On 17 October 2013, a workshop was held in the Ministry of Economic Development of Russia to review the issues of Public-Private Partnership with representatives of OECD and the Ministry of Finance of France
"Russia has little experience in running this kind of projects. Today, we are certainly learning something new to us. The task is not to convince us in anything, as we know for sure that this tool deserves not just some attention but needs overall support from the state. The main thing is to show our regional colleagues this tool is not only positive, but also efficient and serviceable, and can attract investments for performance of the functions traditionally vested with the state. However, in view of a limited financing from the budget and a lower efficiency of management of such services by the state, world practices tend to involve and assign the authority to private businesses," said Sergey Beliakov while opening the workshop.
Ian Hawkesworth, Head of PPP (Public-Private Partnerships) and Capital Budgeting in the OECD Directorate for Public Governance and Territorial Development, dwelled upon the following issues:
- definition of OECD, and its significance;
- performance of PPP;
- problems and risks;
- OECD recommendations for public governance of PPP.
"PPPs enjoy significant investments in the OECD countries," noted Ian Hawkesworth.
He believes that project assessment should be based on the following parameters: proper substantiation of the establishment of PPP (price-to-quality ratio); assessment of price-to-quality ratio – quantitative and qualitative aspects of financial affordability and accessibility and sustainable functioning as applicable to the budget or to the end users; management of contingent commitments; assessment, distribution and calculation of the cost of risks; HR and institutional potential for PPP talks and contract monitoring.
According to the OECD representative, difficulties faced by the emerging and rapidly developing economies include the following:
- difficulties in assessment of the demand – the risks of underestimation and overestimation;
- higher level of some of the risks and, as a result, a higher expected rate of return;
- citizens of the country may expect gradual improvement of the service quality;
- larger investment flows and demands;
- benefit-to-cost ratio analysis is more relevant than in the OECD countries;
- reimbursement of expenses is normally required and possible.
Francois Berger, Director of the PPP Department at the Ministry of Economy and Finance of France, provided a detailed history of emergence of the PPP mechanism worldwide, French experience in using this mechanism (see presentation). "Public-Private Partnership is the tool for optimization and rationalization of state investments," summarized Francois Berger.
Director of PPP Center of Kaluga Region spoke about the problems in implementation of PPP-based projects within the frame of the existing legislation (see presentation).
The event was attended by Richard Foster, Director of Foster Infrastructure (Australia); Oleg Galimov, Deputy Director of the Department of Economy and Finance at the Ministry of Transport of Russia; Oleg Shagako, Executive Director of PPP Development Center; and others.