Kazakhstan has a relatively new Law on Public Private Partnerships which came into force in 2015. This (concession non-concession) PPP Law is supported by:
• a Presidential Decree “About the list of objects which are not subject to transfer by public-private partnership” (2016);
• an Order from the Minister of National Economy about standard tender documentation and the standard PPP agreement on methods for implementing a public-private partnership in separate industries (2015); and
• a further ordinance from the Minister of National Economy from 2016 about approving the technique of cost determination, examination and assessment of documentation on questions of budget investments etc.
This latter ordinance applies to PPPs including concessions. It also deals with the provision of state guarantees and budget crediting, feasibility statements and the sale of the state investment policy by the financial agencies at the expense of the republican budget.
As to its scope of application, the PPP Law explicitly regulates the distinction from or applicability of several other legislative acts. Although these rules may also not explicitly solve every potential question, the Kazakh PPP Law mentions and deals with this issue. In particular, regulatory matters are allocated to other legal acts. Furthermore, it is clearly stated that features of PPP legal regulation are established by industry-specific laws.
An issue that often causes confusion in other jurisdictions is clearly addressed by the PPP Law, namely project implementation in the field of subsurface use. This is regulated by the Law and a law “About the subsoil and subsurface use“.
The PPP Law does not restrict itself to certain project models and includes non-merchant sectors.
There are however some areas where the PPP Law does not collect all the points available in this assessment, namely:
• the early exit of the investor is only possible with the prior consent of the contracting authority;
• no pre-feasibility-study, value for money analysis or socio-economic analysis is necessary during the project preparation stage; however, a viability analysis and a project approval are required;
• there are no explicit rules on unsolicited proposals;
• there are no provisions on legal remedies/special review procedures in the PPP Law itself;
• strict guidelines for contract amendment / adjustment are left for regulation in each particular project; and
• securities on project assets or project proceeds always require the consent of the Awarding Authority; on the other hand, direct agreements and step-in rights for creditors are some of the strengths of the PPP Law.
Compliance of the Concession Legislation
Because it was enacted in 2010, Kazakhstan’s concession Law is only slightly older than the PPP Law.
Project preparation is regulated in more detail than in the PPP Law.
There also are a few areas where the Concession Law does not collect all the points available, namely:
• an early exit of the investor is only possible with the prior consent of the Awarding Authority;
• there are no rules on competitive dialogues;
• there are no provisions on legal remedies/special review procedures in the Concession Law itself;
• strict guidelines for contract amendment / adjustment are left for regulation in each particular project only.
One red flag has been identified relating to non-concession and concession PPPs: the private partner is only allowed to pledge his rights under the project agreement after the written consent of the public partner.