Irkutsk
Ulan-Ude

Blagoveshchensk
Chita
Yakutsk

Birobidzhan
Vladivostok
Khabarovsk

Magadan
Yuzhno-Sakhalinsk

Anadyr
Petropavlovsk-
Kamchatsky
Moscow

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PPP in manual mode

In the Far East, PPP projects are aimed at infrastructure development projects

PPP in manual mode

Tatiana Cheremnaya

Head of the Center for Effective Territorial Development, Candidate of Political Sciences
One of the main urgent needs of the Far East today is the maximum use of all available tools for the development of territories, which are already successfully used in Russia. Among them, of course, is the internationally recognized mechanism of public-private partnership. The EastRussia correspondent asked the Head of the Center for the Effective Development of Territories, the Working Group on Public-Private Partnership of the Eurasian Business Union, Member of the Russian Association of Political Science, Candidate of Political Sciences Tatyana Cheremnaya about the specifics of the PPP mechanism in the Far East.

- If we talk about the Russian Far East - what are its characteristic features when using the PPP mechanism?
- To the Far East, state money is not what it needs - it can not do without them. And it is thanks to the mechanism of PPP where it is possible to create a certain field, at least to some extent attracting the investor, including the foreign one. Without this framework, first of all its infrastructure part, the investor does not run to this macroregion. In this case, unlike most other macroregions, here in the PPP mechanism speech is even more not about the social infrastructure (schools, hospitals, etc.), but about transport. First of all, these are such objects as roads and railways, bridges. It should be noted that recently, with the advent of the Ministry for the Development of the Far East, the issue of attracting not only public funds, but in general - investments in its infrastructure has become a key issue on the agenda and the main task of the region's leadership. It is natural - how to attract business to the Far East, if its territory does not have the appropriate infrastructure.

- In practice, what scale of PPP projects in the Far East can we talk about?
- In principle, when PPP speech is usually about major projects. Especially it concerns transport projects. Currently, the average cost of the project, implemented using the PPP mechanism, is 1,5 billion rubles. It goes without saying that, for the Far East, the scale and capital intensity of projects are also within this range. But also, as in the rest of Russia, the largest share is occupied by housing and utilities projects - reconstruction, modernization of public infrastructure facilities, there are several small projects for kindergartens, but often the implementation of such projects is complex, say, immediately 20 kindergartens, Which raises again the capital intensity of the project pool.

- Tell me, is this skepticism justified, which is actively used today in relation to state money in projects?
- In this case, the proverb will be very appropriate - the devil is not so terrible as he is painted. After all, the way in which funds from the state are allocated for a project is in fact determined not by the fact that they are state, but by the quality of interaction with the state within the framework of a particular project. It is clear that in any case, two or three years of negotiations between the private and public parties will take place before the signing of the first agreement with the state.

- And what is the way to build a quality relationship with the state?
- Yes, in principle, the same as the one through which it is possible to successfully reach an agreement on the implementation of an investment project, including their implementation using the PPP mechanism. This is mainly the painstaking, “manual” work of the governor and his team with investors, their readiness for the development of the region, in particular, for the practical implementation of projects. In this case, of course, the investment climate of the region, the presence of effective demand in it, and some other points play a role. In addition, a definite role and behind the very nature of the project - its complexity, exclusivity in the region. Moreover, what result the governor and his team can achieve with appropriate work on the implementation of PPP projects can be illustrated by specific examples from life. One such example is the Kaluga Region, which is capable of attracting both government funds and investments thanks to the well-coordinated work of the governor's team, which is loyal to business and creates the conditions necessary to attract investors' funds to the region, including foreign ones. In particular, the governor of this region communicates directly with each business representative who is interested in entering the region. That is, in this region, a dialogue has been established between the authorities and business, and there is a feedback.

- How, in turn, when looking at the Russian regions, can one determine whether their management teams work effectively with the state or not?
- The assessment of this work of regional management teams is laid in the ratings of investment attractiveness of the regions. If we talk about the positions of the Far Eastern regions in these ratings to date - unfortunately, they are not at the top of the list, or even in the middle ones. Although in the same ranking of regions in terms of the level of PPP development, compiled annually by the PPP Development Center, among the Far Eastern regions the highest ratings are Republic of Sakha (Yakutia) - 14 place, Khabarovsk Krai - 20 place. But at the same time, for example, Primorsky Krai and Magadan Oblast are at the very bottom in this rating. But here it should be noted that in the case of the Far Eastern regions, taking into account the degree of complexity of implementation and the insufficiently high profitability of their projects, the problems of attracting funds from the state and investments from business are connected, among other things, with the specifics of the Far East as such , Low effective demand, a small population, excessive length of regions, a strong remoteness from Moscow.

- And what is the power to become a factor that dominates the specifics of the territory of the Far East, which will increase the potential for financing its projects?
- This factor may be the earned facilities located on the territory of interstate projects - the same project Power of Siberia, the Great Silk Road. That is, mainly, interstate infrastructure projects that can influence the development of the Far East. At the same time, since this macroregion is not a separate territory, but is a part of our state, then positive changes in all-Russian trends can also "improve" local investment projects. A huge role here can be played by strengthening Russia's work with the BRICS and SCO countries - as a result of such close interaction, investments from these countries in Russia, including the Far East, the implementation of new joint projects within the framework, for example, of the new BRICS Development Bank ...

- And the PPP mechanism itself is currently sufficiently developed in Russia for its use in projects to attract investors, including to the Far East?
- The most important regulatory legal act in accordance with which the PPP mechanism functions in Russia - the Federal Law on PPP - came into effect only from the beginning of 2016. It goes without saying that both the mechanism and the acts that determine its functioning are still at the stage of working out, adapting and going through other necessary initial procedures, and even making some amendments. Accordingly, the investor is still often afraid of projects involving the implementation of the PPP mechanism. It is feared, however, not only because of the "dampness" of this mechanism, but also because it also has its downside. In particular, these are all sorts of political risks, as well as long periods of preparation and implementation of projects.
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