This assertion was made in
the analytical report
ROSINFRA. Simple and Honest about Investment in Infrastructure and
Public-Private Partnership in Russia, which was specifically
prepared by the PPP Development Center for the 6th Russian PPP Week
Infrastructure Congress. As part of the study, experts tried to depict the
situation with the development of global infrastructure and the main trends for
the next few years.
The review focused, in
particular, on the national projects that are being implemented in Russia,
which have become policy documents for the country over the next five years.
Russia is currently spending 2.8% of GDP on infrastructure, but this spending
should reach 5% by 2024 so as to prevent a deficit. In absolute terms, the
country needs to spend RUB 25.9 trillion over the next six years. A total of
RUB 25.7 trillion has been earmarked for 13 investment projects, including
extra-budgetary funds of RUB 7.7 trillion. However, infrastructure does not
count for all national project funds. According to expert estimates, only RUB 15.3
trillion may be directly spent on infrastructure development.
Given the shortage of
budget funds, experts believe it would be logical to actively utilize
public-private partnership mechanisms. But it seems officials have completely
forgotten about PPP in the structure of national projects, the experts say. Of
course, there are extra-budgetary sources in the national projects. But, first
of all, these are funds from state-owned companies, such as Russian Railways
and Rosatom, and second, PPP mechanisms will not necessarily be utilized even
if the money is coming from an «ordinary» private investor. All projects can be
divided into two groups. The first is directly funded from the federal budget.
The second is funded from the budgets of the regions, including the use of
inter-budget transfers from the federal budget. Neither the first nor the
second group has clear rules for spending money through PPP mechanisms. Rather,
on the contrary, the rules are spelled out in the logic of direct budget
However, there are still
exceptions, for example a concession will be used to build a coal terminal at
the Lavna port in Murmansk. Another terminal may be built in Taman using the
same mechanism. In order for PPP mechanisms to work on a massive scale within
the framework of national projects, transparent and understandable rules first
need to be created for their funding, experts say. There are national projects
that have almost no declared extra-budgetary funds in healthcare and education.
That means these policy documents do not rely on PPP in principle. At the same
time, Russia has already gained decent experience in utilizing PPP in these sectors.
«Our country already has successful
experience implementing projects of national importance using public-private
partnership tools. It is essential to expand this experience to other sectors
of the economy and make the institution of PPP more efficient and transparent
for both business representatives and government agencies. Expanding the
practice of using PPP tools will significantly speed up the implementation of
investment projects», Advisor to the Russian President Anton Kobyakov said.
Over the past year, 353
projects have been implemented using PPP mechanisms, which is 33% less than a
year earlier. However, the volume of private investment, by contrast, increased
to RUB 451.7 billion in 2018 from RUB 247.5 billion in 2017. This growth was
mainly due to two mega-construction projects the Elegest-Kyzyl-Kuragino
railway line (RUB 126.6 billion of private investment) and the Northern
Latitudinal Railway (RUB 103 billion). A total of 3,422 contracted PPP projects
with total private investment of RUB 2.182 billion are currently being
implemented in Russia.
According to the Centers
estimates, preparations are under way to implement another 302 potential PPP
projects in the country with total investment of RUB 1041.1 billion. A total of
283 projects with private funds of RUB 166.3 billion are already at the tender
stage. More than a thousand potential projects that could use PPP mechanisms
are at the initiation stage. In monetary terms, these projects are worth more
than RUB 3 trillion combined.
The 6th Russian PPP Week Infrastructure Congress is taking place in
Moscow from 2326 April. The event is being organized by the PPP Development
Center and the Roscongress Foundation with the participation of the relevant
federal ministries and the support of the Russian Governments Analytical
Centre, the Chamber of Commerce, Business Russia, and the Agency for Strategic
Initiatives. Sberbank is a General Partner.
To view the detailed forum program please visit p3week.ru.
Venue: Digital Business Space, Moscow, 47 Ulitsa Pokrovka
Tel.: +7 (495) 988 7713