
B/C
).

IRR is defined as the interest rate which brings to zero the net current value of the investment.

NPV calculates the net present value of the investment or that of the capital by using an updating rate
(discount rate) and a series of payments (positive values) and future receipts (negative values).

The Benefit-Cost Ratio represents the ratio between the updated flow of benefits and the updated flow of
costs.
In both cases: PSC and PPP models the results of the financial analysis are interpreted by taking into
account the following benchmarks:

|
.
|
\
|
=
100
1
u
i
G
V VR
IRR > r (5%)
NPV < 0
10
Project worth to be funded
B/C Ratio> 1
The results of the financial analysis are interpreted by taking into account the best result and the lowest cost
of the project.
The key characteristics of the PSC and PPP models are the following:
- the net present value (NPV) of the project cost calculated based on the cash flow and applicable
updating rate;
- the cash flow is determined as the difference between the amount of all the project costs and
revenues;
- costs estimation based on the most recent and similar procurements in the field or based on the
best estimates;
- identification of all possible revenues afferent to the project;
- the calculation does not include the depreciation and amortization.
In case of the goods with life duration longer than the project duration, by the end of the envisaged life
duration a residual value is taken into calculation, which reflects the goods potential sale value or the value
for further-on use.
The residual value is calculated according to the following formula:
where,
VR = residual value; Vi = inventory value of the fixed asset;
Gu = the deprecation level of the fixed asset estimated over the suggested timeline.
5.2. General work hypotheses
The project costs for IP establishment were determined based on the following basic hypothesis:
1. The inflation rates for the future periods may be estimated based on the evolution for the previous
periods or may be used from the official forecasting sources. Two approaches may be used further on
for inflation. The first one is to apply the inflation rate separately from all the cost and revenue items.
The second approach involves the costs and revenues projection in constant prices. The hypothesis is
that regardless of the future inflation rate, the influence will be proportional over the both: costs and
revenues. The second option for determining the prices and tariffs shall be used in building the models.
2. Updating rate. The standard updating rate taken into consideration in the financial analysis is r = 5%
(according to the recommendations of the European Commission).

10
In the case of the PSC and PPP models, the condition NPV < 0 is determined by the fact that the project cost in these
models = Costs Revenues, thus a negative net present value shows that the project updated costs are lower than the
updated revenues afferent to the project.

3. Project currency. All the project forecasts are calculated in constant lei (the foreign exchange rate in
the project is that of 1 Euro = 16.1775 lei; 1 US dollar = 11.7997 lei).
4. The estimated project life duration is equal to the duration of IP title granting (30 years).
5. As the duration for the computer technology operation is longer than the project duration, it was
decided to replace this group of assets before the end of the project.
6. The hypothesis of the worst case. We assumed that the 100% lease of land plots and production halls
to the Residents will be achieved in 2016. All the costs were calculated at a maximum level, while the
revenues at a minimum level.
5.3. The basic model of the Public Sector Comparator
The PSC basic model represents the integral project cost for creating the Cantemir IP, using the traditional
methods of public procurements for carrying out the project. The basic model includes the capital costs, the
maintenance and administrative costs, and the project revenues.
The key characteristics of the PSC model are the following:
- the net present value (NPV) of the project cost calculated based on the cash flow and applicable
updating rate;
- the cash flow is determined as the difference between the amount of all the project costs and
revenues;
- the estimation of the costs based on the most recent and similar procurements in the field or based on
the best estimates;
- identification of all the possible revenues related to the project;
- the calculation does not include the depreciation and amortization.
5.3.1. Estimation of costs
Within the PSC model, we will estimate the capital costs, replacement costs, the costs for labor force
training, and the operational costs of the IP organized by the LPA through the selected Administrator.
Cost estimates hypotheses. To build up the PSC model, we assumed the following hypotheses for
determining the costs for IP establishment and administration
1. All the necessary objects will be built, procured through goods and services procurement
procedures by the public sector. The built or procured objects are assessed based on the most recent
costs or based on the most recent offers from the construction companies.
2. We envisaged the replacement of the computer technology and the equipment of the administrative
building during the project life. We assume they will be replaced every 10 years.
3. The operational costs include the IP objects maintenance costs and the administration expenses.

The costs of the IP Cantemir Project are constituted from:
a) Capital costs,
b) Costs which are necessary to train the labor force,
c) Working capital,
d) Replacement costs.
A. The capital costs of the project represent 65 635 th lei (see Table 22). The investments in common
internal and external IP infrastructure will be performed by the municipality suppliers, Residents and
Administrator from the LPA and/or CPA sources, NRDF, and foreign grants, according to the following:
Table 22. Finance sources for the capital costs of the IP created via the traditional mechanism of public procurements
Categories of costs, finance sources
Investment
value, lei
LPA budget, State budget 5 091 526
Administrative building 2 887 684
Computers, printers, etc. 214 600
Furniture for premises 77 652
Boiler room 51 768
Local suppliers 2 354 830
Infrastructure and common utilities from outside the IP (water, gas) 919 800
Infrastructure and common utilities from within the IP (electricity, gas) 1 435 030
Foreign grants 47 176 600
Feasibility study 100 000
Infrastructure and common utilities from outside the IP (road) 4 368 000
Production halls BI 19 413 000
Production halls for the Residents 23 295 600
NRDF 14 089 520
Design, studies, funding requests for IP 1 292 040
Common utilities within the IP (water, sewerage, treatment facility) 9 390 200
Internal territory development 2 189 280
Total financing 65 634 654
Municipality suppliers will be responsible for:
The construction of the medium pressure gas pipeline outside the IP and within the IP will be
performed by Moldova - Gaz JSC from the suppliers sources.
The electricity supplier, the JSC RED Union Fenosa, will build the external supply line, and internal
supply network and substation.
The phone network will be built by the Moldtelecom or other supplier.
The Residents responsibilities regarding the infrastructure and utilities shall be the following:
The connection to the IP electricity network shall be performed by the Resident based on a technical
project endorsed at the land plot entry point, 20 m maximum distance from the plots street front. The
installations from within the plots will have underground connection to the distribution networks. The

installed power (kW) will be determined depending on the request and size of the plots area. For
higher installed powers, Residents own investments are necessary. The meter to measure the
consumption shall be installed by the supplier only when the branching services are paid.
The connection of the Residents to the IP natural gas network shall be performed based on the
technical projects endorsed at the land plot entry point, 20 m maximum distance from the plots street
front. The Resident shall be responsible for installing the connection point to pressure, the meter, and
for executing the branching.
The branching of all the constructions to the centralized water and sewerage (technological, sewage) is
obligatory. The connection to the centralized water and sewerage network shall be performed by the
Resident based on a technical project endorsed at the land plot entry point. The Residents with land
plots located in the western part of the IP will get connected to the sewerage network in the western
part of the plot. For discharging the waste water from the plot, the Resident should obtain the
environment approval. The Resident is responsible for performing the branching.
The technological water supply shall be ensured by drilling and capturing from the phreatic stratum (on
its own plot) based on the endorsements and approvals provided by the law. When due to the
performed activity, it is necessary to have a larger volume of fire water than the one ensured by the
existing network, the Resident shall build an additional reservoir within its own plot.
If the discharged waste water exceeds the intake indicators for the treatment facility, the Resident
shall equip itself with pre-treatment installations within its plot.
It is obligatory to capture and discharge to the pluvial network the water resulting from all the
rainproof surfaces (roofs, circulations, platforms). To capture and discharge the pluvial water, the
Resident shall have a separate technical project which will indicate the measures undertaken to
develop and equip the land plot. It is prohibited to discharge the pluvial water into the plots subsoil, as
well as to lead such water drain to the areas bordering its own plot.
The connection to the town phone network shall be performed on underground basis by the Residents.
To organize the selective collection of solid waste, every Resident will conclude a service provision
contract with the local provider.
The constructions built by the Residents will not be launched into operation if they are not connected
to the utility networks: water and sewerage supply, pluvial drainage, electricity supply, gas, and phone
supply.
The remaining utilities shall be carried out based on the public money coming from the state budget, local
budget, National Regional Development Fund, or donors grants.
B. Costs for labor force training were estimated to represent 1 218 th lei.
C. The working capital accounts for 1 859 th lei. The purpose of the working capital is to cover the deficit of
monetary means during the first years of activity.
Table 23. Distribution of capital costs and working capital, thousand lei
Costs 2011 2012 2013 2014 2015 2016 2017 Total
Capital costs 875 16,782 34,000 6,989 6,989 65,635
Costs for training the
labor force
396 396 396 30 1,218
Working capital 57 911 892 1,860
Project total costs 932 17,693 35,288 7,385 7,385 30 68,712

D. Replacement costs account for 214.6 th lei and represent the cost of the computer technology and
equipment within the administrative building. We assume that they will be replaced once in 10 years.
Maintenance costs are incurred by the Administrator and include the objects that are indicated below in
Table 24. The capital costs serve as calculation basis for the respective costs.
Table 24. Maintenance costs hypotheses
Objects Hypothesis description Share
Administrative building
Maintenance costs are determined in
relation to the capital costs
0.8%
BI production halls
0.4%
Parking
0.4%
Development of green spaces, signs
4%
Lighting network
2%
Fencing
0.5%
Pluvial drainage
1%
Administration costs represent the personnel payroll, utility services, service procurement, office
consumables, travel costs, SVSDO, local taxes, real estate tax, and other costs.
Table 25. Administration costs hypotheses
Indicators Hypothesis description
Administrators personnel
payroll
The list of the personnel is presented in Annex 4.
Social and health
contributions
26.5% from the calculated payroll basis
Utility services
Gas Tariff 4903 lei/1000 m
3
, estimated consumption for heating boiler 20 th
m
3
/year.
Electricity Tariff 1.33 lei/kW. Estimated consumption for the administrative
building 15 th kW, street lighting 81.76 th kW, other 4.8 th kW.
Street lighting consumption = no. of pylons x 365 days x 10 hours x 0,04
kW
Water and sewerage Tariff water 24 lei/m
3
, tariff sewerage 16.5 lei/m
3
, estimated
consumption 800 m
3
. Water consumption for canteen is paid by the
lessee.
Discharge of solid waste Tariff 83 lei/m
3
, discharge 80 m
3
/year
Service procurement
Phone land line, mobile
telephony, interne
Monthly consumption 2 500 lei
Banking Tariff for cash receipt 1% plus 2000 lei payment orders
Transport 25 000 lei/year

Indicators Hypothesis description
Insurance 1.0% of the remained value (minus depreciation)
Advertising 80 000 lei/year
Guard costs Tariff 1.5 lei/month for 1 m
2
of area
Office consumables 10000 lei/year
Travel costs 40000 lei/year
SVSDO 10000 lei/year
Local taxes 20 lei per employee per quarter
Real estate tax 0.1% of the residual value of the buildings
Other unforeseen costs 5% of total costs
The annual costs for maintaining the IP objects used by the Administrator account for 112 th lei. The total IP
administration and maintenance cost in 2014 accounts for 1 790 thousand lei. The most significant share in
this category is held by the personnel payroll. The structure of the Administrators personnel, as well as the
payroll costs are presented in Annex 4.

Table 26. Maintenances and administration costs, lei
Items 2011 2012 2013 2014 2015 2035 2041
Maintenance costs 106,354 111,954 111,954 111,954 111,954
Payroll with contributions 41,952 834,953 834,953 834,953 834,953 834,953 834,953
Rent of office space
Services (gas, electricity,
water, sewerage, waste
evacuation) 3,320 272,095 272,095 272,095 272,095 272,095
Services (communication,
banking, transportation,
insurance, advertising, guard) 2,108 8,800 384,774 380,138 375,595 301,739 284,846
Office consumables 10,000 10,000 10,000 10,000 10,000
Travel costs 10,000 20,000 40,000 40,000 40,000 40,000 40,000
SVSDO 5,000 10,000 10,000 10,000 10,000
Local taxes 60 240 880 880 880 880 880
Real estate tax 45,596 44,685 43,790 29,235 25,897
Other costs 2,706 43,366 84,983 85,235 84,963 80,543 79,531
Total maintenance and
administration costs 56,826 910,679 1,784,635 1,789,940 1,784,230 1,691,399 1,670,156
The detailed administration and maintenance costs are presented in Annex 5.
5.3.2. Estimation of revenues
The Project revenues coincide with Administrators revenues. They are composed of the revenues generated
by lease of land plots and production halls, revenues from administrative services, and revenues from
consultancy services. As the tariffs used for the BI Residents are lower, the differences occurred between
these tariffs and the afferent expenditures will be covered by the identified incubation programs or LPA.

Table 27. Hypotheses of revenues from lease and services
Categories of revenue Hypothesis description
1. Lease of land plots
to the Residents
The area of the land plots leased to the Residents accounts for 6.35 ha, the
average area per Resident is 3 968 m
2
. Applied tariff 0.06 lei/m
2
/year. The
bonitation of the land is 51 degrees; the rent price per one degree ha 19 873,34
lei; applied zone coefficient 0.2%, the coefficient for decreasing the set tariffs
0.3%
The coefficient for occupying the Residents production halls subzone was
estimated for the first year to be 40%, for the second year 30% and so on. We
assume that starting with the third year, the maximum capacity will be
reached.
Residents production subzone 1 year 2 year 3 year
Occupation coefficient 40.0% 70.0% 100.0%
Number of Residents 6 5 5
Number of total Residents 6 11 16
2. Rent of production
halls to the Residents
with afferent land
plots
Area of leased land plots 7.200 m
2
; tariff of the annual rent payment 300.00
lei/m
2
of production hall, annually.
The coefficient for occupying the Administrators production halls subzone was
estimated for the first year to be 33.33%, for the second year 33.33%. We
assume that starting with the third year, the intended territory will be occupied
at its maximum capacity.
Administrators halls subzone Year 1 Year 2 Year 3
Occupation coefficient 33.33% 66.67% 100%
3. Rent of
administrative and
commercial premises
The area of premises to be rented accounts for 252 m
2
, tariff 600 lei/m
2

annually
4. Rent of BI
production halls
The share of land occupied by BI - 12%, BI production halls 0.6 ha. Pre-
incubation fees 180.00 lei (60% of the annual payment for hall rent),
Incubation fees 225.00 lei (75%), Post-incubation fees 270.00 lei (90%).
The coefficient for occupying the land meant for the BI was estimated for the
first year to be 40%, for the second year - 40% and so on. We assume that
starting with the third year, the BI subzone will be occupied at its maximum
capacity.
BI subzone 1 year 2 year 3 year
Occupation coefficient 40% 80% 100%
5. One-time payments
and fees to be paid for
participating in
tenders to obtain the
right to be the IP
Payment for taking part in tenders 400 lei/participant; registration of the
Residents right 12 lei/m
2
, registration of the Residents right in the BI 6
lei/m
2
(of the land area)

Categories of revenue Hypothesis description
Resident as well as to
be registered as a
Resident
6. Annual
administration
payment
24.00 lei/m
2
annually for the IP Residents and 12.00 lei/m
2
annually for the BI
Residents
Revenues from consultancy services provision. The consultancy services are provided by the employees of
the BI and IP Development Service and Audit and Bookkeeping Service. These services will provide the
following categories of services to the IP Residents, including to the small and medium enterprises from the
BI:
- Business planning and development services;
- Project development services;
- Marketing and personnel recruitment services;
- Management and knowledge transfer services;
- Audit and bookkeeping services.
The BI enterprises will benefit from assistance to develop their business ideas, business plans, marketing
plans, feasibility studies, identification of resources and funding methods, assistance for equipment
procurement, assistance for production activity launch, assistance for fine-tuning and implementing the
plans, team building, keeping the accounting records.
A protocol room and a conference hall shall be offered to the Residents for rent.
Table 28. Tariffs for consultancy services and protocol and conference halls rent
Type of consultancy services
Average tariff,
euro/unit
Average tariff,
lei/unit
Estimated demand
starting with
2014 (frequency)
Business planning and development
services
600 9 707 6
Project development services 1200 19 413 4
Marketing and personnel recruitment
services
900 14 560 4
Management and knowledge transfer
services
600 9 707 4
Audit and bookkeeping services 400 6 471 9
Protocol and conference halls rent 84 lei/day (6h) 120
The maximum revenue from provision of consultancy services and renting the halls conditioned by the
occupation rate described above shall account for 363.7 thousand lei.

Table 29. Estimation of revenues, lei
Categories of revenues 2013 2014 2015 2035 2041
Land lease to the Residents 1 429 2 619 3 810 3 810 3 810
Lease of halls to Residents with
the afferent land plots
720 240 1 440 480 2 160 720 2 160 720 2 160 720
Rent of administrative and
commercial premises
90 720 120 960 151 200 151 200
Lease of BI halls 216 240 756 480 1 080 600 1 188 600
Charges and fees paid for
participating in tenders and for
registering as a Resident
340 102 320 621 320 477 28 800 14 400
Administration payment 667 404 1 287 846 1 908 000 1 932 000 1 932 000
Consultancy services 163 580 268 111 343 430 363 652 363 652
Payment return for investments
made for road and aqueduct
11

Revenues from recovering the
losses due to the lease
exemptions for the BI Residents
12

144 000 324 000 360 000 432 000
Revenues from recovering the
losses due to the administrative
fees exemptions for the BI
Residents
13

48 000 96 000 120 000 120 000
Revenues for recovering the
losses generated from service
provision for BI
14

33 164 54 195 74 417 74 417
Total revenues 1 892 754 3 851 802 6 088 072 6 275 198 6 440 798
5.3.3. Results for the PSC basic model
The calculation of the costs for the PSC basic module is performed according to the following formula:
PSC basis = Costs Revenues

11
If the private partner funds the reparation of the external access road and the construction of the aqueduct, which we
consider to be public assets, we planned for the investment costs to be reimbursed to the private partner in equal
installments, over 30 years, at the interest rate of 5%.
12
The administration fees for the BI Residents are intended to be from the fees paid by the IP Residents, the rent fees
for the BI production premises are also offered with discounts. The cost differences will be covered from the identified
incubation programs.

14
Consultancy and administrative services offered to the BI Residents with discounts. The cost difference shall be
covered from the identified incubation programs. The Administrator shall keep the record of the services granted to the
BI Residents.

Table 30. Project costs and revenues according to the PSC basic model, thousand lei
Categories of
costs and
revenues
2011 2012 2013 2014 2015 2035 2041
Capital costs 875 16,782 34,000 6,989 6,989
Labor force
training
396 396 396
Working capital 57 911 892
Maintenance and
administration
costs
57 911 1,785 1,790 1,784 1,691 1,670
Revenues 1,893 3,852 6,088 6,275 6,441
Costs-revenues 989 18,604 35,180 5,323 3,081 -4,584 -4,771
To determine the NPV for the IP establishment project, we calculated the residual value for the goods with
longer life duration than the project duration. We set 50 years to be the useful functioning duration for the
administrative building, and 40 years - for the production halls. Thus the estimated residual value of the
objects by the end of 2041 will be 10 882 262 lei.
The present value of the project cost
15
has a negative value,
NPV (PSC model) = - 167 202,
and this is assessed positively, indicating a present value of the investment of 167.2 thousand lei.
The analysis of the cumulated cash flow, for the forecasted period up to 2041, reveals that the project
financial sustainability is actually verified in the option when the IP is organized based on the LPA public
procurements method, thus the investment will be recovered within the timeline taken into calculation. At
the same time, the project registers a return rate of IRR = 5.0% and a benefit-cost ratio of R
b/c
= 1.04,
showing thus that the projects financial benefits during its duration are 4% higher as compared to the
projects costs and expenditures.
The net current value of the PSC model presents the project cost in the option when the IP is organized
based on the LPA public procurements methods, without risk estimation.
5.3.4. Risk-adjusted PSC model
The risk-adjusted model of Public Sector Comparator represents the PSC basic module plus the cost
evaluation model for all the risks associated to the establishment of the Industrial Park. It is necessary to
make these calculations so as to determine the total cost when the LPA organizes the IP establishment using
the traditional way the public procurements mechanisms. The risks associated to the given project are
assessed below.
Risk assessment. The risk is an uncertain event, but possible to occur during a concrete activity inducing
irreversible and damaging effects (additional costs, decrease of revenues and/or profits).

15
PSC (Public Sector Comparator) = Costs Revenues

The main task is to identify all the risks and the way to manage them so as to reduce their impact. This is a
continuous process all over the project implementation period and further on during project operation.
The following steps were undertaken to assess the risks:
(i) Identifying the risks which are relevant to the project;
(ii) Determining the risks material consequences (if it is possible to materialize them);
(iii) Establishing the modality to reduce the likelihood for risk appearance and their impact;
(iv) Allocating the risk responsibilities to another entity or to a third party.
A mitigation plan shall be developed to ensure an efficient management for every identified high level risk.
There are five major risk responses: acceptance, monitoring, avoidance, transfer and mitigation.
The detailed description of the risks is presented in the risk matrix in Annex 6. Every risk was characterized
through impact and occurrence likelihood. The risk impact may be extremely low, low, medium, high, and
extremely high
16
. The likelihood for the risk to appear has the following options: extremely low, very low,
low, medium, high, and extremely high
17
.
The following matrix may be used for a more accurate hierarchy of risks:
Impact
L
i
k
e
l
i
h
o
o
d

extremely
low
low medium high
extremely
high
very low 1-4 3-8 5-12 7-16 9-20
low 3-8 9-16 15-24 21-32 27-40
medium 5-12 15-24 25-36 35-48 45-60
high 7-16 21-32 35-48 49-64 63-80
very high 9-20 27-40 45-60 63-80 81-100
risk category I II III IV
The matrix may be used to establish the management strategy in the following way:
- The risks from the first category (the likelihood or the impact is very or extremely low / both are low,
or at most one is medium) may be covered relatively easily. For this type, it is recommended to have
techniques for risk retention;
- For the risks from the second category, it is recommended to have techniques for risk reduction,
insurance, and transfer, as the materialization of such risks would have a strong impact on the project;

16
The lowest impact is ranked with 1, and the maximum impact with 10. The impact will be qualified depending on
the ranking criteria: extremely low (1-2), low (3-4), medium (5-6), high (7-8), and extremely high (9-10)
17
The lowest likelihood is ranked with 1, and the maximum likelihood with 10. The likelihood will be qualified
depending on the notification - very low (1-2), low (3-4), medium (5-6), high (7-8), and very high (9-10)

- For the risks from the third category (very high likelihood, medium or high impact / extremely high
impact, medium or high likelihood) risk control techniques shall be used so as to reduce the frequency
for such risks occurrence. The control techniques will be combined with those of transfer/retention;
- The risks from the last category (high and very high likelihood with extremely high impact, and very
high likelihood with high and extremely high impact) should be avoided and eliminated.
The risks hypotheses were determined based on the project team expertise.
Table 31. Risks and hypotheses
Risk category Risk name
Hypotheses
Impact
Risk
consequences,
%
Occurrence
likelihood
Location Location risk low 7.5% 7.5%
Design and construction

Design risk low 7.5% 7.5%
Investment costs increase risk low 7.5% 7.5%
Financial Insolvency risk high 15.0% 2.5%
Unavailable external co-
funding risk
high 15.0% 7.5%
Operational and
maintenance

Operational entries risk medium 12.5% 12.5%
Maintenance risks medium 12.5% 12.5%
Market and demand Commercial risks high 15.0% 12.5%
Legal and regulatory Legal and regulatory
framework change risk
medium 12.5% 12.5%
Force majeure Force majeure risks high 15.0% 2.5%
The calculation basis for determining the risks values are the PSC initial values: design costs, construction
costs, operational and maintenance costs, administration costs, anticipated revenues.
Value of risks. The monetary consequence of the risk represents the product of the percentage consequence
and the basic value (initial PSC) of the risk. The value of the risk is calculated through the product obtained
from the scenarios consequences and the likelihood of their appearance. The approach of project risks
assessment was determined based on the frequency (likelihood for event to occur) and the impact the given
phenomenon may have on the project (severity of consequences). In this case, risks assessment is subjective
and it is based on the project team expertise. The risk assessment for the project is presented in Annex 7.
We have calculated the net present value for the PSC model, presented in Annex 8.
The summary of results for the risk-adjusted PSC model. The Public Sector Comparator adjusted to the risks
is determined according to the following formula:
Risk-adjusted PSC = the PSC basic model + risks value

The present value of the project cost adjusted to the risks has a positive value, NPV (PSC model) = 2 997 601,
IRR = 4.6%, R
b/c
= 1.04. The values of the project financial performance indicators show that this is a
sustainable project.
Table 32. Performance indicators of the project fulfilled according to the PSC model
Indicators NPV IRR R
b/c

Basic PSC model -167,202 5.0% 1.04
Updated risks 3,169,804
Risk-adjusted PSC model
2,997,601 4.6% 1.04
To compare these values with the case when LPA would establish a public-private partnership, we will build
the Public-Private Partnership (PPP) reference model.
5.4. The Public-Private Partnership Reference Model
The Cantemir IP Project may be implemented both: by the public administration (or LPA with the central
authorities) or through a public-private partnership. In the second case, the LPA will initiate the public-
private partnership with a partner who has experience in the field so as to fulfill the project. The local
administration requests co-funding from the private partner so as to build some IP objects. Within the
project, the LPA will offer land into use so as to locate the Park, will facilitate the process of obtaining all the
construction authorizations and endorsements, will request financial support to create the infrastructure and
the common utilities from external sources. At the same time, we will analyze projects financial feasibility
when the Cantemir IP is created based on the public-private partnership principles, where the private
partner supports the costs for the IP technical and production infrastructure and the public partner provides
the territory which will be given into use to the Managing companyduring the IP activity period (30 years).
5.4.1. Options for implementing the project through PPP
The IP area is divided into three zones: administrative zone, the land plots zone to be leased to the
Residents, and the zone occupied by infrastructure (roads, engineering networks, etc.).
Table 33. Structure of the Cantemir IP site
Purpose Area, ha Share, %
Area occupied by
buildings and
constructions, ha
Share of
the area,
%
Administrative zone 0.2 2% 0.08 40%
Residents zone 8.55 91% 5.15 60%
Area occupied by infrastructure 0.65 7% 0.65 100%
Total 9.4 100% 5.88 63%

The administrative zone will have an administrative building with an extension to locate the heating facility,
parking lot, green spaces, a platform for waste selective collection from the zone, a billboard with Park
scheme, indicators and sings.
The administrative building
18
has:
a conference hall and a protocol room;
public food service space;
5 office premises and 2 support service furnished premises to be rented for about 122 m
2

premises for banking services, primary health assistance;
premises intended for the Administrator and its services so as to ensure the support services necessary for
the IP activity.
The detailed purposes of the premises from the administrative building are presented in Annex 9.
The list of services offered within the IP:
Category A:
1. Services included in the IP administration fee:
Reception, info-Point;
Support for rapid information of the local public authorities about the Residents needs and wishes;
Inclusion of lodgers in the IP promotion and PR program;
Consultation and information in issues related to the IP activity in its relations with the outside;
Facilitation of relations and links with the Chambers of Industry and Trade;
Facilitation of the customs formalities clearance at home;
Maintenance of the common green spaces and cleaning the public space;
Parking lot for 20 cars;
Access to the Park utilities network: water, sewerage, electricity, phone;
Registration of water, gas, and electricity consumers, and their billing.
2. Services and facilities granted by the Administrator for some direct costs:
Organization of events;
Rent of the conference hall and protocol room;
Rent of offices and support services premises;
Consultancy services provided by the BI and IP Development Service and Audit and Bookeeping
Service;

18
Will be built only in case of options 1 and 2

Special initiatives
19
:
Support services for technologic transfer, personnel recruitment;
Consultancy for local procurements;
Establishing the medical cabinet, work medicine.
Category B:
Services to be offered by service provision companies
20

Services for connecting and launching into operation of infrastructure utilities (water and
sewerage, gas, electricity, telephony, sanitation);
Design and construction services;
Specialized consultancy: mediation, marketing promotion, training;
Courier, mail, health assistance;
Banking services;
Public food services;
Other services for which there will be a significant number of requests from the Residents.
Technical infrastructure and common utilities of the IP will have the following possibilities:
electricity supply at the capacity of 3 530 kVA;
natural gas supply at the capacity of 207 m
3
/h;
drinking water supply at the capacity of 53.9 m
3
/h;
waste water discharge into the sewerage network 51.6 m
3
/h.
The detailed description of the technical infrastructure, common utilities, and territory development within
and outside the IP is presented in chapter 3.
The Residents zone consists from: (i) subzone of production halls to be leased and (ii) subzone of land plots
on which the Resident shall build the necessary premises from its own resources.
Four options shall be analyzed depending on the configuration of the Residents zone and on the funding for
the infrastructure afferent to the respective zone:
Option 1. The subzone of production halls to be leased consists of BI halls (12%) and production halls built by
the Administrator (14%). The private partner funds the construction of the halls. The private partner will
recover the losses registered due to the exemptions offered to the BI Residents (lower tariffs for renting
halls, consultancy services, and administration charges) from the incubation program identified at the BI

19
The services will be peculiar to the specific needs of the Residents
20
The services will be available depending on the existing demand from the Residents.

creation stage. The subzone of land plots on which the Residents will build their own production halls from
their own sources covers 74% of the Residents zone.
Table 34. Structure of the IP, option 1
Indicators
Subzone of halls to be
leased
Subzone of
land plots
Total
Residents BI Residents
Share from the Residents zone 14% 12% 74% 100%
Land area, ha 1.20 1.00 6.35 8.55
2
7200 6000 38300 51500
Minimum area per Resident, ha 0.20 0.07 0.40
per Resident, m
2

1200 400 2394
Maximum number of enterprises-
Residents
6 15 16 37
Number of employees
80 60 400 540
Option 2. The subzone of production halls to be leased covers 12% of the Residents zone area and it is
represented by the halls built by the private partner for the BI Residents. At the same time, the private
partner funds the reparation of the access road and of the aqueduct from Cantemir through Cania to the IP
land. In this case, the LPA will reimburse the private partners investment in equal installments, during a
period of 30 years, with an interest rate of 5%. The subzone of land plots covers 88% of the Residents zone.
Indicators
Subzone of halls to be
leased
Subzone of land
plots
Total Built by the
Administrator for the BI
Residents
Residents
Share from the Residents zone 12% 88% 100%
Land area, ha 1.00 7.55 8.55
2
6000 45500 51500
Minimum area per Resident, ha 0.07 0.38
per Resident, m
2

400 2275
Residents
15 20 35
Number of employees 60 480 540

Option 3. The Residents zone is totally set from land plots which will be leased to the IP Residents (see Table
36).

Indicators
Subzone of land
plots
Share from the Residents zone 100%
Land area, ha 8.55
2
51500
Minimum area per Resident, ha 0.43
per Resident, m
2

2575
Residents
20
Number of employees 540
Option 4. This option is identical to option 3 from the Residents zone configuration point of view, only in this
case, the private partner will be the one to fund the reparation of the access road and aqueduct.
In all those four options, it is allowed to lease some land areas that are larger than the set minimum areas for
the Residents, by leasing a number of adjacent land plots.
5.4.2. Type and structure of PPP project
The solution to carry out a public-private partnership within the project for establishing an IP in the Cantemir
town implies the authorization given by the Town Council to a private partner, which will be selected on
competition basis in compliance with the conditions set in the Law on Public-Private Partnership no. 179-XVI
dated 10.02.2008 for coordination and monitoring the design and construction activities for the
infrastructure, common utilities, BI halls, for the design and construction of the administrative office and
production halls upon the Residents request, for the administration and maintenance of the IP assets,
including the ones received into usage. According to the Law on Industrial Parks when the funding for the
creation of the technical and production infrastructure comes with a co-participation from the private
investor, the Parks administration functions and duties are exercised by the private investor or the created
company.
The public-private partnership may be implemented through design - build operate transfer model,
when the private partner on its area of responsibility designs, builds the technical and production
infrastructures, and operates it in compliance with the contractual provisions and by the end of the contract
period, the private partner, in line with the contract, will transfer to the public partner the goods specified
under the contract. The Cantemir-Cania aqueduct, the BI halls (if they are not built using the public money),
and other common utilities stipulated in the contract may be attributed to the assets to be transferred to the
LPA by the end of the contract. It is also necessary to mention that it is possible to have also the design
build transfer operate model or a combination of these. In the second model, the assets stipulated in the
contract are transferred into the public partners ownership immediately after the launch into operation, and

the public partner, at its turn, transfers partially this infrastructure into the private partners use
(Administrator) to be administrated within the IP
21
.
The legal formula for the collaboration between the public and private sectors is the public-private
partnership contract. The PPP contract duration will be equal to the activity period granted to the Industrial
Park for 30 years.
The public partner is responsible for (a) allocation of the site, (b) obtaining all the authorizations,
endorsements, coordination, and other permits provided by the law as being necessary for the establishment
of an IP, (c) free-of-charge transfer of the public-property assets into the Administrators use for the IP
creation and development, (d) allocation, as the case may be, of financial means for creating the technical
and production infrastructure, (e) supporting the projects submitted to the financiers to create the technical
an production infrastructure, to establish the BI objects by the Administrator.
The private partner, within this project, assumes itself the responsibility to coordinate the design,
construction, launch into operation; to follow the transfer of the finalized objects to the public partners; to
receive objects into use; to build objects from own sources, and to administrate and maintain the IP activity.
5.4.3. Payment mechanism
The private partner recovers its investments, covers the maintenance and administration costs, and also
obtains a reasonable profit from the administration of the IP and provision of services within the IP.
In case of options 1 and 2, the IP Administrator provides for the BI Residents lower tariffs for the IP services
(consultancy services, administration payment), and the losses generated from offering the BI Residents
these facilities will be recovered from the incubation programs identified previously or by the LPA Cantemir.
At the same time, in case of options 2 and 4, when the private partner funds the rehabilitation of the access
road and the construction of the aqueduct from Cantemir through Cania up to the IP site, we assumed that
LPA will reimburse the private partners investment in equal installments, during a period of 30 years, with
an interest rate of 5%. The subzone of land plots covers 88% of the Residents zone.
The main revenue sources of the Administrator are indicated in Table 37.
Table 37. IP Administrators revenue sources
Categories of revenue Option 1 Option 2 Option 3 Option 4
Revenues from leasing the land plots + + + +
Revenues from leasing the BI halls + + - -

21
After the launch into operation of the infrastructure, common utilities, BI halls, some assets will be transferred, as the
case may be, to the enterprises who are managing the services (enterprises Moldova - Gaz, Apa-Canal Cantemir,
RED Union Fenosa JSC). The common utilities will be transferred up to the Residents and Administrators branching,
except for the sewerage network which will not be transferred to the Supplier.

Revenues from leasing the Administrators halls + - - -
Revenues from renting space in the
administrative building
+ + - -
One-time charges and fees for participation in
tenders to obtain the IP Residents right and for
getting registered as a Resident
+ + + +
Revenues from providing services to the IP
Residents
+ + + +
Revenues from cashing in administration fees + + + +
Revenues from recovering the losses induced by
the exemptions for the consultancy services
offered to the BI Residents
+ + - -
the exemptions from paying the rent for halls
rent by the BI Residents
+ + - -
the exemptions from administrative fees offered
to the BI Residents
+ + - -
Recovering the investments for repairing the
access road and building the aqueduct
- + - +
Revenues from entrepreneurial activity
22
+ + + +
5.4.4. Estimation of costs
The categories of costs in the PPP reference model are the same as in the case of the PSC basic model and
namely: the capital costs, costs for labor force training, working capital, replacement costs, maintenance and
administration costs. The real difference of the costs is expected to come from the potential private partners
through their offers.
The hypotheses of costs estimation are the same as in the case of the PSC basic model, except for the
management of the given project by a private partner, selected on tender basis, through a PPP contract.
Capital costs. According to the options defined above, the capital costs of the PPP-implemented project
account for 65 635 th lei in option 1; 42 339 th lei in option 2; and 19 563 th lei in options 3 and 4.
Table 38. Capital costs of the project for those 4 options, th lei
Categories of capital costs Option 1 Option 2 Option 3
Option 4
Feasibility study 100 100 100 100
Designs, studies, funding requests 1 292 1 292 1 102 1 102
Technical infrastructure and common utilities outside the IP

22
The revenues which may be obtained by the Administrator from entrepreneurial activities will not be taken into
consideration in the calculation model.

Categories of capital costs Option 1 Option 2 Option 3
Option 4
Access to the road network outside the IP 4 368 4 368 4 368 4 368
Common utilities outside the IP 920 920 920 920
Technical infrastructure and common utilities within the IP
Common utilities within the IP 10 825 10 825 10 825 10 825
Internal land development of the IP 2 189 2 189 2 189 2 189
Administrative building, equipment, and furniture 3 232 3 232 59 59
BI production halls 19 413 19 413 0 0
Administrators production halls 23 296 0 0 0
Total capital costs 65 635 42 339 19 563 19 563
The financing of the project to create the Cantemir IP is shared by the private partner, local utility suppliers,
public partners, as well as external grants. If LPA does not succeed to attract the planned external sources,
the Public Administration will have to cover them from its own resources. These contributions are presented
in Table 39.
Table 39. Financing sources for the IP project for those 4 options, thousand lei
Categories of capital costs O 1 O 2 O 3 O 4
Co-participation of the private partner 49 992 31 964 3 920 9 188
Designs, studies, funding requests
1 292 1 292 1 102 1 102
Common utilities outside the IP (access road reparation,
aqueduct)
5 268 5 268
Common utilities within the IP (water, sewerage)
570 570 570 570
Internal land development of the territory
2 189 2 189 2 189 2 189
Administrative building, equipment, and furniture
3 232 3 232 59 59
BI production halls
19 413 19 413
Administrators halls
23 296
Local suppliers 1 455 1 455 1 455 1 455
Infrastructure and common utilities outside the IP (gas)
20 20 20 20
Infrastructure and common utilities within the IP (electricity, gas)
1 435 1 435 1 435 1 435
External grants 5 368 100 5 368 100
Feasibility study
100 100 100 100
Infrastructure and common utilities outside the IP (access road
reparation, aqueduct)
5 268 5 268
BI production halls

NRDF 8 820 8 820 8 820 8 820
Common utilities within the IP (waste water biological treatment
facility)
8 820 8 820 8 820 8 820
Total capital costs 65 635 42 339 19 563 19 563
The detailed funding schedules for every option are presented in Annexes 10, 11, 12, and 13.

Replacement costs account for 214,6 th lei and represent the cost of the computer technology and
equipment of the administrative building. We suggest replacing them once in 10 years.
Working capital represents 1 859.9 th lei.
Cost for labor force training was estimated to account for 1 218 th lei.
Table 40. Investment costs for the Cantemir IP project implemented via a PPP contract, th lei
Categories of capital costs Option 1 Option 2 Option 3 Option 4
Capital costs 65,634,654 42,339,054 19,562,565 19,562,565
Costs for labor force training 1,859,822 1,847,592 670,762 670,762
Working capital 1,218,000 1,215,000 1,218,000 1,218,000
Total costs 68,712,476 45,401,646 21,451,327 21,451,327

Maintenance and administration costs for option 1, in case of the PPP model, are identical with the
maintenance and administration costs for the PSC model.
The lowest costs are registered in case of options 3 and 4, due to lack of buildings and halls, and reduced
number of personnel. In case of this option, it is assumed that the space for the Administrators personnel
will be rented.
The small differences among the options are registered due to the modification of the calculation basis for
the real estate tax.
5.4.5. Estimation of revenues
The hypotheses of the revenues generated from lease of land plots, lease of IP and BI Residents production
halls, and service provision for the PPP model are the same as in the PSC model. Changes occur only in the
calculation base. In case of the PPP contract, the Administrators revenues for option 1 coincide with the
revenues of the Administrator in PSC basic model. These revenues imply the revenues generated from lease
of land plots, lease of production halls, administration and consultancy services provision. As it was
mentioned above, one category of revenues generated within the PPP contract is the revenue from the
recovery of the losses registered due to service provision to the BI Residents at lower tariffs. These revenues
will be paid from the sources of some clearly defined incubation programs or by the Cantemir LPA.
The revenues of the project implemented via a PPP partnership for options 2 and 3 (4) are different from the
revenues for option 1, according to the following:
- the revenues from lease of land plots for options 2, 3, and 4 go up in comparison to option 1 due to the
increase of the area for land plots subzone from 74% up to 88%, and respectively 100%;
- the revenues from lease of BI production halls, and administrative and trade premises are left out for
options 3 and 4;
- in case of options 3 and 4, the revenues obtained from charges and fees to be paid for participating in
tenders to obtain the Residents right and for getting registered as a Resident are diminished;
- the revenues from the consultancy services in case of options 3 and 4 are left out, and they are
approximately the same as in options 1 and 2;

- the revenues from recovery of losses registered due to services provided to BI Residents in option 2 are
higher; these revenues are missing in options 3 and 4;
- the revenues obtained from the recovery of investments for the access road reparation and aqueduct
construction are appropriate only for options 2 and 4.
The estimation of revenues in case of options 2, 3, and 4 are presented in Annexes 14, 15, and 16.
5.4.6. Results of the PPP reference model
The project cost calculation based on the PPP reference model is performed according to the following
formula:
PPP reference model = Costs Revenues
The net current value of the reference model represents the project cost for the option when the project is
organized based on public-private partnership contract.
Table 41. Performance indicators for the PPP reference model
Indicators Option 1 Option 2 Option 3 Option 4
Net Present Value (NPV) -167,202 4,580,756 -755,858 -5,309,764
Internal Rate of Return (IRR) 5.0% 4.1% 5.4% 7.4%
Benefit-Cost Ratio (R
b/c
) 1.04 .97 1.09 1.27
The results of the Cantemir IP project for the PPP option show (to the extent of forecasted magnitude) that
the project has a negative cost and is financially sustainable in options 1, 3, and 4. In case of option 2, the
project has a positive cost and does not prove to be sustainable. From financial point of view, the project has
the best results in options 3 and 4, when the Residents zone is built only from land plots which are leased to
the Residents, registering and investment return of 5.4% and 7.4% respectively, and a benefit-cost ratio of
1.09 and 1.27 respectively, meaning that the updated benefits of the project will exceed a little the costs
afferent to the project.
5.4.7. Risk-adjusted PPP reference model
The PPP reference model does not include the risks associated to the IP establishment project. We shall built
the risk-adjusted PPP reference model, which includes the PPP reference model plus the model for cost
assessment of the retention risks associated to the project.
The risks associated to the project were determined and assessed in the PSC model. According to the risks
classification, they are divided (according their control model) in retained risks and transferable risks. The risk
is allocated to the party which has the best control over the risk. The risks controlled by the LPA and
Mayoralty are the retained risks and are automatically included in the risk-adjusted reference model. The
transferable risks which are complemented under the private partners control are not included in the risk-
adjusted reference.
Table 42. Allocation of risks
Risk
Transferable
risks
Retention
risks
Location risk
0% 100%

Design risk
80% 20%
Investment costs increase risk
100%
Insolvency risk
100%
Unavailable external co-funding risk
100%
Operational entries risk
100%
Maintenance risks
100%
Commercial risks
90% 10%
Legal and regulatory framework change risk
70% 30%
Force majeure risks
100%
The assessment of the retained risks in case when the Administrator funds the investments for the
administrative building and production halls at the Residents request is reflected in the below table.
Table 43. Retained risks calculated for the PPP reference model, option 1, lei
Categories of risks 2011 2012 2013 2014 2015 2035 2041
Location risk 872 581
Design risk
872 581
Commercial risks 3,549 7,222 11,415 11,766 12,076
Legal and regulatory framework
change risk
1 3,359 7,290 12,741 14,307 14,798
Total retained risks 1,745 1,164 6,908 14,512 24,156 26,073 26,875
Current value of risks 345,901
The risks calculation for options 2, 3, and 4 are presented in Annexes 17, 18, and 19.
The risk-adjusted PPP reference model is determined according to the following formula:
Risk-adjusted PPP reference model = PPP reference model + value of retained risks
A project is considered to be sustainable and generating profit when the current value of the project is
negative (meaning that the updated costs are lower than the updated revenues), the return rate is higher
than that updating rate, and the benefit-cost ratio is over-unitary, indicating thus higher benefits than costs
afferent to such benefits. Table 39 represents the performance indicators of the Cantemir IP establishment
project via a public-private partnership.
Table 44. Performance indicators of the risk-adjusted PPP reference model
Indicators Option 1 Option 2 Option 3 Option 4 Benchmarks
NPV PPP reference model
-167,202 4,580,756 -755,858 -5,309,764
NPV retained risks
345,901 377,445 470,852 424,633
NPV risk-adjusted PPP
reference model
178,699 4,958,200 -285,006 -4,885,131 <0
IRR
5.0% 4.0% 5.1% 7.2% >5%
R
b/c
1.04 .97 1.09 1.27 >1

Conclusion. As compared to the value of the risk-adjusted PSC basic model, the value of the PPP reference
model has the cheapest cost and accounts for minus 5 309 thousand lei in option 4, when the private
partner invests in building the production halls upon the Residents request and leases land plots to the
Residents who build their own production halls. At the same time, the private partner funds the
rehabilitation of the access road and the construction of the aqueduct. This option does not provide for an
administrative building, as the Administrator will rent space for the administrative needs. After assessing
the risks afferent to the project, option 4 remains to be the one to register the best financial performance
indicators for the project, having a return rate of 7.2% and a benefit-cost ratio of 1.27, meaning that the
projects revenues exceed its costs by 27%.

6. Economic and Financial Forecasting of the Managing CompanyActivity
We envisage the co-participation of the private investor in establishing the Cantemir IP through a public-
private partnership. LPA shall involve a private partner with experience in the area, which will be selected on
tender basis and will be delegated the functions and duties to administrate the IP. This project will be
implemented via a public-private partnership contract.
In the analyzed options, the private partner: (a) will finance the design works, the development of studies
and funding requests, (b) will prepared the land area occupied by the common infrastructure and its zone, (c)
will build common utilities within the IP (aqueduct, sewerage), (d) will ensure the land development of the
area, (e) will incur the administration costs. In the case of the first two options, we suggest for the private
partner to invest in building the administrative building, while in case of options 3 and 4, the Administrator
will rent administrative spaces for its personnel in the town. In case of the first option, we envisage a larger
involvement of the private partner via construction of its production halls meant to be leased to the IP
Residents; in case of the second option, the private partner will rehabilitate the external access road and will
build the aqueduct from Cantemir to Cania. In case of the third option, we envisage a lower involvement of
the private partner from financial point of view. And the last option requests the private sectors
involvement in rehabilitating the external access road and building the aqueduct from Cantemir to Cania, just
like in the second option.
We will also analyze the options for building the production halls meant for the BI. In the case of the first two
options, the BI production halls are to be built using the private partners sources. The options 3 and 4 are
planned without any BI activity.
LPA, local and regional suppliers will fund within the project framework the electricity and gas supply
networks inside and outside the IP. The external sources, in case of options 1 and 3, will be requested to
finance the rehabilitation of the external access road and the construction of the aqueduct from Cantemir to
Cania. The NRDF will fund the construction of the waste water biological treatment facility, as the private
partner would be eligible for funding to create the IP technical and production infrastructure.
The tasks of the Managing companyare described in the IP Organization and Operation chapter. The
private partner will return its investments, will cover the administration and maintenance costs for the IP
objects, and will obtain a reasonable profit from the revenues generated by leasing the land plots and the
production halls, revenues from administration fees, provision of services to the IP Residents, as well as
charges and fees paid by the tender participants and Residents. As well, the Administrator will recover the
losses incurred from exemptions from administrative payments and services granted to the BI residents from
the incubation programs or the LPA. If the private partner funds the rehabilitation of the external access road
and the construction of the aqueduct, which are considered to be public assets, we plan for the private
partner to be recover its investments in equal installments over a period of 30 years, with an interest rate of
5%. By the end of the contract, the public assets will be transferred free of charge to the public authorities in
good condition and free of any issues or obligation, in compliance with the contractual provisions.
The advantages of the PPP contract for the Cantemir IP establishment project are the following:
- the private sector shall: (a) coordinate, monitor and carry out the design and the construction of the
technical and production infrastructure of the IP, (b) keep track of the transfer of created assets
23
into

23
Public utilities

the public partners ownership, immediately after the end of the contract, (c) design and build the
administration office, (d) administrate and maintain the IP assets, including the ones received into use;
- the private partner participates in projects funding;
- transfer of risks to the private partner;
- brings innovations, management and financial efficiency from the private sector;
- ensures the quality improvement for services operation and maintenance.
We will demonstrate projects viability from the financial point of view for the private partner. The
conclusion is that the most optimal option is the one to implement the project via a PPP contract.
To recover its investments, the private partner provides such services as lease of land plots, production halls,
and premises from the administrative building the services are provided to the Residents by including them
in the administration costs, as well as for direct payment. The results of the financial analysis for the
Administrator are presented in Tables 45-49.
Table 45. Present value of the private partners flows according to option 1, lei
Indicators 2011 2012 2013 2014 2015 2025 2041
Investment costs 775 224 9 010 860 26 228 380 6 988 680 6 988 680
Working capital 56 826 910 679 892 317
Administration and
maintenance costs 56 826 910 679 1 784 635 1 789 940 1 784 230 1 733 107 1 670 156
Revenues 1 892 754 3 851 802 6 088 072 6 275 198 6 440 798
Monetary means
flow 505 565 -12 645 487 -32 137 427 -5 862 675 -3 222 284 4 881 944 4 770 642
NPV 13 246 263
IRR 7.2%
R
b/c
1.20
Indicators 2011 2012 2013 2014 2025 2041
Investment costs 775 224 11 644 860 19 544 140
Working capital 56 826 910 679 880 087
Administration and
maintenance costs
56 826 910 679 1 760 175 1 765 969 1 713 913 1 656 264
Revenues 311 050 1 570 042 2 736 256 4 426 248 4 591 848
Monetary means
flow
505 565 -15 495 237 -24 528 881 1 147 077 3 169 842 2 935 584
NPV 5 270 667
IRR 6.2%
R
b/c
1.11
Indicators 2011 2012 2013 2014 2025 2041

Indicators 2011 2012 2013 2014 2025 2041
Working capital 47 615 356 923 266 224
Administration and maintenance
costs
47 615 356 923 532 448 538 668 536 911 535 091
Revenues 1 239 652 1 752 591 2 057 130 2 057 130
Monetary means flow 432 693 -2 972 980 -1 006 304 1 519 189 1 520 219 1 522 039
NPV 16 817 095
IRR 38.1%
R
b/c
2.31
Indicators 2011 2012 2013 2014 2025 2041
Working capital 47 615 356 923 266 224
Administration and
maintenance costs
47 615 356 923 532 448 538 668 536 911 535 091
Revenues 311 050 1 550 702 2 063 641 2 368 180 2 368 180
Monetary means flow 432 693 -5 822 730 -3 856 054 1 830 239 1 831 269 1 833 089
NPV 16 540 916
IRR 19.7%
R
b/c
1.94
Table 49. Results of the financial analysis via the PPP contract
Indicators Benchmarks option 1 option 2 option 3 option 4
Investments 49 991 824 31 964 224 3 919 735 9 187 735
NPV > 0 13 246 263 5 270 667 16 817 095 16 540 916
IRR > 5% 7.2% 6.2% 38.1% 19.7%
R
b/c
> 1 1.20 1.11 2.31 1.94
Conclusion. In case of all the options, the private partner ensures the maintenance and administration costs.
The private partner recovers the investments and covers the maintenance and administration costs, as well
as obtains a reasonable profit from administration and provision of services in the IP.
From financial point of view, option 3 of the project via a PPP contract registers the best indicators, proving
thus the self-sustainability and implicitly the viability of the Administrators business. When considering the
investment volume to be also an important criterion, option 4 gets the priority.
6.1. Analysis of the Administrators sensitivity
Sensitivity analysis assesses the impact resulting from modifying some entry variables over the projects
profitability.
The tackled methodology is based on:

identification of critical variables
24
of the projects parameters
calculation of the expected value of Administrators profitability
development of measures so as to reduce the projects risks
The indicators taken into calculation for the sensitivity analysis are the following:
Internal Rate of Return (IRR);
Net Present Value (NPV).
In principle, the analysis covers the calculation of the following indicators for every variable:
Sensitivity Index (SI), according to the formula:

where, P = studied parameter (NPV or IRR), V = variable, Index 1 = modified values, Index 0 = initial values.
The sensitivity index is actually an elasticity coefficient which shows to what extent the studied parameter
changes when the variable changes with one percent. If this index is higher than 1, the respective variable is
a risk carrier.
Switching value SV. This index shows to what extent a variable should change for the NPV to take a
0 value (in other words, for the project to become non-viable).
A small value of the SV for a given variable indicates a risk related to this variable: a small deviation from the
average value endangers the investments profitability. The higher the switching value is, the lower the risks
are.
Identification of the switching value
For the given analysis, the following variables are taken into consideration:
The occupation level of the land and spaces from the Residents zone;
The amount of the rent and administration tariff
The volume of investment
The revenues from the consultancy services
Maintenance and administration costs.
Formulation of hypotheses regarding the deviation of the entry variables from the probable values
The hypothesis of a reasonable deviation from the average value set in the previous sections (financial
analysis) was considered for each of these variables (the deviations are expressed in percentages):

24
The switching values are considered to be those parameters for which a variation of 1% induces an increase by 1% of
the Internal Rate of Return and by 5% of the Net Present Value
0
0 1
0
0 1
V
V V
P
P P
IS
=

For the occupation level of the land and halls in the Residents zone, a decrease by 10%, 20%, and
30% was estimated as against the estimated occupation rate;
For the rent and administration tariff, a decrease by 5%, 10%, 15%, and 20% was estimated as
against the envisaged value;
For the investment volume, an increase by 10%, 20%, and 30% was estimated as against the level
envisaged in the investment budget;
For the revenues from consultancy services, a decrease by 20% and 40% was estimated as a result
of the lack of interest for a part of the development services offered by the BI and IP, as against the
envisaged value of 100%;
For the maintenance and administration costs, an increase by 25% and 50% was estimated as
against the expected level for these expenses.
Recalculation of the performance indicators values according to the hypothesis of the forecasted
deviations
The evolution of the indicators depending on the variables modification is presented in Annexes 20-24.
The following may be deduced from the analysis of the in separate influence over the key performance
indicators:
The project has a high sensitivity related to the decrease of the occupation level of land plots and
production halls from the Residents zone. The sensitivity indexes have values higher than 1 for the
discussed options. The switching value, in absolute values for the NPV, has the lowest value of 9.0% for
Option 2. This means that when the forecasted level of occupation decreases by 9% in case of Option 2, the
project becomes non-valid. The case of option 1 with the switching value of 17.0% is close to this value as
well. The switching value for Option 3 and Option 4 is higher, meaning that when the occupation rate
decreases by 58%, the project becomes financially unprofitable;
The project has a high sensitivity related to the decrease of the lease tariff and administration fees.
The switching value, in absolute values, has the lowest value of 7.6% in case of Option2. This means that
when the envisaged tariff for lease and the forecasted administration fees decrease by 7.6% for Option 2, the
project is not financially profitable. Option 2 is the most sensible to decrease of tariffs. The same goes for
Option 1. Options 3 and 4 are less sensible than the first two options.
To estimate the financial indicators, we forecasted an administration fee of 24 lei/m
2
. During the sensitivity
analysis, it was determined that the administration fee cannot be lower than 28.2 lei/m
2
and 29.6 lei/m
2

respectively for Option 1 and Option 2, for the project to be viable; this is because we consider that the
private partner will provide an IRR of at least 10% for the business. In case of options 3 and 4, the
administration fees up to 14.3 lei/m
2
ensure the reasonable profitability of the Administrator.
Table 50. Amount of the administration fees, lei/m
2
of area
Indicator
Benchmar
k
PPP contract.
option 1
PPP contract.
option 2
PPP contract.
option 3
PPP contract.
option 4
Administrator indicator
IRR 5% 20.7 22.2 9.4 9.8
IRR 10% 28.2 29.6 11.3 14.3
PPP project indicator IRR 5% 24.0 24.0 23.7 19.7

Conclusion 28.2 29.6 11.3 14.3
The administration fee of 11.3 lei/m
2
may ensure the profitability of the private partner only in case of
Option 3.
The project has a high sensitivity when the investment volume increases for Option 1 and Option 2.
The switching values (in absolute values) provide that the increase of the investment volume for over 15.4%
in Option 2 and over 28.5% in Option 1 makes the project to be financially non-feasible.
The project has a low sensitivity when the investment volume increases, in case of Option 3 and Option 4.
The project has a low sensitivity when the revenues from the consultancy services decrease in case
of Option 1 and Option 2. The Options 3 and 4 do not provide for the provision of consultancy services;
The project has a high sensitivity when the maintenance and administration costs increase in case
of the first two options, and a low sensitivity in case of Options 3 and 4.
Conclusion. The project becomes more feasible when the private partner ensures a higher rate of
occupation of land plots and IP production halls. In this case it would become possible to decrease the
amount of the tariffs and of fees envisaged for the last two options.
The option in which the Administrator operates only the land plots becomes opportune when there are no
external finance sources, conditioned that the private partner invests in rehabilitation of the access road
and construction of the aqueduct.


7. IP Implementation Plan
7.1. Institutional forms for IP implementation
The Cantemir town local public administration, based on the Law on Industrial Parks No. 182, dated
15.07.2010 launches a project for establishing in the locality an Industrial Park. To launch operatively the
production activities, as well as the provision of services, minimizing the costs related to the activities launch
within the IP, the Park will be equipped with technical and production infrastructure. We will use the
previously used grouping of technical and production infrastructure.
For the purpose of project implementation, we suggest analyzing several options regarding the peculiarities
of possible financing for the creation of technical and production infrastructure of the IP:
1. Integrally from the budgets of the Cantemir town and district, from the state budget, and the
National Regional Development Fund (NRDF), but only for the groups
25
(a), (b), and partially (c).
2. Combined. With funds from the external sources grants for the groups (a) and (e), for the goods
from the groups (b) and (c), according to the option indicated in p.1.
#
State budget, Cantemir district
and town budgets, Cania local
budget
External sources,
including grants
NRDF Local suppliers IP Residents
2.1 IP administration costs, (d) (a) and (e)
(b) and
(c)
Partially (a) and
(b)
(g)
3. Based on public-private partnership principles, according to the following scheme
26
:

22
Classification of the groups of objects:
a) infrastructure and common utilities from outside the Park;
b) infrastructure and common utilities from within the Park;
c) internal land development;
d) spaces necessary for the administrator and provision of services supporting the production activities, optional;
e) halls and constructions for carrying out production activities which fit the activity profile of the Park, meant for BI
Residents from the IP, optional;
f) halls and constructions for carrying out production activities which fit the activity profile of the Park, meant for
Residents, built by the Administrator, optional;
g) halls and constructions for carrying out production activity which fit the activity profile of the Park, built by the
Residents.

# Private Partner
External sources,
including grants
Local
suppliers
NRDF
IP
Residents
3.1
Incurs the IP administration and
maintenance costs, from group (b)
water and sewerage networks,
groups (c), (d), (e), and (f)
From group (a)
rehabilitation of the
access road and
construction of the
aqueduct Cantemir-
Cania
From group (a)
gas network
and from group
(b) gas,
electricity
From group
(b) biological
treatment
facility
(g)
3.2
Incurs IP administration and
maintenance costs, from group (a)
rehabilitation of the access road and
construction of the aqueduct
Cantemir-Cania, from group (b)
groups (c), (d), and (e)
-
From group (a)
gas network,
from group (b)
gas, electricity
From group
(b) biological
treatment
network
(g)
3.3
maintenance costs, from group (b)
group (c)
From group (a)
rehabilitation of the
access road and
construction of the
aqueduct Cantemir-
Cania
From group (a)
gas network
and (b) gas,
electricity
From group
(b) biological
treatment
facility
(g)
3.4
maintenance costs, from group (a)
rehabilitation of the access road and
construction of the aqueduct
Cantemir-Cania, from group (b)
water and sewerage networks, and
group (c)
-
From group (a)
gas network
and from group
(b) gas,
electricity
From group
(b) biological
treatment
facility
(g)
In case of options 1 and 2, the administration of the IP is performed by the Managing companycreated or
selected on tender basis by the local public administration. The LPA may select an enterprise to be the
Administrator, but these services shall be paid. If we assume that the funding for the technical infrastructure
and common utilities are included in the state and district budgets, and partially in the NRDF, it will be
difficult to fund the administration and management of the project during the launch period, until the
management and maintenance costs will be covered from the IP own revenues generated by the
administration services. The LPA budget is austere; having only minimum sources for covering the current
costs. It will be rather cumbersome to take a loan, as the LPA has no credit history. It will also be problematic
to ensure collateral for the loan. At the same time, the LPA cannot afford itself to undertake risks, which
might lead to stopping the provision of some services by the local suppliers or to a considerable increase of
the tariffs in the locality.

26
In both options, the private partner will incur the costs related to the administration of the IP activity during the first
years from its own resources, meaning that it will ensure integrally the financial means for the working capital.

It is also unlikely to have possible sources from the district and regional budgets, because these budgets have
concrete purposes, and this project is not included in them. The NRDF may contribute partially, but again the
requests coming from the field are revised and approved depending on the established priorities, the
magnitude of the project, its impact on community, being in direct completion with other communities from
the republic.
Regarding the participation in different programs providing grants there are different possibilities, but it is
necessary to write projects and to win competitions. Neither the Cania village mayoralty not the Cantemir
town mayoralty have sufficient experience in attracting investments through project application. It is rather
doubtful that external specialists would be attracted, as the mayoralty has no financial sources for this
purpose. Thus, these options make the projects funding practically impossible.
Based on the analysis presented in the previous chapters, it results that option 3 regarding the possible
financing peculiarities is the most probable solution to implement the given project. The Cantemir Town
Council will select on tender-basis and in compliance with the conditions set in the Law on Public-Private
Partnership No. 179-XVI, dated 10.02.2008 a private partner to be the Administrator. Practically all the
functions to create, finance, and operate the IP will be under the private partners competence.
The public-private partnership may be implemented via the design - build operate transfer model, when
the private partner, within its area of responsibility, designs, builds the technical and production
infrastructure, and operates it in line with the contractual provisions, and by the end of the contract transfers
the assets specified in the contract to the public partner. The following may be specified among the assets to
be transferred to the LPA by the end of the contract: the Cantemir-Cania aqueduct, BI halls (if built using
public money), and other common utilities stipulated in the contract. It is also necessary to mention, that it is
possible to make use of the design build transfer operate model or a combination of models. In the
second case, the assets stipulated in the contract are transferred into the public partners ownership
immediately after the launch into operation, and the public partner, at its turn, transfers this infrastructure
partially
27
into use to the private partner (Administrator) so as to be administrated within the IP.
The legal form of the collaboration between the public and private sectors is the public-private partnership
contract. The duration of the PPP contract will be equal to the activity period granted to the Industrial Park
of 30 years.
The private partner, within the given project, coordinates the design, construction, and launch into
operation processes, follows up of finalized assets transfer to the public partner, receives objects into use,
builds objects from its own resources, administrates and maintains the IP activity.
The public partner (LPA) is responsible for: (a) allocation of the land area, (b) obtaining all the authorizations,
endorsements, coordination, and other permits provided by the law as being necessary for the establishment

27
After launching into operation the infrastructure, common utilities, BI halls, some assets, as the case may be, will be
transferred into the management of other enterprises which administrate the respective services (the enterprises
Moldova - Gaz, Ap-Canal Cantemir, RED Union Fenosa JSC). The common utilities will be transferred up to the
Residents and Administrators connecting point, except for the sewerage network which will be not transferred to the
Supplier.

of the IP, (c) free of charge transfer of public property assets into Administrators use for establishing and
developing the IP, (d) allocation, as the case may be, of financial means for creating the technical and
production infrastructure, (e) supporting the projects submitted to the financial supporters to create the
technical and production infrastructure, the BI objects by the Administrator.
The advantages of the PPP model are the following: the private partner shall coordinate the design and
construction of the technical and production infrastructure of the IP and follow the transfer of created assets
into the public partners ownership immediately after finishing the construction, as the case may be; transfer
of the design and construction risks to the private partner; public assets are transferred into private partners
operation for a determined period of time; the transfer of the operation risks brings with it the management
efficiency and innovation, as well as the financial efficiency from the private sector, and ensures the
attraction of business to the IP, quality improvement of the utilities operation and maintenance, and service
provision in the IP.
The private partner recovers its investments and covers the operation and maintenance costs, as well as
obtains a reasonable profit from Park administration and provision of services within the IP.
7.2. Stages for IP implementation
We will devise the IP establishment and launch activities into three main stages: the preparation and launch
stage, the Residents selection and their activity launch stage, and the IP activity stage.
Table 51. The main stages for the Cantemir Industrial Park implementation
No. The main stages Period
1 The preparation and launch stage 2011 2012, I quarter
2 The stage to build the IP infrastructure and
common utilities, and Administrators objects
2011, IV quarter - 2013, I
semester
3 The stage for Residents selection and their
activity launch
2012, II semester - 2018
4 IP activity stage 2012, II semester - 2041
The activities and schedules within the IP establishment project are presented in Annex 25.
The preparation and launch stage covers the period of 2011-2012, I quarter. This stage includes the
selection of the IP Administrator-enterprise, the obtaining of the IP title, the design of the technical and
production infrastructure.
Taking into account the fact the Cantemir IP is a Greenfield-type park, this is the stage when several steps are
to be undertaken, and namely:
Step 1: Selection of the private partner as the IP Administrator, (some activities already are under
implementation (or have been implemented)):
i. First of all, the LPA comes with the initiative to create the IP and consulted the central and regional
authorities;
ii. The local public authority identifies the land area intended for the IP establishment;

iii. A feasibility study is developed to analyze the opportunities for IP establishment, which will serve as
basis to decide upon the following steps, implementation forms, and conditions;
iv. If it is decided to establish the IP via a PPP, the requirements of the PPP Law will be taken into
consideration. For this purpose: (a) the project will be included via a Local Council Decision in the list
of projects to be implemented via PPP, the PPP conditions and objectives will be approved, as well as
the general requirements regarding the selection of the private partner; (b) the Local Council will
appoint the commission for private partner selection, will authorize the executive authority to send
the Feasibility Study to the Public Property Agency (PPA) and will approve all the necessary
document for organizing the tender; (c) after obtaining the endorsement from the PPA, the
information note shall be published about the tender; (d) the commission will analyze the received
bids and will select the winner; (e) will prepare the draft of the contract with the winning partner
regarding the creation of the IP and will submit it to the Council for approval and appointment of the
person to sign it;
Step 2: Obtaining the IP title:
i. The private company, Administrator, will submit a request so as to obtain the title of Industrial Park.
It is necessary to mention that IP title obtaining according to the condition stipulated in the contract
(which obviously will be in line with the Law on IP) may be a condition for the entry in force of the
PPP contract. This is natural, because to a big extent, the obtaining of the IP title depends on the LPA
and serves as basis for the implementation of the PPP contract through the facilities offered by the IP
title. In other words, the lack of this title may lead to the impossibility to fulfill the contractual
obligations, assumed by both partners;
ii. The Local Council mandates the executive body of the LPA to set up the Commission for granting the
technical, legal, and consultative support for the fulfillment of the legal requirements set for IP title
obtaining: modification of the land area destination, obtaining the decision of the local public
administration authority regarding the destination of the land area, obtaining of authorizations,
endorsements, coordination, and other permits provided by the law as being necessary for the
establishment of the industrial park, infrastructure and constructions meant for the Park, as well as
fulfillment of other administrative procedures which are necessary for the establishment of the
industrial park, launch and development of its Residents activity.
iii. After preparing all the necessary documents to obtain the IP title, the applicant submits to the
Ministry of Economy an application, annexing all the documents required by the Law on IP (the
documents certifying the establishment of the Administrator-enterprise, the copies of the
documents confirming the use right for the land area for at least 30 years, the location plan of the
site intended for the IP, the statement of the land owner regarding the fulfillment of conditions set in
art. 5 let. a) and b) of the Law on IP, endorsements of the public utility networks holders, the
cadastre file regarding the modification of the land area destination or the authorization to build the
object, the approval of the Local Council under whose jurisdiction the land area intended for the IP is
located, the feasibility study regarding the IP establishment);
iv. The Ministry of Economy revises the application for obtaining the IP title and prepares the draft
Government Decision;
v. Approval via a Government Decision of the IP title granting.

Step 3: Design of the technical and production infrastructure:
This step will be used to design the utilities and the internal and external infrastructure, as well as other
objects which are necessary to start the IP construction and activity.
The stage for building the infrastructure and common utilities within and outside the Park, as well as of
the Administrators objects:
Works to prepare the land area shall be performed, which will include black soil stratum covering and
preparedness activities to start the construction. Some of these works may be carried out in parallel with
other prior activities. As well, there will be built utility networks, roads, and other installations from outside
and within the IP, objects related to the IP development, buildings and other assets which are necessary for
the Administrator to launch the IP activity.
The stage for selecting the Residents and launching their activities. The stage for selecting the Residents
covers the period of 2012, II semester 2015; the stage for Residents activity launch starts in 2013 and ends
in 2018. The Residents selection will last for 3.5 years; the Residents projects launch will last for 3 years
from the date the contracts for activity development within the IP are signed.
The IP activity stage is the period when the Residents and the Administrator will operate within the IP with a
regime of specific facilities.

8. Industrial Park Impact on the Zone
The project will have a solid social-economic impact, as a result of the newly created direct and indirect
places of work, increase of the local economy competitiveness, and attraction of direct investment for the
local needs. Moreover, the project has an insignificant impact on environment, contributing, at the same
time, to improving the landscape of the zone.
8.1. Economic Impact
The establishment of the Industrial Park in the Cantemir district will have a number of positive effects on the
economy at the local, regional, and national levels.
Based on the carried out analyses and current reality, the following quantifiable economic benefits of the
project may be estimated:
Increase of industrial production areas by approximately 51.5 thousand m
2
;
Increase of the enterprises survival rate (SME), 39 enterprises will be incubated in the BI of the IP by
2041;
Increase of the level and diversification of the consultancy services in the region;
Additional increase of investments by 211.2 mln lei or 13.1 mln euro (it is envisaged to have 8.82 mln lei via
the NRDF), including:
technical and production infrastructure 19.6 mln lei;
administrative building 3.2 mln lei;
production premises 166.6 mln lei ;
production equipment 21.8 mln lei.
Creation of jobs:
707 direct places of work, including - 540 production jobs, 11 administrative jobs during 2012 2017,
through business incubation - 156 production jobs by 2041;
55 - 100 indirect paces of work (useful common services, auto services, public food services, etc.);
150 - 200 temporary places of work during the construction period 2012-2017.
Unquantifiable benefits:
provision of some quality specialized services;
increase of the additional investment volume at the local level;
a vector of local image shall be created through the IP, which will be able to act as a promotion anchor to
attract investments at the town and district levels;
increase of local economy as a result of the revenues incurred by the Administrator and the lessee
enterprises; these revenues will have an indirect contribution to the local GDP increase, thus inducing
the increase of local economy competitiveness compared to the economies of other territorial units;
increase of the real estate and land value in the zone after the implementation of the project as a result
of the respective zone development;

8.2. Social Impact
The project will have a positive social impact on the population within 20 km around the IP. It will be
manifested through the following:
- a part of jobs will be taken by the persons employed in the region companies, but also many
unemployed persons will be employed, as well as many persons who will return from abroad;
- we envisage for up to 10% of the persons working abroad to return to their home-town and
neighboring villages;
- the payroll fund will increase by about 38.4 mln lei annually;
- the services will improve: water, electricity, natural gas, sewerage, and telecommunication supply;
- local community will benefit from infrastructure development;
- the entries from local taxes, real estate tax, etc. will increase.
8.3. Environment Impact
One of the primary objectives of the IP is the existing environment conditions protection. The transfer into
use of the IP land plots and objects to the Administrator and subsequently to the Residents is conditioned by
observance of the legal provisions set for environment protection. The authorizations issued by the territorial
environment bodies for environment protection must be observed for every separate construction. The
Administrator and Residents will sign a common statement regarding the environment problems, which will
be an integral part of the lease contract.
The location of the constructions and the operation of the economic units shall be performed by applying all
the in-force rules for environment protection. The economic activities susceptible to pollute the air, water,
and soil shall be prohibited in the zone. All the activities will be carried out within closed premises; no activity
will produce noises or vibrations which would be perceptible from outside. The description of the
environment factors and some measures for environment protection is presented in Annexes 26 and 27.
The residents shall observe the imposed legal conditions (materials with special regime, safe operation
conditions, environment protection, work protection, anti-fire conditions, etc.). The production shall observe
the ISO 9001-2000 standards as well as ISO 14001-2000 environment standards.
All over the lease contract duration, the Residents shall undertake all the necessary and obligatory measures
to protect the environment under the conditions set forth in the legislation in force regarding environment
protection. An environment approval shall be obtained for discharge of waste water from the Residents land
plot area.
98
Annex 1 Basic economic indicators for the enterprises that may be located in the Cantemir Industrial Park
No. Activity type
Necessary
investmen
ts, mil lei
Volume of net
sale, mil lei
Number of
jobs,
persons
Added
value, mil
lei
Payroll
fund, mil
lei
Profit,
mil lei
Necessary
area, ha
1. Production of Dutch cheese with a processing
capacity of 10 tons of milk per shift
3.7 17.5 50 4.5 2.8 3.1 0.4
2. Manufacturing of meat products (sausages,
delicatessen and comfort food) with the
production capacity of 8 tons of items per shift
62 120 60 20 4.2 17.9 0.4
3. Production of starch from maize with a
processing capacity of 200 tons of maize
(production of 130 tons of starch) in 24 hours
80 220 360 70.8 25 58.3 6.5
4. Production of oil from grape seeds with a
production capacity of 40 tons of oil per year
20 32 30 16 3.6 14 0.4
5. Wholesale trade with table grapes and fruits
based on the use of a refrigerator with a
storage capacity of 1000 tons
3.1 7 40 3 2.8 1.6 0.5

Total 168.8 389.5 540 114.3 38.4 94.2 8.2
99
Annex 2 Capital cost of the Project, lei
Categories of costs Hypothesis description
Indicators,
parameters,
consumption
Unit of
measure
Numbe
r of
units
Price,
MDL/un
it
Amount,
MDL
Feasibility study About the IP establishment Unit 1 100,000 100,000
Design, studies, IP funding requests
6% of capital costs, excluding the
residents 6% Unit 1
1,292,04
1 1,292,041
Common infrastructure and utilities from
outside the park
Access to the road network outside the
IP
Access road to the national highway
R37
Rehabilitation the road of the IVth
category with a width of 6 m length m 560 7,800 4,368,000
Public utilities outside the IP
electricity length m 0 0 0
gas
polyethylene pipe with D 75 mm
connected to the town system length m 90 220 19,800
water
polyethylene pipe with D 250 mm
connected to the town system length m 3000 300 900,000
sewerage length m 0 0 0
Public utilities within the IP
electricity
electricity transportation line of 0,4 kV,
underground cable, section 120 m
2
length m 560 800 448,000
1 transformer TM-1600/10 capacity kVA 1 352,000 352,000
assembling works, connection of the 10% of the 77,850

Indicators,
parameters,
consumption
Unit of
measure
Numbe
r of
units
Price,
MDL/un
it
Amount,
MDL
line 10kW transformers cost
gas polyethylene pipe with D 90 mm length m 540 220 118,800
branch pipes 11,880
water polyethylene pipe with D 110 mm length m 540 300 162,000
branch pipes 16,200
sewerage polyethylene pipe with D 250 mm length m 490 800 392,000
waste water biological treatment facility 1400 m
3
in 24 hours 8,820,000
pluvial water drainage m 0 0 0
Internal development
Rooting up bushes from the area m
2
40000 10 400,000
Removal of the electricity transportation
line of 10 kW from the area length m 600 206 123,600
Removal of the anchor for electricity
transportation line of 110 kW from the area length m 200 530 106,000
Ensuring the underground drainage of
the pluvial water that might flow on this area
from underneath the culvert of the access
road to the Park pipe with D 500, at 05 m depth length m 190 500 95,000
Reinforcing the right side of the ravine
where the Tigheci Streamlet flows forestry band of 5 m width length m 490 75 36,750
Development of green spaces area m
2
1000 50 50,000
Parking place 20 parking lots 18 m
2
area of the parking m
2
60 9,707 582,390
Installation of signs billboard, 3 X 6 for 4.5 m height units unit 3 20,000 60,000
Installation of the park scheme, signs set unit 1 20,000 20,000
Platform for waste evacuation area m
2
10 500 5,000
Street garbage cans for 35 m unit 16 300 4,800

Indicators,
parameters,
consumption
Unit of
measure
Numbe
r of
units
Price,
MDL/un
it
Amount,
MDL
Lighting for internal roads
Line in the air of 0,4 kW with pylons (8 m, 2 m in the soil)
distance between
the pylons 40 m m.l. 560 206 115,360
Led lamps warranty of 3 years, 50000 hours consumption 40 W unit 14 2,000 28,000
Perimeter fencing fence
zinc-covered lace installed on the
pylons length m.l. 1365 412 562,380
Administrative building and equipping
meant for the IP administration,
services, rent of offices (2 floors) occupied areas m
2
361
premises area m
2
595 4,853 2,887,684
PCs, printers, etc.
Computers unit 15 10,000 150,000
Printers-copy machines unit 11 3,600 39,600
Copy machine-printer unit 1 15,000 15,000
Projector unit 1 10,000 10,000
Furniture for the premises premises 16 4,853 77,652
Boiler power kW 160 324 51,768
BI production halls zone building halls, storages, etc. area m
2
6000 3,236 19,413,000
Production equipment created jobs employee 70 0 0
Production halls zone built by the
Administrator building halls, storages, etc. area m
2
7 200 3,236 23,295,600
Production halls zone built by the
Residents building halls, storages, etc. area m
2
38 300 3,236 123,919,650
Total capital costs 189,554,305

Annex 3 Distribution of Projects capital costs, thousand lei
Capital costs 2011 2012 2013 2014 2015 2016 2017 Total
Feasibility study 100 100
Designs, studies, funding requests 775 517 1,292
Common infrastructure and utilities outside the IP
Access to the road network outside the IP 2,184 2,184 4,368
Public utilities outside the IP 460 460 920
Common infrastructure and utilities within the IP
Public utilities within the IP 5,413 5,413 10,825
Internal development of the IP 1,095 1,095 2,189
Administrative building, equipment and furniture 3,232 3,232
Production halls BI 3,883 15,530 19,413
Production halls of the Administrator 9,318 6,989 6,989 23,296
Production halls built by the Residents 123,920
Total capital costs
875 16,782 34,000 6,989 6,989 65,635
Share of capital costs
1% 26% 52% 11% 11% 0% 0% 100%

103
Annex 4 List of the IP Administrators personnel
No. Function/Position
Number
of staff
Gross
average
wage,
MDL
Payroll
expenses,
MDL
Gross
average
wage
Euro
Payroll
expenses,
Euro
Annual
payroll
expenses,
Euro
2011 2013 2011 2012
Administrative staff 3.5 20626 1275 15300 3 1 2050 15300
1 IP Director 1 8089 8089 500 500 6000 1 1000 6000
2 Assistant - receptionist 1 4044 4044 250 250 3000 1 0 3000
3 Legal advisor 0.5 5662 2831 350 175 2100 1 350 2100
4 Accountant 1 5662 5662 350 350 4200 1 700 4200
Maintenance staff 2.5 6066 375 4500 0 2 0 4500
5 Cleaning staff 2 2022 4044 125 250 3000 1 3000
6 IT responsible 0.5 4044 2022 250 125 1500 1 1500
Operation staff 5 28310 1750 21000 0 5 0 21000
BI and IP development service
7 Consultant in business development 1 5662 5662 350 350 4200 1 4200
8 Consultant in project design 1 5662 5662 350 350 4200 1 4200
9
Consultant in marketing and staff
recruitment
1 5662 5662 350 350 4200 1 4200
10
Consultant in management and
knowledge transfer
1 5662 5662 350 350 4200 1 4200
Audit and Accounting Service
11 Consultant Bookkeeping Taxation 1 5662 5662 350 350 4200 1 4200
TOTAL 11 55002 3400 40800 3 8 2050 40800

104
Annex 5 Maintenance and administration costs, lei
Items 2011 2012 2013 2014 2015 2020 2025 2035 2041
Maintenance costs

Administrative building 23,101 23,101 23,101 23,101 23,101 23,101 23,101
BI halls 77,652 77,652 77,652 77,652 77,652 77,652 77,652
Parking 1,165 2,330 2,330 2,330 2,330 2,330 2,330
Development of green spaces, signs 1,596 3,192 3,192 3,192 3,192 3,192 3,192
Lighting network
1,434 2,867 2,867 2,867 2,867 2,867 2,867
Pluvial drainage 0 0 0 0 0 0 0
Fencing the area 1,406 2,812 2,812 2,812 2,812 2,812 2,812
Payroll
basic wage 33,164 660,042 660,042 660,042 660,042 660,042 660,042 660,042 660,042
social and health contributions
8,788 174,911 174,911 174,911 174,911 174,911 174,911 174,911 174,911
Rent of office space
0 0 0 0 0 0 0 0
Utility services

Gas
98,060 98,060 98,060 98,060 98,060 98,060 98,060
Electricity
134,995 134,995 134,995 134,995 134,995 134,995 134,995
Water and sewerage
32,400 32,400 32,400 32,400 32,400 32,400 32,400
Solid waste evacuation
3,320 6,640 6,640 6,640 6,640 6,640 6,640 6,640
Procurement of services

Land phone line, mobile telephony, internet 30,000 30,000 30,000 30,000 30,000 30,000 30,000
Banking 2,108 8,800 9,000 9,000 9,000 9,000 9,000 9,000 9,000
Transportation
25,000 25,000 25,000 25,000 25,000 25,000 25,000
Insurance 230,064 225,428 220,885 199,509 180,206 147,029 130,136
Advertising
80,000 80,000 80,000 80,000 80,000 80,000 80,000
Guard expenses
10,710 10,710 10,710 10,710 10,710 10,710 10,710
Office consumables 10,000 10,000 10,000 10,000 10,000 10,000 10,000
Travel expenses 10,000 20,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000
SVSDO equipping 5,000 10,000 10,000 10,000 10,000 10,000 10,000
Local taxes 60 240 880 880 880 880 880 880 880
Tax on real estate
45,596 44,685 43,790 39,583 35,780 29,235 25,897
Other expenses
2,706 43,366 84,983 85,235 84,963 83,684 82,529 80,543 79,531
TOTAL EXPENSES 56,826 910,679 1,784,635 1,789,940 1,784,230 1,757,368 1,733,107 1,691,399 1,670,156
105
Annex 6 Risk matrix
No. Risk category Description Consequences Mitigation Impact Probability Risk allocation
1 Location
1.1 Location risk
The risk of some
unforeseen conditions
induced by the IP
location. The IP location
in immediate
neighborhood of a
locality.
Additional costs for
authorization or partial
delay of some activities
in the IP, which lead to
partial decrease of
revenues.
LPA institutions and districts verify
the IP location compliance with the
exiting norms. Determination of
the activity type in the IP, for it to
not pollute the environment and to
not produce noise. Prohibition of
some types of activities in the IP.
Low Low
Risk held by the
public partner
2 Design, building
2.1 Design risk
The design risk
represents the non-
observance of some
technical standards,
delay of design.
Increase of costs
and/or delay of design
Design quality may be ensured by
the experience of the design
institute. If the design complies
with the ToR, these consequences
are minor.
Low Low
Administrator
Private Partner
2.2.
Investment costs
increase risk
Risk of events that may
occur during the
construction, lead to the
impossibility to observe
the schedule of giving
the object into operation
or/and to increase of
costs.
Increase of investment
costs, decrease of
revenues.
This risk may be avoided via a
coherent planning of the
resources, for execution of works,
by implementing a forecast system
and verifying the incurred costs, as
well as to be incurred. The
Administrator is the responsible
entity, the construction works shall
be performed by an operator with
experience, so as to meet the
obligations set forth in the
contract.
Low Low
Administrator
Private Partner

3 Financial
3.1 Insolvency risk
The risk for the
Administrator to
become insolvent or
later, it proves to be
unsuitable to
administrate the IP.
Withholding the IP
title, additional costs
The private partner shall submit
good-faith bank guarantees, which
are transferred automatically to
the LPA and loses the already
invested amounts, in case the work
is not finished. LPA shall launch a
new procedure for obtaining the IP
title PL.
High Very low
Administrator
Private Partner
3.2
Unavailable
external co-
funding risk
The risk that the
external funding and
that from the NRDF is
late or becomes
ineligible.
Non-observance of the
deadlines to launch
into operation the IP
utilities, additional
costs for submitting the
funding requests,
increase of the working
capital volume.
External funding, provided
especially for the outside
infrastructure, construction of the
BI halls may be applied to several
sources and implemented via the
co-funding of the external
partners. The Administrators
commitment to build the halls
meant for the residents from its
own resources shall be performed
only on contract/basis with each
resident. The Administrators
funding from the NRDF depends on
its experience. In the perspective
of EU accession or association, the
possibilities for foreign resources
attractions will go up.
High Low Private Partner
4 Operational and maintenance
4.1
Operational
entries risk
The risk that the
necessaries entries cost
more than what was
envisaged.
Increase of
administration costs.
The Administrator may apply long-
term commitments in its
contractual relations with the
suppliers.
Medium Medium Private Partner

4.2 Maintenance risks
The risk that the
maintenance costs will
go up as against to what
was envisaged
Increase of
maintenance cost.
The Administrator applies long-
term contracts with the suppliers
of materials and services.
Medium Medium Private Partner
5
Market or
demand

5.1 Commercial risks
Low level of demand or
reduced payment
capacity under the
envisaged limits.
Decrease of revenues
The Administrator with experience
selected on tender basis, which
applies: advertising, methods to
attract clients and to reduce costs,
planning and control.
High Medium
Private and Public
Partner
6 Legal and regulatory
6.1
Legal and
regulatory
framework change
risk
The risk of changes in
legislation and/or
regulatory framework,
which may not be
envisaged when signing
the contract, which
determines a decrease
of revenues and/or
increase of costs.
Decrease of revenues
and/or increase of
costs
The size of tariffs for the objects
built from the LPA and external
resources upon the LPA request
will be under the district and local
LPA control. It will be requested to
adjust the tariffs to arguments
(significant enough) and to be
quantifiable.
Medium Medium
Private and Public
Partner
7 Force majeure
7.1
Force majeure
risks
The risk of incapacity to
satisfy the service is
caused by a force
majeure reason.
Loss or deterioration of
assets, service
(includes incapacity to
supply services), loss of
the possibility to obtain
revenues or delay of
revenues.
The Administrator undertakes
measures to insure the assets and
follows the reparation or
substitution in the shortest
possible time. LPA and regional
suppliers ensure the continuation
of service provision with IP utilities
via alternative measures.
High Very low
Private partner,
regional service
providers. Private
partner assumed the
risk for the
loss/impairment of
assets.

Annex 7 Risks value in the IP organization option based on the traditional mechanism of goods and services procurement
Name of risk 2011 2012 2013 2014 2015 2025 2041
Location risk

Calculation base (20% of design cost)
155 045 103 363
Risk consequences, MDL
11 628 7 752
Risk value, MDL
872 581
Design risk

Calculation base
775 224 516 816
58 142 38 761
Risk value, MDL
4 361 2 907
Investment costs increase risk

Calculation base
16 265 459 33 999 795 6 988 680 6 988 680
1 219 909 2 549 985 524 151 524 151
Risk value, MDL
91 493 191 249 39 311 39 311
Insolvency risk

Calculation base (5% of design cost, etc.)
38 761 25 841
5 814 3 876
Risk value, MDL
145 97
Unavailable foreign co-funding risk

Calculation base (10% of design cost + working capital) 134 348 962 361 892 317
20 152 144 354 133 848
Risk value, MDL
1 511 10 827 10 039
Operational entries risk

Calculation base
44 060 847 073 1 506 822 1 507 186 1 502 643 1 461 964 1 411 894
5 508 105 884 188 353 188 398 187 830 182 746 176 487
Risk value, MDL
688 13 236 23 544 23 550 23 479 22 843 22 061

Name of risk 2011 2012 2013 2014 2015 2025 2041
Maintenance risks

Calculation base
106 354 111 954 111 954 111 954 111 954
13 294 13 994 13 994 13 994 13 994
Risk value, MDL
1 662 1 749 1 749 1 749 1 749
Commercial risks

Calculation base
1 892 754 3 851 802 6 088 072 6 275 198 6 440 798
283 913 577 770 913 211 941 280 966 120
Risk value, MDL
35 489 72 221 114 151 117 660 120 765
Legal and regulatory framework change risk

Calculation base
60 240 715 309 1 552 270 2 712 960 3 053 070 3 151 187
8 30 89 414 194 034 339 120 381 634 393 898
Risk value, MDL
1 4 11 177 24 254 42 390 47 704 49 237
Force majeure risks

Calculation base
1 892 754 3 851 802 6 088 072 6 275 198 6 440 798
283 913 577 770 913 211 941 280 966 120
Risk value, MDL
7 098 14 444 22 830 23 532 24 153
Risks value
7 579 119 144 280 257 175 530 243 911 213 489 217 965

110
Annex 8 Present value of the risks in the IP organization option based on the traditional mechanism for procurements, lei

Name of the risk 2011 2012 2013 2014 2015 2025 2041
Location risk 872 581
Design risk 4 361 2 907
Investment costs increase risk 91 493 191,249 39,311 39,311
Insolvency risk 145 97
Unavailable foreign co-funding risk 1 511 10 827 10,039
Operation entries risk 688 13 236 23,544 23,550 23,479 22,843 22,061
Maintenance risks 1,662 1,749 1,749 1,749 1,749
Commercial risks 35,489 72,221 114,151 117,660 120,765
Legal and regulatory framework change risk 1 4 11,177 24,254 42,390 47,704 49,237
Force majeure risks 7,098 14,444 22,830 23,532 24,153
Risks value 7 579 119 144 280,257 175,530 243,911 213,489 217,965
Present value of the risks 3 169 804

111
Annex 9 Structure and equipping of the administrative building
Name of the space Area m
2

P
r
e
m
i
s
e
s

F
u
r
n
i
s
h
e
d

C
o
m
p
u
t
e
r
s

P
r
i
n
t
e
r
s

C
o
p
y

m
a
c
h
i
n
e
-
p
r
i
n
t
e
r

P
r
o
j
e
c
t
o
r

R
e
n
t
Area of
premises meant
for rent
1 Floor
294 11 6 8 4 1 0 3 130
Main lobby
30 1
Manager
20 1 1 1 1
Secretariat
16 1 1 1 1 1
Accounting
20 1 1 1 1
Consultancy services
20 1 1 5 1
Public food services
100 1 1
Health assistance services
14 1 1
Banking services
16 1 1
Phone and IT services
10 1 1
Hygiene spaces and WC
20 2 1
Corridor
28
2 Floor
301 11 10 7 7 0 1 7 122
Lobby
40 1
Support services 1
16 1 1 1 1 1
Support services 2
16 1 1 1 1 1
Furnished office 1
18 1 1 1 1 1
Furnished office 2
18 1 1 1 1 1
Furnished office 3
18 1 1 1 1 1
Furnished office 4
18 1 1 1 1 1
Furnished office 5
18 1 1 1 1 1
Conference hall
60 1 1 1
Protocol room
24 1 1
Hygiene premises and WC
16 1 1
Corridor
39
Total building
22 16 15 11 1 1 10 252

112
Annex 10 Schedule to fund the IP establishment, option 1, lei
Categories of costs 2011 2012 2013 2014 2015 Total
Private partner 775 224 9 010 860 26 228 380 6 988 680 6 988 680 49 991 824
Design, studies, IP funding requests 775 224 516 816 1 292 040
Common utilities outside the IP (water pipeline, reparation of
the access road)
Common utilities within IP (water, sewerage) 285 100 285 100 570 200
Internal development of the area 1 094 640 1 094 640 2 189 280
Administrative building and equipping 2 887 684 2 887 684
Computers, printers, etc. 214 600 214 600
Furniture for premises 77 652 77 652
Boiler room 51 768 51 768
Production halls BI 3 882 600 15 530 400 19 413 000
Production halls for Residents 9 318 240 6 988 680 6 988 680 23 295 600
Local suppliers 727 415 727 415 1 454 830
Common infrastructure and utilities outside the IP (gas) 9 900 9 900 19 800
Common infrastructure and utilities within the IP (electricity,
gas) 717 515 717 515 1 435 030
External grants 100 000 2 634 000 2 634 000 5 368 000
(reparation of the access road, water pipeline) 2 634 000 2 634 000 5 268 000
Production hall BI
NRDF 4 410 000 4 410 000 8 820 000
Common utilities within the (waste water biological
treatment facility) 4 410 000 4 410 000 8 820 000
Total 875 224 16 782 275 33 999 795 6 988 680 6 988 680 65 634 654

113
Private partner 775 224 11 644 860 19 544 140 31 964 224
the access road) 2 634 000 2 634 000 5 268 000
Administrative building and equipping 2 887 684 2 887 684
Furniture for premises 77 652 77 652
Boiler room 51 768 51 768
Production halls BI 3 882 600 15 530 400 19 413 000
Production halls for Residents
Local suppliers 727 415 727 415 1 454 830
gas) 717 515 717 515 1 435 030
External grants 100 000 100 000
(reparation of the access road, water pipeline)
Production hall BI
NRDF 4 410 000 4 410 000 8 820 000
treatment facility) 4 410 000 4 410 000 8 820 000
Total 875 224 16 782 275 24 681 555 42 339 054

114
Private partner 660 993 1 879 002 1 379 740 3 919 735
the access road)

Furniture for premises
Boiler room
Production halls BI
Local suppliers 727 415 727 415 1 454 830
gas)
717 515 717 515 1 435 030
External grants 100 000 2 634 000 2 634 000 5 368 000
2 634 000 2 634 000 5 268 000
Production hall BI
NRDF 4 410 000 4 410 000 8 820 000
treatment facility)
4 410 000 4 410 000 8 820 000
Total 760 993 9 650 417 9 151 155 19 562 565

115
Private partner 660 993 4 513 002 4 013 740 9 187 735
the access road)
2 634 000 2 634 000 5 268 000
Furniture for premises
Boiler room
Production halls BI
Local suppliers 727 415 727 415 1 454 830
gas)
717 515 717 515 1 435 030
External grants 100 000 100 000

Production hall BI
NRDF 4 410 000 4 410 000 8 820 000
treatment facility)
4 410 000 4 410 000 8 820 000
Total 760 993 9 650 417 9 151 155 19 562 565


Annex 14 Estimating the revenues based on the PPP project model, option 2, lei
Categories of revenues 2013 2014 2015 2020 2025 2030 2035 2041
Renting land plots to Residents 1 429 2 619 3 810 3 810 3 810 3 810 3 810 3 810
Lease of halls to Residents with the afferent area 720 240 1 440 480 2 160 720 2 160 720 2 160 720 2 160 720 2 160 720 2 160 720
Lease of administrative and commercial premises
90 720 120 960 151 200 151 200 151 200 151 200 151 200
Lease of BI halls 216 240 756 480 1 080 600 1 080 600 1 080 600 1 080 600 1 188 600
Payments and fees paid for participation in tenders
and for registration as Resident
340 102 320 621 320 477 28 800 28 800 28 800 28 800 14 400
Administration payment 667 404 1 287 846 1 908 000 1 932 000 1 932 000 1 932 000 1 932 000 1 932 000
Consultancy services 163 580 268 111 343 430 363 652 363 652 363 652 363 652 363 652
Payment recovery for the investments for road and
water pipeline

Revenues from recovery of losses induced by the
lease exemptions for BI Residents
144 000 324 000 360 000 360 000 360 000 360 000 432 000
administrative payments exemption for BI Residents
48 000 96 000 120 000 120 000 120 000 120 000 120 000
Revenues from recovery of losses generated by
service provision for BI
33 164 54 195 74 417 74 417 74 417 74 417 74 417
Total revenues 1 892 754 3 851 802 6 088 072 6 275 198 6 275 198 6 275 198 6 275 198 6 440 798


Lease of halls to Residents with the afferent area
90 720 120 960 151 200 151 200 151 200 151 200 151 200
Lease of BI halls 216 240 756 480 1 080 600 1 080 600 1 080 600 1 080 600 1 188 600
368 800 305 400 305 400 28 800 28 800 28 800 28 800 14 400
Consultancy services 163 580 268 111 333 723 358 799 358 799 358 799 358 799 358 799
water pipeline
311 050 311 050 311 050 311 050 311 050 311 050 311 050 311 050
144 000 324 000 360 000 360 000 360 000 360 000 432 000
48 000 96 000 120 000 120 000 120 000 120 000 120 000
33 164 54 195 79 270 79 270 79 270 79 270 79 270
Total revenues 1 570 042 2 736 256 4 214 338 4 426 248 4 426 248 4 426 248 4 426 248 4 591 848


Lease of halls to Residents with the afferent area

Lease of BI halls
416 800 312 600 312 600
Consultancy services
water pipeline
311 050 311 050 311 050 311 050 311 050 311 050 311 050 311 050



Total revenues 1 550 702 2 063 641 2 680 780 2 368 180 2 368 180 2 368 180 2 368 180 2 368 180

119
Annex 17 Retained risks calculated for the PPP reference model, option 2, lei
Categories of risks 2011 2012 2013 2014 2015 2025 2035 2041
Location risk
872 581
Design risk 872 581
Commercial risks
583 2 944 5 130 7 902 8 299 8 610 3 182
change risk
2 4 941 10 270 17 735 19 982 20 683 26 521
Total retained risks
1 745 1 748 7 885 15 401 25 636 28 281 29 292 29 703
Current value of the risks
377,445
Location risk
744 496
Design risk
744 496
Commercial risks
2 324 3 286 4 443 3 857 3 857 7 501
change risk
1 4 12 861 22 504 32 147 32 147 32 147 11 325
1 488 995 15 186 25 790 36 590 36 004 36 004 18 825
Current value of the risks 470,852
Location risk 744 496 744
Design risk
744 496 744
Commercial risks 583 2 908 3 869 5 026 4 440 4 440
change risk
1 3 11 172 19 548 27 925 27 925 27 925 1
1 488 1 578 14 080 23 418 32 951 32 365 32 365 1 488
Current value of the risks
424 633
120
Annex 20 Sensitivity analysis as related to the level of occupation of land plots and halls from the Residents zone
Modifi
cation
(%)
Option 1. Option 2. Option 3. Option 4.
NPV
IRR
(%)
NPV
IRR
(%)
IS for NPV SV (%)
IS for
NPV
SV
(%)
IS for NPV SV (%) IS for NPV SV (%) NPV IRR (%)
IS for
NPV
SV (%)
70% -13,550,733 2.5% 6.7 -10,726,238 2.3% 10.1 8,594,100 22.6% 1.6 8,255,179 12.7% 1.7
80% -6,253,222 3.9% 7.4 -4,913,331 3.8% 9.7 11,244,895 27.1% 1.7 10,929,900 14.9% 1.7
90% 7,383,930 6.3% 4.4 17% -1,904,064 4.5% 13.6 9% 12,708,457 30.4% 2.4 58% 12,404,903 16.3% 2.5 58%
100% 13,246,263 7.2% 5,270,667 6.2% 16,817,095 38.1% 16,540,916 19.7%

Annex 21. Sensitivity analysis as related to the lease and administration tariff
Modifi
cation
(%)
NPV
IRR
(%)
NPV
IRR
(%)
IS for NPV
SV
(%)
IS for
NPV
SV
(%)
IS for
NPV
SV (%)
80% -5,779,612 4.0% 7.2 -8,197,476 3.0% 12.8 11,300,161 27.5% 1.6 10,986,419 15.0% 1.7
85% -1,142,654 4.8% 7.2 -4,943,933 3.8% 12.9 12,680,824 30.2% 1.6 12,376,643 16.2% 1.7
90% 3,572,808 5.6% 7.3 -1,616,850 4.6% 13.1 14,059,770 32.8% 1.6 13,766,867 17.4% 1.7
95% 8,368,484 6.4% 7.4 13.8% 1,786,074 5.4% 13.2 7.6% 15,438,433 35.5% 1.6 60.8% 15,154,410 18.5% 1.7 59.0%
100% 13,246,263 7.2% 5,270,667 6.2% 16,817,095 38.1% 16,540,916 19.7%

Annex 22. Sensitivity analysis as related to the investment volume
Modifi
cation
(%)
NPV
IRR
(%)
NPV
IRR
(%)
IS for NPV
SV
(%)
IS for
NPV
SV
(%)
IS for
NPV
SV (%)
130% -1,764,478 4.8% -3.8 -5,051,896 4.0% -6.5 15,990,745 31.1% -0.2 14,217,363 15.1% -0.5
120% 3,275,317 5.5% -3.8 -1,578,356 4.7% -6.5 16,267,694 33.2% -0.2 14,994,021 16.4% -0.5
110% 8,278,114 6.3% -3.8 26.5% 1,862,327 5.4% -6.5
15.4
%
16,542,387 35.5% -0.2 579.4% 15,770,070 17.9% -0.5
207.2
%
100% 13,246,263 7.2% 5,270,667 6.2% 16,817,095 38.1% 16,540,916 19.7%
130% -1,764,478 4.8% -3.8 -5,051,896 4.0% -6.5 15,990,745 31.1% -0.2 14,217,363 15.1% -0.5

Annex 23. Sensitivity analysis as related to the revenues generated by the consultancy services
Modifi
cation
(%)
NPV
IRR
(%)
NPV
IRR
(%)
IS for NPV
SV
(%)
IS for
NPV
SV (%) IS for NPV SV (%) IS for NPV SV (%) NPV IRR (%)
IS for
NPV
SV
(%)
0% 7,462,026 6.3% 0.4 -573,493 4.9% 1.1 16,817,095 11.7% 0.0 16,540,916 19.7% 0.0
60% 10,935,609 6.8% 0.4 2,939,142 5.7% 1.1 16,817,095 11.7% 0.0 16,540,916 19.7% 0.0
80% 12,090,936 7.0% 0.4 4,104,905 6.0% 1.1 -90.2% 16,817,095 11.7% 0.0 16,540,916 19.7% 0.0
100% 13,246,263 7.2% 5,270,667 6.2% 16,817,095 38.1% 16,540,916 19.7%


Annex 24. Sensitivity analysis as related to the maintenance and administration costs
Modifi
cation
(%)
NPV
IRR
(%)
NPV
IRR
(%)
IS for NPV
SV
(%)
IS for
NPV
SV (%) IS for NPV SV (%)
IS for
NPV
SV (%) NPV IRR (%)
IS for
NPV
SV (%)
150% 847,821 5.1% -1.9 -6,990,732 3.3% -4.7 12,946,475 29.0% -0.5 12,670,296 16.2% -0.5
125% 7,047,042 6.2% -1.9 53.4% -860,032 4.8% -4.7 21.5% 14,881,785 33.4% -0.5 217.2% 14,605,606 17.9% -0.5
213.7
%
100% 13,246,263 7.2% 5,270,667 6.2% 16,817,095 38.1% 16,540,916 19.7%
123
Annex 25 Schedule of activities within the project for Cantemir IP establishment
Name of stage, activity
2011 2012 2013 2014 2015 2016 2017 2018
I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV
Preparing and launch stage

Identification of the site necessary
for IP establishment
Establishment of the commission for
supporting the process of IP
establishment and operation
Obtaining the Local Councils
approval for using the respective
site to establish the IP
Development of the feasibility study
for IP establishment
Confirmation of the appropriateness
to create the IP
Development and approval of the
tender book
Publication of the informative
release
Organization and implementation of
the tender to select the private
partner
Signing the PPP contract with the
tender winner
Preparing and submitting the
application and the set of
documents for obtaining the IP title
Recruiting the personnel for the
Administrator
Personnel training program
Organization of the advertising
campaign
Development of the IP Regulation
Development of the IP general
project
Development of designs for creating

Name of stage, activity
2011 2012 2013 2014 2015 2016 2017 2018
I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV
technical and production
infrastructure
Obtaining authorizations,
endorsements, coordination, etc.
necessary for creating the IP,
infrastructure, and constructions
Development and submission of
finance requests for creating the
infrastructure, constructions from
external sources
Organization of the professional
recycling and training
Infrastructure and common
utilities building stage
Preparing the site
Building infrastructure objects
Building the administrative
premises, etc.
Adopting the magnitude of the
Administrators fees for the LPA
Residents activities selection
and launch stage
Organization of the tender for
selecting the residents
Signature of contracts for activity
operation within the IP
Building the BI production halls
Building Residents production halls
Official ceremony for IP&BI opening
Launching the Residents activities
Job fair organization
Monitoring the IP activities
IP activity stage
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

125
Annex 26 Some measures to be included in the IP Regulation regarding the environment protection

The single coordination plan for all the distribution networks. The coordinator plan shall be filled in
with all the networks types (branches), as well as any type of work that modifies or completes the
general infrastructure, which will be performed during the IP development.
Endorsement by the state institutions of the following:
- Street lighting within the IP (roads, parking, other).
- Lighting within the premises of the objects.
- Day and night light marking of the IP premises.
- Day and night light marking of the constructions within the objects premises.
- Technologies susceptible to issue noxae during the operation, electromagnetic waves, or
waves to disturb of air traffic system coordination.
The Park Administrator shall permanently monitor all the operation works (constructions, technical-
urban objects, other), starting from layout of locations, during the establishment, as well as during the
operation, in line with all the types of approved documentation (urbanism, technical design and
operational details), as well as in line with the provisions of the IP Operation Regulation.
The applications of the potential residents will contain, on compulsory basis, the repot-commitment
regarding the technological process necessary for the operation of the business from the perspective
of the used technologies and the way in which it observes the national and European rules for
environment protection. The report-commitment shall be analyzed when bids are assessed by the
commission.

126
Annex 27 Description of environment factors and of some environment protection measures
ENVIRONMENT FACTORS
Protection of the existing environment conditions is one of the primary objectives of the IP. IP
development takes place at the extent it does not interfere with the property of those who hold land plots
in the zone, or those who have already rented land plots and operate industrial and commercial activities.
The lease of the land plots by the residents implies the observance of the legal conditions for environment
protection.
Environment factors Measures for environment protection
Waste water
Industrial waste water produced by the Administrator and Residents must be
discharged by observing fully all the conditions mentioned in the environment
authorization, which imposes conditions for waste water discharge (IP sewerage
network);
The discharge of the substances resulting from operation, maintenance,
treatment or filtering is prohibited.
Waste
The wastes will not be disposed of through burning in open fire.
All the waste and residual products shall be collected and disposed selectively on
a specially equipped site for every Resident and Administrator.
Wastes should be collected for recycling or re-usage, if it is possible and feasible.
The wastes that cannot be re-used will be managed by the municipality
enterprise via a contract signed with the Administrator and the Residents.
All the chemical and toxic wastes shall be eliminated according to the EU Rules
regarding toxic and dangerous wastes. Documents which register the type,
quantity, date, and way for waste discharge shall be kept.
The waste discharge shall be performed by observing the requirements of the
sanitary authorities.
Air emissions
The unpleasant smells generated by the operations carried out within the IP
activities should not be detectable in exceeding limits.
The concentration of the impurities in suspension (in atmosphere), within the
buildings, should be kept under the permitted limits.
The emissions into the atmosphere, of any nature, which may affect the visibility
in the zone, are subject to endorsement from the competent body. The set
conditions shall be included in the environment authorizations.
The conditions set in the environment authorization regarding the atmosphere
emissions shall be observed. The provisions from the national regulations and
standards regarding the air pollution shall be respected.
Storages
The storage areas for chemicals/petrol/or solvents will be sealed or protected
for the ground and underground water not to be contaminated by the leaks,
according to the national rules set for storage.
Noise
The provisions of the National Regulation regarding the produced noise, as well
as those of the EU Regulations on protecting the employees from noise shall be
observed.
Electromagnetic
waves
It is prohibited to use materials of devices generating electromagnetic waves.
However, if such waves are produced, measures shall be taken to reduce,
mitigate or eliminate them completely.


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