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Economy Ministry proposes to impose moratorium on PPP inspections

The Ministry of Economy of Kyrgyzstan proposes to impose a moratorium on inspections of public-private partnership projects. The corresponding draft government decree has been submitted for public discussion.

To date, 28 public-private partnership projects are being promoted in the country. They are at different stages and are being implemented in different areas. Private partners have been selected and agreements have been signed for the projects «Organization of dialysis services in Bishkek, Osh and Jalal-Abad cities», «Electronic ticketing in public transport», «Construction of children’s cinema Kyzyl Kyrgyzstan.» At the same time, projects are subject to checks and security forces bring charges against them.

Thus, law enforcement agencies voiced accusations regarding the unreasonableness of reducing the size of the bank guarantee in the course of the tender, increasing the terms of conditions for commissioning hemodialysis centers and the established price for a hemodialysis session within the project «Organization of hemodialysis services in Bishkek, Osh and Jalal-Abad cities.»

As for the projects «Electronic ticketing in public transport», «Construction of children’s cinema Kyzyl Kyrgyzstan», the prosecutor’s office also carried out inspections on the issues of holding a tender and drafting PPP agreements. As for the project «Organization of municipal parking lots along the roads», which has not yet entered the implementation stage, the inspection bodies have questions about the procurement of consulting services for the development of a feasibility study.

The systematic checks carried out by the law enforcement agencies in relation to PPP projects put moral and psychological pressure on government agencies and private companies.

Ministry of Economy

«As a result, state, municipal and private organizations are wary of working with PPP projects, so that once again they do not go through the proceedings and do not go to give explanations to law enforcement agencies. We believe that such inspections by law enforcement agencies can cause irreparable harm in terms of attracting private investment for implementation of PPP projects,» the ministry stressed.

The business community also often complains about checks by law enforcement agencies at different platforms. Entrepreneurs constantly say that the intervention of security officials has an extremely negative effect on the implementation of PPP projects, contributes to a delay in the preparation and implementation of projects, a decrease in the activity of both private and public partners and, in general, negatively affects the investment climate of the country. The issue of conducting inspections of investment projects by law enforcement agencies was discussed at a meeting of the Committee for Development of Industry and Entrepreneurship.

«PPP is in a formative stage in Kyrgyzstan. The process is very difficult. Sustainable development requires support from the state. Taking into account the problem that has arisen, it is proposed to impose a moratorium on inspection of PPP projects,» the Ministry of Economy concluded.

It is proposed to impose a temporary ban (moratorium) on inspections of investors and government partners implementing PPP projects carried out by law enforcement agencies until January 1, 2023.

An exception may be inspections in the framework of criminal and civil proceedings; based on applications of individuals and legal entities; by the Customs Service in relation to goods under customs control and issues related to prevention of the spread of coronavirus COVID-19 in Kyrgyzstan.