Public-private partnerships contracts worth $3 billion concluded in first half of 2019

NUR-SULTAN – Five hundred and sixty-five public-private partnership (PPP) contracts worth 1.29 trillion tenge (US$3.35 billion) were concluded in Kazakhstan in the first half of 2019. Nine of the projects were national and the rest were local, said Vice Minister of National Economy Madi Takiyev at a July 22 government meeting.

Madi Takiyev. Photo credit: primeminister.kz.

The development of PPP, a long-term cooperative arrangement between two or more public and private sectors, kicked off in Kazakhstan with the adoption of the 2006 law On Concession and gained momentum with the adoption of the 2015 law On Public-Private Partnership. An additional 620 PPP projects worth 1.89 trillion tenge (US$4.91 billion) are under development.

“The majority of the projects fall under education, healthcare, housing and communal services, culture and sports,” said Takiyev.

The Ministry of Education and Science is developing PPP mechanisms to increase the number of summer camps from 236 to 1,000 to meet the needs of approximately 500,000 children. Two hundred and nineteen kindergartens operate under a PPP mechanism, providing 29,000 spots for children. PPP projects on student dormitory construction in Karaganda and the North and West Kazakhstan Regions are also under way as part of the 2016-2019 State Programme for Education and Science Development.

The Ministry of Healthcare is developing PPP projects to purchase medical equipment for cancer treatment. Twenty-one PPP contracts on school canteen management were concluded in the Akmola Region to meet children’s nutrition needs, and similar projects are under way in the Turkestan and East and North Kazakhstan Regions. Forty-eight PPP contracts on new sports facilities were also concluded. For example, former production areas will be rented out as sports facilities for youth.

Takiyev added that PPP projects on urban greening were implemented in Almaty and will be reproduced in Atyrau.

President Kassym-Jomart Tokayev instructed the government to develop PPP projects in agriculture, energy, industry and infrastructure that will ensure a return on investment through paid services rather than the national budget.

To attract more investment and decrease public expenditure, the Ministry of National Economy introduced three categories for PPP projects. One hundred and fifty-four projects fall under Category I, receiving full reimbursement on investment from the national budget. Two hundred and sixty-five projects fall under Category II, receiving partial reimbursement on investment from the national budget and paid services. One hundred and thirty-seven projects fall under Category III, receiving reimbursement on investment from paid services and none from the national budget.