Public-private partnership in the Republic of Tatarstan: precedent in completed projects

Issues of development of public-private partnership (PPP) in the region were discussed in the meeting, which was held in the eve in Tatarstan Investment Development Agency.

The meeting, chaired by Linar Yakupov, was attended by Russia State Duma deputy Radik Ilyasov, Chairman of the State Council of the Republic of Tatarstan on economy, investment and entrepreneurship Marat Galeev, Deputy Chairman of the State Council of the Republic of Tatarstan on budget, taxes and finance Aida Sharipov, Chief of the special projects division of the Tatarstan Presidential Office Ramil Shamsutdinov, First Deputy Minister of Land and Property Relations Sergey Demidov, Federal Antimonopoly Service of the Republic of Tatarstan Deputy Head Danir Mukhametzyanov. The discussion was also attended by State Unitary Enterprise «Tatarstan Agency for the state order» CEO Jacov Heller, Head of «Investment Center" Green vale» Renat Saifullin, Deputy Chairman of the construction companies group «VIS» Board of Directors Rashid Aytuganov, Managing partner of «RISE Capital» Alexander Dimov and Dmitry Chikishev.

Focusing on the issues proposed for discussion, at the meeting Linar Yakupov said that currently the State Duma of the Russian Federation is considering a bill «On the basis of public-private partnership in the Russian Federation». Despite the fact that the second reading of the Bill postponed indefinitely, its developers hope that it will be adopted in the current year.

It was noted that PPP projects become profitable only in case of the long-term implementation: PPP agreements are generally for a term of 10 years or more. But the current Russian legislation doesn’t have the necessary legal conditions for investment in long-term infrastructure projects with private investment and risk sharing between the state (municipal) and private actors. Legally in Russia today is actually exists only one form of PPP – a concession agreement.

In Tatarstan, continued Tatarstan Investment Development Agency Chief Executive, is signed three concession agreements on the health sector. The most successful of them – is a development project of the Family Planning and Reproduction Center in Kazan, working since 2011 in collaboration with the Finnish-Russian medical company «Ava –Peter». Another concession agreement concluded with «Modern medicine clinic HD» for organization of outpatient dialysis center. The third agreement is with «Medical association «Salvation» provides the organization of a clinic on the Hadi Taktash street and a wide range of services to the people of the Kazan Volga and Vakhitov regions.

Agency’s Chief Executive noted that at the end of 2013 to assess the opportunities of PPPs using in the Republic of Tatarstan Agency asked local governments of municipalities, as well as Kazan and Naberezhnye Chelny an information about objects, which creation (reconstruction) is not provided in the required amount of budgetary funds and for which can be used PPPs.

In general list of projects included 360 infrastructure objects, the creation (reconstruction) of which requires more than 74 billion rubles. Currently, local governments can contribute to these projects 1.8 billion rubles, which is less than 2.5% of the necessary amount. Local authorities suggest using PPPs to construct and reconstruct 175 communal infrastructure objects (water supply and sanitation facilities, landfills, sewage treatment, street lighting, heat and gas supply objects), 107 social infrastructure objects (education, health, culture, improvement, social welfare, sports and tourism), 75 transport infrastructure objects (roads, public transport, parking, railroad entrances and river stations) and 4 industrial infrastructure objects (technology parks and industrial sites).

State Duma of Russia deputy Radik Ilyasov supported the Agency's initiatives of using the PPPs in the republic and told about the current situation and discussions which are now held in the State Duma and the Russian Government on the draft law «On the basis of public-private partnerships in the Russian Federation».

Chairman of the State Council of the Republic of Tatarstan on economy, investment and entrepreneurship Marat Galeev expressed doubt that law could be adopted this year, and should focus on the republican law, adopted in August 2011. Marat Galeev made a recommendation not to try to find investors for the implementation of 360 projects and concentrate on the implementation of two or three major projects, one of which was named Kazan Smart City. Marat Galeev expressed confidence that Tatarstan should form a «case-study» on the base of national and international level project.

At the meeting Linar Yakupov presented the representatives of the construction companies group «VIS» and «RISE Capital» fund, who have experience in implementing PPP projects in Russia, including such well-known projects as the airport «Pulkovo -3». «They are interested to take part in a number of major projects in the republic on the basis of public-private partnership», - underscored Linar Yakupov.

Deputy Chairman of the Board of Directors «VIS» Rashid Aytuganov noted that the current portfolio of contracts amounts 147.29 billion rubles, 35 facilities are under construction in several regions of Russia.

Presented by «RISE Capital» and «VIS» integrated investment solutions for public-private partnerships have been criticized by the State Unitary Enterprise «Tatarstan Agency for the state order» CEO Jacov Heller, which turned into a lively discussion.

The participants also discussed the prospect of building in Kazan private kindergartens, schools and other social infrastructure under PPP. It was noted that in Tatarstan is difficult to create a precedent for the construction of kindergartens using the suggested investment decisions, in contrast to the Yamal-Nenets Autonomous region, where «VIS» has implemented a similar project.

Linar Yakupov noted the importance of PPPs in the implementation of Kazan Smart City, in particular, in the creation of technopolis infrastructure.

Alexander Dimov proposed to hold in Kazan seminar of PPP projects implementation based on the experience of «VIS» for representatives of the authorities.

In conclusion Linar Yakupov said that offers, made during the meeting, will be fixed for further implementation. Due to the planned for the first quarter of the year a meeting of the Investment Council of the Republic of Tatarstan, the issues of this meeting, will be discussed there. He also noted the importance of specifying the phrase «public-private partnership» in the legislative and regulatory acts of the Republic of Tatarstan and supported Alexander Dimov suggestion to hold a training seminar for representatives of the authorities in February this year.

Tatarstan Investment Development Agency Press Service