There are a number of specific acts dealing with PPPs at the national level which set out a comprehensive legal framework for PPPs in Kyrgyzstan. These include:
• the Law of the Kyrgyz Republic “On Public-Private Partnership in the Kyrgyz Republic”, dated 22 February 2012 (hereinafter: the “PPP Law”);
• the Decree of the Government of the Kyrgyz Republic on appointment of competent authorities in the field of public-private partnership, dated 14 September 2012;
• the Regulation on tender commission for selection of private partners for public-private partnership projects, approved by the Decree of the Government, dated 28 January 2013;
• the Order on the preparation of rules on tenders and tender documentation for public-private partnership projects approved by the Decree of the Government, dated 28 January 2013; and
• the Regulation on participation of a private partner in public-private partnership projects (models of public-private partnership), approved by the Order of Ministry of Economy, dated 28 February 2013 (hereinafter: “PPP Models Regulation”).
There are no sector-specific laws or laws at the regional or municipal levels regulating concessions/PPPs. There is no specific act dealing with concession at the national level. There is the Law on Concessions and Concessionary Entities dated 6 March 1992. However, the Law was designed back in 1992 to set out a legal framework specifically for mining projects.
Limited Range of Projects
Pursuant to the PPP Law, there are various PPP models depending on the type of infrastructure facility or infrastructure services, their sector specifics, goals of a PPP project, and arrangements between the parties to a PPP agreement.
There are nine principal PPP models:
(i) Build-and-Transfer (BT);
(ii) Build-Lease-and-Transfer (BLT):
(iii) Build-Operate-and-Transfer (ВОТ);
(iv) Build-Own-and-Operate (BOO);
(v) Build-Own-Operate-and-Transfer (BOOT);
(vi) Build-Transfer-and-Operate (BTO);
(vii) Contract-Add-and-Operate (CAO);
(viii) Rehabilitate-Operate-and-Transfer (ROT), and
(ix) Rehabilitate-Lease-Transfer (RLT).
The PPP Law requires the contracting authority to select PPP projects following a preliminary economic evaluation/feasibility study.
Private Party Selection
The private partner is selected in a tender. There are no rules allowing the public to be involved in the project selection procedure. Review of the selection process is rather bureaucratic and may generate transparency risks.
Securities and Government Support
The PPP Law allows for direct agreements with financial institutions, including foreign financial institutions. The public partner is not prevented from entering into agreements governed by foreign law.
The private partner has the right to demand amendments to the PPP agreement, or to early termination of the PPP agreement, if regulations which adversely affect the conditions for implementation of the PPP project are adopted.
The PPP Law does not provide for a step-in procedure. Although step-in rights are generally not prohibited and may be inferred both from certain provisions of the PPP Law and the principle of freedom of contracting, it would be safer for financing parties to have such an instrument expressly stated in the PPP Law.
The Kyrgyzstan government pays increasing attention to the development of PPP and last year introduced a PPP policy for the years 2016-2021. The Government admits that despite the existence of a comprehensive PPP legal framework in the country, PPP effectiveness is very low.
The key factors that impede the growth of PPP are the poor quality of public services, lack of resources for preparation and implementation of PPP projects on the Government’s end, including a lack of professional and experienced staff, and perception of PPP by the private sector as an unreliable investment instrument due to high political and legal risks. To address these and other problems, the Government plans to take measures with a view to enhancing public governance in the field of PPP, fostering private sector’s confidence in and awareness of PPP, and developing a financial framework for PPP.
We have no data about PPP projects from 2012 to 2014. In 2015, one transport project was initiated, and is still pending (project in planning). Three social & health projects were also initiated in the same year, but there is no available information on their current status (i.e. ongoing/closed).
No new PPP laws or amendments are in the pipeline.