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Anatoliy Valetov. Public funding and private investment


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Anatoliy Valetov. Public funding and private investment

  1. 1. Department for External Economic and International Relations Public funding and private investment Presenter: Deputy head of Department Anatoliy Valetov Moscow Urban Forum 2011 1  
  2. 2. DEPARTMENT FOR EXTERNAL ECONOMIC AND INTERNATIONAL RELATIONS Structure of PPP infrastructure projects currently developed by Department Structure of PPP projects medical facilities water supply industry 10% 27% 4% energy 14% transport 7% waste community hotels 10% facilities 7% 4% rapid transit system parking 10% 7% Department for External Economic and International Relations is a Government’s of Moscow foreign investment body. 2  
  3. 3. Areas of PPPimplementation 3  
  4. 4. HEALTHCARE Current state Investment opportunities n Main assets have a high deterioration level. n Renovation of existing medical facilities andn Low qualification level and aging of medical construction of additional ones as well as operationpersonnel. Lack of modern training systems for and maintenance of medical facilities in Moscow. doctors and nurses. n Outdated equipment and diagnosis techniques.   MISSION •  quality health care in municipal clinics 4  
  5. 5. WASTE MANAGEMENT Current state Investment opportunities n 5.5 tons of sanitary waste is produced inMoscow annually. Capacity deficit of 2-3 milliontons is estimated. Moscow region produces another2 million tons. n Construction of a modern plant for neutralizing highly toxic waste and sewage drain. n Approximately 80% of waste is disposed onland fills, 13% is incinerated and 7% is recycled. n Construction of waste treatment plants based on technologies providing recyclable discharge. n Government program priced at a total of 80billion rubles provides for an increase ofincineration capacities outside Moscow City. MISSION •  disposal of solid waste without incineration •  incineration of highly toxic waste without damaging the environment 5  
  6. 6. PARKING Current state Investment opportunities n Parking lot deficit is over 4 million spaces (with an overall demand for 5 million spaces). n Developing park-and-ride facilities near rapidn Planned budget for creating a parking space transit stations. system is 246 billion rubles for the years2011-2016. n Construction of non-residential buildings in which over half the space is intended for organizedn In May 2011 Department for External parking for local residents. Economic and International Relations along withEBRD issued an analytical report on the parking space sector with comprehensive recommendations for Moscow City Government. MISSION •  increase of the capacity of municipal transportation •  increase turnover of parking spaces •  uniform parking policy across the city •  usability of the owners of the transport facilities •  increasing of the income of the municipal budget 6  
  7. 7. RAPID TRANSIT SYSTEM Current state Investment opportunities n Outdated car park and operation systems do notmeet modern standards. n Construction and operation of new rapid transitn A construction of 75 km of new lines must be lines as well as setting-up a joint-venture incompleted by 2015. manufacturing cars for the rapid transit system. n Metro car park must be completely renewed by n Setting-up a joint-venture in manufacturing2020 which includes a replacement of 4000 cars escalators for the rapid transit system. and a purchase of 2000 cars for new lines. n Financial input for construction is estimated at90 to 150 billion rubles annually. For car parkrenewal – about 300 million rubles. MISSION •  accessibility of remote districts of the city •  comfort and attractiveness of public transport 7  
  8. 8. Public-privatepartnership 8  
  9. 9. PUBLIC-PRIVATE PARTNERSHIP : HISTORY With the end of investment agreement’s era the city faced the lack of expertise in any otherform of PPP. Recently it has begun to study the implementation of such forms of PPP asconcession, release agreements and privatization. CANCELLATION ON THE INVESTMENT IVESTMENT NEW MODELS OF PPP CONTRACT CONTRACTS Moscow tried to draft up its From 1998 to 2008 Later this form of agreement first concession agreements, investment contract was was stated as inappropriate. but they never came toused as basic scheme of the But we still have 1300 of realization PPP those projects running It is essential for Moscow to learn to use new models of public-private partnership in immediate future 9  
  10. 10. HURDLES IN USE OF PPP MODELS Russian legislation is directed to protect the budget funds and state property and not as much to their involvement in the investment process Risks are evaluated by investors as high, which affects in terms of investment return and guarantees from the state Moscow does not have special PPP law, however, such laws have been adopted in 45 regions of Russia (as of September 2011) 10  
  11. 11. PUBLIC-PRIVATE PARTNERSHIP AS A TOOL INTEGRATING MOSCOW IN THE WORLD INVESTMENT PROCESS additional funding for infrastructure modernization   expansion of resource- high control over final intensive innovative result industries PPP   introduction of new high financial forms of management effectiveness and technology Implementation of public-private partnership plays an important role in the development of Moscow as a global metropolis 11  
  12. 12. PRACTICAL STEPS IN IMPLEMENTATION OF PPP 1 Setting up of investment committee headed by the Mayor of Moscow 2 Maintenance of investment projects database Setting up of Investment Agency3 Adoption of legal acts specifying conclusion procedure for concession4 agreements 5 Studying of possibility of enacting a PPP law Moscow City Government is taking steps to accelerate the implementation of PPP schemes in economy of the city 12  
  13. 13. INVEST IN MOSCOW! 13