Infrastructure Projects. Public-Private Partnership

One of the top priorities of the Kazakhstan-2050 Strategy is active engagement of the business community in cooperation with the government aimed at finding the best solutions to social and economic problems on the principles of a public-private partnership and implementing the “strong business, strong government” idea.

Public-Private Partnership is a cooperative arrangement between the public and private sectors, typically of a mid- or long-term nature, used to finance, build and operate infrastructure and socially important projects on the principles of balanced distribution of risks, benefits, costs, rights and obligations.

In Kazakhstan, the PPP legal framework development was triggered by the adoption, on 7 July 2006, of the Concession Law which fostered a clear, fair, predictable and stable legal environment for investment of financial and other resources in the implementation of concession-based projects.

On 31 October 2015, Kazakhstan adopted the Public-Private Partnership Law intended to enhance the role of private-public partnership in initiating and developing PPP projects.

PPP mechanisms offer benefits to both the public and private sectors – the public sector gets a chance to address a number of public problems by reducing the burden on the government budget and taking advantage of the private sector expertise and technology, while the private sector is given a free hand to invest in new infrastructure projects and to find additional sources of revenue.

In Kazakhstan, the PPP framework is developed and promoted by the Kazakhstan Public-Private Partnership Centre established in pursuance of Kazakhstan Government Resolution Regarding the Founding of an Organisation Specialising in Concession Projects No. 693 of 17 July 2008.  Besides, the Kazakhstan Government has set up a number of PPP centres at the regional level which are called to deal directly with projects and to assist local executive authorities with their implementation.

Local executive authorities have started to show an interest in how best to use and implement PPP mechanisms.  If in 2012 PPP was actually implemented only in 6 regions, nowadays, all regions across Kazakhstan try to attract investments for such socially important projects as the construction, upgrade and reconstruction of hospitals, kindergartens, schools, health centres, roads and various housing/utility facilities.

Notwithstanding a number of deterrents to the development of PPP framework at the local level, lately, this model of interaction between public and private sectors is very much sought after.  Sayat Zholshy & Partners keeps abreast of the times and has accumulated enormous experience in supporting the projects that use PPP mechanisms.  For example, we advised a major Kazakhstan investment company with regard to the development of fee-based municipal parking facilities in Almaty, including the construction and operation of multilevel car-parks.

We also advised and provided legal support to a Client in connection with the development of a municipal solid waste recycling system in Almaty allowing for separate collection, transportation, processing (sorting), utilisation and disposal of solid municipal waste, including the construction of a single waste sorting plant in Almaty.