Natalia Diatlova has spoken with RBC Pro on a key difficulty in implementing PPP and MPP projects in Russia

Partner and Head of PPP Practice at Maxima Legal, Natalia Diatlova, took part in a review of RBC Pro, devoted to the analysis of disputes arising from the implementation of public-private partnership projects in Russia.

In particular, among the difficult issues that concessionaires are facing today, Natalia singled out the organisation and holding of a joint tender for the right to enter into a concession agreement if two regional parts of the Russian Federation wish to be concessionaires in the same agreement. “When reading the current legislation, it follows that in case of two public law entities on the public side, a joint tender is possible, but with both acting as concessionaires, a separate concession agreement is required. But the subjects of the Russian Federation do not dare to take the risk of holding a joint tender, because its results are likely to be challenged in court due to the conclusion of a single concession agreement with the concessionaire. At the same time, banks financing transport project are also not ready to take risks and finance such projects”, Natalia Diatlova explained.

According to Natalia, because of this problem, regional projects are stuck at the stage of organising tenders, and as a result, often infrastructure is built using other financing mechanisms, usually through a public procurement mechanism.

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