New Public-Private Partnership Law Can Bring About Important Changes
The Law of Ukraine "On Public-Private Partnership" (the "PPP Law") was adopted by the Parliament of Ukraine on 1 July 2010. The law was signed by the President and will become effective three month after its official publication. The PPP Law aims to establish a legal framework for attracting private investments into projects that are in the public interest and determines the basic principles of public-private cooperation.
Definition of PPP
The PPP Law defines public-private partnership (the "PPP") as cooperation between public partners (state and municipal bodies) and private partners (legal entities and natural persons-entrepreneurs) based on an agreement. PPP projects may be realized through concession, joint activity, production sharing or other types of agreements.
Sectors where PPP projects may be implemented include exploration and extraction of natural resources, construction and operation of motorways, railways, airport runways, bridges, tunnels and subways, sea and river ports and their infrastructure, tourism, recreation, sport, healthcare, electric-power generation, property management etc.
PPPs are long-term projects that last from 5 to 50 years.
What is the status of PPP facilities?
The PPP facilities (objects) can be existing facilities, including ones in need of reconstruction, objects under construction or purchased objects owned by the state and municipalities. Transfer of an object to a private partner does not entail the transfer of title to the object. PPP objects are to be returned to a public partner after expiration of the agreement concluded within the framework of the PPP. The designated use of the PPP objects cannot be altered. PPP objects cannot be privatized during an operational PPP project.
How a private partner is selected?
Decisions with regard to the PPP are taken by the relevant public partner. The private partner is selected through a tender. A tender notice is published in the official publications and on the public partner's website. PPP projects using state property would have to be approved and private partners selected by the Cabinet of Ministers or a state agency authorized by the Cabinet. For municipal property these decisions would have to be approved by the city or village council.
How does the PPP Law change existing laws?
The PPP Law introduced the following changes in land law:
The PPP Law introduces the following changes in the Concessions Law:
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