Public-private partnership: Ukraine and international experience
Topical today remains an interest in public-private partnerships. In a broad sense, public-private partnership is seen as the interaction of government and business (one or more) for the funding and management of special state or municipal institutions in various fields.
It should be noted that Ukrainian legislation uses the term «state-private partnership», while in law and practice of other countries the term «public-private partnership» is used more often.
The emergence of a public-private partnership and its forms
For the first time, PPP appeared in 1992 in the UK with the help of John Major who proposed the so-called «private finance initiative». The main idea of this initiative is to attract entrepreneurs to cooperate with public authorities in order to develop the economic and social spheres. By the way, this initiative has become a base for the future public-private partnership of some other countries (eg Australia). Regarding the development of PPP in Ukraine officially the development of PPP began its countdown only in 2010, with the adoption of the Law of Ukraine «On public-private partnership». Although the Law of Ukraine «On Concessions» was adopted in 1999.
Regarding forms of the PPP, there is no single answer to this question, because there is a separate legal practice in each country. For example, in Ukraine, the most common type of cooperation is the concession. There are seven basic forms of concession. Thus, they can change and intermingle, creating a completely new form.
The simplest form-BOT, or in other words Build-Operate-Transfer. BOT is a mechanism that allows the private entity to use the object of the contract during the term of it while after the end of the agreement the object should be transferred to the State. The most striking examples of this form of concession can be Japan, China, and Israel. For instance, on the basis of BOT, the China Hotel was built in 1979. The second example of public-private partnerships in the form of concession is BOOT (Build-Own-Operate-Transfer). The main difference between this type and the previous one is that the ownership of the object of the contract belongs to the state, even during the procession of the contract. Australia seems to be important to mention, because in this country is possible to depart from the last requirement of the contract, namely the transfer of the object of the contract to the state ownership. Also, some countries, such as Canada, Australia, and New-Zealand, use the BOOT term to replace the BOT.
Other examples are the BTO, BOO, BOMT, DBOOT, and DBFO. Thus, the construction of wind power in the Republic of Mauritius was under the BTO scheme.
Sectors of the PPP use
The sectors in which the public-private partnership is used should be also mentioned. As noted above, the UK is the most successful country in the implementation of the PPP. A list of spheres where the PPP is used in this country can be seen as a proof of this. The only exceptions in the list are a construction of ports. France on this issue almost caught up with Britain, as all areas of activity somehow could include PPP. Only three areas of activity, namely the construction of airports, ports, and social structures, currently in the process of preparation. Note, that there is no Ukraine in the list for because our country has just started its way in this area. Although the need for investment in Ukraine is significant. Thus, the spheres of energy, that reaches 39.53%, infrastructure - 23.23%, and in processing industry - 11.64%.
PPP in Ukraine
There are 243 public-private partnership projects in Ukraine that are in the process now. Of these, 210 on concession contracts, while only 33 contracts under the terms of joint activities. The biggest areas that use this type of partnership is processing waste (47.7%) and water (32.5%). The rest is occupied by transport infrastructure (7.0%); recreation, culture, sports and real estate (1.2%); production of heat and electricity (4.9%) and other sectors (7.4%).
But this is not all. The use of public-private partnership is planned for 321 additional projects. 105 of which are water supply facilities, 51 - energy production, 32 projects in the fields of recreation, culture, and sport, as well as in waste treatment and 4 projects in health care. For comparison, there are 550 such projects in the UK that worth over 56 billion euros.
International experience
Regarding international experience in public-private partnerships can be noted that from 1990 to 2010 significantly increased private investment in the telecommunication sector (from about $ 5 000 to about $ 70 000). The energy sphere became equal to telecommunications by 2010, to $ 70 000, while in 1990 a number of investments were equal to zero. It is interesting that the water supply remains close to none while in 2007 there was a rise to $ 10 000.
Summarizing the above, we can conclude that Ukraine should have a long way through in the PPP sphere based on the best international practices.
