Is Ukraine Ready for PPP?
Tatiana Korotka, Director of PPP Professional ServicesUSAID Public Privet Partnership Program
Program Summary
P3DP is a five year USAID program that started in October 2012 to promote PPPs a model to improve communal services and infrastructure, in accordance with international best practices.
Objectives:
•Building institutional capacity of the national PPP Unit
•Enhancement to legal and regulatory framework
•Building capacity of local organizations
•Identification and developing pilot PPP transactions
Country context*
Population 45,593,300
GDP $176,3 billion
GDP growth 0.3%
Inflation 0.5%
GED 75,6% ВВП
Public Debt 36,8%
Public investment required for sustained economic growth
$100 billion over next 10 years (PFR, 2011)
*Source: http://www.worldbank.org/en/country#:
Regional results – Overall scores*
Rank Country Score Level
1 Croatia 63.5Developed2 Lithuania 62.9
3 Slovenia 61.84 Latvia 54.4
Emerging
5 Hungary 53.86 Poland 527 FYR Macedonia 51.18 Russia 519 Albania 50.5
10 Turkey 49.611 Slovakia 47.6
12 Romania 47.413 Bulgaria 45.514 Serbia 4315 Armenia 39.916 Estonia 37.717 Moldova 35.818 Kazakhstan 35.619 Montenegro 31.720 Bosnia and Herzegovina 29.6
Nascent
21 Ukraine 2822 Georgia 27.823 Kyrgyz Republic 25.624 Mongolia 24.625 Belarus 10.3
Countries can also be compared based on groups rather than exact scores
Several countries fall in the “nascent” category.
They fall in this grouping for different reasons
Inadequate legal and regulatory frameworks
Lack of political will or strong focus on privatization
Insufficient capacity
*Source: Economist Intelligence Unit
Notes: Several answers are possible
Please, indicate the reasons, in your opinion, for which the partnership was not established (several answers are possible):
Baseline Survey
Legal & Regulatory PPP Environment
Legislative Issues Results
PPP Policy and Strategy PPP Development Concept for 2013-2018PPP Strategy and Implementation Plan (2014)
PPP Laws Framework PPP, Concessions (district heating, water supply and sanitation, motorway, sea ports)
Tariff Regulations RAB-methodology for water and heat tariffs, SWM regulations being developed
Licensing, PPP procurement and PPP Procedures
PPP development, tender, and appraisal methodology adopted by GOU
Budgetary Restrictions Draft amendments to laws related to ESCO contracts and governing Budget Code
International Arbitration, Land Issue
Draft amendments to PPP Framework Laws
Fair Termination payments Draft law adopted by Verkhovna Rada
PPP Unit•Facilitate the use of PPPs in Ukraine•Establish systems and processes to monitor the use of PPPs in Ukraine•Develop staff capacity necessary for its PPP work
Line Ministries
Local Governance Authorities
Institutional Environment
PPP Pilot Projects Practice
Current Sectors Solid Waste Management, District Heating, Healthcare, Parks & Recreation, Renewables & Energy Efficiency, Education, Transportation
2 to 4 projects expected to go to Public Tendering in 2013
Pilot City Capacity
Development •General PPP Training
•Specialized Training•Sectoral Seminars
•Study-tour•Stakeholder
Communication Support
Zaporizhia Healthcare
Objective Increase quality and improve access to medical services
Details•Hospital remains Municipal-owned•Private partner to introduce new
fee-based medical services •Free medical services remain •Private partner to renovate sections of hospital •Feasibility Study complete and awaiting
approval by Municipality Authorities•PPP agreement ≈ 25 years •Investment size ≈ $2,000,000 Tender is expected in November 2013
Simferopol Urban Park Renewal
Objective Improve park
landscape and quality of facilities
without additional cost to city
Details •Park remains Municipal owned•Green zone improves•Feasibility Study is expected
by the end of August•PPP agreement ≈ 25-30 years•Conventional breakdown into «green» and «commercial» zones•Total Investments ≈ $12,000,000
Tender expected in December 2013
Kyiv Summer Sports and Recreation Facility
Objective Establish a sports
and recreation zone on Dolobetsky
Island along the Dnipro river in Kyiv
Details•Green zone remains untouched •P3DP provided input to FS, tender
criteria, stakeholder communications•PPP agreement ≈ 15 years•Total investments ≈ $2,470,000
Tender results expected in October 2013
Malyn Energy Efficiency
Details•DCO (design-construction-operation) PPP agreement•Maintenance of the heating facility •Decrease cost of heating•PPP agreement ≈ 10-15 years•Total investments ≈ $500,000
Tender is expected in December 2013
Objective Modernize and adapt district heating facilities to renewable and more efficient energy sources
Kyiv Kindergarten
Details•Municipality retains ownership of the kindergarten(s)•Two facilities are being considered•Private partner is responsible for capital renovation and operations•Cadre of underprivileged children will be granted attendance free of charge•PPP agreement ≈ 15+ years •Total investments ≈ $1,620,000 / $2,400,000
Objective Increase Kindergarten capacity by reconstruction and renovation of existing buildings
Tender is expected in 2014
PPP Projects in Development
Reduce traffic congestion and pollution
Details •Off-street parking facility•Possible co-financing by City•Construction and operation •PPP agreement ≈ 15+ years
Introduce energy-efficient and effective lighting system
Details •Modernize street lamps and infrastructure •Improve system management•Improve safety and quality of life in city•PPP contract ≈ 15 years
Dnepropetrovsk Street Lighting
Lviv Parking Garage
Improve landfill operations
Details •Increase landfill capacity and improve environmental condition•Gas-to-energy operations•PPP contract ≈ 15+ years
Ivano - Frankivsk SWM
Conclusions: We witness the dawn of PPPs in Ukraine
Key success factors:Stronger Political Support on the local levelEffective Financial Infrastructure Success StoriesImproved investment climate Capacity building
In Summary