Public-Private Partnerships: Does Russian Practice Follow International Experience?

Abstract

Business partnerships between state agencies and private sector entities represent one of the most common forms of interaction between government and the business sector. Moreover, these public-private partnership (PPP) projects can be a major and effective catalyst for significant social and commercial development in the public sphere.

This article is devoted to an analysis of recent changes in the legislative base concerning PPP in the Russian Federation.

We intend to identify pragmatic approaches toward assessing the economic effects of PPP involvement for potential stakeholders, as well as constructing models of financial frameworks for mapping the PPP project implementation. This article presents the result of testing the financial model that we propose. The ultimate intention is that this model can be used in the preparation of concession agreements and negotiation in the preparation of PPP projects.

To achieve this, we analyze the legal framework and development trends of public-private partnership projects, both theoretically and practically. We consider and evaluate PPP from the point of view of 3 aspects: organizational, methodological and managerial. To achieve this, we must identify the interests of the various stakeholders who are directly or indirectly interested in the practical results of the project in both a material and a sociopolitical sense.

For each of the stakeholders, we identify areas for them to evaluate in the process of analyzing potential PPP projects.

This includes the potential quantitative and qualitative results of a project that can be identified and, as a rule, measured, which allows for a standard approach to political and commercial evaluation. As a result, we present an algorithm for building a financial model which accounts for material and seemingly immaterial variables

It is suggested that this approach to building a financial model and evaluating the effects of PPP projects provides a uniquely useful perspective on the field. We utilize the most modern methods for assessing risks, benefits and effects for various stakeholders of projects implemented in the form of PPP, and as a result this paper provides ample opportunity for further development of research. The presentation of the evaluation algorithm for PPP stakeholders takes into account the complex structure of the partnership participants and will be useful for academic, commercial, and administrative parties.