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Public-Private Partnership in the Republic of Tajikistan

Public-Private Partnership in the Republic of Tajikistan

Introduction

The Republic of Tajikistan adopted the Law "On Public-Private Partnership" No. 907 on December 28, 2012. This law regulates collaborations between public authorities and private sector entities in infrastructure and social services projects.

Definition and Purpose of PPP

Public-Private Partnership (PPP) is defined as cooperation between the state and private companies to implement projects in various sectors like transport, energy, health, and education. The aim of these projects is to meet public needs, which is a primary responsibility of the state.

Scope of Regulation

The PPP Law governs the preparation and implementation of PPP projects, establishing the legal framework for creating, executing, and terminating PPP contracts. However, it does not apply to:

  • Procurement of goods, services, and works (regulated by the Law on State Procurement).
  • Privatization of state property and enterprises (regulated by the Law on Privatization).
  • Subsoil usage rights (regulated by the Laws on Subsoil and Concessions).
  • Credit projects funded by international financial institutions and foreign governments (regulated by the rules of these institutions).

Transparency and Equal Treatment

The PPP Law ensures transparency and equal treatment throughout the project lifecycle, detailing procedures for project initiation, approval, private partner selection, project implementation stages, and post-implementation relations.

Competent Authorities

  • Government of Tajikistan: Defines the authorized state body on PPP, establishes the PPP Council, approves its composition and regulations, and lists infrastructure facilities and social services exempt from the PPP Law.
  • PPP Council: Reviews and approves project proposals, pre-selection reports, and draft agreements, and oversees the activities of the authorized body.
  • Authorized State Body: The State Committee on Investment and State Property Management (Goskominvest) implements state policy on PPPs, assists in project proposal preparation, and provides recommendations. Goskominvest also manages tender documents, PPP agreement standards, and supports the PPP Council's operations through the Centre for Implementation of Public-Private Partnership Projects.

Objects of a PPP The government determines the infrastructure facilities and social services exempt from the PPP Law, which include military, scientific, production, social institutions, and infrastructure critical for state functioning and citizen security.

Parties Involved

  • Public Partner: Central or local authorities with the power to initiate projects and enter agreements with private partners.
  • Private Partner: Individual entrepreneurs or legal entities, including consortia with technical and financial expertise, and foreign legal entities.

Main Obligations

  • Private Partner: Constructs facilities, carries out activities, or provides services at their own expense as per the agreement.
  • Public Partner: Grants rights to the private partner for owning and using the PPP facility and assists in obtaining necessary licenses and permits.

Private Partner Selection

Private partners are typically selected through a tender process, though non-tender selection is possible with PPP Board consent under specific conditions such as urgent need, short project duration with low initial investment, national defense or public safety matters, or lack of tender responses.

Term and Payment

The law sets no restrictions on PPP Agreement duration, with a minimum term of three years for social service projects. Payment methods and procedures are outlined in the PPP Agreement, which can include budgetary funds or consumer payments post-implementation.

State Obligations and Risk Distribution

The PPP Law addresses remedies for non-performance and compensation for increased costs or reduced income due to changes in law or public authority actions. Risk distribution is determined contractually, with mechanisms for the private partner to secure assets and revise agreements under significant economic or legislative changes.

Post-Agreement Asset Resolution

The PPP Agreement specifies asset transfer procedures upon termination, including assets to be returned, purchased by the public partner, or disposed of by the private partner. It also covers compensation for transferred assets, technology transfer, and staff training.

Termination of the PPP Agreement

The agreement can be terminated by mutual consent or due to uncontrollable circumstances. Additional grounds for termination by the private partner include the public partner's failure to fulfill obligations, inability to revise the agreement, or actions that increase costs or decrease revenues.