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Russsia
ASSESSMENT OF THE QUALITY OF THE PPP LEGISLATION AND OF THE EFFECTIVENESS OF ITS IMPLEMENTATION
2011
I- PPP Legislative Framework
Assessment (LFA)
Compliance of the PPP legal framework with PFI Guide
recommendations1 and Best Practice
Core Area Rating Assessment
1- PPP Legal Framework
Existence of specific PPP law or a comprehensive set of laws regulating
concessions and other forms of PPP and allowing a workable PPP legal
framework
13/21
2-Definitions and
Scope of the Law
Existence of a clear definition of the boundaries and scope of application
of the concession legal framework (e.g. definition of "PPP", sectors
concerned, competent authorities, eligible Private party) limiting the risk
of a challenge to the validity of PPP contracts, irrespective of whether
the act is specifically targeted at PPP
23/24
3-Selection of the Private
Party
Mandatory application of a fair and transparent tender selection process.
Limited exceptions allowing direct negotiations, competitive rules for
unsolicited proposals and the possibility to challenge illegal awards.
33/45
4-Project Agreement Flexibility with respect to the content of the provisions of the Project
agreements which should allow a proper allocation of risks without
unnecessary or unrealistic/not bankable/compulsory
requirements/interferences from the Contracting Authority (obligations,
tariff, termination, compensation).
20/30
5-Security and Support Issues Availability of reliable security instruments to contractually secure the 16/21
1 UNCITRAL Legislative Guide on Privately Financed Infrastructure Projects, 2001 (hereinafter the "PFI Guide")
Checklist: Russia
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assets and cash-flow of the Private Party in favour of lenders, including
"step in" rights and the possibility of government financial support, or
guarantee of, the Contracting Authority’s proper fulfilment of its
obligations.
6-Settlement of Disputes and
Applicable Laws
Possibility to obtain proper remedy for breach under the applicable law
through international arbitration and enforcement of arbitral awards. 10/15
General LFA Rating 73,5% High Compliance
II-Legal Indicators Survey
(LIS)
Effectiveness Assessment : How the PPP law works in practice
Core Area Rating Legal Indicator Survey
7- Policy Framework Existence of a policy framework for public private partnerships 13/24
8 Institutional Framework Existence of an institutional framework for public private partnerships 8/21
9- PPP Law Enforcement Award and implementation of PPP projects in compliance with the Law 23/27
General LIS Rating 44/72 59% Medium Effectiveness
OVERALL RATING 63,8% Medium Compliance/ Effectiveness
Local Expert2: Gide Loyrette Nouel (Moscow)- Alexander Dolgov
2 The Local Experts in charge of each country have been consulted for the elaboration of the responses to the Checklist in their capacity of well recognized established law
firm in the country but the Local Experts as well as EBRD are in no way responsible for the responses given to any question in this Checlist as the Consultant was free to
use any other sources of information for its final determination.
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RATING: Key for assessment of Each Question
Yes 3 points Yes, with reservations 2 points No, with Limited compliance / redeeming
features
1 point
No 0 point
N/A Not applicable 0 point/not included in the total
Key for Assessment of Each Core Area and for Overall Assessment
> 90% Very High Compliance/ Effectiveness
≥ 70%-89% High Compliance/ Effectiveness
50%-69% Medium Compliance/ Effectiveness
30%-49% Low Compliance/ Effectiveness
< 30% Very low Compliance/ Effectiveness
TERMINOLOGY
So as to keep answers consistent and avoid ambiguity, we set out below some brief definitions of the terminology used in this questionnaire. Any
definition is provided solely to clarify some of the terminology used below. The reader should note that any such definition does not correspond
with any given definition under best international practice (which does not provide for any standardised PPP legal definitions recognised
worldwide) neither should it be interpreted that we recommend the adoption of such definitions under actual documentation, but they are
included in the interests of clarity for the completion of this questionnaire, and we should be grateful if you could adopt such definitions for the
purposes of completing the questionnaire.
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"Public Private Partnership" -"PPP" or "PPP project" includes all types of long-term arrangements between public authorities
and private institutions , including but not limited to; Concessions , BOT and derived forms, PFI and Institutional PPP. For the
purposes of this questionnaire, PPP excludes the sale of public assets or of public company shares which are part of a privatisation
process and also excludes public works, services or supply contracts which are subject to public procurement rules.
The following types of Public - Private Partnership Agreements may be adopted by a Contracting Authority for undertaking infrastructure
projects. These are solely indicative in nature and the Contracting Authority may seek to adopt a combination of the different contractual
arrangements, which incorporate some of their elements or combine elements.
"BOT" - (Build-Operate-and-Transfer)- and derived forms : a contractual arrangement whereby the Private Party undertakes to
finance, design, construct under a turnkey risk basis, operate and maintain an Infrastructure project for a specified period after
which period the project facilities are transferred to the Granting Authority usually without payment of any compensation.
The Private Party has the right to collect contract or market based tariffs or fees from the users of the infrastructure project, as
specified in the PPP agreement, to recover its investment and operating and maintenance expenses for the project. A BOT type of
PPP arrangement may provide for all the implementation and operational efficiencies of the private sector, together with new
sources of infrastructure capital. Derived forms of BOT contractual arrangements exist such as Build-Own-Operate-and-Transfer
(BOOT) similar to the BOT agreement, except that the Private Party owns the Infrastructure project during the specified term before
its transfer to the Contracting Authority or its designee, or such as Build-Own-and-Operate (BOO) which is a contractual
arrangement similar to the BOT agreement, except that the Private Party owns the Infrastructure project and no transfer of the
project to the Contracting Authority or its designee at the end of the fixed period is envisaged. Derived forms incorporating Lease
right rather than Ownership or dealing with rehabilitation or extension rather than construction which extent the possible
combination which for the purpose of this questionnaire will all be hereafter referred to as BOT for simplification purpose except
where legal specificity requires specific treatment.
"Concession": is an act attributable to the State whereby a Contracting Authority entrusts to a third party the total or partial
management of public services for which that authority would normally be responsible and for which the third party assumes all or
part of the risk.
"PFI" (Private Finance Initiative) : a form of cooperation and partnership between public authorities and Private Parties which aim
to ensure the funding, construction, renovation, management or maintenance of an infrastructure or the provision of service to the
infrastructure without the delegation of the public service itself. It is a contractual arrangement whereby the Private Party
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undertakes the financing and the construction of an infrastructure project and after its completion transfer it to the Contracting
Authority or its designee. This arrangement may be employed in the construction of a public service facility for which the public
service must be operated directly by the contracting authority for whatever reason but the operation and maintenance of the facility
remain the responsibility of the Private Party for the entire duration of the PPP agreement. The contracting authority will reimburse
the total project investment on the basis of a rent based of an agreed schedule with the payment starting from the date of
commencement of operation and pay for the services rendered to the facility on a performance basis.
"IPPP"(Institutional PPP): a structural or corporate form of PPP which provide for the cooperation between public authorities and
a Private Party through a joint venture or mix (public- private shareholding) company in which case all reference to the selection
process refers to the selection of the Private Party.
Other definitions:
The "Law" or "PPP Law": a law regulating any form of PPP including but not limited to Concession, BOT, PFI, IPPP and
including, for the purpose of this questionnaire, the set of rules applicable to any PPP in the absence of a specific PPP law. The
Law for the purpose of this questionnaire also includes any implementing regulation and any form of governmental act regulating
PPP.
"BOT Law" : a law regulating a BOT type of PPP in their multiple forms.
"Law On Concession Agreements": a law regulating a Concession form of PPP.
"Contracting Authority": a public authority empowered to award a PPP and enter into Project Agreements
"PFI Law": a law regulating a PFI form of PPP.
"PPP unit" : specialized institution/agency/ministerial department established to promote and take care of PPP.
"Private Party" : Private Party or other entity in the form of a special purpose company to which a Project Agreement in general
has been awarded. [The word Private party will be used for the sake of this study even in case the PPP regulation allows PPP
business partner to be a mix company or even a public entity.]
"Project Agreement": an agreement(s) between the Contracting Authority and the Private Party regulating their respective rights
and obligations with respect to the PPP project.
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REFERENCE TO BEST PRACTICE
•UNCITRAL Legislative Guide on Privately Financed Infrastructure Projects, 2001 (hereinafter the "PFI Guide") and UNCITRAL
Model Legislative Provisions on Privately Financed Infrastructure Projects, 2003 (UNCITRAL Model Legislative Provisions).
•EC - Commission Interpretative Communication on Concessions Under Community Law dated 12 April 2000; together with additional
EU major documents/decision /recommendation on concessions including Directives 2004/18/EC and 2004/17 EC of 31 March 2004;
Green Paper on Public Private Partnerships and Community Law on Public Contracts and Concessions dated 30 April 2004; Report on
the public consultation on the Green Paper (SEC(2005) 629- Communication from the Commission to the European Parliament, the
Council, the European Economic and Social Committee and the Committee of the Regions on Public-Private Partnerships and
Community Law on Public Procurement and Concessions (Brussels, 15.11.2005.COM(2005) 569) European Parliament resolution on
public-private partnerships and Community law on public procurement and concessions (2006/2043(INI)); European Commission
Guidelines for Successful Public-Private Partnerships (2003).Commission Interpretative Communication Brussels, 05.02.2008
C (2007)6661on the application of Community law on Public Procurement, and Concessions to Institutionalised Public-Private
Partnerships (IPPP);
•EBRD Core Principles for a Modern Concessions Law – selection and justification of principles Prepared by the EBRD Legal
Transition Team.2005;
•UNIDO Guidelines for Infrastructure Development through Build Operate Transfer (BOT) Projects, 1996 (UNIDO BOT Guidelines);
and
•OECD Basic Elements of a Law on Concession Agreements, 1999-2000.
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RUSSIA OVERALL ASSESSMENT OF THE QUALITY OF THE PPP LEGISLATION AND OF ITS EFECTIVENESS
Federal Law No. 115-FZ "On Concession Agreements" was adopted in 2005 (the "Concession Law"). It was completed with Model Concession
Agreement regulations and with the Amendments and Additions of 8 November and 4 December 2007, 30 June 2008, 17 July 2009, 2 July 2010,
and 19 July 2011). It is not supported by a general policy framework for PPP but various government representatives have announced on many
occasions that concessions and PPP in general, are acknowledged and welcome in Russia.
The Concessions Law operates under the general Russian statutory framework, meaning that it is intended to cover concession-specific aspects of
a project only, and does not create a special (more favorable or straightforward) legal regime for concessions.
The Concessions Law expressly refers back to the existing land, subsoil, budgetary, tax, environmental and other legislation. Another key feature
of the Russian concession legislation is that it is enacted exclusively at the federal level but applies to all federal, regional and municipal
concession projects. Regional and municipal authorities are not allowed to pass concession-related laws and regulations. They may, however,
enact laws and regulations on other non-concession forms of PPP.
The Concession Law regulates only one specific form of PPP, i.e. BTO, which can be utilised in particular to benefit from the Federal Investment
Fund. Otherwise it is possible to use an alternative legal framework established by more flexible and investor-friendly regional PPP laws for
similar projects providing for the private ownership of the PPP facilities on the basis of non-concession forms of PPP.
The Concession Law is a relatively long piece of legislation (38 articles) covering in details numerous aspects that are important to be covered
under a general concession law including among others entities involved into the concession granting process, concerned sectors, selection
procedure, concession agreement, as well as certain financial security and government support issues. It also contains a number of positive
elements (guarantee of non discrimination, open tender procedure, etc.).
There are no fundamental omissions in the Concession Law, but it is not a self standing piece of legislation which could allow any foreign
investor or financier to have access to the entire regime applicable to a concession project in one single document. Also, the Concession Law (i)
is too detailed and over prescriptive regarding a number of issues which can make the implementation of concession projects based on the Law
difficult / impossible in practice, and (ii) contains numerous ambiguous articles which create legal uncertainty. In particular, the Concession Law
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is very restrictive in respect of security instruments, too prescriptive regarding concessionaire's obligations and selection procedure, does not
allow international arbitration and provides for a case-by-case institutional scheme.
Numerous amendment made since its inception in 2005 and since the latest EBRD Assessment have added to the complexity and brought very
little clarification except with respect to the compensation in the event of early termination of the concession agreement and the possibility
expressly given to the granting authority to contribute to the expenses for the creation / renovation/ operation of the concession facility.
Generally speaking, the Concession Law and regional PPP laws may constitute a solid basis for the development of PPP in the country, but need
some significant improvement compared to international standards as well as increased predictability and reliability to become more attractive to
lenders and sponsors.
A number of amendments to the Concession Law are currently under discussion. The RF Ministry of Transport prepared and submitted to the
State Duma in September 2011 a new set of amendments to the Concession Law and some other federal laws for the purposes of implementing
of long-term contracts in the sphere of road construction on the basis of concession agreements. Some of the contemplated amendments are
rather positive, e.g. (i) making model concession agreements in respect of some types of infrastructure not mandatory; (ii) the allowing
assignment of rights and transfer of debt by the concessionaire at any time (subject to the grantor's consent) and not only upon completion of the
construction stage, as currently provided by the Concession Law.
As of September 2011, the PPP laws, regulating BOT and other non-concession PPP forms exist in more than half of all the regions of the
Russian Federation. Their quality and importance are increasing. A few PPP projects have already been awarded in accordance with the regional
PPP laws (with only Pulkovo Airport having headed the financial close in St. Petersburg so far) and some PPP projects are at the bidding stage
(e.g. in St.Petersburg, Perm, Nizny Novgorod, Ekaterinburg).
At the same time a draft federal PPP law is being prepared by the Ministry of Finance. Hopefully, it will give a definition of PPP at the federal
level providing more comfort to sponsors and financiers, but will not strangle the regional PPP initiative.
In comparison with the situation at time of previous EBRD PPP Assessment the institutional base of PPP in Russia has also been improved. A
number of PPP departments have been established in the federal and regional governments and its sub-divisions. PPPs are also noted in some of
the regional strategy policy documents.
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There is, however, a risk that the Russian PPP market, having just recovered from a significant set-back during the recent economic downturn
while many concession and PPP projects were either broken, or abandoned altogether, may yet plunge into another prolonged period of standstill
due to the global markets turmoil which arguably may again wit rather hard the Russian raw materials-based economy.
ASSESSMENT & LEGAL INDICATOR SURVEY
1. LEGAL FRAMEWORK
1.1 Existence of different forms of PPP legal framework
QUESTION
ANSWER
ARTICLE
COMMENTARY
1. Does the country have a single act dealing
specifically with Concessions or a generalised
act incorporating the legal framework for PPP,
including Concessions?
The Concession Law exists on the federal level. This
law provides the legal framework for concession
agreements only. There is no law regarding the general
framework for PPPs in Russia. However, we should
note that recently many laws on PPPs have been
adopted in certain regions of the Russian Federation. As
of September 2011 such laws exist in more than half of
all the regions in Russia.
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2. Does the country have an act that allows BOT or
derived forms such as BOOT, BOO or other
forms either as part of a specific act or as part of
a general PPP Law?
Article 3 of
the
Concession
Law3
The Concession Law regulates BTO projects
exclusively. Regional laws regulate different PPP
forms to a verying degree, including in many cases
BOT, BOOT and BOO. There is unfortunately a risk of
inconsistency between regional PPP laws and the
federal Concession Law and Public Procurement Law.
In case of a dispute, if a court finds that the regional
law contradicts with the federal one, the latter should
inevitably prevail.
3. Does the country have an act that allows PFI,
either as part of a specific act or as part of a
general PPP Law?
The Concession Law does not provide for PFI. Albeit
some regional PPP laws regulate PPP forms which are
in substance very close to PFI (as it is defined above,
i.e. BOLT).
4. If the answer is No to any of the three first
questions concerning a specific form of PPP
does the Constitution or other general act (ex:
the Civil Code, sectoral law) recognise the basic
principles of the concerned PPP and regulate its
granting?
The RF Constitution and the Civil Code recognise some
basic principles relevant for PPP: freedom of contract,
equality of participants etc.
For our general information: Is a new PPP Law or an amendment to the existing Law being prepared, or considered, in the country?
If so, at what stage of the legislative process is such new PPP Law or amendment to the existing Law?
3 Due to the large number of regional PPP laws, we do not provide references to specific articles of such laws in this checklist.
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At the moment the RF Ministry of Finance is in the process of preparing of a new federal law on PPP. Also some amendments to the Concession
Law are being discussed among experts and governmental authorities.
1.2 Specificity and integration of PPP the legal framework
5. If the country has a Public Procurement Law, to
what extent does the Public Procurement Law
apply or not to the granting of a PPP?
The Public Procurement Law does not contain an
express provision indicating that it does not apply to
concessions or other PPP forms. However, the
Concession Law provides for a specific regime for
concession agreements. Therefore, the Public
Procurement Law does not apply to concession.
However, there is a risk that it may apply to other PPP
projects.
6. If the country has sectoral laws regulating PPP
in specific sectors, is it clear which law is
applicable to the granting of PPP for each
particular sector?
There are no laws regulating PPPs in different sectors.
The Concession Law provides for the general
framework for the launch of a concession project,
tender procedure, selecting the winner and entering
into the PPP agreement. However, there are model
concession agreements for different sectors (utilities,
health care, railway transport, etc.) which have been
approved by the RF Government and are mandatory.
Separate aspects, concerning the lease of public
property, land plots disposition, budget, tariffs and
other issues imortant for PPP are regulated by different
federal laws and Government acts. Some sectoral laws
(e.g. Law on Roads and Roads Activity in the RF, Law
on Power Energy) contain certain provisions regarding
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PPPs in the relevant sectors.
7. Does the country have a Law allowing the
Institutional form of PPP (IPPP) which
regulates IPPP participation to PPP?
Russian law does not provide for this
PPP form.
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2. DEFINITIONS AND SCOPE OF THE PPP LAW(S)
2.1 PPP definition 4
QUESTION
ANSWER
ARTICLE
COMMENTARY
1. Does the Law define one or several term(s) (i.e.
"PPP", "Concession", "BOT", "Partnership"
etc. and/or respective agreements) for the
arrangements to be regulated by the Law which
specify the limits of application of the Law?
For our general information,: please provide the
given definition(s), if any.
According to the Concession Law "under a concession agreement one party (the concessionaire) undertakes on its own account to construct and/or reconstruct a property (immoveable property or technologically interconnected immoveable and moveable property intended for an activity envisaged by the concession agreement) specified in the agreement (hereinafter referred to as the subject matter of the concession agreement) the title to which either belongs, or will belong to the other party (the grantor), permitting him to use
4 PFI Guide, Consolidated Legislative Recommendations, Recommendation 3and Commission Interpretative Communication on Concessions Under Community Law dated
12 April 2000; together with additional EU major documents/decision /recommendation on concessions including Directives 2004/18/EC and 2004/17 EC of 31 March
2004; Green Paper on Public Private Partnerships and Community Law on Public Contracts and Concessions dated 30 April 2004; Report on the public consultation on the
Green Paper (SEC(2005) 629- Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the
Committee of the Regions on Public-Private Partnerships and Community Law on Public Procurement and Concessions (Brussels, 15.11.2005. COM(2005) 569)
European Parliament resolution on public-private partnerships and Community law on public procurement and concessions (2006/2043(INI))
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(operate) the subject matter of the concession agreement while the grantor undertakes to grant to the concessionaire for a period specified in the agreement the rights of possession and use of the subject matter of the concession agreement for the purpose of conducting the aforementioned activity". There are no definitions of PPP or any other forms at the federal level. Most regional laws, however, define PPP and sometimes specific forms of PPP such as BOT. For instance, under Article 4 of St. Petersburg PPP Law: "public-private partnership means a mutually beneficial partnership between Saint Petersburg and a Russian or a foreign legal entity or individual or an unincorporated group of legal persons acting under a simple partnership agreement (joint operation agreement) for the purpose of implementing socially significant projects, projects aimed at the development of education, public health service, social public service, physical recreation, sport, culture, transport and engineering infrastructure, infrastructure of communications and telecommunications in Saint Petersburg by means of conclusion and execution of agreements, including concession agreements".
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2. Does the Law apply to all contracts entered into
that fall under the definition(s) given above,
irrespective of the name given to such contract
(concession, license, usufruct right, lease, etc.)?
The name given to the contract indeed does not matter. Substantially the Concession Law regulates only concessions (BTO). Regional PPP laws pretend to cover the gap and apply to all other forms of PPP.
3. Does the Law make a clear distinction between
a PPP agreement (such as a Concession) and a
license (i.e. an authorisation to operate by a
public authority)?
Yes, the Concession Law and regional PPP
laws do not provide for any regulation of
the licensed activity. Federal Law No. 128-
FZ "On the Licensing of Certain Types of
Activity" of 8 August 2001 provides for
the exhaustive list of activity types that are
subject to licensing irrespective of the
grounds for performing such an activity
(e.g. a concession).
2.2 Contracting Authority
QUESTION
ANSWER
ARTICLE
COMMENTARY
4. Does the Law identify (or allow clear
identification by reference to other laws or
regulations) the public authorities ("Contracting
Article 5 of
the
Concession
The Concession Law states that the Government of the
Russian Federation or the federal executive authority
designated by the Government, or the region of the
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Authorities") that are empowered to select
projects, prepare for, and award PPPs and enter
into Project Agreements ?
Law Russian Federation, or the municipality shall be grantor
under the concession agreement. In certain cases legal
entities (usually owned by the State or municipality)
may perform certain but not all functions of the grantor.
In regional PPP laws the relevant public authorities are
usually also clearly identified.
For our general information: If yes, which of the following authorities are identified:
Federal authorities (the Government or ministries, or independent agencies designated by the Government);
Regional authorities;
Municipal authorities.
2.3 Private Party and Project Company
QUESTION
ANSWER
ARTICLE
COMMENTARY
5. Is it possible for a PPP be awarded to a foreign
company, a Private Party or to a domestic
company with foreign participation in the share
capital and/or management (without
discrimination)?
Article 5
and 19 of
the
Concession
Law
The Concession Law explicitly provides that a foreign
legal entity may become a concessioner. Article 19 of
the Concession Law guarantees equal rights to Russian
and foreign legal entities and a legal regime prohibiting
the application of discriminating measures and
measures impeding foreign companies to freely use the
investments, benefits and gains obtained in the course
of their activity. Regional PPP laws generally follow
the same approach.
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Nevertheless, in practice it is impossible for a foreign
company to obtain licences and/or permits mandatory
for certain types of activities. A company established
in Russia with foreign participation is considered to be
a domestic company and benefits from the same
protective clauses of the Concession Law and regional
PPP Laws.
For our general information: can a PPP be awarded to public entities or to entities jointly owned by private and public entities (IPPP)?
Are there restrictions imposed on such contracts?
The Russian legislation does not prohibit participation in Concession projects by public legal entities or by legal entities with partial public
participation.
2.4 Concerned sectors5
QUESTION
ANSWER
ARTICLE
COMMENTARY
6. Does the Law identify (or allow identification
by reference to other laws or regulations) the
sectors and/or types of infrastructure and/or
services in respect of which a PPP may or may
not be granted?
Article 4 of
the
Concession
Law
The article provides for the types of infrastructure
which may be the object of a concession agreement.
Regional PPP laws also identify certain sectors in
respect of which a PPP may be granted.
The list of infrastructure types which may be the object
5 For further information on the concerned sectors please refer to:PFI Guide, Consolidated Legislative Recommendations, Recommendation 3 and 4.
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7. Do the sectors eligible for PPP correspond to a
large extent to those listed below, or if not, is
the list of eligible sectors an open-ended one (as
opposed to being exhaustive) allowing (or at
least not preventing) PPP to be granted in
numerous sectors”?
Article 4 of
the
Concession
Law
of a concession agreement is large but exhaustive.
Some regional PPP laws follow the same approach, i.e.
provide for the exhaustive list of infrastructure types
eligible for PPP (e.g. the St.Petersburg PPP Law),
others contain inexhaustive lists (e.g. the Khanty-Mansi
Autonomous Okrug - Ugra PPP Law).
8. Do the sectors eligible for PPP includes the
merchant sectors of the economy (energy,
transport, water, oil and gas) eligible for PPP in
addition to non commercial activities such as
the provision of government services (such as
schools, hospitals, prisons, defence and
housing).
Article 4 of
the
Concession
Law
The Concession Law provides for the possibility to
grant concession in the merchant sectors of economy in
respect of transport (roads and their engineering
facilities, tunnels, bridges, railway transport, pipeline
transport, sea and river ports, sea and river ships,
airports and the respective infrastructure, hydraulic
facilities, metro and public transport); energy; public
utilities. The oil and gas infrastructure may not be the
object of concession (it is subject to Federal Law
No. 225-FZ "On Product Sharing Agreements" of 30
December 1995).
In the sphere of government services provision
concession over the following types of infrastructure
may be granted to the Private Party: health care
infrastructure including sanatoriums; schools, sport,
culture, leisure and tourism infrastructure. The
Concession Law does not provide for the possibility to
enter into concession agreements in respect of prisons
and defence infrastructure.
The regional PPP laws usually include the merchant
sectors of the economy, except for oil and gas.
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For our general information: Please indicate the restrictions if any imposed by the Law on the sectors eligible for PPP: there is no particular
restriction but all types of infrastructure not being included into the list may not be considered for concession purpose.
Only the sectors listed in the Concession Law are eligible for concession purposes. There is less clarity in respect of other PPP types. Sometimes
restrictions are implied and follow from other laws stipulating that certain activity is a prerogative of the State.
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3. SELECTION OF THE PRIVATE PARTY6
3.1 General Considerations
QUESTION
ANSWER
ARTICLE
COMMENTARY
1. Does the Law require, in principle, the
Contracting Authority to select Private Parties
through a competitive tender process?
Article 13
of the
Concession
Law
The general rule is that a Private party should be
selected only on a competitive basis through a tender
procedure. Article 37 of the Concession Law provides
for a very limited number of cases in which a
concession agreement may be entered into with a
Private Party without holding a tender. For example, a
lease agreement concerning public property executed
by a Private Party before 1 July 2010 and the relevant
object may be used for the purposes of a concession
project. In such an instance, a lease agreement may be
replaced by a concession agreement without holding a
tender procedure.
The regional PPP Laws also require tender procedure
for selection of a Private Party. Some regional laws
provide a detailed description and requirements to
tender procedure, other laws regulate it more broadly
setting up a general principle of Private Party selection
6 For further information on the selection of the Private Party, please refer to: PFI Guide, Consolidated Legislative Recommendations, Recommendations 14 to 39 included.
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trough a competitive tender but leaving the specific
procedure to other regional normative acts.
2. Is there reference in the Law to the principles of
transparency, equal treatment and
proportionality?
Chapter 2 of
the
Concession
Law
The Concession Law does not provide a separate clause
on the principles of transparency and proportionality.
However, chapter 2 of the Concession Law provides
clauses on guaranties of the Private Party rights, equal
treatment of Russian and foreign companies, guaranties
for performance of concession activities.
The regional PPP laws usually provide for the
principles stipulating the equality of rights of public
and private partners.
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3. Is there a provision in the Law concerning the
publication of information related to the
competitive procedures in the country media
and in the international media (for large
projects)?
Article 21,
23, 26 of
the
Concession
Law
For an open tender, tender documentation and
information related to the tender shall be published in
the domestic media and on the official government
website allocated for the publishing of information
concerning all public competitive procedures. There is
no provision on the possibility or obligation to publish
information in the international media. However,
according to Article 26 of the Concession Law the
announcement on tender procedure may be published in
any media, subject to special decision of the tender
commission, taking into account that it will be also
published on the official government website.
The regional PPP laws contain provisions to the extent
that that such information must be published in the
regional media.
4. Are there provisions within the Law or any
special manual or recommendations governing
in detail the selection of the Private Party (i.e.:
the pre-selection of bidders, the procedure for
requesting proposals or other procedure such
as competitive dialogue/two stage procedure)?
Articles 21-
35 of the
Concession
Law
The Concession Law provides 15 very specific articles
regulating all the details concerning the tender
procedure preparing, holding and selection of the
winner. The tender criteria concerning tender
procedures are also specified in the Concession Law.
Some regional laws provides a detailed description and
requirements for tender procedure, others regulate it
more broadly setting up a general principle of Private
Party selection trough a competitive tender but leaving
the specific procedure to other regional normative acts.
For instance, the St.Petersburg PPP Law regulates the
tender procedure in detail, including pre-selection of
bidders, the procedure of requesting proposals and their
assessment, etc.)
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5. Does the Law provide that if the Contracting
Authority rejects an applicant at the time of pre-
selection or disqualifies a bidder, it must make
public the reasons for the decision (or inform
the rejected bidder thereof explaining the
reasons for rejection)?
Article 28,
29 of the
Concession
Law
The Concession Law provides a limited number of
reasons allowing the Contracting Authority to
disqualify the bidder at the time of pre-selection. The
procedure of opening submitted applications is public.
Selection of participants and rejection of applicants is
formalised by the minutes of the pre-selection
procedure. The reasons for rejecting a participant shall
be noted in the minutes and a copy shall be sent to all
applicants. The rejected applicant is entitled to
challenge the rejection in court.
The most detailed regional PPP laws such as the
St.Petersburg PPP Law or the Khanty-Mansi PPP Law
follow the same approach.
Other regional PPP laws do not regulate the tender
procedure in such detail, but provide that tender
procedure must be transparent.
3.2 Award of PPP
QUESTION
ANSWER
ARTICLE
COMMENTARY
6. Does the Law provide that all proposals are
ranked solely on the basis of a predefined
Article 23,
24, 32 of
The Concession Law establishes the mandatory rule
that tender documentation shall imperatively set forth
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evaluation criteria set forth in the pre-selection
documents/ request for proposals?
the
Concession
Law
the tender criteria and parameters of these criteria.
The regional PPP laws which contain detailed
provisions regarding the tender follow the same
approach.
7. Does the Law provide for the publication of a
notice of the award of the project, identifying
the Private Party and including a summary of
the essential terms of the project agreement?
Article 23,
35 of the
Concession
Law
According to the Concession Law the tender
documentation subject to publishing shall contain the
material conditions of the concession agreement.
The information concerning the winner shall be
published in the same printed media that was used for
publishing the announcement, and posted on the official
website.
The more detailed regional PPP laws follow the same
approach.
8. Does the Law provide that the Contracting
Authority or any other public authority maintain
records of key information pertaining to the
selection and award proceedings?
Article 33,
34 of the
Concession
Law
The Concession Law does expressly provide for the
obligation of the tender commission to keep minutes for
the analysis and estimation of bids which shall set forth
the following mandatory information: tender criteria,
conditions provided for in the bids, the results of bids
assessment, the name and legal address of the winner
and the reasons for deciding to award concession to the
selected winner.
Article 34 of the Concession Law provides for the
obligation of the tender commission to keep minutes of
the results of the tender setting forth the exhaustive list
of mandatory information. It is kept by the Contracting
Authority throughout the whole term of the concession
agreement.
The more detailed regional PPP laws follow the same
approach.
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9. If the answer to the previous question is Yes,
does the Law provide that such record is
accessible to the public, or at least to interested
parties?
Article 21,
35 of the
Concession
Law
According to Article 21 of the Concession Law all
minutes and records mandatory for tender procedure
shall be posted on the official website.
Moreover any participant is entitled to require
clarification regarding the tender results and the
Contracting Authority is obliged to provide him with
the respective clarification within thirty days from the
date of the request.
The more detailed regional PPP laws follow the same
approach.
3.3 Final negotiations
QUESTION
ANSWER
ARTICLE
COMMENTARY
10. Does the Law contain provisions regulating
final negotiations (i.e. post contract award) so
that transparency, equal treatment and
competition are preserved?
The concession agreement shall be executed by the
winner or by the sole applicant or participant in the
instance that the tender failed within the period
established in the tender documentation. A definition of
"final negotiations" does not exist. However, in practice
the parties may negotiate the concession agreement
except for its mandatory terms.
Most regional PPP laws do not provide for detailed
procedure regulating the final negotiations.
11. Does the Law provide that the Contracting
Authority has the authority to terminate
negotiations with the invited bidder if it
Article 26
of the
Concession
Law
There is no such provision in the Concession Law.
Contracting Authority shall send the concession
agreement to the winner. If he does not sign the
agreement, the Contracting Authority may enter into
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becomes apparent that the bid will not result in
an agreement and start negotiations with the
second ranked candidate?
the concession agreement with the second-ranked
bidder.
The regional PPP laws do not regulate this issue.
3.4 PPP Award without competitive procedure
QUESTION
ANSWER
ARTICLE
COMMENTARY
12. Does the Law provide that the Contracting
Authority has the authority to award a PPP
without a competitive process? Is this only in
limited/ exceptional circumstances?
Article 37,
38 of the
Concession
Law
The Concession Law provides that the Contracting
Authority is entitled to enter into the concession
agreement without a competitive process only in the
cases provided for by the Concession Law. If only one
application or only one bid was submitted the
agreement may be entered into with the sole participant.
Moreover the concession agreement may be signed
with the lessee of public assets if the lease agreement
was signed before July 1 2010 and the leased assets
may be awarded as concession infrastructure.
The St.Petersburg PPP Law provides that a PPP may be
awarded without a tender - if only one appllication has
been submitted.
13. Does the Law provide for a procedure, set of
rules or principles to be respected when
Article 37,
38 of the
Concession
The rules and terms for the execution of the concession
agreement by the sole bidder, as well as by the lessee of
the infrastructure, are provided for in the Concession
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awarding a PPP without a competitive process?
Law Law.
Except for the provisions mentioned in the previous
answer the regional PPP laws reviewed by us do not
provide for such a procedure.
For our general information, please specify the conditions which would allow such direct negotiations?
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3.5 Special case of unsolicited proposals
QUESTION
ANSWER
ARTICLE
COMMENTARY
14. Does the Law provide for an adequate
framework for the Contracting Authority to
manage unsolicited proposals/private initiatives
(i.e. a proposal relating to the implementation of
a PPP that is not submitted in response to a
request or solicitation by the Contracting
Authority) that ensures transparency and equal
treatment and does not distort competition?
Article 13
of the
Concession
Law
No, neither the Concession Law, nor the regional PPP
laws provide for any framework for unsolicited
proposals / private initiatives.
3.6 Review procedures
QUESTION
ANSWER
ARTICLE
COMMENTARY
15. Does the Law allow the bidders who claim to
have suffered, or that may suffer loss or injury,
to seek review of the Contracting Authority’s
actions or failure to act?
Articles
22, 33 of
the
Concession
Law
The Concession Law does not specify the right of the
interested parties (at the stage of announcement of
tender) or bidders (at the stage of winner selection) to
challenge the procedure or the minutes formalising such
a decision, or other violations of their rights. According
to the general principle of civil law, if one party suffers
from any violation of its rights by an other party, it may
claim damages in court.
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4. PROJECT AGREEMENT7
4.1 Model or list of provisions
QUESTION
ANSWER
ARTICLE
COMMENTARY
1. Does the Law contain (or refer to) a model PPP
agreement (which is an optional template
agreement for guidance only) or a list of
mandatory material provisions which must be
included in the agreement (the content of such
provisions being left for negotiation)?
Article 10,
13 of the
Concession
Law
The list of the material conditions to be imperatively
included in a concession agreement is provided for in
the Concession Law.
The RF Government also approved model concession
agreements for various industry sectors which
according to the Concession Law which are mandatory
and must be used as a basis for the concession
agreement for a specific project which reduces the
flexibility for negotiations.
4.2 Duration and extension of the Project Agreement
QUESTION
ANSWER
ARTICLE
COMMENTARY
2. Does the Law provide that the duration of the
Project Agreement should depend on the length
Article 6 of
the
Concession
The Concession Law indicates that the duration of the
concession agreement should be established in the
7 For further information on the project agreement definition, please refer to:PFI Guide, Consolidated Legislative Recommendations, Recommendations 12 and 40 to 68
included.
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of time taken for the amortisation of the Private
Party's investment and an appropriate return on
the capital?
Law
concession agreement, taking into account the term of
the construction and reconstruction of assets, amount of
investments and payback time.
The general approach of the regional PPP laws is the
same.
3. Does the Law provide that the renewal or
extension of the Project Agreement should be
limited and depend on exceptional
circumstances (such as Contracting Authority
default or an event of force majeure)?
Article 10,
13, 20 of
the
Concession
Law
The Concession Law does not provide a clause
authorising the renewal or extension of the project
agreement. Moreover, the term of the concession
agreement is a material condition of the concession
agreement and as a general rule is not subject to
modification. However, there are cases in which the
concession agreement including its term may be
modified in court. For instance, such a modification
may be allowed if legislation has changed and
established new norms aggravating the conditions for
the Private Party compared to those expected by the
Private Party when he entered into the agreement.
For our general information, please provide the given minimum and maximum duration (if any)
4.3 Termination of the Project Agreement
QUESTION
ANSWER
ARTICLE
COMMENTARY
4. Does the Law leaves open to the Project
Agreement negotiations the list of possible
ground for termination and the content of to the
Articles 13,
15 of the
Concession
Law
The Concession Law provides for the list of cases under
which the concession agreement may be terminated
early, both by a court decision and without a court
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termination provision?
decision (through mutual agreement of the parties). The
content of the termination provisions are ascribed in the
Concession Law and the Civil Code, which will to
some extent be applicable. However the list of cases
under which the concession agreement may be
terminated is not exhaustive and additional grounds
may be provided for in the agreement.
Most of the regional PPP laws do not regulate this
issue.
5. If the answer to the previous question is No does
the Law provide for a list of grounds of
termination which does not affect the balance
between the parties rights and obligations (one
sided provisions) or the stability of the
contractual relation under the Project
Agreement (e.g.: too large or non exhaustive
list)?
Despite the fact that the list of grounds for termination
of the concession agreement may be terminated is not
exhaustive and additional grounds may be provided for
in the agreement in our view the Concession Law doe
not contain any provisions or grounds for termination
which may directly affect the balance between the
parties rights and obligations under the Project
Agreement.
6. Does the Law provide for (or at least does not
prevent) compensation of the Private Party for
losses incurred as a result for termination on the
grounds of public interest for losses incurred as
a result of public authority acts?
Articles 15,
16 of the
Concession
Law
According to the Concession Law in the event of early
termination of the concession agreement, the Private
Party is entitled to claim compensation for the expenses
incurred by it in respect of construction or
reconstruction of the asset that is the object of the
concession agreement. Losses may be claimed only in
the event of material violation by one party of the
agreement's provisions.
The most of the regional PPP laws do not provide for
such compensation directly but usually contain a
guarantee for a private partner on compensation of its
losses in the case of amendments to applicable
legislation, tax regime etc.
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7. Does the Law provide for (or at least does not
prevent) compensation of the Private Party for
all cases of early termination (including in case
of serious breach or failure by the Private
Party), for fair value after depreciation of the
assets financed by the Private Party?
Article 16
of the
Concession
Law
The Concession Law provides for the possibility to
claim losses in the event of early termination due to
serious violations of the agreement by the other party.
Only the party who suffered from violation may claim
losses. To do so it has to prove the losses and the
amount of compensation ultimately remains at the
judge's discretion.
The detailed regional PPP laws follow in general the
same approach.
4.4 Tariff setting, service standards
QUESTION
ANSWER
ARTICLE
COMMENTARY
8. Does the Law provide clear guidance on all
The Concession Law contains a number of provisions
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aspects of interaction between the bodies that
have the power to award PPP and the bodies
that regulate tariffs and service standards?
regarding tariff regulation.
However, the Concession Law and the regional PPP
laws do not provide any guidance on the interaction of
the Contracting Authority and the authority responsible
for setting the tariffs.
4.5 Financial responsibilities of the Private Party and Contracting Authority
QUESTION
ANSWER
ARTICLE
COMMENTARY
9. Does the Law provide that the Private Party can
collect tariffs or fees for the use of the facility or
its services?
Paragraph
1.1. Article
7 of the
Concession
Law
The Concession Law provides that the Private Party can
collect tariffs for the use of the facility or its services.
In most cases the regional PPP laws do not regulate this
issue.
10. Does the Law provide for the possibility of
fixed and/or consumption-based payments to the
Private Party by the Granting Authority or other
public authorities (in the case of Power
Purchase Agreement , shadow tool or PFI for
instance) ?
The Concession Law as well as the regional PPP laws
do not prevent any form of payment which is
established by the agreement itself. However, the
Concession Law does not expressly provide for the
availability payments from the Contracting Authority or
any other authorities. It only says that the Contracting
Authority may incur part of the expenses for
construction and maintenance of the concession
facilities.
5. SECURITY AND SUPPORT ISSUES8
5.1 Security Interests
8 For further information on support and financial securities, please refer to: PFI Guide, Consolidated Legislative Recommendations, Recommendations 13, 49, 57 and 60.
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QUESTION
ANSWER
ARTICLE
COMMENTARY
1. Does the Law provide for (or does not
specifically prevent) a Private Party to create
security interests over the project assets, rights
and proceeds or other valuable guarantees
related to the project?
Articles 3
and 7 of the
PPP Law
Yes, the Concession Law entitles the Private Party to
pledge its rights under the concession agreement
subject to certain conditions. However, it prohibits the
pledge of concession facilities.
The regional PPP laws allow the Private Party to create
security without any restrictions unless otherwise
provided under applicable Russian law or PPP
agreement.
2. If the answer to the previous question is Yes,
does the Law clearly state which types of
security can be provided and include some of
the most common type of guarantees in project
financing (such as those listed in the request for
general information below)?
Yes, the Concession Law stipulates that the Private
Party may pledge its rights under the concession
agreement upon the construction stage. Otherwise, it
gives no clear guidance regarding the security package.
The regional PPP laws usually provide more comfort to
international financiers, at least containing no
restrictions as to the available security package and
sometimes setting out a non-exhaustive security types
that may be used.
For our general information, please can you confirm whether a Private Party may pledge or assign by way of security:
the proceeds and receivables arising out of the PPP; Yes, the Private Party may freely dispose of its property and receivables arising
from the PPP.
the assets for which it has rights of use under a project agreement; Under the Concession Law it is not possible to pledge or mortgage
the concession facilities. Under the regional PPP laws there are usually no restrcictions on creating security over any assets.
its property;
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shares of the Project Company; Yes.
the project agreement; Yes, but only upon completion of the construction stage for the concession agreement. In the latter case it may
also be subject to the new tender procedure.
obtain other valuable guarantees (please specify)? Yes, any guarantees that are not prohibited under Russian law (e.g. state or municipal
guarantees, bank guarantees, suretyships of other legal entities).
5.2 Government support
QUESTION
ANSWER
ARTICLE
COMMENTARY
3. Does the Law provide for (or does not
specifically prevent) the public authority to
provide support to the Contracting Authority
and a guarantee for the proper implementation
of the PPP by the Contracting Authority?
Paragraph
13 of
Article 3 of
the
Concession
Agreement
According to the Concession Law the Contracting
Authority may (i) partially finance expenses for
construction and maintenance of the concession facility,
(ii) provide budget guarantees. Moreover, the
concession agreement may establish the Contracting
Authority's obligation to prepare the territory necessary
for project implementation.
The regional PPP laws usually provide for a broader
range of government support measures.
4. Does the Law provide for (or does not
specifically prevent) the Public Authority to
provide financial or economic support for the
implementation of PPP?
Yes, please refer to the previous answer.
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5. If the answer to the previous question is Yes,
does the Law clearly state which public
authorities may provide such support and which
types of support can be provided? (i.e. tax and
customs benefits; foreign exchange protection
(convertibility and transfer guarantees;
subsidies; equity or loan participation)?
Paragraph
13 of
Article 3 of
the
Concession
Agreement
According to the Concession Law the Contracting
Authority may (i) partially finance expenses for
construction and maintenance of the concession facility,
(ii) provide budget guarantees.
The regional PPP laws provide for various government
support measures, including but not limited to tax and
customs benefits, foreign exchange protection,
subsidies/availability payments, state and municipal
guarantees, equity participation.
The above-mentioned support may be granted by the
Contracting Authority, i.e. the Russian Federation, a
constituent entity of the Russian Federation (region) or
a municipal unit.
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5.3 Lenders’ rights
QUESTION
ANSWER
ARTICLE
COMMENTARY
6. Does the Law provide for the Parties to arrange
the financing with reasonable flexibility under
the Project Agreement without strict time
constraints or other constraints (except with
respect to security package and government
support)?
Yes, there are no time or other constraints for arranging
the project financing, except with respect to security
package and government support.
7. Does the Law provide, in the event of the
default of the Private Party for the lenders to
“step-in” or substitute the Private Party with a
qualified new Private Party without initiating a
new tender process?
Some regional PPP laws contain provisions to this
effect. However, the Concession Law requires a new
tender in the event of step-in.
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6. SETTLEMENT OF DISPUTES AND APPLICABLE LAWS9
6.1 Settlement of disputes
QUESTION
ANSWER
ARTICLE
COMMENTARY
1. Does the Law permit the Contracting Authority
to enter into a Project Agreement that is subject
to international arbitration?
No, the Concession Law does not allow for
international arbitration. The regional PPP laws are
more liberal in this regard and usually do not prohibit
international arbitration and sometimes expressly allow
it.
2. Has the government of the country ratified the
Washington Convention on the Settlement of
Investment Disputes (ICSID) (1965)?
Russia has not yet ratified this convention
3. Has the government of the country ratified the
New York Convention on recognition and
enforcement of foreign arbitral awards (1958)?
Yes, Russia did ratify the NY Convention on 10 August
1960
9 For further information on the settlement of disputes, please refer to: PFI Guide, Consolidated legislative Recommendations, Recommendations 57, 69 and 71.
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6.2 Applicable laws
QUESTION
ANSWER
ARTICLE
COMMENTARY
4. Does the Law permit (or does not prevent) the
Contracting Authority) to enter into side
agreements to the Project Agreement (such as a
direct agreement with the lenders to the project
or a support and guarantee agreement in
respect of the Project Agreement) that is
governed by foreign law.
Yes, the Concession Law expressly provides for direct
agreement at least in the utilities sector, and does not
prevent it from being governed by foreign law if that is
possible under the general rules of the Civil Code.
The regional PPP laws do not prohibit direct
agreements governed by foreign law.
5. Has the country ratified any international
convention for the protection of foreign
investments?
Russia has ratified many bilateral agreements
concerning the protection of foreign investments.
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II- EFECTIVENESS ASSESSMENT: HOW THE LAW WORKS IN PRACTICE:
(Please comment based on the previous 2006 effectiveness general assessment)
7. POLICY FRAMEWORK
7.1 Existence of PPP Policy Framework
QUESTION
ANSWER
ARTICLE
COMMENTARY
1. Is there a general/national policy framework
(explicit or implicit) for PPPs for infrastructure
or public services?
No, there is not.
2. Is there any administrative guidance or printed
information edited by the government or the
PPP Unit concerning the legal framework for
PPP projects in the country?
No, there is not.
3. Is there a municipal/regional policy framework
(explicit or implicit) for PPPs in infrastructure
or public services?
No, there is not.
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7.2 PPP Awareness and Sustainability
4. Is there a national and/or municipal /regional
long term programme for PPP promotion and
awareness?
Currently there is no such programme at the national
level.
At the same time such programmes have been adopted
at the regional level, e.g. the "Strategy for PPP
Development for 2011-2015" has been adopted by the
Government of the Buryatiya Republic.
5. Are there PPP training programmes on a
national and/or municipal/regional level for
public servants and other PPP concerned
people?
In 2011 the first PPP chairs in Russia were established
in the Moscow State Institute for International Affairs,
the Financial University under the Government of the
Russian Federation and Russian State Service
Academy. A number of short-term and long-term
educational programmes have already been announced
and are to be started in the coming months. Some PPP
training programmes are conducted by/with the support
of Vnesheconombank, some NGOs and international
law firms.
6. Are there PPP courses as part of university
curriculum or specialist departments and
faculties in universities teaching PPP?
Please see above.
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7.3 Obstacle to implementation of PPP Policy
7. Are you of the opinion that there are no
social/political obstacles to implementing PPP
in the country (e.g. grass roots opposition,
policy measures against private sector
participation in public infrastructure/services,
etc.)?
Due to budget deficit the RF Government generally
supports and promotes PPP in the permitted sectors.
Many provisions in RF legislation, long-term target-
oriented budget programmes and strategy concerning
the development of some sectors (approved by the RF
Government) provide for the necessity of using PPP
mechanisms in order to solve current problems with
infrastructure and the public sector economy. There are
no social obstacles except for those relating, in most
cases, to ecological issues or the protection of
historically important buildings, objects and territories.
8. Are you of the opinion that there are no legal
obstacles to implementing PPP in the country
(e.g. non-publication of a decree provided under
the Law and necessary for such law to become
effective, etc.)?
PPP legislation should be further developed in order to
solve existing legal impediments so as to introduce
long-term budgetary support for the whole term of a
PPP/concession agreement, and to solve other
limitations arising from budgetary, land, procurement,
concession and other legislation.
The hottest topic in relation to PPP in Russia at the
present time is whether a general PPP law should be
adopted, or just amendments to the existing legal acts
on the federal level, bearing in mind that development
of regional PPP legislation has been very impressive
and that some doubt remains with respect to their
conformity with the federal legislation which may
affect the validity of regional PPP.
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For our general information, please describe the existing impediment and obstacles if any with respect to the two previous questions
8. INSTITUTIONAL FRAMEWORK
8.1 Existence and role of PPP Central Units/Agency
QUESTION
ANSWER
ARTICLE
COMMENTARY
1. Is there a specialised
institution/agency/ministerial department
established to promote PPP and to serve as
Central PPP Unit?
No, there are no governmental authorities responsible
for PPP as a Central PPP Unit. At the same time PPP
departments have been established at several ministries
of the RF Government to promote and develop PPP
(e.g. at the Ministry for Transport, Ministry for
Economy Development). The PPP Centre of VEB and
the PPP Development Centre are also very keen on
promoting PPP especially in Russian regions.
2. Is such Central PPP Unit composed mainly of
specialists recruited from the business
community and not exclusively composed of
civil servants coming from different public
ministries?
The PPP departments established at several ministries
of the RF Government are composed of civil servants.
The PPP Centres are composed mainly of specialists
from the business community.
3. Is the role of such Central PPP Unit comparable
to a "task force" assisting in the development of
projects in general and not limited to promotion
of PPP?
The role of the aforementioned PPP departments and
centres is to assist in the development of PPP projects,
as well as in the promotion of PPP in Russia generally
or in particular respects.
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4. Is the consent or recommendation of such
Central PPP Unit necessary for the development
and granting of most PPP projects (except small
or local PPP)?
N/A
N/A
N/A
5. Is one of the roles of the Central PPP Unit to
assist in building capacity namely of the public
sector with respect to PPP?
N/A
N/A N/A
For our general information, please name such establishment and specify its place in public hierarchy, format and key functions
(regulatory, operational, know how collecting, etc. or a combination thereof).
8.2 Other institutions concerned by PPP
6. Is there any PPP unit/agency or department of
the Central PPP unit either at the municipal or
regional level?
Some PPP agencies have been established by regional
administrations as their sub-divisions. For example,
there exists the Division for Investments and
Development of PPP at the Department for Economy
Development and Trade of Ivanovo Region, also the
Department for PPP of the Ministry of Sakha Republic
for Economic and Industrial Policy and the Agency for
Strategic Investments in St.Petersburg.
Some regional administrations have established quasi
PPP Unit in the form of autonomous budget
organisations called "Agencies for Investments" or
"Regional PPP Centres" which are not in the system of
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regional administration but have been established by
the regional administrations for the purposes of
promoting of PPP, acting on behalf of the region in
respect of PPP projects (e.g. "Corporation for
Development of Kaluga Region").
7. Is there any specific PPP unit department in any
ministry (other than the central PPP unit) or at
sectoral level?
There are certain departments responsible for PPP
programmes or officials in some ministries of the RF
Government (for example, the Department for
Investment Policy and PPP Development at the RF
Ministry for Economy Development).
Is there either a specific "one stop shop" for PPP
authorisations and formalities or a "one stop shop"
which services are available to the sponsors of PPP
project as well as other investors?
No, not at the federal level. Moreover, some regions
(notably Kaluga and St.Petersburg) follow the "one stop
shop" approach establishing specialised PPP units/PPP
development corporations (see above)
8. Is the division of power between different public
authorities involved in the PPP granting process
simple and coordinated?
No, there is no clear division of powers between the
state authorities in this regard.
9. PPP LAW ENFORCEMENT
9.1 Effectiveness of PPP enforcement and compliance with the Law
QUESTION
ANSWER
ARTICLE
COMMENTARY
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1. Have any PPP projects in any form ever been
awarded in the country on the basis of the Law
discussed above ? (with or without specific
reference to the Law)
Yes, a number of concession projects have
been awarded on the basis of the
Concession Law and also a number of PPP
projects have been awarded in certain
regions of the RF on the basis of the
relevant regional PPP laws.
2. Have such PPP projects, if any, been awarded
generally following a transparent competitive
selection procedure (and only through direct
negotiation under exceptional legal
circumstances as may be provided by the Law)?
All federal concession projects have been
awarded through a transparent tender
procedure established by the Concession
Law. We have not analysed all the regional
PPP projects in details, but the major and
most well-known PPP projects in the
Russian regions have been awarded
through a transparent competitive selection
procedure (for example, the PPP projects
awarded in St.Petersburg).
3. Have any PPP projects or similar long term
agreements (falling under the definition of PPP
under this questionnaire) been awarded on any
legal basis different from the Law since the Law
has been in force?
Yes, apart from the Concession Law PPP
projects in Russia are awarded on the basis
of the regional PPP laws, as well as the
Civil Code provisions for the freedom of
contract (e.g. in the form of investment
agreements).
For our general information, please give example of legal instruments, or reasons used, to bypass the Law and establish a PPP.
9.2 Statistics on PPP implementation under the Law
4. Have most of the awarded PPP projects been
Only a few projects have reached financial
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successfully implemented and put into operation
in compliance with the Law?
close in Russia so far with Pulkovo Airport
in St.Petersburg being one notable
example of a successful regional PPP
project.
5. Has a PPP project ever been awarded and
implemented in the country at the local /regional
/municipal level in compliance with the Law?
Yes, to the best of our knowledge a few
concession/PPP projects have been
awarded and implemented with a varying
degree of success on the local level.
6. Have PPP project ever been awarded in the
country in the non merchant sector (such as
Hospital, School, prisons) and not exclusively
in the merchant sector (energy, water,
transport)?
There are some concession/PPP projects
that have been awarded in the following
sectors: schools (Khanty-Mansi
Autonomous Okrug-Ugra), sport centres
(Nizhegorodskaya oblast).
For our general information:
Approximately how many PPP projects are presently in operation (figure or order of magnitude)in the country and in what sectors have
PPP projects been awarded (energy, water, education, health for example)?
Not more than 10 large-size concession/PPP projects are currently in operation in the sphere of roads, airport, water, heating.
Please give some examples of the most significant projects awarded:
under which legal form have such PPP project s been awarded (Concession, BOT, PFI, other):
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have such PPP project been granted by (i) central, (ii) sub-sovereign/regional (if applicable) or (iii) municipal government as
Contracting Authority;
when did PPP begin to be awarded in the country: (i) in the last 10 years or before; (ii) in the last 5 years; or (iii) within the past few
years only; and
please give examples of any PPP projects awarded but not implemented (or not implemented under a PPP form)
are there any PPP/Project Agreements in discussion?
Some of the major concession/PPP projects awarded in Russia are the following:
Moscow-St.Petersburg road
Type of project: concession (BTO)
Grantor: RF Government
M1 Moscow-Minsk road (Odintsovo City bypass)
Type of project: concession (BTO)
Grantor: RF Government
Pulkovo airport
Type of project: PPP (BOOT) under the St.Petersburg PPP Law
Grantor: City of St.Petersburg
Concessions in Russia have begun to be awarded in the last 5 years since the adoption of the the Concession Law. PPP has a longer history,
but its serious development has started with the adoption of the St. Petersburg PPP Law on 25 December 2006.
There are some projects which have been awarded but not yet implemented. In particular, Orlovsky Tunnel project (PPP project in
St.Petersburg to be implemented on the basis of the St.Petersburg PPP Law), Nadex (PPP project in St.Petersburg to be implemented on the
basis of the St.Petersburg PPP Law).
A lot of PPP projects are in the process of preparation/discussion, in particular, PPP projects in Perm, Volgograd, Voronezh and other
Russian regions etc.
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9.3 Challenge of PPP
7. Are you of the opinion that there is a reasonable
chance for an unsuccessful bidder to
successfully challenge in the country a PPP
awarded under conditions contrary to the Law?
Yes, this is reasonably possible.
8. If the answer to the previous question is Yes, are
you of the opinion that there is a reasonable
chance for the plaintiff to get some
compensation or for such action to result in the
cancellation of the award?
Yes, it is reasonably possible that the award may be
cancelled. The compensation and its amount shall be
defined at the judge's discretion. Hypothetically, it is
possible to obtain a decision requiring the payment of
compensation. However, at the moment there is no
supporting court practice.
9. Have PPP project been implemented by the
parties most generally without serious
claims/arbitration by either Party concerning the
performance of the Project Agreements under
the Law?
There is only limited historical track record to this date.
Pulkovo Airport may serve as a good example so far.
Moscow - St.Petersburg Road (15 -58 km) provides an
opposite example.
10. If any Project Agreement has been terminated
prior to the end of the contractual period by the
Contracting Authority, has fair compensation
been paid to the Private Party in compliance
with the Law?
N/A
We are not aware of such cases.