Security and support issues.
Armenia is one of the countries in the EBRD region without a clear PPP policy and legal/regulatory framework . However, the Law of the Republic of Armenia “On Procurement” (the PPA) treats the procedure for awarding rights to a private party either as (non-concession) PPPs or concessions as a form of public procurement. There are also other legal acts that regulate matters in connection with PPPs:
• Resolution No. 526-N “On Approval of Procedure of Procurement and Annulling the Resolution No. 168-N of the Government of the Republic of Armenia dated 10.02.2011” (hereinafter ''Resolution No. 526'');
• Resolution No. 1241-N ''On State Private Partnership Assessment and Approval of Programmes'', dated 09.10.2012 and entered into force on 18.10.2012 (hereinafter ''Resolution No. 1241''); and
• sectorial laws.
As the PPA explicitly covers PPP transactions, including asset management and concession transactions, all aspects of contract awarding are governed by a single statute. Furthermore, it follows from this fact that concessions are seen as one kind of PPP (as in this assessment). The PPA, however, is not specific to PPPs so that its rules are applicable to all kinds of contracts including PPP contracts.
Finally, there are obvious gaps in the PPA, which do not regulate such issues as replacing the winner in case of a “step in” by financing parties, legal succession or insolvency of the private party.
Despite the gaps in the applicable legal provisions, Armenia's ''PPP legal framework'' scores as medium compliant. The compliance of the ''project selection'' regime is low compared to international standards. The ''private party selection'' scores high. Due to the missing rules, the regime for ''project agreements'' is only low in compliance, as are the rules for securities and government support.
There is no specific policy document in force to promote PPPs. The relevant provisions are scattered across general provisions of the investment law and sector specific laws/regulations, including those in the mining, water, energy, urbanization, transport, procurement, railroad sectors.
Although a number of transport, water and energy projects structured as PPPs are being implemented in Armenia, the absence of a PPP policy and a clear legal and regulatory framework remains an obstacle to structuring and funding more PPP projects in the country.
For these reasons the results for the political and the institutional framework are very low for PPPs. Despite a weak legal, political and institutional framework, the results relating to awarded concession projects are high due to the large number of projects. Regarding PPPs, the results match expectations. The business environment is “medium” effective.