Why PPP doesn’t work in Kyrgyzstan ?

By Gulnara Kalikova, counsel at Kalikova & Associates

There is too much talk and not enough action; the law isn’t working; there is a lack of projects - this is what many officials and businessmen say when asked about public-private partnership (PPP) in Kyrgyzstan. Why does such opinion arise? Is there a need to change it?

PPP is a long-term (up to 50 years) arrangement between the public sector (state and municipal authorities and organizations) and the private sector (legal entities and individual entrepreneurs) whereby the private partner undertakes to deliver projects involving the design, construction, reconstruction and/or management of public and municipal facilities (roads, airports, railway stations, hospitals, sports and many other infrastructure facilities).

Briefly about PPP in Kyrgyzstan
  
Legislation: The PPP Act came into force in 2012. Based on lessons learned from the previous PPP Acts, the Government prepared a draft of the new PPP Act significantly simplifying and shortening the PPP project preparation process. In May 2018, the draft passed the first reading in Parliament, its further consideration being scheduled for this autumn.

Policy: In 2016, the Government adopted the PPP Development Programme 2016 – 2021. Many national, sectoral, and municipal strategies and programmes mention PPP as a tool for improving the efficiency of public and municipal asset management.

Institutional framework: Key PPP units include the Ministry of Economy (a PPP policy unit), the Ministry of Finance (a risk management unit) and the Investment Promotion and Protection Agency (a project implementation unit). Some sector-specific public and municipal authorities have PPP specialists among their staff members. 

Track record: PPP track record is modest. To date, there are only two PPP projects signed: hemodialysis centers and movie theater reconstruction. A number of projects in the area of public transport, parking lot, kindergarten, customs logistics center, bypass road, computed tomography and other services are at the stage of preparation (feasibility study).

PPP is a tool used by many countries to attract investment into infrastructure and to improve the efficiency of infrastructure facilities management. Kyrgyzstan has undertaken a number of steps to introduce PPP but the launching of PPP projects moves slowly with the public and private sectors having little interest in real projects.  

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