The public-private partnership mechanism is the most common method of building key infrastructure facilities in international practice.
In Russia, the volume of PPP infrastructure projects approximates 1.8 trillion rubles, i.e. about 1.6% of GDP. The global indicator for developed countries ranges between 5 and 8%, which means that the Russian PPP market is at the formation stage, and significant growth is anticipated in the near future.
One of the main advantages of the PPP mechanism is the opportunity it provides to construct new infrastructure facilities within a short time, eliminating the risks of unfinished construction and reducing budget expenditures by attracting private investments.
During the life cycle of PPP projects, not only is the facility constructed, it is also launched into operation, bringing social and economic benefits. In addition, all the risks and costs of operating facilities during the life cycle of PPP projects are borne by the private party.
Federal Law of July 13, 2015 on public-private partnership N224-FZ
- Simplified interaction between the public and private sector, allowing the latter to independently develop and propose the implementation of socially significant projects on mutually beneficial terms.
- Increased competitiveness and transparency in the selection of infrastructure projects contractors, as evidenced by the increasing number of participants in the internal PPP market.
- Guarantee options for concession agreements and PPP projects, including but not limited to the following:
- guarantees of protection of private investments from inflation;
- guarantees of minimum guaranteed income throughout the entire lifetime of the facility;
- guarantee of minimum payment after the completion of the facility construction;
- guarantees of minimum traffic for when investing in transport infrastructure.
- Option of holding a joint tender for the right to conclude a concession agreement.
- Elimination of the requirement of antimonopoly authority's prior consent in the event that the implementation date of certain concessionaire obligations is postponed.
- Clarification of the specifics of concluding a concession agreement without holding a tender with the tenant of the corresponding facilities.