Public–Private Partnerships : Policy and Governance Challenges Facing Kazakhstan and Russia

This innovative new book examines government approaches to Public-private partnership (PPP) formation. It explores the management experience and challenges that key stakeholders involved in PPP governance face in Russia and Kazakhstan. An increasingly common method of delivering public services, PPP deployment in these two countries is still in its infancy, beginning only in 2005. __Public-Private Partnerships__ highlights how the governments of Russia and Kazakhstan understand the nature of partnerships, which contextual features drive PPP formation and why these two nations have selected concession as the principal PPP form. The contributors provide comprehensive coverage of the management issues that present challenges in PPP delivery, including partner interaction concerns, opportunistic behaviour and approaches to risk management. The authors also discuss the legal and regulatory impediments to PPP development and the PPP critical success factors. Contents 5 List of Figures 7 List of Tables 8 Introduction 9 1: PPP Meanings and Forms: A Critical Appraisal 15 Introduction 15 PPP Meanings 16 The Underpinning Theories 19 Contractual Versus Institutional PPPs: Principal Differences 21 A Summary of Approaches to the Meaning of a PPP 22 PPP Forms 23 Partnership Models 25 Who Initiates PPP Formation? 26 Conclusion 27 References 28 2: Internal and External PPP Drivers in Kazakhstan and Russia 31 Introduction 31 Reasons for Partnering 32 PPP Shortfalls 36 Internal and External PPP Drivers in Kazakhstan and Russia 38 Internal PPP Drivers 40 A Need to Obtain Private Financing for Utilities and Housing Infrastructure 41 A Need to Increase Attractiveness of Selected Industries for Private Investors 42 A Need to Give a Stronger Impetus to Regional Economic Development 42 External PPP Drivers 43 Impact of International Organisations 43 Pressure from Foreign Investors 45 Integration with Globalisation Processes 46 Conclusion 47 References 48 3: Why Partnerships? The Approaches in Kazakhstan and Russia 50 Introduction 50 Why Partnerships? A Critical Assessment of Russian Literature Claims 51 PPPs and Innovation 52 PPPs’ Synergy and Efficiency 52 Project’s Social Significance: A Valid Criterion? 54 PPP Drivers: A Critical Assessment 55 Lessons Learned 59 Government Approaches to PPPs in Russia and Kazakhstan 60 Conclusion 64 References 65 4: PPPs in Kazakhstan and Russia: The Nature and Scope of Government Involvement 67 Introduction 67 PPP Emergence in Europe: The Historical Context 68 PPP Development in Russia 70 PPP Development in Kazakhstan 74 Conclusion 80 References 81 5: Concessions: PPP Pathfinder 84 Introduction 84 A Concession: What’s in a Name? 85 Why Is the Focus on Concessions? 87 Problems and Limitations of Concessions 91 Conclusion 95 References 97 6: Partner Interaction Dynamics and PPP Organisational Forms 98 Introduction 98 The Governance Concept 100 Partner Interaction Issues: Varying Perceptions 102 Partner Interaction Issues: Positive Perceptions 103 Partner Interaction Issues: Negative Perceptions 105 PPP Project Financing 105 Facilities Construction 106 Interaction Regarding Tariff-Setting 106 Interaction Regarding Other Operational Issues 108 Service Quality: A Neglected Area of Partner Interaction 109 PPP Organisational Forms and Their Implications for Partner Relations 109 A Jointly Formed Project Company 110 A Project Management Structure without an SPV 112 A Project Management Structure with an SPV 112 PPP Organisational Forms: Advantages and Disadvantages 115 Governance Structures 117 Tools and Methods for Dispute Resolution between Partners 119 Conclusion 121 References 122 7: PPP Risk Management: Management of Financial and Revenue Risks and an Emergent Guarantee Culture in PPPs in Kazakhstan and Russia 125 Introduction 125 Risk Management: Theoretical Framework 126 Perceptions of Financial Risk 128 Perceptions of Revenue (Demand) Risk 131 Conclusion: How the Government Fosters a Guarantee Culture in PPPs? 136 References 140 8: Legal and Regulatory Barriers to Effective PPP Governance in Kazakhstan: Findings from the Field 143 Introduction 143 What Is Critical for Successful PPP Implementation? 144 Legal and Institutional Framework as a PPP Critical Success Factor 145 Irregularities in the PPP Legal Framework and Lack of Government Commitment to PPPs 147 The Role of Government Regulation for Successful PPP Management 149 The Role of Government Regulation in PPP Management: Findings from the Field 151 Government Regulation of PPP Tariffs: Effective or Bureaucratic? 151 The Government Regulation of PPP Workers’ Wage: What Is the Impact on Partnership Management? 154 Discussion and Conclusion 155 References 159 9: Case Study: How Experiential Learning Facilitates the Formation of a Public–Private Partnership in Russia 163 Introduction 163 Project Background 164 Theoretical Framework 166 Approach and Aim 167 Findings and Discussion 168 Lessons Learned 170 Other Opinions: The Value of Cross-Checking 173 Case Study: Implications for Theory 175 Conclusion 176 References 178 10: The Role of PPPs in Disaster Risk Management in Infrastructure 180 Introduction 180 What Is Capacity Building for Disaster Risk Management? 181 Infrastructure and Disasters 183 Theoretical Framework 184 A Conceptual Model 186 Conclusion: PPPs’ Social Value 187 Limitations of the Concept 189 References 190 11: PPP Impact on Market Failures and Externalities 192 Introduction 192 PPP Project Descriptors 193 Theoretical Framework and Approach 197 The PPP Impact on the Availability of Public Services 199 The PPP Impact on Lenders’ Perception of the Government 202 The PPP Impact on Service Monopoly 205 Conclusion 206 References 208 12: Critical Issues in PPP Development, an Emerging Policy Paradigm and the Future of PPPs 211 Introduction 211 Critical Issues 212 A Trend: An Emerging PPP Policy Paradigm 214 Defining a Policy Paradigm 214 The Evolving PPP Policy Paradigm: Core Elements 215 What Factors Contribute to an Evolving PPP Policy Paradigm? 217 A Paradigm as a Tool for the Rapid PPP Deployment 221 The Future of PPPs: Outlook 222 Towards Effective PPP Governance: Citizens’ Engagement 226 References 227 Conclusion 229 Critical Issues 229 The Future of PPPs: Outlook 230 Towards Effective PPP Governance: Citizens’ Engagement 234 Index 236 Front Matter....Pages i-xvi PPP Meanings and Forms: A Critical Appraisal....Pages 1-16 Internal and External PPP Drivers in Kazakhstan and Russia....Pages 17-35 Why Partnerships? The Approaches in Kazakhstan and Russia....Pages 37-53 PPPs in Kazakhstan and Russia: The Nature and Scope of Government Involvement....Pages 55-71 Concessions: PPP Pathfinder....Pages 73-86 Partner Interaction Dynamics and PPP Organisational Forms....Pages 87-113 PPP Risk Management: Management of Financial and Revenue Risks and an Emergent Guarantee Culture in PPPs in Kazakhstan and Russia....Pages 115-132 Legal and Regulatory Barriers to Effective PPP Governance in Kazakhstan: Findings from the Field....Pages 133-152 Case Study: How Experiential Learning Facilitates the Formation of a Public–Private Partnership in Russia....Pages 153-169 The Role of PPPs in Disaster Risk Management in Infrastructure....Pages 171-182 PPP Impact on Market Failures and Externalities....Pages 183-201 Critical Issues in PPP Development, an Emerging Policy Paradigm and the Future of PPPs....Pages 203-220 Back Matter....Pages 221-240 This innovative new book examines government approaches to Public-private partnership (PPP) formation. It explores the management experience and challenges that key stakeholders involved in PPP governance face in Russia and Kazakhstan. An increasingly common method of delivering public services, PPP deployment in these two countries is still in its infancy, beginning only in 2005. Public-Private Partnerships highlights how the governments of Russia and Kazakhstan understand the nature of partnerships, which contextual features drive PPP formation and why these two nations have selected concession as the principal PPP form. The contributors provide comprehensive coverage of the management issues that present challenges in PPP delivery, including partner interaction concerns, opportunistic behaviour and approaches to risk management. The authors also discuss the legal and regulatory impediments to PPP development and the PPP critical success factors.-- Publisher's website