Notion and aims of PPP
Public Private Partnership (PPP) is a summation of middle- and long-term cooperation between the State and business structures for solution socially meaningful problems on mutually beneficial terms. Public and Private cooperation for solution socially meaningful problems has its history, in Russia too. But it became more popular last decades, so it also gets its popularity in the Russian Federation.
PPP means attraction the private business by State or municipal Administrations for implementation works on technical service, exploitation, reconstruction, modernization or construction of new social infrastructure buildings and performing public service, using such objects on terms of risks, competence and responsibility sharing. These terms are defined by the contract and by all the normative documents acting at the time of signing.
Main features of PPP in narrow (economic) meaning are the following:
- PPP sides are State (Public) and Private Business;
- partnership concludes on the official law base;
- partnership gives equal opportunities for both sides;
- PPP has a distinct public, social destination;
- during the process of projects’ implementation on the base of PPP the resources and the contributions of the parties are consolidated;
- financial risks and costs, including the achieved results are distributed between the sides according to pre-defined proportions (shares).
As a rule, PPP suggests, that not State links up to the business projects, but the State involves (attracts) business to take part in the socially meaningful projects’ implementation.
A sight on PPP from the financial point of view can be the following:
- PPP is the State (municipal) approach to risks sharing with private business for formation of financial lever. This lever helps to attract off-budget financing of capital investments in social infrastructure and improving the quality and efficiency of public service on the urgency, payment and repayment terms;
- The State should use necessary economics regulators for providing investor’s interests.
Main models of PPP are the following:
- An institutional pattern (on the base of common shares in the fund of the project company, other share participation);
- A contract pattern (contract for managing, constructing, exploitation of the objects, rent, concession, etc.).
The organization of PPP project is a process of preparation and holding the public procedure for the choice of private partner and conclusion the contract with him. The contract says about the sides’ rights and responsibility on the goals of the project PPP achievement. Also it says about the organization of monitoring of performing the private partner and organs of State authority and municipal administration responsibilities.
As for choosing and forming the PPP pattern, it can be next questions:
- The choice of contract form;
- the choice of responsibilities form;
- the working-out of competitive procedure, which provides the best private partner, who can achieve PPP project aims.
The choice of contract form, according to the Russian Federation legislation, covers issuance of documents in the form of:
- shareholders’ agreement;
- concession agreement;
- rent of public property by private participant and an investment treaty on its improvement;
- contract services;
- investment treaty on creation the object by private partner and its rent by public participant and changing its ownership;
- contractual agreement turnkey in installments.
The choice of responsibilities form covers the following:
- state (municipal) guarantees;
- revolving budget guarantees in frames of the normative acts;
- surety companies;
- direct agreements with financial organizations;
- other providing forms.
The working-out of competitive procedure, which provides the best private partner, who can achieve PPP project aims covers the following:
- the organization of competition between technical offers, including design and cost estimates or business-plan, competition criteria (for example, the role and weight of costs on complete cycle of exploitation), the meaning of financial offers in the presence of qualified technical decisions competition;
- unity of competition procedures for all accompanying questions on the implementation the main PPP contract;
- an opportunity to unite competitive procedures on the homogeneous projects, which are realized by the standard contract documents for forming pool projects aimed to attract financing.
In order to promote PPP in Russia and assist the projects’ development the web-site “Public Private Partnership in Russia” under the auspices of Center PPP “State Corporation Bank for Development and Foreign Economic Affairs” (Vnesheconombank) was established. There is a wide block of information on this direction.
October, 2010. The Agreement about interaction and cooperation in the sphere of regional investment policy between the Ministry of regional development of the Russian Federation and the Government of Kamchatskiy krai was signed. This Agreement with the help of PPP may attract federal budget and non-budget funds for financing perspective investment projects.
Within the context of PPP development in Kamchatskiy krai were created:
- Long-term regional target program “Creation of favorable investment climate in Kamchatskiy krai for 2011-2013”;
- Law “About public private partnership in Kamchatskiy krai”.
Normative legal documents are worked-out. It sets the selection order of potential investors for investment projects’ implementation on the competitive base. On the base of Kamchatka State Autonomous Organization “Kamchatskiy exhibition center” was established Center for investment attraction.
The practice of rendering the measures of state support the investment activity as concluding concession agreements is implemented in Kamchatskiy krai.
The concession form of PPP, according to the Federal law №115-FL “About concession agreements” from July 21, 2005, suggests the transfer for a while for reconstruction (modernization) and exploitation movable and immovable property objects to normal and legal persons, consortiums and unions, acting on simple partnership agreement.
The main public-private partnership regulating laws in the Kamchatka region are:
|Типовое концессионное соглашение|