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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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The same applies to the regional PPP laws.

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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.

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For our general information, can you provide any examples of a successful legal challenge in the courts or otherwise of a PPP award in

the country based on the PPP Law? Please describe the matter and, if known, the outcome of such matter.