The parliament (Verhovna Rada) of Ukraine on its yesterday’s session approved in principle a bill on amendments to State Budget Code concerning adjustment of budget relationships arising from realisation of agreements related to public-private partnership (PPP) like concessions in particular, as reported by press office of Ministry of Economy, Trade and Agriculture (META).
“The draft law is going to secure full-scale functioning of the PPP mechanism in every sphere of activities and to create conditions for the growth of private investments in socially important projects”, Vice Minister of Economy Iryna Novikova noted at the parliament floor.
Vice Minister told that the basic distinction of this mechanism from any other is its longtermness, as a PPP agreement is normally in force from 5 to 50 years. Such contracts provide for the fulfillment of certain financial obligations during the entire term of the contract. However, today the state is deprived of the opportunity to take long-term obligations, since the principle of three-year budget planning is in effect. The adoption of the bill will provide investors with a guarantee that the state will fulfill its long-term obligations under the PPP.
Moreover, the draft law suggests establishing requirements for the total annual long-term liabilities volume within a PPP (concession); to envisage assignment of State Road Fund money on payment for operational readiness of classified public motor roads built under a PPP based contract including the concession agreement; to adjust the concession fees payment.
In April Cabinet of Ministers of Ukraine passed the resolution approving a new wording of PPP Implementation’s Efficiency Analysis Procedure. Commenting upon this resolution, ex Vice Minister, now Councilor to Minister of Infrastructure Viktor Dovhan accented on the fact that from then on the port concession (Chornomorsk ferry complex, Odessa passenger complex, and Berdiansk Port) as well as that of airports, railway stations and motor roads will be prepared under the new rules.
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