Anatoliy Valetov. Public funding and private investment
1. Department for External Economic
and International Relations
Public funding and private investment
Presenter: Deputy head of Department
Anatoliy Valetov
Moscow Urban Forum
2011
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2. DEPARTMENT FOR EXTERNAL ECONOMIC AND INTERNATIONAL RELATIONS
Structure of PPP infrastructure projects currently developed by Department
Structure of PPP projects
medical facilities
water supply
industry
10%
27%
4%
energy
14%
transport
7%
waste
community hotels
10%
facilities
7%
4%
rapid transit system
parking
10%
7%
Department for External Economic and International Relations is a Government’s of
Moscow foreign investment body.
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4. HEALTHCARE
Current state
Investment opportunities
n Main assets have a high deterioration level.
n Renovation of existing medical facilities and
n Low qualification level and aging of medical construction of additional ones as well as operation
personnel. Lack of modern training systems for and maintenance of medical facilities in Moscow.
doctors and nurses.
n Outdated equipment and diagnosis techniques.
MISSION
• quality health care in municipal clinics
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5. WASTE MANAGEMENT
Current state
Investment opportunities
n 5.5 tons of sanitary waste is produced in
Moscow annually. Capacity deficit of 2-3 million
tons is estimated. Moscow region produces another
2 million tons.
n Construction of a modern plant for neutralizing
highly toxic waste and sewage drain.
n Approximately 80% of waste is disposed on
land fills, 13% is incinerated and 7% is recycled.
n Construction of waste treatment plants based on
technologies providing recyclable discharge.
n Government program priced at a total of 80
billion rubles provides for an increase of
incineration capacities outside Moscow City.
MISSION
• disposal of solid waste without incineration
• incineration of highly toxic waste without damaging the environment
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6. PARKING
Current state
Investment opportunities
n Parking lot deficit is over 4 million spaces (with
an overall demand for 5 million spaces).
n Developing park-and-ride facilities near rapid
n Planned budget for creating a parking space transit stations.
system is 246 billion rubles for the years
2011-2016.
n Construction of non-residential buildings in
which over half the space is intended for organized
n In May 2011 Department for External parking for local residents.
Economic and International Relations along with
EBRD issued an analytical report on the parking
space sector with comprehensive recommendations
for Moscow City Government.
MISSION
• increase of the capacity of municipal transportation
• increase turnover of parking spaces
• uniform parking policy across the city
• usability of the owners of the transport facilities
• increasing of the income of the municipal budget
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7. RAPID TRANSIT SYSTEM
Current state
Investment opportunities
n Outdated car park and operation systems do not
meet modern standards.
n Construction and operation of new rapid transit
n A construction of 75 km of new lines must be lines as well as setting-up a joint-venture in
completed by 2015.
manufacturing cars for the rapid transit system.
n Metro car park must be completely renewed by n Setting-up a joint-venture in manufacturing
2020 which includes a replacement of 4000 cars escalators for the rapid transit system.
and a purchase of 2000 cars for new lines.
n Financial input for construction is estimated at
90 to 150 billion rubles annually. For car park
renewal – about 300 million rubles.
MISSION
• accessibility of remote districts of the city
• comfort and attractiveness of public transport
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9. PUBLIC-PRIVATE PARTNERSHIP :
HISTORY
With the end of investment agreement’s era the city faced the lack of expertise in any other
form of PPP. Recently it has begun to study the implementation of such forms of PPP as
concession, release agreements and privatization.
CANCELLATION ON
THE INVESTMENT
IVESTMENT NEW MODELS OF PPP
CONTRACT
CONTRACTS
Moscow tried to draft up its
From 1998 to 2008
Later this form of agreement first concession agreements,
investment contract was
was stated as inappropriate. but they never came to
used as basic scheme of the
But we still have 1300 of realization
PPP
those projects running
It is essential for Moscow to learn to use new models of public-private partnership in
immediate future
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10. HURDLES IN USE OF PPP MODELS
Russian legislation is directed to protect the budget funds and state
property and not as much to their involvement in the investment process
Risks are evaluated by investors as high, which affects in terms of
investment return and guarantees from the state
Moscow does not have special PPP law, however, such laws have been adopted in 45
regions of Russia (as of September 2011)
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11. PUBLIC-PRIVATE PARTNERSHIP AS A TOOL INTEGRATING MOSCOW IN THE
WORLD INVESTMENT PROCESS
additional funding for
infrastructure
modernization
expansion of resource-
high control over final intensive innovative
result
industries
PPP
introduction of new
high financial
forms of management
effectiveness
and technology
Implementation of public-private partnership plays an important role in the
development of Moscow as a global metropolis
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12. PRACTICAL STEPS IN IMPLEMENTATION OF PPP
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Setting up of investment committee headed by the Mayor of Moscow
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Maintenance of investment projects database
Setting up of Investment Agency
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Adoption of legal acts specifying conclusion procedure for concession
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agreements
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Studying of possibility of enacting a PPP law
Moscow City Government is taking steps to accelerate the implementation of PPP
schemes in economy of the city
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