Latest Amendments to Kazakhstan's Public-Private Partnership Legislation

The president of the Republic of Kazakhstan signed Law No. 399-VI, On Amendments into Certain Labour-Related Legislative Acts of the Republic of Kazakhstan (the Amendment Law), on January 2, 2021. The Amendment Law entered into force on January 16 and amended a number of legislative acts of the Republic of Kazakhstan, including the Civil Code, the Budget Code, and the Entrepreneurial Code as well as the Law of the Republic of Kazakhstan on Public-Private Partnership (PPP), No. 379-V, dated October 31, 2015 (the PPP Law). This LawFlash summarizes the most important new elements introduced into the PPP Law through the Amendment Law.

Qualification Criteria

The list of qualification criteria that must be satisfied by bidders in order to qualify as a private partner was updated to include the following new or updated criteria:

The founders and managers of the potential private partner must not be included on the list of persons associated with the financing of terrorism and extremism, which list is published on the Kazakhstan Financial Monitoring Agency's website.

The potential private partner must not be included in the register of bad-faith participants of public procurement, which is published on the public procurement portal of Kazakhstan.

The potential private partner must have its own funds to be injected into PPP project implementation and amounting to at least 20% of the value of the PPP facility.

The potential private partner must not have tax arrears in excess of six times the monthly calculation index (MCI)[1] set for the corresponding financial year.[2]

PPP Agreement

The PPP Law, as amended, includes the following restrictions on amendments or termination of the PPP agreement:

The amendment or termination should be agreed with all "interested state bodies"; however, the PPP Law does not provide any definition of "interested state bodies."

Amendments to the PPP agreement providing for a change in the scope of government obligations require a consent of the republican or local budget commission.[3]

Any terms of the PPP agreement that have been specified by the PPP Law (i.e., the scope and types of work and services, requirements as to the quality of goods, works, and services) are considered material and can only be changed by agreement of the parties, if. the amendments result in a positive budgetary efficiency (i.e., if the amendments do not result in an increase in budget expenditure or an increase of state revenue);

the amendments do not reduce the minimum requirements as to quality, volume, and/or availability of goods, works, and services provided for by the PPP agreement; and the economic and social efficiency of the PPP project is maintained or improved.

The PPP Law, as amended, sets out a nonexhaustive list of grounds for early termination of the PPP agreement, which includes liquidation of the private partner, along with any other grounds provided for under Kazakhstan law.

 

Source: Lexology