Public-private partnership

Implementation of investment projects based on public-private partnership is the most important tool of investment attractiveness and one of the opportunities stimulate investment activity.

Public-private partnership is the form of legally formalized cooperation based on  pooling of resources and distribution of risks of a public partner and a private partner which allows to attract private investments into the economy, provide the accessibility of goods, works, services and improve their quality.

The procedure and conditions for concluding agreements on public-private partnerships are established by the federal law dated July 13, 2015 № 224-ФЗ“On Public-Private Partnership in the Russian Federation and Amendments to Certain Legislative Acts of the Russian Federation”.

Obligatory elements of PPP agreements are:

- construction and (or) reconstruction of the facility by a private partner;

- full or partial financing of the construction and (or) reconstruction by a private partner;

- the private partner's operation and (or) maintenance of the facility;

- the private partner's ownership of the facility, subject to encumbrance.

One of the forms of public – private partnership is a concession agreement. According to it the private partner undertakes to create or reconstruct the property specified in the agreement at its own expense while the ownership right will belong to the public partner. The private partner can carry out activities using the property, the public partner undertakes to grant the rights to own and use the property for a period of time established by the agreement.

The procedure for concluding concession agreements is established by the federal law dated July 21, 2005 № 115-ФЗ “On concession agreements”.

Obligatory elements of concession agreements are:

- construction and (or) reconstruction of facilities by the private partner;

- the private partner’s activities with the use (operation) of the property specified in the agreement;

- the public partner’s right to own the property and the private partner’s right to use the property for the period specified in the agreement.