National companies can participate in PPP projects
NCE discussed the new law "On public-private partnership"
During the selectoral meeting with the regions were presented expert opinions of the representatives of NCE RK, Kazakhstan PPP Center, as well as the Ministry of National Economy of Kazakhstan.
"Last week was adopted by a separate law" On Public-Private Partnership ", which aims to create new opportunities. First of all, a partnership between the Government and business, which enhance the ability of entrepreneurs", - said the Managing Director / Director of the Department of Economics NCE RK Nurlan Sakuov, opening the meeting.
About nine regulations will be adopted in the near future. According to the Ministry of National Economy of Kazakhstan, NCE should play a key role in the development of these instruments.
"There are some acts and regulations that require the engagement of NCE. If to be more specific it is the formation of the Register of private partners. Why is it needed? This Registry defines those small businesses that are really interested in implementation of PPP projects. Moreover, there will introduced simplified procedures for small projects up to 4 million MCI, which are implemented on the ground", - added the director of department of development of Kazakhstan PPP MNE RK Nurym Ayazbayev.
The managing director of JSC "Kazakhstan PPP Center" Evgeny Amanbaev shared with the participants more information about the innovations proposed by the Law "On Public-Private Partnership".
"According to the law, public-private projects can be implemented in all areas of the national economy. But there will be formed a specific list of facilities (for example, a dam or a blood station), which can’t be transferred. The rest of the restrictions have been lifted, and a PPP project can be developed in any industry. The new law also significantly expands the range of participants in PPP: opens the way for donors, quasi-state structures. If the state's share in a legal entity is 50% or more, the company is on the side of the public partner and if the share is less than 50%, then such quasi-public entity could participate in the project on the side of the private sector", - said Evgeny Amanbaev.
Developers expect involvement of new market entities, which will strengthen the attractiveness and prospects of PPP projects. A new and vast market will open up for business. Therefore, the new law allows to conclude multilateral treaties, in which can participate several entities, both from private owners and the state. From now on the projects are divided on the contractual and institutional. If previously only real estate was considered as an object of PPP, from now on, it can be new technologies, innovation, and intellectual property.
As it was stated during the meeting by the representatives of the Kazakhstan PPP Center today through new legislative instruments the state is ready to give the private sector the whole cycle of the project: from the idea, design, finance, build and subsequent maintenance. Everything is included in the life cycle of the project, it can be transferred to the private sector from the state. Moreover, if the state implemented before the capital costs, then purchased maintenance services, now in the framework of service contracts it is allowed to apply a service model and to purchase services from the private sector. For example, a contract may be applied in the field of information technology.
It should be noted, PPP contracts are now concluded not for a short term, as in public procurements, but on the medium and long from 3 to 30 years.
In addition, the law prescribed the new opportunities for investors. Those who invested in the PPP projects may qualify for subsidies on goods and services that are produced within the framework of this project. The investment and operating costs up to 100% can be compensated.
"There is always an obstacle on the way – it is a competitive procedure. If an investor in the planning stage was actively involved, make suggestions and he had the financial and organizational costs, in the course of the competition he can get extra points, which will be priority in determining the winner", - said Evgeny Amanbaev.
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