But from 2015 to the present a number of legislative

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this was indeed so. But from 2015 to the present, a number of legislative initiatives have been adopted that introduced fundamental distinctions between concession and other forms of PPP; - concession agreements provide for the provision of state support, which represents a corruption risk. Concession legislation provides for state support mechanisms similar to PPP agreements: municipal and state guarantees, the possibility of financing from state / local budgets. Such mechanisms are mainly designed to reduce the cost of borrowing, which should affect the cost of projects and their accessibility to end users. The guarantee of demand and the size of the payment for the readiness of the facility make it possible to redistribute risks between private and public partners, since the risk of demand will also partially depend on the state operator, which, in particular, determines the price / tariff policy; - concession agreements contain provisions on direct negotiations with current tenants of state / municipal property, which represents a corruption risk. Indeed, such a norm is envisaged by bill No. 8125, but it aims to encourage existing tenants of state / municipal property to switch 7
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to concession instruments that are more beneficial for the state. Indeed, in the case of a lease, the period of which sometimes reaches 49 years, the contribution of a private partner is limited to making a rent and does not provide for any investment obligations and concession payments. If a private partner does not want to transfer from a lease to a concession, he has the opportunity to continue to use the facility on a leasehold basis; - the norms of existing laws in the field of concession and PPP do not give investors confidence in the safety of their long-term investments. Within PPP contracts, investments from a private partner are anticipated for both joint venture and concession projects. Since such investments must be recouped from the revenues of the private operator, the average duration of PPP contracts should be at least ten years. In order to interest private investors to invest in such a long period, the private partner is guaranteed invariability of the law throughout the term of the contract, the provision of state / municipal guarantees. Bill No. 8125 also introduces a demand guarantee mechanism for road concessions, which will make it possible to interest a private partner in investing in Ukraine; - non-transparent conditions for the lease of concessionaire property. The concessionaire may be a consortium consisting of several companies, including a financial institution, an object operator and other participants. Since the concession agreement can apply to both infrastructure and related services, there may be a need to attract tenants to related services; - insufficient mechanism to limit fiscal risks. Bill No. 8125 provides for the restriction of state participation in the amount of the fee for the availability (availability) of the concession facility within 49% of the demand guaranteed to the concessionaire.
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  • Fall '19
  • Public–private partnership, Public-private partnerships

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