Public Private Partnerships and Concessions

Public Private Partnerships and Concessions

The most important instrument of investment attractiveness and one of the opportunities for enhancing investment activity is the implementation of investment projects based on public-private partnerships.

Public-private partnership is a partnership of a public partner, on the one hand, and a private partner, on the other hand, which is legally formalized for a certain period of time and based on pooling resources, sharing risks, which is carried out in order to attract private investment into the economy, and to provide public authorities and bodies local government accessibility of goods, works, services and improve their quality.

The procedure for concluding public-private partnership agreements and a list of objects in respect of which it can be concluded are established by Federal Law of July 13, 2015 No. 224-ФЗ “On Public-Private Partnership in the Russian Federation and Amending Certain Legislative Acts of the Russian Federation” .

One form of public-private partnership is a concession agreement. According to the concession agreement, one party (the concessionaire) is obligated at its own expense to create or reconstruct the property defined by this agreement (hereinafter referred to as the object of the concession agreement), the property right to which belongs to or will belong to the other party (the concessor), to carry out activities using the object of the concession agreement, the grantor undertakes to provide the concessionaire for the period established by this agreement with the right to own and use the object of the concession agreement for the implementation ia specified activities.

The procedure for concluding concession agreements is established by the Federal Law of July 21, 2005 No. 115-ФЗ “On Concession Agreements”.