Ministry of Economic Development of the Russian Federation
Ministry of Economic Development of the Russian Federation
Ilya Torosov: the PPP projects market has grown 30 times in a decade and retains the potential for growth
28 September 2020 8:32

Russia is currently working hard to launch a new investment cycle, and private investment is essential for this. Deputy Minister of Economic Development Ilya Torosov spoke about the importance of fine-tuning mechanisms for attracting them during the period of economic recovery at the plenary session "Infrastructure for People: How Private Investments Change the Quality of Life in Regions and Cities" within the framework of the Infrastructure Congress "Russian PPP Week 2020"

One of the most popular and legally protected forms of investment in infrastructure for businesses is public-private partnership, the market of which has grown 30 times over the past decade. In Russia, 3,300 concessions are being implemented worth 2 trillion rubles, of which 1.5 trillion is private investment. This is 1.6% of 2019 GDP, but in many countries this percentage is higher, Ilya Torosov noted and predicted further growth of concession cooperation.

To improve the legislation, the Ministry of Economic Development has already prepared a draft law. As the speaker explained, it was the result of two years work with the involvement of business, authorities, and experts. It will be submitted to the Government in the near future. It clarifies the forms of financial participation of the public side (including the possibility of the state to fully reimburse investors for the creation and operation of the facility), fine-tuned tender procedures, and a mechanism to stimulate pre-project preparation within the framework of a private initiative is laid down.

"We expect these decisions to significantly increase investment activity and protect the interests of investors. According to experts, the introduction of amendments will allow launching additional PPP projects in the next 5 years in the amount of more than 1 trillion rubles" - the Deputy Minister noted.

According to Torosov, business is very interested in promoting the mechanism of the investment protection and promotion agreement (IPPA). This tool solves two important tasks: first, it stabilizes conditions and ensures their predictability for business when implementing investment projects. Secondly, it removes infrastructure restrictions by reimbursing investors' expenses for transport, energy, utilities, social and digital infrastructure in the amount of taxes paid.

Currently, the Government of the Russian Federation is considering two resolutions that establish the procedure to participate in IPPA and the procedure to reimburse the investor's costs for creating infrastructure.

"As soon as they are accepted, it will be possible to launch the procedure for concluding the first sederal-scale IPPA. We are working with the regions to create a regional regulatory framework and plan to launch regional projects from April 1. I would like the regions to be more active," Torosov noted. 

It is planned to continue making constructive changes to the IPPA mechanism. In the near future, the State Duma will consider simplifying the procedure for reimbursing infrastructure costs and switching to the mechanism of tax deduction for taxes of the Russian Federation subjects and the direct Federal taxes. It is also planned to extend the operation of the IPPA mechanism to projects of complex development of territories, further optimize the procedure for IPPA signing, and continue work on systematizing measures to support investors, Ilya Torosov concluded.

Дата публикации: September 28, 2020
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