What's new in the new Public-Private Partnership Act of the Kyrgyz Republic?

By Gulnara Kalikova, Counsel, Kalikova and Associates
Albina Rakhmidinova, Senior Lawyer, Kalikova and Associates

The new Public-Private Partnership Act of the Kyrgyz Republic will enter into force three months after its official publication (July 26, 2019), i.e. on October 26, 2019. How is the new PPP Act different from the current one? Will the new PPP Act become an impetus for the development of public-private partnership (PPP) in Kyrgyzstan?

 PPP is a long-term cooperation between public (state and municipal authorities and organizations) and private (investors) partners in the construction and operation of state and municipal infrastructure facilities (roads, airports, train stations, hospitals, sports facilities and others) by attracting private investment.

 Reasons for passing the new PPP Act

 The government has been trying to introduce PPP in Kyrgyzstan for a few years now. The current PPP Act was enacted in 2012 and some secondary legislation was adopted in subsequent years. The PPP Development Program 2021 was approved by the Government in 2016. The Program announced a goal to attract at least KGS 20 billion of private financing in infrastructure development by 2021. Currently (as of mid-2019), less than 5% of this amount have been raised with only three PPP agreements signed, specifically the hemodialysis centers, cinema theater reconstruction and Bishkek public transport e-ticketing projects.

 Why is PPP not developing in Kyrgyzstan? This is explained by a number of factors such as lack of political will among state and municipal officials who consider PPP projects to be too complicated and time-consuming to prepare; lack of public and private sectors’ knowledge and experience in PPP projects; legal gaps and inconsistencies in regulation of PPP.

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