Uzbekistan is recalibrating its development strategy for New Tashkent after acknowledging that private-sector participation has so far fallen short of the city’s potential. The government has already invested more than $2 billion in infrastructure and major social facilities, but officials are now preparing a broader package of incentives and procedural reforms to attract domestic and international investors.
From residential district to economic centre
The New Tashkent project covers a total of 20,000 hectares. During the first phase, planned for 6,000 hectares, projects worth $50 billion are expected to be implemented. Construction is currently concentrated on more than 1,000 hectares financed mainly by the state, while only 94 hectares have been allocated to private businesses.
The authorities stressed that New Tashkent is not intended to become simply an extension of the capital’s housing market. It is planned as an independent economic centre bringing together business, education, healthcare, tourism and services. At present, however, two-thirds of the land allocated to investors is being used for residential projects, while active construction has not yet begun on 28 lots.
The slowdown was attributed not to a lack of investor capital or interest, but to outdated requirements, lengthy permit procedures and the approach of some agencies that act as controllers rather than partners. Uzbekistan has therefore ordered a review of the entire project cycle, from allocating land to entrepreneurs through to commissioning completed facilities.
Housing, services and a new business ecosystem
By the end of the year, 20,000 apartments are expected to be completed in New Tashkent, creating a new living environment for at least 70,000 people. The authorities emphasised that housing must be developed alongside leisure, sports, retail, education and healthcare services.
A 55,000-seat stadium meeting FIFA requirements is under construction. In preparation for next year’s FIFA Under-20 World Cup, officials have been instructed to assess demand for hotels, restaurants and entertainment venues and to present entrepreneurs with concrete investment proposals.
The relocation of government bodies is also expected to support the city’s business activity. The ministries of construction, transport and energy are already operating in New Tashkent, while buildings for other agencies are being developed. The remaining ministries and state organisations are now expected to begin moving to the new city.
More flexible land allocation and lower project costs
Investors will receive greater flexibility in implementing the city’s master plan. If a distinctive project meets the city’s interests, proposals to change a lot’s size or the planned function of a site are to be reviewed quickly and according to clear criteria.
The authorities also plan to increase the number of sites offered with pre-prepared concepts, design documentation and construction permits. Large commercial projects will be supported through an open-initiative mechanism based on the Swiss Challenge principle. After an investor publicly announces an initiative, other participants will be able to offer better terms. If no competing proposal is submitted, the site will be allocated to the original initiator.
Infrastructure charges will be revised to encourage service and social infrastructure projects. The basic rate will be cut threefold for retail facilities, service companies and business centres; fivefold for hotels and tourism facilities; and tenfold for cultural and entertainment venues. Private kindergartens, schools and hospitals will pay a charge set at 1 percent. The new system will also apply to projects where construction has already started.
The government will also reduce the cost of applying green-building standards. For non-residential facilities worth more than $50 million, the state will fully cover the cost of obtaining a green certificate. Investors will not be required to landscape 30 percent of every individual plot, as the state will ensure that 30 percent of the entire city is green in line with the master plan.
Dedicated support for major investors
Every project valued at more than $50 million will receive a designated representative responsible for supporting the investor through to commissioning. Such projects will also be governed by individual investment agreements setting out the obligations of both sides and adapting the terms to the specific project.
To give businesses from across Uzbekistan access to the new opportunities, 100 hectares will be allocated in New Tashkent to each district of the capital and each of the country’s 13 other regions. During the initial auction for these sites, businesses from the respective regions will receive access to participate.
Fifty initial lots have been designated for foreign investors. Information packages describing their locations, economic calculations and available opportunities will be distributed through Uzbekistan’s diplomatic missions. Ministers have also been instructed to present New Tashkent projects systematically during meetings with major international companies.
The Shirin district to receive similar support
The slow pace of construction in Samarkand’s Shirin district was also criticised. It was decided that the incentives and opportunities introduced for New Tashkent would be extended to the project.
Addressing the distinction between domestic and foreign investors, the authorities stressed: “Capital, advanced ideas and honest work have no nationality.” Every entrepreneur involved in construction in New Tashkent and the Shirin district is expected to contribute to Uzbekistan’s development. The authorities subsequently held a dialogue with investors and heard their proposals and initiatives.
For international furniture, construction, interior and exterior manufacturing, hospitality, design and architecture companies, the measures create a clearer route into one of Uzbekistan’s largest urban development projects. The combination of prepared investment lots, lower infrastructure charges, state-backed green certification, dedicated project support and potential demand from housing, hotels, retail, services and public facilities could open new opportunities. The main challenge will be whether the promised regulatory streamlining and investor-oriented administration are implemented quickly enough to convert New Tashkent’s substantial planned pipeline into privately financed projects.
