On 8 June 2021, the Law on Public-Private Partnership of Turkmenistan came into force. The activities of the private business in the country gains steam. The private companies are involved in major projects in the agro-industrial complex, transport, industry, and construction sector.
This trend has led to the need for legal regulations for the growing public-private partnership, aimed to increase the efficiency of cooperation and balance possible risks.
It is noteworthy that the present Law is also applicable to partnerships with foreign businesses.
What is a public-private partnership (PPP)?
According to the new PPP Law, a public-private partnership is a legally formalized mutually beneficial cooperation between public and private partners for a certain period of time, based on the pooling of their resources for the preparation and implementation of a public-private partnership project.
Who are the public partners and the private partners?
Public partners are executive authorities, as well as other bodies (organizations) authorized by the Cabinet of Ministers, acting on behalf of Turkmenistan.
Private partner is a legal entity, foreign organization, an individual entrepreneur.
The legal entity with 50% public share in authorized capital the share exceeding 50 percent belongs to the state) is not eligible to act as private partner.
What is the form of PPP mechanism?
The public-private partnership mechanism is implemented in the form of a public-private partnership agreement.
A PPP agreement is a civil contract between public and private partners.
Who exercises state regulation of PPP?
The Cabinet of Ministers of Turkmenistan and the Ministry of finance and economy exercise state regulation in the field of PPP.
The Cabinet of Ministers determines the unified policy in the field of public-private partnership; determines the state partner for public-private partnership projects on the proposal of the ministry of finance and economy, and has other competencies.
The ministry of finance and economy organizes interaction with investors, international financial organizations, as well as other PPP participants; and performs other functions within the framework of PPP.
What is the procedure of selection of a private partner?
The private partner is selected through tender or direct negotiations.
The public partner enters into a public-private partnership agreement with the private partner. The term of the public-private partnership agreement may not be less than three years and must not exceed forty-five years.
The tender for the public-private partnership project is held in two stages. At the first stage, applications are reviewed and tender proposals developed on the basis of conceptual and technical solutions specified in the terms of the tender documentation are evaluated.
At the second stage, the submitted technical and commercial (financial) proposals are considered and evaluated, taking into account the specified parameters of the tender subject.
Information about PPP projects, including their concepts, terms and criteria for selecting private partners, the main provisions of the PPP agreement, information about the processes of preparing and implementing public-private partnership projects are posted on the official websites of the public partner and the authorized body.
What financial support does private partners have under PPP?
Under the public-private partnership agreement, the following types of financial support are available for private partners:
- subsidies, including those aimed at ensuring a guaranteed minimum income of the private partner from the implementation of the PPP project;
- investments in the form of assets and property;
- State budget funds allocated to pay for the consumption or use of a certain amount or part of the goods (works, services) produced or delivered during the implementation of a PPP project;
- State budget funds in the form of budget loans, loans, grants, credits;
- State guarantees of Turkmenistan;
- tax and other benefits;
- other types of financing, guarantees and / or compensation.
Areas not covered by the PPP Law
The PPP Law does not apply to:
- relations regulated by the Law of Turkmenistan On Tenders for the supply of goods, performance of works, provision of services for State needs,
- oil operations, regulated by the Law of Turkmenistan On Hydrocarbon Resources,
- specialized activities related to ensuring the rule of law, defense and security of the state. /// nCa, 9 June 2021
The complete translation of the newly promulgated law of Turkmenistan on Public-Private Partnership is available now. This law is also applicable to the foreign partners of Turkmenistan.
Price – USD 120/-
Format – Word and PDF
Mode – USB flash drive
The interested buyers may contact us through contact form on the website.
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