Budget Subsidies + “Private Concession Initiative” = Stopper for Social Infrastructure Development

2021 ◽  
Vol 152 (6) ◽  
pp. 30-39
Author(s):  
Vitaly V. Maximov ◽  
◽  
Keyword(s):  
Law Enforcement ◽  
Social Behavior ◽  
Private Investment ◽  
State Ownership ◽  
Public Private Partnership ◽  
Infrastructure Development ◽  
Social Infrastructure ◽  
Private Partnership ◽  
Commercial Activities ◽  
Budgetary Participation

The overwhelming majority of social infrastructure facilities remain in state ownership, requiring special formats for attracting private investment without possibility of disposition and loss of their destination. Mechanism of public-private partnership doesn't leave any other option for such projects, and the "private concession initiative", which has become widespread in recent years, is best suited for projects focused on commercial activities, although this limits its application to social facilities. Non-competitive basis of this format relies on the market offer of the investor, whose rationality does not imply social behavior and whose activity is obviously not intended for budgetary participation. Recently, there has been an increase in cases of government authorities taking commitments on budgetary co-financing of agreements concluded as a result of such initiatives, which is often fraught with systemic violations of budgetary legislation. Connivance of the control-supervisory and judicial authorities results in formation of skewed law enforcement practice, in 36.2% of projects investors receive additional rental income from the budget, objectively not justified. This not only results in budget overpayments, but also devalues competitive formats that were previously quite successful — at present only 1/5 of social projects are concluded through a competitive process.

scholarly journals Affordable social infrastructure vs public-private partnership

2021 ◽  
Vol 17 (3) ◽  
pp. 339-348
Author(s):  
Vitaly Maximov
Keyword(s):  
Social Services ◽  
Private Investment ◽  
Public Private Partnership ◽  
The State ◽  
Infrastructure Development ◽  
Social Infrastructure ◽  
Private Partnership ◽  
Economic Mechanism ◽  
Wide Range ◽  
Private Investors

The article is devoted to the problems of sustainable development of social infrastructure and social services, which are beyond the effective demand of large cities, cannot develop according to market laws, and provide the necessary level of infrastructure fullness. Despite 45.9% of private companies in the social sectors, the vast majority of real estate objects continue to be owned by the state, forming the need to find economic mechanisms for the development of state social infrastructure, outside of limited budget opportunities. The possibility of attracting private investment in new construction and reconstruction without alienating the ownership right to it makes public-private partnership (PPP) and the economic mechanism based on it have no alternative. However, its practical application suffers from asociality, leading to the appearance of state-owned facilities where private investors conduct exclusively commercial activities. The apparent budget savings lead the state, judicial and supervisory authorities in such territories to a strategic failure, reducing the number of state facilities operating at state prices, ignoring the requests of the population for affordable social infrastructure, increasing social tension in society. This work is aimed at studying the irrational behavior of private investors, the stability of which is provided by the PPP mechanism, where the state determines the necessary level of the sociality of infrastructure objects that best corresponds to the existing stratification of residents of a certain territory through competitive procedures and essential conditions of the future project. It is necessary to continue research on improving federal legislation, whose social neutrality leads to conflicting expectations of the parties from PPP, adding sensitivity to a wide range of risks, repelling private investment and investors, limiting infrastructure development only to budget opportunities. The development of an economic mechanism that ensures finding a balance of accessibility and market rationality of social facilities is not an easy task, which has many solutions taking into account the characteristics of a particular territory and its population

scholarly journals АНАЛІЗ ТЕНДЕНЦІЙ РОЗВИТКУ СИСТЕМИ ДЕРЖАВНО-ПРИВАТНОГО ПАРТНЕРСТВА НА РИНКУ ПОСЛУГ АВТОМОБІЛЬНОГО ТРАНСПОРТУ

2021 ◽  
Vol 151 (5) ◽  
pp. 94-103
Author(s):  
Даниїл В. Лапоног
Keyword(s):  
Private Investment ◽  
Road Transport ◽  
Public Private Partnership ◽  
Infrastructure Development ◽  
Private Partnership ◽  
The Public ◽  
Partnership Development ◽  
Transport Services ◽  
The Government

The article seeks to provide insights into contemporary research in public-private partnership development in the road transport market. The study reviews a range of world public-private partnership best practices which demonstrate that effective interaction between government and business at different levels (national, subnational and regional) allows to attract and allocate investment resources more effectively, thus contributing to creating new jobs, promoting better infrastructure development and enhancing the overall quality of life in the country. It is argued that among the key factors boosting the public-private partnership market development the most significant is the level of institutionalization. It is also asserted that this factor, in combination with the relevant political environment and the capital market specifics, facilitates building successful partnerships. Moreover, government initiatives together with legal and regulatory interaction frameworks shape solid foundation to encourage further public-private partnership development by gaining positive effects from successful implementation of such partnerships, designing roadmaps and unified standard procedures and processes aimed at simplifying the relationships between the private sector and the government. Apart from the above, it is highlighted that the institutional factor aligned with the government strategic goals affects the formation and legitimation of public-private partnership markets. The study also provides argument that through the models of public-private partnerships the public sector can benefit, in the first place by utilizing resources of private companies, thus fostering further infrastructure development and raising the effectiveness and efficiency of road transport services market. The findings reveal that the purpose of public-private partnership programs institutionalization in the sector of road transport services is to enhance government motivation to attract private investment and offer new road network services based on public-private partnership contracts which will contribute to ensure the quality of road services.

Kajian Potensi Dan Peluang Pembangunan Infrastruktur Di Sektor Sosial Dengan Skema KBPU

2016 ◽  
Vol 1 (2) ◽  
pp. 105-120
Author(s):  
Towaf Totok Irawan
Keyword(s):  
Fiscal Policy ◽  
Public Private Partnership ◽  
Infrastructure Investment ◽  
Social Sector ◽  
Infrastructure Development ◽  
Social Infrastructure ◽  
Investment Planning ◽  
Private Partnership ◽  
Cooperation Mechanism ◽  
The Social

This study aims to formulate recommendations and opportunities for potential infrastructure development in the social sector by using KPBU scheme. The direct beneficiaries of this activity are the Deputy of Investment Planning as a unit that is directly responsible for formulating the proposed establishment of the Act related KPBU in the field of infrastructure investment. The output of this activity is also expected to be useful for investors in infrastructure and related stakeholders. Model cooperation Public Private Partnership in social infrastructure should take into account the uniqueness of each sector, particularly the constraints, risks and macro conditions, including fiscal policy and commitment to the objective of each sector. So that needs to be made cooperation mechanism Public Private Partnership in the field of social infrastructure by making adjustments to the conditions and limitations in the field of social infrastructure. Results and recommendations are discussed further in the paper. Keywords: Multi Criteria Analysis, infrastructure development

scholarly journals Public-private partnerships in social services: foreign practices and prospects for implementation in Ukraine

2017 ◽  
pp. 21-37
Author(s):  
Alina Zhukovska
Keyword(s):  
Social Services ◽  
Public Private Partnership ◽  
Public Private Partnerships ◽  
Healthcare Sector ◽  
Medical Services ◽  
Infrastructure Development ◽  
Social Infrastructure ◽  
Private Partnership ◽  
Priority Areas ◽  
The Uk

The article outlines the issues of social infrastructure development in Ukraine. The need of addressing these issues through implementing public-private partnership projects is justified. Some priority areas for introducing public-private partnership in Ukraine are identified. The best foreign practices of attracting private sector to solving problems of social infrastructure development are considered. It is revealed that priority areas where public-private partnerships operate are dependent on the level of socio-economic development of the country. Some practices of public-private partnership projects in education in the UK, Australia, Germany, and Egypt are analyzed in detail and their common characteristics are systematized. Based on the analysis of best foreign practices applied in implementing public-private partnership projects in healthcare, the following key measures are formulated: direct provision of medical services, management of medical assets, development and production of pharmaceuticals, improvement of access to medical services and products. The performance of public-private partnership projects in the healthcare sector in the UK, France, Australia and Sweden is analyzed in detail. The paper describes both more and less successful examples of publicprivate partnership in this sector. The article defines the following reasons for low-level implementation of public-private partnership projects in healthcare: schedule delays in construction, operation-cost overruns, poor hospital and ward layout, use of low-cost medical equipment which requires regular renewal. The research also considers the best foreign practices of introducing public-private partnership projects in the field of culture. Some characteristic features of public-private partnership projects in social services in foreign countries are identified. The national practices of introducing public-private partnership projects are highlighted and priority areas of their operation are singled out. It is found out that the implementation of public-private partnership projects in social services is not popular among domestic investors. Some individual projects of public-private partnership in social services are considered. A particular attention is paid to both more and less successful ones. The main problems of the implementation of public-private partnership projects in the national education, healthcare, culture are outlined and ways for their solution are proposed.

The perspectives of public-private partnership implementation as the instrument of infrastructure development in Ukraine

2019 ◽  
pp. 9-13
Author(s):  
Halyna Kravets
Keyword(s):  
Economic Growth ◽  
Development Strategy ◽  
Global Economy ◽  
Wide Spectrum ◽  
Private Investment ◽  
Emerging Economy ◽  
Public Private Partnership ◽  
Infrastructure Development ◽  
The European Union ◽  
Private Partnership

Infrastructure development stands out among the prime goals of an economy’s social and economic trajectory. Being a major driving force of wellbeing, economic growth strongly depends on infrastructure. An increase in capital investments in infrastructure has a comprehensive positive effect on an economy. Public-private partnership (PPP) is of particular importance for an efficient economic development strategy, especially for that of an emerging economy. Providing for sustainable economic growth is a struggle for emerging economies due to a wide spectrum of negative features they possess such as poor governance, corruption and widespread poverty. Involvement of private investment in terms of PPP leads to a decrease in government expenditures. Creating a favorable environment for PPP precedes a rapid increase in the number of private companies willing to compete for those contracts. Hectic competition expedites the establishment of the market economy, which is a reasonable conclusion to an emerging economy. Competing for a tender coerces private parties to generate as innovative approaches as possible in order to win. Maintaining a constantly increasing share of innovative activity in constructing and operating infrastructure is a viable opportunity to make a highly urbanized area gain a momentum towards more sustainable environment. Being a means of promoting green and smart technologies, PPP enables expediting integration into the global economy. Encouraging PPP facilitates globalization. Widespread utilization of PPP contracts in governmental procurement transfers risks related to construction and maintenance of infrastructure to private parties. Sustaining a creditworthy institutional and regulatory environment mitigates high sensitivity of PPP to crisis and derivative events. Ukraine is highly likely to significantly benefit from PPP. Considering Ukraine’s strong intention to integrate into the European Union, PPP may help to boost infrastructure development. It is recommended for Ukraine to follow the principle of reciprocate motivation in order to succeed in establishing an efficient mechanism of PPP development.

scholarly journals A Global Review of Public Private Partnerships Trends and Challenges for Social Infrastructure

2018 ◽  
Vol 147 ◽  
pp. 06001 ◽  
Author(s):  
Adrianto Oktavianus ◽  
Iris Mahani ◽  
Meifrinaldi
Keyword(s):  
The Elderly ◽  
Public Private Partnership ◽  
Infrastructure Development ◽  
Social Infrastructure ◽  
Public Infrastructure ◽  
Private Partnership ◽  
Limited Budget ◽  
Economic Infrastructure ◽  
The Government ◽  
Implementation Models

In developing countries, the government which has limited budget for public infrastructure development should choose which infrastructure should be developed. Most countries decided to build more economic infrastructure than social infrastructure because former have direct economic impact for society. The involvement of private sector in public infrastructure financing has been accomplished for decades in the form of Public Private Partnership (PPP). However, the implementation is also more often for economic infrastructure, but some countries have started to implement PPP for social infrastructure (education, healthcare, care of the elderly, etc.) when they think to add human capital and improve quality of life. This study attempts to review a set of public private partnership implementation models relevant for social infrastructure development in some countries. Moreover, this study also more explores to the challenges and issues in different areas of social infrastructure. The outcome is to show a trend public-private partnership for social infrastructure in some successful projects from different countries. The challenges and issues about implementation public-private partnership for social infrastructure also be a part of the results from this study. Finally, the study has a valuable input for implementation of PPP on social infrastructure in Indonesia.

scholarly journals MANAGEMENT OF INFRASTRUCTURE DEVELOPMENT IN RUSSIAN REGIONS ON THE BASIS OF PUBLIC-PRIVATE PARTNERSHIP

2019 ◽  
pp. 106-111
Author(s):  
F. Ibyatov
Keyword(s):  
Well Being ◽  
Public Private Partnership ◽  
Social Needs ◽  
Standard Of Living ◽  
Infrastructure Development ◽  
Russian Regions ◽  
Social Infrastructure ◽  
Private Partnership ◽  
Regional Authorities ◽  
Productivity And Competitiveness

Building a modern, sustainable and reliable infrastructure is crucial to meet the growing needs of people in Russian regions. Investment in infrastructure increases economic growth temps, opens up new economic opportunities and facilitates investment in human capital. Сurrently, the population of the Russian regions is experiencing infrastructure deficit, as evidenced by congested roads, poorly maintained recreational areas, deteriorating social infrastructure assets: schools, hospitals, that are either missing or in urgent need of repair. In this regard, the state bears huge costs in parallel with the reduction of productivity and competitiveness of the regions and observing a lower standard of living. The regional authorities are not able to finance the needs of regional infrastructure, some regions have infrastructure created many years ago, that needs modernization, it is necessary to find funding for «greenfield projects – infrastructure projects implemented in undeveloped «green» areas». The decision of the regional authorities on the implementation of public-private partnership should be based on determining the benefits, which this approach will bring to the public: lower costs, high level of service or reduced risk. The conclusion, that the provision of regions with infrastructure facilities is due to the satisfaction of social needs of citizens, economic well-being and a decent standard of living of the population, – has been substantiated.

scholarly journals Public-private partnership in Russia: Problems of regional development

2021 ◽  
Vol 8 (7) ◽  
pp. 126-133
Author(s):  
Medvedeva et al. ◽  
Keyword(s):  
Management Practices ◽  
Public Private Partnership ◽  
Regional Level ◽  
Business Community ◽  
Qualitative Assessment ◽  
Infrastructure Development ◽  
Social Infrastructure ◽  
Private Partnership ◽  
Strategic Direction ◽  
Modern Analysis

Social infrastructure provides the development of the territory of regions and countries. Public-private partnership is currently one of the most important tools for modernizing social infrastructure. A modern analysis of publications on infrastructure development shows a high interest of scientists in this issue: The relationship between quantitative and qualitative indicators of infrastructure functioning and socio-economic development of territories, and the dysfunction of management practices are studied. At the same time, the scientific literature does not sufficiently study issues related to a comprehensive assessment of the level of development of public-private partnership, restrictions, and prospects for interaction between government and business on the development of social infrastructure at the regional level. The purpose of this article is to identify the limitations and prospects of interaction between government and business on the development of social infrastructure at the regional level in the Russian Federation based on an integrated assessment of the level of PPP development. The main method of this research is an expert survey of civil servants and representatives of the business community in the Moscow region. The results of the study revealed a low level of mutual trust between business and government, and an average level of PPP development at the regional level. It is concluded that to assess the depth of development of the PPP mechanism in the region, it is necessary to include criteria that demonstrate the evaluation of these projects by the PPP participants themselves. Assessment of the level of PPP in the region should be integral, contain both quantitative indicators (financial and economic) and qualitative (assessment of PPP participants). The strategic direction of PPP development should be to increase the involvement of all stakeholders, taking into account their views in making management decisions in this area. This will help to increase the transparency and openness of the relevant procedures and will allow timely identification of dysfunctions that arise as a result of interaction between government and business.

Mechanisms for Regulating the Labor Resources of Rural Territories

2020 ◽  
pp. 54-57
Author(s):  
N.M. Edrenkina ◽  
◽  
A.E. Lisitsin ◽  
Keyword(s):  
Rural Areas ◽  
Public Private Partnership ◽  
State Regulation ◽  
Social Infrastructure ◽  
Private Partnership ◽  
Labor Resources ◽  
Labor Potential

The tendencies of state regulation of the labor potential of rural territories are revealed, which prove the lack of effective mechanisms of its reproduction. Mechanisms to increase the efficiency of state regulation of the labor potential on rural areas, aimed primarily at creating jobs and the number of people employed in the segment of small and medium-sized business are proposed. Thanks to public-private partnership in this area, it is possible to reduce budget expenditures on the development of social infrastructure.

Sign in / Sign up

Export Citation Format

Share Document