Слайд 1 - GRATA Law Firm

Обдуманные ходы
Эффективные решения
PPP as a mechanism for
infrastructure formation in
Kazakhstan: legal aspects
09.05.2016
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Обдуманные ходы
Эффективные решения
PPP LEGAL FRAMEWORK HISTORY
Formation History of PPP Legal Framework in Kazakhstan
• The first Law of Kazakhstan ‘On Concessions’ was adopted in
1991 and lapsed in 1993 (the Law governed legal terms of
object provision into concession to foreign investors).
• Concession under the ‘old’ Law means “leasing to a foreign
individual or legal entity – concessionary – of property, land,
natural resources”.
• After the ‘old’ Law was lapsed and prior to the adoption of
the current Law ‘On Concessions’ the legal framework for
PPP projects in Kazakhstan was the general rule of the Civil
Code of Kazakhstan, JSC Law, Privatization Law, etc.
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Обдуманные ходы
Эффективные решения
PPP LEGAL FRAMEWORK HISTORY
“New” Law ‘On
Concessions’ was adopted
in 2006 and allowed
assignment of rights to
create state property
objects for both foreign
entities and resident legal
entities.
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In 2008 and 2010 there
was a range of
amendments introduced to
the concession legislation
in terms of procedures for
the transfer of objects into
concession, expanding of
state support, etc.
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Обдуманные ходы
Эффективные решения
PPP LEGAL FRAMEWORK HISTORY
Concession under the ‘new’ Law means “the transfer under the
concession contract of state property objects into temporary possession
and use for improvement and effective operation, as well as the rights to
create (construction) of new objects for account of the concessionary or
in co-financing with the concessor with further transfer of such objects
to the state and provision of the concessionary with the right to own,
use for further operation as well as with or without state support”.
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Обдуманные ходы
Эффективные решения
PPP PRACTICAL EXPERIENCE OF KAZAKHSTAN
Share Purchase Agreements
The following is currently performing:
• Construction and operation of the rail way ‘Shar-Ust
Kamenogors Station’
• Construction and operation of the passenger terminal of the
international airport of Aktau
• Construction and operation of the inter-regional power line
‘North Kazakhstan – Aktobe Region’
• Construction and operation of the gas turbine plant in
Kandyagash city, Aktobe region
• Construction and operation of the rail way ‘Yevraliyevo-Kuryk’
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Обдуманные ходы
Эффективные решения
NORMATIVE LEGAL REGULATION
The Law of Kazakhstan ‘On Concessions’;
The Law of Kazakhstan ‘On Investments’;
The Civil Code of Kazakhstan;
The Law of Kazakhstan ‘On State Social Procurement’;
The Law of Kazakhstan ‘On State Property’;
The Tax Code of Kazakhstan;
The Land Code of Kazakhstan;
The Budget Code of Kazakhstan;
The Law of Kazakhstan ‘On Motor Roads’;
The Law of Kazakhstan ‘On Rail Way Vehicles’;
The Law of Kazakhstan ‘On Security Market’;
Various special bylaws in concessions.
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Обдуманные ходы
Эффективные решения
BASIC PPP CONTRACT FORMS
Concession
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Leasing
Management
Contract
Service
Agreement
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Обдуманные ходы
Эффективные решения
CONCESSION AS A PPP FORM
Transfer under a
concession agreement of
current state property
objects into temporary
ownership and use (for
improvement and
effective operation); or
Transfer under a
concession agreement of
the rights to create
(construct) new objects:
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• is performed for account of the concessionary or in
co-financing with the State;
• need to transfer such an object to the State (BTO);
• concessionary is entitled to own and use for further
operation;
• with or without state support.
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Обдуманные ходы
Эффективные решения
CONCESSION OBJECT
Concession objects resulting from the execution
of contract terms are transferred into the state
ownership since the creation thereof for further
operation of these objects by the concessionary
A concession object cannot be the subject matter
of a pledge
Concession objects cannot be alienated during
the term of the concession contract
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Обдуманные ходы
Эффективные решения
CONCESSION BENEFITS
State guarantees on infrastructure bonds;
State loan guarantees;
transfer of the exclusive IP rights owned by the State;
provision of in-kind grants;
co-financing of concession projects;
Guarantees of consumption by the State of a certain amount of goods
(works, services) when the State is a principal consumer;
compensation for a certain volume of investment expenses.
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Обдуманные ходы
Эффективные решения
STATE SUPPORT
The State
provides for one
or several types of
state support
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When the State
support is
provided in the
form of cofinancing, the
concessionary
shall be obliged
to issue
infrastructure
bonds
The total value
of the State
support shall not
exceed the value
of an object
created (under
construction) at
the expense of
the
concessionary
under the
concession
agreement
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Обдуманные ходы
Эффективные решения
CONCESSION APPLICATION FIELDS
Transport (airports, rail ways and motor roads);
Electric Power Industry;
City Infrastructure (hospitals, kindergartens, stadiums);
Waste Disposal;
Water Resources (water desalination plants, water
treatment facilities).
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Обдуманные ходы
Эффективные решения
WHY DOES NOT CONCESSION WORK IN KAZAKHSTAN?
The concept ‘availability fee’ is not provided for in the laws of Kazakhstan
(Methods for determination of the concession object value, concession
project value and total value of the State support to the concessionary’s
activities, 2009, complicates the applicability thereof on contractual
basis).
Excessive bureaucracy and lack of transparency (formation of the list,
tender, etc.).
Participation in a tender for the selection of a concessionary is not
acceptable for many investors.
In some cases, compensation is needed not only for investment expenses
but for operating costs as well.
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Обдуманные ходы
Эффективные решения
GAPS IN LAWS
Many concepts applicable in the international practice do not work:
• Capacity Charge for IPP projects and Availability Payment for
PPP projects - can be provided on a contractual basis, but
must be take into account the restrictions of the Methods for
determination of the concession object value, concession
project value and total value of the State support to the
concessionary’s activities, and tariff regulation.
• Assignment of rights is not a pledge under the laws of
Kazakhstan.
• The concept “direct agreement” is not recognised by the laws
of Kazakhstan.
• The concept “step in right” does not work – through pledging
interests in SPV as an alternative.
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Обдуманные ходы
Эффективные решения
GAPS IN LAWS
Many concepts applicable in the international practice do not work:
• The concept of “take or pay” - can be envisaged as a ‘penalty’ in the contract, but
the amount of the ‘penalty’ may be revised unilaterally by the court if it deems it
excessive.
• The concept of “termination payment” can be envisaged as a ‘penalty’ in the
contract, but the amount of the ‘penalty’ may be revised unilaterally by the court
if it deems it excessive.
• Long-term contracts of purchase / consumption for 30 or more years is no longer
possible (for example, electricity tariffs are set at a maximum of seven years)?
• The concept of “Single Offtaker” - there may be problems with the Law “On
Competition”.
• Obligatory sale of the pledge subject through an auction is not practical for the
purposes of project financing.
• The concept of subordinated debt shall be recognised, including in case of the
bankruptcy of a company.
• To amend the law to clarify the authority of local executive bodies (may Akimat
provide a guarantee, is there the need to hold a tender or there will be problems
with the anti-corruption laws?).
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Обдуманные ходы
Эффективные решения
Contact Details
104, M.Ospanov Street
Almaty, Kazakhstan, 050020,
Ph.: +7 (727) 2445-777,
Fax: +7 (727) 2445-776
[email protected]
09.05.2016
Shaimerden Chikanayev
Almaty, Kazakhstan
Partner
Mob.: 8701 7878020
[email protected]
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