Public-private partnership (PPP) is an important tool for attracting investment for economic development.
In our material we will tell about what PPP is and under what projects can entrepreneurs become a partner of the state.
The public-private partnership is a kind of cooperation between the public partner and the private partner that has the following features:
1) building relations between the public partner and private partner by concluding a public-private partnership agreement;
2) medium-term or long-term period for the implementation of a public-private partnership project (from five to thirty years, depending on the characteristics of the public-private partnership project);
3) joint participation of the public partner and a private partner in the implementation of a public-private partnership project;
4) pooling resources of the public partner and a private partner for the implementation of a public-private partnership project;
5) attracting investment by the private partner for the implementation of a public-private partnership project.
The main objectives of the PPP are:
- creating conditions for effective interaction between the public partner and the private partner in order to ensure sustainable socio-economic development of the Republic of Kazakhstan;
- attracting investments into the economy of the state by combining the resources of the state partner and the private partner for the development of infrastructure and life support systems for the population;
- increasing the availability and quality of the goods, works and services, taking into account the interests and needs of the population, as well as of the other interested parties;
- increasing the overall innovation activity in the Republic of Kazakhstan, including promoting the development of high-tech and science-intensive industries.
The state provides for support to the entrepreneur - private partner in the form of:
- provision of government land grants in accordance with the law of the Republic of Kazakhstan;
- co-financing of PPP projects;
- guarantees of consumption by the state of the certain amount of goods, works and services produced during the implementation of the PPP project;
- etc.
The state is involved in following forms:
- provision of the land plots in accordance with the land legislation of the Republic of Kazakhstan;
- granting the right to use state property objects;
- provision of engineering and transport communications for the PPP facility;
- etc.
and it also provides for reimbursement of the PPP project investment and operating costs, remuneration for managing a state-owned PPP object, etc. in accordance with the legislation on PPP.
The entrepreneur, for his part, participates in the following forms:
- financing of PPP projects;
- creation and operation of PPP facilities;
- PPP project management;
- etc.
and ensures the quality and availability of goods, works and services within the framework of the concluded PPP agreement.
In addition to the own funds, the PPP projects financing sources could be presented by:
- the borrowed funds;
- the funds from the state budget in the amount stipulated by the terms of the agreement
- the funds of the quasi-public sector subjects;
- other funds not prohibited by the law.
The PPP is regulated by the law.
What are the forms and types of PPP
According to the implementation, the PPP is divided into the two main forms:
- institutional;
- contractual.
In turn, the contractual PPP has the following types:
- concession;
- trust management of the state property;
- lease of the state property;
- leasing;
- technology development testing and small-scale production agreements;
- life cycle contract;
- service contract;
- other types of the agreements that meet the characteristics of PPP.
In Kazakhstan, the contract PPP is of popularity.
What projects are feasible with the PPP scheme?
The PPP projects can be:
- construction (reconstruction) and operation of educational facilities (kindergartens, schools, student dormitories);
- modernization of school canteens;
- construction and operation of sports facilities;
- construction and operation of health facilities;
- trust management of public utility facilities (outdoor lighting networks);
- etc.
The list of planned and ongoing PPP projects in Kazakhstan is given in the Register on the website www.kzppp.kz.
The partnership assumes a mutually beneficial distribution between of the participants’ responsibilities, guarantees, risks and incomes in the process of project implementation.
The PPP conditions are fixed by the PPP agreement.
The Kazakhstan PPP Center: What Is Its Role In Building the Partnership
JSC "Kazakhstan Public-Private Partnership Center" is a center for the PPP development.
More detailed information on the activities of the Center is available here.
The activities of the PPP Center are:
- research and development of recommendations on the PPP issues;
- examination of the tender documentation and business plans for the republican PPP projects;
- evaluation of the PPP projects implementation;
- training of specialists in the field of PPP;
- maintaining a list of the PPP projects planned for implementation.
What facilities are not realized using the PPP?
A list of the facilities is approved that cannot be transmitted to the PPP implementation.
Such facilities include:
- The land, waters (except for the right of temporary free land use), flora and fauna;
- specially protected natural areas (reserves, wildlife reserves, etc.);
- cultural heritage objects;
- main railway network;
- water management structures of particular strategic importance (dams, hydroelectric facilities);
- health facilities working in the field of HIV prevention;
- depositories of the causative agents of the especially dangerous infections;
etc.
What is the role of NCE "Atameken" in the PPP?
You can get advice on the partnership from the Atameken National Chamber of Entrepreneurs.
In addition, the NCE "Atameken" performs the following functions:
- participation in the tender committee to determine a private partner;
- participation in the monitoring of the PPP projects implementation;
Participation of the NCE RK "Atameken" in the monitoring of the PPP projects implementation is carried out within the framework of the PPP Projects Monitoring board with the development of recommendations on:
- the review results of the PPP projects implementation practice and issues;
- the distribution of the successful PPP projects implementation practice;
- the expansion of the spheres and industries of the PPP project arrangement application;
- the improvement of the law of the Republic of Kazakhstan in the field of PPP;
- the support of the PPP projects;
- the information and methodological support for the PPP projects implementation.
Also the NCE RK "Atameken" provides consultations, convenes seminars on the PPP issues, provides legal support and protection of the rights and legitimate interests of the business entities in the government bodies of the Republic of Kazakhstan.
