The Verkhovna Rada of Ukraine has adopted in the second reading and as a whole the draft law No. 7508. According to the Ministry of Economy, it simplifies the participation of private business in the recovery through the mechanism of public-private partnership (PPP). The document solves several problems at once – it simplifies bureaucratic procedures, provides financial guarantees for investors and allows for faster implementation of projects.
“Public-private partnership is one of the key instruments for attracting investment. Although the PPP concept has existed in Ukraine for a long time, we have only concluded two large concession agreements in all this time. Thanks to the changes to the legislation, we expect that the PPP mechanism will finally work and bring us up to $ 1 billion in investments in specific projects in the coming years. First of all, these may be the following areas: ports, hospitals, municipal facilities,” – noted the First Deputy Prime Minister of Ukraine – Minister of Economy of Ukraine Yulia Svyrydenko.
What the bill changes:
introduces an electronic trading system (ETS) for concession projects according to EU standards and procedures. Everything will take place online – from posting information about the competition announcement to publishing the concluded contract.
new and improved guarantees for investors and creditors: the private partner will receive guarantees from the state to protect their rights, stability of conditions and non-discriminatory treatment during the implementation of PPP projects. Changes in the legislation will not affect the terms of already concluded contracts.
new sources of financing: the concept of “donor” appears in the legislation – international partners who can provide financial support directly or through budgets. This approach significantly minimizes risks for private partners and makes projects more accessible to public partners.
simplifies the procedure for preparing “small” projects: projects worth up to 5.5 million euros can be implemented without developing a feasibility study, and the decision will be made only on the basis of a concept note. This approach will help communities develop faster by attracting private partners. They will be able to build both local roads and necessary social facilities in a short time.
a special regime for reconstruction projects: a simplified mechanism for preparing PPP projects will operate for the reconstruction of war-damaged infrastructure, the procedure for which will be determined by the Government of Ukraine. This procedure will be in effect during martial law and for another 7 years after its end.
“Infrastructure in installments”: the state will be able to pay for the implementation of infrastructure projects to a private partner with budget funds after the facility is put into operation. This approach will reduce the burden on budgets of different levels and will allow for the implementation of a larger number of socially important projects even in conditions of limited funding.
expansion of the list of public partners: state-owned companies will be able to participate in PPP, which will allow attracting more investment.
special procedures for housing construction projects: due to large-scale destruction and the need to provide people with new homes, the peculiarities of concluding PPP contracts for housing have been envisaged.
The authors are confident that simplifying the general procedure for preparing PPP projects and implementing an electronic procurement system according to EU standards will help attract a large amount of private investment in the development and modernization of social and other infrastructure. This will have a multiplier effect for the economy, which is especially important for the country in modern conditions.
The drafters of the bill expect to attract an additional 8-10 billion hryvnias to the Ukrainian economy annually, provided that an average of 5 projects per region worth at least 50-100 million hryvnias each are approved and implemented.
