How to make PPP work in Russia: 2012 Overview

Industry appeal

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Respondents named the Russian power industry as the least promising for PPPs.

Survey participants regard transport and utilities as the Russian industries that show the most promise for PPP mechanisms in the next five to ten years.

Respondents named the Russian power industry as the least promising for PPPs. This may have to do with the comparatively low return on investments in conditions of tariff regulation.

Assessment of the industry appeal of PPPs in Russia in the next five to ten years

Public officials differed with other respondents in their evaluation of the prospects for PPPs in social infrastructure.

Assessment of the prospects for widespread use of PPPs in Russian social infrastructure

Our findings indicate that, while there is a need to update and develop social infrastructure, there are no well-developed approaches or schemes for attracting private investors to such projects.

Despite the fact that one of the most frequently mentioned advantages of PPPs is the advanced technology introduced by private investors, the survey participants believe that the regions need conventional, standard infrastructure projects with welldeveloped means of implementation more than they need hightech projects. This likely reflects a desire by respondents to try out PPPs at the regional level in relatively simple, reproducible projects before moving on to more complex projects.

Chief obstacles

The respondents were unanimous in believing that the chief obstacles in the way of wider use of PPPs in Russia are:

  • The failure of federal laws to satisfy modern requirements
  • The low quality of preparation of PPP projects
  • An insufficient level of state readiness to put PPP projects into practice

Note that it was public officials who pointed to the lack of a unified state policy on PPPs, the underdevelopment of public institutions and their low level of readiness to undertake such projects as being among the most serious obstacles.

Representatives of development institutions are more concerned than other respondents about the paucity of PPP projects that are well developed and in demand and the consequent low level of competition on the market.

Assessment of the significance of the chief obstacles in the way of wider use of PPPs in Russia


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