The White House is discussing changes in the practice of state buyout of social facilities built by private investors. The topic caused a new round of controversy between departments on the delimitation of concessions and public procurement. To increase transparency, the Ministry of Finance proposes to select investors for construction in accordance with strict procurement legislation, the Ministry of Economy insists on a flexible mechanism that is interesting to investors.
As it became known to Kommersant, there is a discussion in the White House about ways to buy out social facilities built by private investors by the state. Now there are two ways – through public procurement (according to the law on the contract system 44-FZ) or through the mechanism of public-private partnership (PPP). The President instructed the government to analyze them back in January 2020 after the regions complained about the FAS’s interpretation of transactions for the purchase of finished objects by government agencies as cases of collusion or restriction of competition.
The positions of the regions and departments were consolidated by the Ministry of Finance in the draft report to the president. He states that many regions are successfully buying out social facilities (35 regions have reported, some of the subjects do not have this practice). The authorities of a number of constituent entities of the Russian Federation propose to adjust the mechanism – for example, to introduce in 44-FZ a new type of contract for the purchase of a future facility (which is de facto the purchase of construction work and is already provided for by law), as well as additional guarantees for the purchase of facilities through escrow accounts and requirements coordination of their projects with industry departments. The Ministry of Finance objected that the “buyout guarantee mechanisms” are already in the law.
The Ministry of Finance, referring to the fact that the state buys social facilities under 44-FZ on the basis of a contract with a single supplier, proposes to select concessionaires according to rather strict public procurement rules. But this idea runs counter to the attempts of the Ministry of Economy to distinguish between purchases and concessions – the department has been working on a bill for several years, which implies the rejection of the possibility of financing PPP projects by 100% at the expense of budgets.
Market participants do not agree with the proposal of the Ministry of Finance. Anna Batueva, Managing Director for Legal Affairs of the National PPP Center (VEB.RF Group), notes, second, the public side does not pay immediately for the facility and, in fact, transfers part of its functions to private operators, which ensures more efficient and flexible infrastructure management ”. This procedure, she said, is clear to all participants, and its replacement with a public procurement system negates the main advantages of PPP.
The Ministry of Economy in its letter also indicates that the ideas of the Ministry of Finance will lead to a loss of flexibility and a decrease in the investment attractiveness of PPP mechanisms. So, concessions, in contrast to contracting under 44-FZ, allow negotiations after competitive procedures, and the operation of an object by an investor helps to reduce the risks of poor-quality construction. The Ministry of Economy supports the proposals of the regions – they have already been included in the departmental concept of the mechanism for providing a buyout guarantee.
Another topic of discussion is that when guaranteeing a buyout under 44-FZ, as the Ministry of Economy points out, the import substitution mechanisms envisaged in the procurement sector should be “initially applied”. Now they are not used – the laws on PPP and concessions do not contain such requirements. However, the department notes, such a legal gap creates the risks of government agencies using PPP agreements to bypass import substitution requirements. However, tightening of such requirements for PPP, explained to Kommersant in the Ministry of Economy, is also not planned.
What departments offer
Ministry of Education believes that the buyback mechanism contributes to the fulfillment of national goals (for example, to create new places in education). “The cycle of creating educational organizations, taking into account the competitive procedures for binding a standard project (creating a new project) and choosing a contractor that will carry out construction and installation work, in most cases takes longer than the acquisition (redemption) of a finished building,” they note in the department. At the same time, the ministry believes that the position of the FAS impedes the “proper scaling” of the buyout practice.
However, the key claim to the “turnkey” facility buyout mechanism, which gave rise to the discussions, will probably not be resolved. So, yesterday at FAS Kommersant was told that the position of the service remains the same. “The mechanism for the purchase of social facilities exists and is being implemented, inter alia, through the special provision of clause 31 of part 1 of article 93 of the law on the contract system. In this case, violations are detected by the FAS in exceptional cases. These are cases of procurement to bypass competitive procedures or with conditions created in advance for a specific market participant, providing such participants with preferences or an unconditional right to build and then implement a specific object, ”the department explained.