Public-private partnership is developing rapidly in Uzbekistan. This creates a favorable environment for attracting direct investments.
In December 2018, the Agency for the development of public-private partnership under the Ministry of Finance of the Republic of Uzbekistan (hereinafter the "Agency") was established.
On May 10, 2019, the Law of the Republic of Uzbekistan "On public-private partnership" was adopted. The PPP development Agency is defined as the authorized state body in the field of PPP development.
I. Legal concept of public-private partnership (PPP) in Uzbekistan
According to the PPP Law, the preparation of any project can be divided into three main categories:
1. Initiation and preparation of the PPP project;
The PPP project may be initiated by a government Agency and / or an individual entrepreneur or legal entity. Initiating a public-private partnership project includes:
- development of the concept of a public-private partnership project;
- sending the concept of a public-private partnership project for evaluation, approval and approval to the appropriate state authority;
- consideration by the authorized state body of the concept of the public-private partnership project;
- approval, rejection or return of the concept of the public-private partnership project for revision by the authorized state body;
- approval of the agreed concept of the public-private partnership project by the state partner or the Cabinet of Ministers of the Republic of Uzbekistan;
- inclusion of the concept of a public-private partnership project by an authorized state body in the Register of public-private partnership projects.
The state initiator develops the concept of a PPP project, usually in the priority areas of the economy and social sphere that fall within its competence. Preparation of the PPP project is carried out on the basis of preliminary financial calculations that ensure the identification of the rationality and effectiveness of the PPP project and its optimal form for its implementation.
The private initiator has the right to develop and present the concept of a PPP project to a potential public partner. The concept of a PPP project should contain an innovative approach to solving existing problems and provide a balanced benefit acceptable to the parties.
Prior to submitting the concept of a public-private partnership project, the private initiator can conduct preliminary discussions, as well as exchange information about the PPP with a potential public partner.
If an individual entrepreneur or legal entity has declared its interest in the implementation of a PPP project, the identification of a private partner for the implementation of a public-private partnership project is carried out on the basis of a tender.
The private initiator may be reimbursed for expenses related to the preparation of the public-private partnership project in an amount not exceeding 1% of the total cost of the PPP project at the expense of the winner or reserve winner of the tender.
The concept of a PPP project is approved by various government agencies, depending on the total cost of a potential PPP project. This is how the concept can be approved by:
- The competent state authority - total cost of up to 1 million USD;
- The competent state authority in agreement with the PPP Agency - total cost of more than 1 million to 10 million USD;
- The Cabinet of Ministers - total cost of more than 10 million USD.
After approving the model of the PPP scheme and including it in the register, the public partner agrees to prepare the PPP scheme and begins the selection process for the private partner.
2. Selection of a private partner;
Tenders can be one-stage (for a PPP project in the equivalent of up to one million USD) or two-stage (more than 1 million USD).
When conducting a one-stage tender, bids (offers) of bidders developed on the basis of a conceptual solution and conditions specified in the tender documentation, with a detailed technical and commercial (financial) offer, with mandatory price (tariff) indication, are considered and evaluated. In the process of organizing a tender, negotiations with bidders on the parameters of the subject of the tender are allowed.
The law also provides for the possibility of concluding a PPP agreement without a tender based on direct negotiations in the following cases:
- ensuring the defense and security of the state;
- ownership of exclusive rights to the results of intellectual activity, other exclusive rights, land, other real estate and other property that is a prerequisite for the implementation of the project to a certain person;
- defined by Presidential decrees and resolutions.
3. The partnership agreement.
The public partner enters into a PPP agreement with the winner of the tender in accordance with the terms, terms and procedures set out in the tender documentation.
Originally published 17 June, 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.