Kazakhstan Works to Balance Public-Private Partnerships

A lack of understanding is fueling skepticism concerning cooperation between the public and private sectors in provincial Kazakhstan. For example, few businessmen know that such cooperation allows them to see strong returns on investments, remake exploitation costs and share risk and responsibility with the state. It is deputy chairwoman of the Kazakhstan Public-Private Partnership Dana Yeshimova’s job to answer questions about the PPP.

This lack of understanding and the resulting skepticism is not only found in the regions, but also in major urban centres as well. Consequently, it is necessary to promote knowledge about the PPP among the population similar to how it was done with the public procurement institute.

I would like to note that both entrepreneurs and state agencies must understand the project equally and plan their actions step by step. When one side has doubts, the feasibility of even a small project becomes questionable.

Secondly, it’s better to begin with small projects that are innovative and well planned out. Perhaps through trial and error and with successes and opportunity, entrepreneurs will come to favour long term business doings.

Third, the PPP will become attractive to domestic entrepreneurs under two conditions. The first is that it grants them building rights and the second is that it is to bear responsibility for its operations (the mechanism of traditional procurements.) Otherwise, we will again have poorly built hospitals, schools and kindergartens as well as unscrupulous developers. The PPP project needs management throughout its life cycle: construction (reconstruction.) operation and management.

Small scale PPP projects include kindergartens, clinics, playgrounds and the like. Projects are opportunities for domestic entrepreneurs or investors to work with the state. PPP projects are business projects for the owners of private businesses and are investment projects for the state.

Public-private partnerships are part of a format that allows participants to join forces, for example, by creating a consortium and using the resources of construction companies, firms with experience in exploitation and management or in providing services (healthcare, education, etc.)

Social protection such as healthcare, secondary education, pre-school education and training, housing, public utilities and transport projects are more appropriate for regions outside of the city centres. No less important are business ideas for innovative projects in infrastructure.

For those who wish to become a co-owner of a business, they should apply to regional PPP centers or subordinate organizations of local authorities who are assigned support functions on PPP projects. Local projects worth 7.5 billion tenge (US$41 million) will be coordinated and examined by local executive bodies. At the same time, PPP Centres are ready to provide methodological and practical assistance to investors in implementing local PPP projects in the suburbs and rural regions. The PPP is regulated by the Law on Concessions.

The Damu Fund and second tier banks in turn will help attract small scale lending.

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