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Perdebek M. K., E-21 SP
Karaganda Economic University, Kazakhstan
THE INSTITUTIONAL BASIS FOR THE
FORMATION AND DEVELOPMENT OF PUBLIC-PRIVATE PARTNERSHIP IN THE REPUBLIC OF
KAZAKHSTAN
Public-private
partnership is one of those opportunities of improvement of national economy,
its removal on a new stage, diversifications of business with attraction of
large investment projects, development of production of business together with
the state in new spheres of business today. Public-private partnership plays an
important role in realization of potential of the budget, in particular, in
attraction of private business in social projects.
Development of
public-private partnership in the Republic of Kazakhstan is a priority of the
state economic policy. There is a number of factors in the process of
performing this task, which are closely interconnected, defining success of
implementation of infrastructure projects on the basis of PPP:
1) Legislative
and regulatory framework and organizational environment
- legislative and
regulatory acts in the field of PPP
- institutional
infrastructure
- methodology and
practice of tenders
- mechanisms and practice of settlement of
disputes
- state policy of
PPP
2) Market
environment
- scale and
condition of the markets
- the solvency of
the public sector
- mechanisms of
price regulation
- risk
management system
3) Partnership
network
- participation
of international financial organizations
- activity of the
private sector (internal and external partners)
- access to
financing sources (financial organizations, establishments, associations)
- participation of local authorities
One of the major
factors of development , the first step in the development of the PPP is the
presence of specific legislation , and except actually frame law, as a
necessary condition harmonization of regulatory acts in the sphere of PPP with
the general law by making corresponding changes into laws and bylaws. It should
be noted that in some developed countries with more experience of public-
private partnerships , such as the UK , a separate law regulating PPPs may not exist
. On the other hand, there are examples not of current laws in PPP - in
Ukraine, Moldova. It follows from this that existence of the special statutory
act isn't a sufficient condition for PPP development, and lack of other
necessary elements of the institutional environment can quite make the PPP
projects economically inexpedient.
The development of the public-private partnership (PPP) in the Republic of
Kazakhstan began in the early '90s , when the country gained its independence
and began the use of innovative mechanisms of cooperation of the state and
private sectors, such as:
– the corporate form of government (participation of the state in
authorized capitals of legal entities along with the private sector);
– trust management of state property (rent);
– government procurements (service contracts);
– privatization.
The partnership between the state and the private sector began with the
concession and was aimed at the development of its mechanism , which today is
the most actual form of PPP around the world.
In Kazakhstan,
the first law regulating this form of PPP in the Republic of Kazakhstan is
dated on December 23, 1991 when the Law
No. 1021-XII "About concessions in the Republic of Kazakhstan"
was approved. The first law on
concessions regulated organizational, economic and legal conditions of
providing objects in concession to foreign investors in the territory of the
Republic of Kazakhstan. The emphasis on foreign investors is explained by a
difficult economic situation and all difficulties of the transitional economy
observed at that time in the Republic of Kazakhstan. In general the first law
reflects the policy of those of years consisting in attraction of the maximum
volume of foreign investments and foreign participation in national economy
Concession prevailed further development in the middle of the 2000s. The primary problems were the degradation of road infrastructure, lack
of new roads and housing, problem of full breakdown of system of utilities.
Concession gained
further development in the middle of the 2000s . Critical wear on road
infrastructure , the lack of new roads and the almost complete collapse of the
system utilities received the status of the priority issues that eventually led
in 2005 to the signing of the first concession agreement " Construction
and operation of the new railway line" Shar - Ust - Kamenogorsk ".
The retrospective
analysis of legislative base of PPP in RK testifies about rather slow progress:
ifl the first law "About Concessions" was adopted in 1991, till
2006-2007 normative legal acts were a Civil code, the Laws "About
Privatization", "About Joint-stock Companies" and "About
the State Purchases". For all this time only four contracts PPP in an
energy drink and on transport were signed: transfer to management of the RK gas
transmission system, concession agreements on three city power plants, and
later - two more, on construction of a railway
line "Sphere Ust Kamenogorsk" and power lines "Northern
Kazakhstan - the Aktyubinsk area".
On July 7, 2006
No. 167-III was adopted the new law "About concessions". The new law
has led to the point, namely, the emergence of the possibility of transfer of
the right to create objects of state property , not only foreign investors but
also to legal entities - residents of the Republic of Kazakhstan.
The new law defined legal conditions of concession,
types of the state support of the concessionaire and regulation of the public
relations arising in the course of the conclusion, execution and the
termination of contracts of concession. Besides in the law definition was given
to the mechanism of concession. So, according to the law, concession is
transfer under the contract of concession of objects of state ownership to
temporary possession and use for improvement and effective operation, and also
the rights for creation (construction) of new objects at the expense of means
of the concessionaire or on the terms of joint financing by the concessor with
the subsequent transfer of such objects to the state with providing to the
concessionaire of the rights of possession, use for the subsequent operation,
and also with providing the state support or without that.
After the
adoption of the law was signed a number of contracts of concession in the
transport and energy sectors, including: - a passenger terminal of the airport
Aktau «ATM Grup Uluslararasi Havalimani Yapim Yatirim ve Isletme Ltd.Sti.»; -
Construction of a gas turbine power plant in Aktobe region Kandyagash. with JSC
"Kandyagash GTPP"; - Construction of the railway section Eralievo -
Kuryk with "Astana-AREK"; - Construction of the railway section
Khorgos - Zhetigen with LLP «ENRC Logistics»; - Electrification of the railway
section Makat - Kandyagash with LLP «Nurzhol Energy».
After adoption of
the new law acceptance of a number of subordinate regulations, including
resolutions of the government of the Republic of Kazakhstan "About the
approval of the list of the objects offered to transfer to concession for the
medium-term period (for 2007-2009) and the similar resolution, but already
considering the period from 2010 to 2012 followed. Providing legislative base
of PPP in general was also promoted by adoption of law in 2006 "About a
project financing and securitization".
During the time
which passed from adoption of the new law for the purpose of improvement of
legal support of PPP in Kazakhstan, changes were made and to the laws anyway
influencing development of concession and PPP in general. So, changes concerned
Tax, Budgetary and Land codes of RK, and also the laws "About
Highways", "About Natural Monopolies", "About Railway Transport",
"About Investments", "About Power Industry" and "About
Securities Market" and other.
As it was already
mentioned above, works in the field of public-private partnership on
realization of the 1st stage PPP I began with definition of a state policy in
the field of public-private partnership. The state policy in the field of
public-private partnership finds reflection in messages of the president. In
the messages the President says that we in the country have a potential for
public-private partnership development therefore there is a need of its further
development. Problems of a state program of "the forced industrial and
innovative development for 2010-2014" are aimed at the development of the
concept of public-private partnership.
In January 2010,
the law was adopted " About
amendments and additions to the legislative acts of the Republic of Kazakhstan
on issues of project financing ." This law , in turn, minimized risks ,
based on the future cash flows of debt capital in the implementation of
large-scale projects to improve the protection of creditors' interests , and
helped to attract investors. Under this mechanism, the Government of Kazakhstan
developed a project to build the "Big Almaty Ring Road " .
At implementation
of the Message of the President to the people of Kazakhstan of 2010 "New
opportunities of Kazakhstan - New decade - - new economic recovery", in
2011 in June "the program for 2011-2015 on development of public-private
partnership in the Republic of Kazakhstan" was accepted. In this document
the task of expansion of scope of public-private partnership (health care,
education and municipal infrastructure), the state support for development was
set and introduction of new types of contracts, planning of the budget, for an
izmeniye of ways of investment projects to improve planning and procedures for
implementation of obligations. Also the program was directed on elimination of
the legal issues described in the program for public-private partnership
support. These tasks are accurately reflected in the program purpose:"
Mechanisms of public-private partnership, the investment projects used in
creation of legislative and institutional base for realization".
From the period
of 2008-2015 , the legal framework was improved rapidly. The PPP standard and
legal base operating for today includes two groups of documents:
1 ) normative -
legal acts of general validity : the Constitution , the Civil , Tax , Land and
Budget Code, the Law of Kazakhstan " On investments ", " On
State Property ", " On natural monopolies ", " On state
support of industrial and innovative activities ", etc.
2) special
normative legal acts: Laws RK "About Concessions" and "About
Modification and Additions in Some Acts of RK for Introduction of the PPP New
Forms and Expansion of Spheres of Their Application"; Decrees of the
President "About the prena of the objects which aren't subject to
concession"; "About the approval of rules of representation,
examination and selection of concession projects", Government resolutions
"About education in the specialized organization for concession"
(Tsetra GCHP); "About the adoption of standard contracts of concession in
various branches of economy", "About the statement of criteria for
concession projects", "About the approval of rules of formation of
tariffs (the prices, rates of collecting)" on adjustable services of
subjects of natural monopolies" and etc.
In general,
during the period about 2011-2014 a number of amendments to the law of the
Republic of Kazakhstan "About concessions", the providing number of
new financial and legal mechanisms was developed and adopted:
New types of
contracts of concession
One and two-stage
competitions
Protection of the
state concession obligations against the sequester
Direct agreements
with creditors
Payment for
availability and many others
Along with
amendments to the basic law on concessions changes were made to the Budgetary
and Tax codes, the legislation in the sphere of natural monopolies, the package
of bylaws is developed.
In 2015 on 31 of
October absolutely new law on public-private partnership was adopted
The new law
provides lifting of restrictions on scopes of PPP, expands subject structure of
participants of PPP, raises a role of the private sector in initiation and preparation
of the PPP projects.
The package of
the bylaws defining an order of planning and implementation of the PPP projects
with application of competitive dialogue, a private financial initiative of
advanced competitive procedures is at the same time developed.
In RK the
external assessment which is carried out since 2008 on a joint initiative of
the European bank of reconstruction and development and Asian Development Bank
for developing countries is not less important for understanding of a state and
prospects of development of the PPP institutional environment. As it was
already mentioned, monitoring and an assessment of quality of the PPP
institutional environment is carried out in such parameters as the concept of
PPP, definitions and the sphere of regulation, competitive procedures, project
documentation, financing and state support, and also settlement of disputes.
The comparative
assessment of PPP legislation in the Republic of
Kazakhstan and itsnearest neighbor (and economic partner), the
Russian Federation in 2007-2008 and
2011, reflecting changes in the institutional
environment during the study period. Attention is drawn to the
fact that the initial lag on most valuation parameters of
the Russian Federation has managed to catch up and
then overtake the Republic of Kazakhstan in terms
of favored PPP. Kazakhstan has kept the
lead but on the item "dispute resolution", which is
generally in line with international standards (UNCITRAL, OECD,
EBRD).
In general, the
RK standard and legal base corresponds to a level of development of partnership
of the state and business, however a number of problems limits practice of PPP.
The analysis of
an organizational component of the PPP institutional environment shows that
Kazakhstan chose the decentralized model of management of development as the
specialized central body is absent, and regulatory functions are distributed
between the Government, the ministries and their representatives (agents).
In particular,
according to the law "About Concessions":
1) The government
of RK approves the list of concession projects, rules of competitions on
selection of the concessionaire, results of tenders, exercises the general
supervision of the ministries and participating departments of concession
agreements;
2) The Ministry
of economic development and trade bears responsibility for the analysis of
investment offers, technical and economic obosnovaniy an assessment of
efficiency of projects, forms the list of concession projects and presents it
to the Government of RK;
3) The Ministry
of Finance of RK approves competitive documentation and drafts of concession
agreements (on objects of state ownership), keeps the register of concession
obligations, on behalf of the state carries out guarantee agreements, accepts
the property received by the state under contracts of concession;
4) the branch
ministries (for example, the Ministry of transport and communications of RK)
prepare concession offers, will organize and hold tenders, sign contracts,
organize transfer of property, to an atakzha exercise control over the
implementation of concession contracts;
5) local
governments (akimats, the large cities) prepare offers on inclusion of objects
of municipal property in the list of objects of concession, hold tenders, sign
the contracts connected with objects of municipal property and control their
performance.
Table 1.
Functions of the operating PPP institutes in RK (under concession agreements)
|
Organization |
Government of RK - approves the list of objects, documentation and an order of transfer of
objects; - the approval of the PPP projects, the decision about transfer of
property, provision of guarantees and B'day; - general supervision of activity of regulatory bodies, local
governments; - coordination and coordination of policy in the sphere of PPP |
||||
|
Ministry of economic development and trade |
Branch ministries and departments |
Ministry of Finance |
Institution of local government |
PPP center |
|
|
Functions |
- legislative
initiatives in the sphere of PPP; - development of
offers on projects according to PPP development policy; - coordination of
competitive documentation on objects of state property; - monitoring of
implementation of the PPP projects |
- development of offers on the PPP projects on own and private
initiative; - preparation and tendering process; - monitoring and control of implementation of projects; - acceptance of objects in property on end of the project |
- coordination of the list of objects, documentation and order of a
predacha of objects; - registration, ensuring implementation of obligations under contracts; - control of performance of contracts, conditions and procedures of use
of budgetary funds; - acceptance of objects in state property; - selection and financing of the PPP projects, granting the state
guarantees |
- development of offers on the PPP projects (municipal property); - coordination the reionalnykh of interests at implementation of the PPP
projects; - acceptance of objects at end of the PPP project |
- an assessment of the objects accepted in state property; - carrying out an independent assessment, audit, examination of offers; - preparation of suggestions for improvement of the legislation; - development of methodical providing, training |
Since 2008 an
important role in developments of PPP is played by also specialized institution
- the Kazakhstan center of public-private partnership created by the government
of RK.
The purpose of
creation of the center is the effective sustainable development of the Center
as the innovative body promoting social and economic development in the
conditions of the global economy based on knowledge.
It is possible to
distinguish the following from the main objectives of the center:
creation of
system of a transfer of knowledge;
introduction of
effective mechanisms of a transfer of knowledge;
formation of team
of qualified specialists in the sphere of a transfer of knowledge;
advance of the
PPP tools in RK as innovative method of interaction of the state and business.
Besides, the task
of development of recommendations for authorized body and the interested state
agencies of improvement of institutional system in the field of PPP is assigned
to the PPP Center.
Primary
activities of the PPP Center are carrying out:
- economic
examination of concession offers; -
economic examination of the feasibility study on concession projects;
- examinations of competitive
documentation, including at introduction in it of changes and additions; -
examinations of the concession requests submitted by participants of
competition when carrying out competition at the choice of the concessionaire;
- examinations of drafts of contracts of concession, including when entering
into contracts of concession of changes and additions; - examinations of proposals of the
concessionaire on obtaining the guarantee of the state; - estimates of implementation of concession
projects, including on a joint financing condition from the budget; - economic
examination of republican budgetary investment projects; - economic examination
of investment projects for granting the state guarantees; - economic examination of the budgetary
investments planned to realization by means of participation of the state in
the authorized capital of legal entities at the expense of means of the
republican budget; - monitoring and assessment of implementation of the
budgetary investment projects; -
monitoring and an assessment of realization of the budgetary investments by
means of participation of the state in the authorized capital of legal
entities; - monitoring of concession
projects on a joint financing condition from the budget.
Besides the
Kazakhstan center in RK also the PPP regional centers work. In general, from
sixteen regions of RK six are engaged in razvitey PPP (The East Kazakhstan,
Southern Kazakhstan, Karaganda and Mangystausky areas, the cities of Astana and
Almaty) though the PPP projects are realized in eight of them. The logic of
expansion of a regional network of the PPP centers proceeds from practical
needs of an institutional poderzhka of regional initiatives for spheres of
municipal and social infrastructure.
Introduction of a
new, rating technique of an assessment by the international organizations
within the Infraskop project became the following step in improvement of
methodology of the analysis of the PPP institutional environment in developing
countries. Research of 2012 covers 25 countries of Eastern Europe and the CIS,
including - Kazakhstan.
Table 2.
Assessment of conditions for PPP in some countries of Eastern Europe and the
CIS
|
Country |
Overall assessment |
Legislative and regulatory framework |
Institutional infrastructure |
Experience of realization of PPP |
Investment climate |
Financing and state support |
Regional legislation |
|||||||
|
P. |
P. |
P. |
P. |
P. |
P.. |
P. |
P. |
P. |
P. |
P. |
P. |
P. |
P |
|
|
Croatia |
1 |
63,5 |
2 |
84,4 |
1 |
91,7 |
11 |
31,8 |
7 |
56,8 |
13 |
38,9 |
4 |
50,0 |
|
Russia |
8 |
51,0 |
15 |
46,9 |
14 |
33,3 |
3 |
50,7 |
6 |
58,2 |
7 |
58,3 |
2 |
75,0 |
|
Armenia |
15 |
39,9 |
18 |
34,4 |
14 |
33,3 |
10 |
32,3 |
3 |
70,6 |
18 |
27,8 |
4 |
50,0 |
|
Moldova |
17 |
35,8 |
16 |
43,8 |
4 |
58,3 |
23 |
3,1 |
11 |
51 |
20 |
16,7 |
13 |
25,0 |
|
Kazakhstan |
18 |
35,6 |
22 |
25,0 |
7 |
41,7 |
17 |
16,2 |
12 |
51,7 |
9 |
55,6 |
13 |
25,0 |
|
Ukraine |
21 |
28,0 |
18 |
34,4 |
17 |
25,0 |
8 |
35,7 |
20 |
35,4 |
22 |
8,3 |
13 |
25,0 |
|
Georgia |
22 |
27,8 |
22 |
25,0 |
23 |
16,7 |
16 |
16,7 |
9 |
54,7 |
15 |
33,3 |
13 |
25,0 |
|
Kyrgyzstan |
23 |
25,6 |
12 |
53,1 |
23 |
16,7 |
23 |
3,1 |
22 |
31,5 |
22 |
8,3 |
13 |
25,0 |
|
Belarus |
25 |
10,3 |
25 |
15,6 |
25 |
8,3 |
19 |
12,5 |
25 |
10,8 |
22 |
8,3 |
23 |
0,0 |
P- place, P- point
At the general,
rather low place in the lower third of a rating (the 18th place in the overall
ranking from 35,6 points from 100 - in comparison with the 10th place, 51
points at the Russian Federation), RK lags behind first of all in such
estimated parameters as standard and legal regulation (the 22nd place, 25
points), positive experience of implementation of the PPP projects (the 17th place,
16,2 points) and standard regulation of PPP at the regional level (the 13th
place, 25 points). It should be noted also that on a level of development of
institutional infrastructure (i.e. organizational support from governing
bodies, financial and advisory institutions) Kazakhstan is included into ten
leaders (the 7th place, 41,7 points) that rather precisely reflects results of
a state policy in 2008-2012 on creation of the institutional favorable
environment for PPP.
References
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Hodge, Carsten Greve and Anthony E.
Boardman, 30 Novermber 2010
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