Development of Co-ordinated National Transport Policies › fileadmin › fm-dam › TAREP › 47lh › 47lh3.pdf · Development of Co-ordinated National Transport Policies Progress

Development of Co-ordinated National Transport Policies Republic of Kazakhstan, Republic of Tajikistan, Kyrgyz Republic, Republic of Uzbekistan, Republic of Turkmenistan Reference: EuropeAid/122076/C/SER/Multi

Progress Report 1 (Period: 08/05/07 – 07/11/07) Phase 2 Report

The European Union’s TACIS Action Programme 2004 – Central Asia Promotion of Networks: TRACECA Republic of Kazakhstan, Republic of Tajikistan, Kyrgyz Republic, Republic of Uzbekistan, Republic of Turkmenistan

GOPA - TRADEMCO Consortium

Progress Report 1

Development of Co-ordinated National Transport Policies

The European Union’s TACIS Action Programme 2004 – Central Asia Promotion of Networks: TRACECA

Republic of Kazakhstan, Republic of Tajikistan, Kyrgyz Republic, Republic of Uzbekistan, Republic of Turkmenistan

Submitted by the Consortium GOPA – TRADEMCO

(Period: 08/05/07 – 07/11/07)

GOPA Consultants Hindenburgring 18 61348 Bad Homburg Germany Tel.: +49-6172-930 528 Fax: +49-6172-930 550 E-mail: [email protected]

TRADEMCO S.A. 21, Kodratou Str. 10436 Athens Greece Tel.: +30-210-5279 300 Fax: +30-210-5279 399 E-mail: [email protected]


Progress Report 1 i

Contents

Report cover page....................................................................................................................................................... iv

1 Project synopsis.................................................................................................................................................. 1

2 Summary of the project progress since the start............................................................................................. 2

2.1 Overall progress ..................................................................................................................................... 2

2.2 Main highlights at a glance .................................................................................................................... 3

2.3 Development of the project environment ............................................................................................... 3

2.4 Progress on deliverables......................................................................................................................... 4

3 Summary of the project planning for the remainder of the project .............................................................. 6

3.1 General comments.................................................................................................................................. 8

3.2 Remaining tasks ..................................................................................................................................... 8

4 Project progress in the reporting period........................................................................................................ 11

4.1 Legal study and evaluation work.......................................................................................................... 11

4.2 Settlement of antenna project office in Tashkent, Uzbekistan ............................................................. 11

4.3 Identification and recruitment of regional senior legal experts ............................................................ 11

4.4 Implementation of PPP centralised regional seminar........................................................................... 12

4.5 Participation in OSCE conference........................................................................................................ 12

4.6 Progress on High Level Group............................................................................................................. 13

4.7 Steering Committee organisation ......................................................................................................... 13

5 Project planning for the next reporting period ............................................................................................. 18 Tables

Table 1: Progress on deliverables........................................................................................................................... 4 Table 2: Road deaths in the CAR region................................................................................................................ 9 Table 3: Tasks to be achieved .............................................................................................................................. 11 Forms

Form 1.4: Overall plan of operations........................................................................................................................ 7 Form 2.2: Project progress report ........................................................................................................................... 14 Form 2.3: Resource utilisation report ..................................................................................................................... 15 Form 2.4: Output performance report..................................................................................................................... 17 Form 1.6: Plan of operations for the next period (work programme) ..................................................................... 18 Note: Numbering of the forms is in accordance with the EC-TACIS guidelines for contractors on administrative re-porting. Annexes

Annex 1: Mission reports

Annex 2: Centralised regional seminar in PPPs

Annex 3: Photo gallery

Annex 4 Regional adverts


Progress Report 1 ii

Abbreviations

ADB Asian Development Bank

AIFU International Forwarders Association

BOMCA The European Union’s Border Management Programme in Central Asia

BSEC Organisation of the Black Sea Economic Cooperation

CA Central Asia

CAR Central Asia Republics

CAREC Central Asia Regional Economic Cooperation

CIS Commonwealth of Independent States

EBRD European Bank for Reconstruction and Development

ESCAP Economic Commission for Asia and the Pacific

EC European Commission

EU European Union

EURASEC Eurasian Economic Community

EWG Expert Working Group

FIATA Fédération Internationale des Associations de Transitaires et Assimilés (International Federation of Freight Forwarders Associations)

GDP Gross Domestic Product

HLG High Level Working Group

IATA International Air Transport Organisation

ICT Information and Communication Technologies

IFI International Financing Institution

IGC Inter-Governmental Commission

IMO International Maritime Organisation

IRF International Road Federation

IRU International Road Transport Union

LC Logistic Centres

LLDC Landlocked Developing Countries

M&E Monitoring and Evaluation

MLA Multilateral agreement

MoTC Ministry of Transport and Communications

MoU Memorandum of Understanding

NGO Non-governmental Organisation

OSCE Organisation for Security and Co-operation in Europe

OSZhD Warsaw-based Committee for the Organisation for Cooperation between Railways

OTIF Bern-based Intergovernmental Organisation for International Carriage by Rail

PETrA Pan-European Corridors and the Black Sea Pan-European Transport Area

PPP Public-Private Partnership

PRC People’s Republic of China

SCO Shanghai Cooperation Organisation

SME Small and Medium Enterprises


Progress Report 1 iii

SMGS Agreement on the International Carriage of Goods

SMPS Agreement on International Carriage of Passengers

SPECA Nations Special Programme for the Economies of Central Asia

TACIS Technical Aid to the Commonwealth of Independent States

TEN-T Trans-European Transport Network

TIR Transports Internationaux Routiers

ToR Terms of Reference

TRACECA Transport Corridor Europe-Caucasus-Asia

UIC Paris-based International Union of Railways

UN United Nations

UNECE United Nations Economic Commission for Europe

UNESCAP UN Economic Commission for Asia and the Pacific

USAID United States Agency for International Development

WTO World Trade Organisation


Progress Report 1 iv

Report cover page

Project Title: Development of Co-ordinated National Transport Policies Republic of Kazakhstan, Republic of Tajikistan, Kyrgyz Republic, Republic of Uzbekistan, Republic of Turkmenistan

Contract Number: EUROPEAID/122076/C/SER/Multi

Beneficiary Countries: Republic of Kazakhstan, Kyrgyz Republic, Republic of Tajikistan, Republic of Uzbekistan, Republic of Turkmenistan

Local operators EC Contractor

MoTC Kazakhstan 47, Kabanbai Batyr Str. 010000, Astana

MoTC Kyrgyzstan 42, Isanov Str. 720017 Bishkek

MoTC Tajikistan 14, Aini Str. 734042 Dushanbe

Uzbek Association of Transport and Transport Communication 16A, Uzbekistan Ave. 700027 Tashkent

GOPA - TRADEMCO Consortium Almaty Regional Office 158, Panfilov Str., room 40 050000 Almaty, Kazakhstan Tel. +7 327 2671578 Fax: +7 327 2671578 Tel. +7 317 2204237 (Astana office) Tel. +992 37 2246680 (Dushanbe office) Tel. +998 90 351 4037 (Tashkent office) E-mail: [email protected]

Contact Person:

Mrs. Saltanat Rakhimbekova, Head of Department of Transport Policy and Interna-tional Cooperation, MoTC Kazakhstan/Chairwoman of Steering Committee

Dr. B. Brunnengraeber Dr. F.-J. Goetz Project Director Team Leader

Date of report: 7 November 2007 Period covered: 08/05/07 – 07/11/07 Author of report: Dr. Franz Josef Goetz, Team Leader GOPA - TRADEMCO Consortium EC M&E Team

[name] [signature] [date] EC Delegation

[name] [signature] [date] TACIS Bureau

[name] [signature] [date]


Progress Report 1 v

Disclaimer

This report has been produced by: GOPA – TRADEMCO Consortium

”The content of this publication is the sole responsibility of the

GOPA - TRADEMCO Consortium and it can in no way be taken to reflect the views of the European Commission”


Progress Report 1 1

1 Project synopsis

Project Title: Development of Co-ordinated National Transport Policies Republic of Kazakhstan, Kyrgyz Republic, Republic of Tajikistan, Republic of Uzbekistan, Republic of Turkmenistan

Contract Number: Europeaid/122076/C/SER/Multi (re-launch)

Countries: Republic of Kazakhstan, Kyrgyz Republic, Republic of Tajikistan, Republic of Uzbekistan, Republic of Turkmenistan

Project objectives: The overall objective of the project is to support the transition process to a market economy through strengthening in-ternational trade and improving the movement of goods and persons by road at lower cost, including cross border. The more specific objective is the development of coordinated transport policies for the Central Asian republics, with the final aim of enhanced regional cooperation in road transport, incl. multimodal operation.

Planned outputs: 1. Principles for National Transport Policies coordinated on the regional level; 2. Short, medium and long term action programme for legislative action 3. Legislative frameworking principles and proposals, reflecting TRACECA MLA and Strategy as well as interna-

tional/EU standards 4. Legal harmonisation principles to establish a regional market for the road transport sector in Central Asia 5. Preliminary qualitative scanning of existing logistic centres, needs assessment and catalogue of good practice, as a

precursor for the 2006 TRACECA project on “International Logistics Centres/Nodes Network in Central Asia)

Project activities: Review and clarification phase: Task 1: In-depth review of the present situation Task 2: Analysis of the membership of the four CARs in international conventions and regional agreements, as well

as in international governmental and non-governmental organisations and initiatives Task 3: Practical handling and application of road transport legislation Task 4: Assessment of management systems, qualifications and personnel prerequisites Task 5: Analysis of the results of the above mentioned steps of the fact-finding exercise resulting in systematic

benchmarking Task 6: Identification of strengths, weaknesses, opportunities and threats (SWOT) Task 7: Collection of legislative package for the Central Asian countries related to cargo transportation with main

focus on road transport. Task 8: Presentation of findings from tasks 1-7, development of mutually accepted guiding principles for a hierarchi-

cally classified set of laws, awareness creation and know-how transfer measures Planning and Implementation phase: Task 9: Elaborate short, medium and long term action plans Task 10: Assist in the coordination of action plans among the involved beneficiaries and in implementing the action

plans Task 11: Development of a regional road transport market Task 12: Survey of existing logistic freight centres/ needs assessment and development of catalogue of good practice Task 13: Organisation of study tour Task 14: Information, dissemination and awareness creation measures

Project starting date: 07 May 2007

Project duration: 18 months


Progress Report 1 2

2 Summary of the project progress since the start

2.1 Overall progress

The project commenced on 7 May with the signing of the contract. The project work on-site in Almaty, Kazakhstan started with the visit on 9 May 2007. The project implementation for the reporting period as outlined below followed closely the initial overall plan of opera-tions, and met the targets shown in the overall plan of operations, overall output performance plan and work programme set in the inception report (August 2007). The consultant’s activities were in compliance with the project’s revised terms of reference. The present first progress report concludes the six-month inception and review and clarification phases. Starting from project mobilisation, the consultant began to collect and analyse the relevant policy and economic docu-mentation and legal texts in the sphere of transport in general and of road transport in particular. Regular meetings with all counterpart organisations were duly and successfully implemented. In order to assess the legal situation of transport in the CAR region, and to be in a position to formulate policy guide-lines and recommend related action plans, the project team collected and studied on a country by country basis the in-ternational commitments resulting from participation in international conventions and organisations, as well as respec-tive national legal transport frameworks. The analysis of this information was based on a comparison between the four project area countries, as well as with the TRACECA MLA requirements and with international/EU best practice. To this end, the consultant’s team focused its study on the most relevant international conventions/agreements of prime concern for CAR countries to integrate themselves into international transport such as: • the seven international UNECE conventions and agreements related to transport endorsed by the UNESCAP Reso-

lution 48/11; • other international conventions that have been recommended by previous studies for TRACECA; • EU legislation on international transport, used as benchmarks. The consultant familiarised himself with relevant studies previously carried out by other projects or organisations. In this context, relevant TRACECA projects have been reviewed and their findings, results and recommendations were taken on board. Ongoing legal projects have been followed and assessed. In this context it needs to be pointed out, that the Republic of Kazakhstan leads the policy of unification and codifica-tion of legislation through its draft Transport Code currently being considered by Parliament. The new transport code is the most obvious, but not the only manifestation of this strategy. It increasingly becomes clear to the consultant, that the new transport code (which can be considered a role model with regard to its structure, although some improvements could be made to the detail), might serve as a first stage benchmark for other less advanced Central Asia countries, as proposed in the progress report 1 - appendix (currently under preparation) for the further project work. Since the task of identification of violations of provisions of the MLA and of international conventions and agreements has been made part of the TOR, the consultant further investigated the practical application and handling of legal provi-sions in place. On the more economic part, attention has been given further to the collection of data concerning non-physical barriers to trade facilitation as evidenced by long transport times, delays, high transport/transit cost and heavy paperwork and red tape. The findings are again described in detail in the separate progress report 1 - appendix. The training needs analysis which had been delayed during the inception phase has been an integral part of the review and clarification work since then. Based on the experience and findings of the inception period, a certain re-allocation of professional input took place in order to meet the project requirements. The existing legal long-term senior expert contract was therefore terminated at the beginning of August 2007, to reduce the international expertise and to utilise instead additional regional/local ex-perience in the legal field. This reinforcement of the legal part of the project team is enabling the project to recover fully during the remaining project period and this should also help to satisfy the critics and demands of certain beneficiaries concerning a greater participation of national resources in the project work.


Progress Report 1 3

2.2 Main highlights at a glance

At a glance, the highlights since the start of the project were: • Participation as speaker of the Team Leader, Dr. Franz-Josef Goetz, in the 1st Black Sea and 4th Silk Road Con-

ference in Istanbul, Turkey, on 14 to 16 May 2007 organised by the IRF; the meeting provided an excellent forum for informing a wider community about the project.

• Meetings with the various beneficiaries in the project region, TRACECA National Secretaries, main stakeholders in international traffic, other involved state organisations (customs, etc.) to discuss: − the situation in the transport sector; − existing ideas and plans; − essential points for future cooperation; and − with the various beneficiaries and partners (IFIs, associations, etc.) the project itself and the planned working

steps. A detailed list of meetings and persons met during the inception phase had been provided in the annexes to the In-ception Report. Further meetings conducted and persons met during the review and clarification phase are listed in annex 1 to the present progress report.

• Various project missions of the project team to Astana (MoTC Kazakhstan), Kyrgyz Republic (MoTC Bishkek), to Tajikistan (MoTC Dushanbe) and Uzbekistan (Uzbek Association of Transport and Transport Communications). See list of meetings and people met included in both the inception report and annex 1 to the present progress report.

• Successful opening of project offices in Almaty (main project office), Astana, Dushanbe, and Tashkent. As re-gards Bishkek an antenna legal expert (Mr. Ramis Kongurbaev) has been identified and approved by the EC Dele-gation: negotiations concerning the project antenna office are ongoing.

• The kick-off meeting was held on 3 August 2007 in Almaty (Hotel Astana). It was organised by the international experts of the project and attended by Mrs. Anna Bramwell, head of the technical cooperation section of the Dele-gation of the European Commission to the Republic of Kazakhstan, the Kyrgyz Republic and the Republic of Taji-kistan, Mrs. Gulnara Dusupova, the project manager of the EC Delegation’s technical cooperation section, Mrs. Saltanat Rakhimbekova, head of department of transport policy and international cooperation under the MoTC of Kazakhstan, the general secretary IGC TRACECA and the TRACECA national secretaries from Kazakhstan, Uz-bekistan and the Kyrgyz Republic, and Mr. Bernd Brunnengraeber, GOPA project director.

• Preparation of the inception report (August 2007) and distribution after approval of the EC Delegation project manager.

• Successful identification and recruitment of senior regional legal experts in the four project countries. This pool of experts will be coordinated by the international legal expert, and involve the project antenna offices. They will work closely with relevant authorities and the strategic partners.

• Participation in the OSCE conference on prospects for the development of trans-Asian and Eurasian transit trans-portation through Central Asia until the year 2015 by project international consultant Mr Dimitri Kostianis. The conference was held in Dushanbe, Tajikistan from 23-24 October 2007. The conference was organised in accor-dance with Ministerial Council Decision No. 11/06 on the “Future Transport Dialogue in the OSCE”, by the OSCE Secretariat together with the United Nations Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and the Small Island Developing States (UN-OHRLLS) and with the support of the Government of the Republic of Tajikistan and the OSCE centre in Dushanbe. The Dushanbe conference pro-vided an excellent platform to introduce the present project, its objectives and work programme. A more detailed account of the conference is contained in annex 2 to this report.

• Preparation and implementation of a Centralised Regional Seminar in Tajikistan, Dushanbe on the subject of “Public – Private Partnerships (PPPs) in Transport”. The seminar held on 25 October was piggy-backed on the above mentioned OSCE conference.

2.3 Development of the project environment

As regards the nature of the status of the Uzbek beneficiary, there is lack of clarity in how far the Uzbek Association of Transport and Transport Communications will be further involved, as the consultant has been unofficially informed that the Association has been dissolved by a Presidential Decree on 23 October. When this news is confirmed this will bring up the question of who will be the future beneficiary in Uzbekistan. The project has asked the EC Delegation for assis-tance in clarifying this question.


Progress Report 1 4

All beneficiary countries visited have confirmed their strong interest in the project and its activities. One reason is that the present project in all countries of the area directly complements ongoing/planned improvements of the regional road transport infrastructure that are being financed from the state budget, or with international donor support. Although Kazakhstan now relies on its own research work and resources in the field of transport development and fa-cilitation, it welcomes the project initiatives in fields requiring international cooperation and know-how transfer such as the establishment of a legal framework, development of logistics centres and networking, promotion of the PPP con-cept, and traffic safety. The assistance of the MoTC Kazakhstan and its various departments and affiliates has been very positive. The support of MoTC and the TRACECA national secretary in Tajikistan (Dushanbe) has been very constructive and helpful despite the fact that they are not endowed with ample resources, in particular for the identification of office premises and staff for the project country office. Throughout the past project period there was lack of support from the side of the MoTC TRACECA National Secretary in the Kyrgyz Republic and the Association of Transport and Transport Communications in Uzbekistan. Both initially argued for increased involvement of local experts in the project’s work. Following the understandable request for more regional legal expert time the Delegation agreed on a re-allocation of the legal experts budget and in favour of assigning additional local/regional legal experts. Respective vacancy announcements were launched by the project in the different beneficiary countries. Suitable candidates were identified and interviewed on the occasion of various project missions by the project team leader. As a result, a request for approval of altogether eight regional legal experts has been submit-ted to the EC Delegation and is currently waiting for approval within the scope of an overall contract addendum. Currently, the consultant is involved in the establishment of a legal data bank comprising the national laws (mainly relevant to road transport) in both Russian and English. It is intended to continue this effort throughout the project im-plementation period, and to make it available on the project website currently under construction. Other tasks such as regular reporting to the EC delegation, the beneficiaries, coordination with donors will be continued with the same engagement as in the past months.

2.4 Progress on deliverables

Progress on the deliverables (as defined in the inception report) is summarised in the table below. Table 1: Progress on deliverables

Task TOR Deliverables Progress Overview of road sector development strategies and programme

Completed – see progress report 1 - appendix

Demonstration of value added of road sector activi-ties

Partly discussed – to be contin-ued.

1 In-depth review of the present situation

Formulated guidelines for private sector development (PPP enabling environment)

Completed - see progress report 1 – appendix

A catalogue of participation in international conven-tions and agreements to which the beneficiary coun-tries are signatories (or in the process of negotiation).


Prioritised gap analysis identifying recommended country-specific accession needs to other conven-tions and agreements, including reporting to the beneficiaries.


2 Analysis of the member-ship of the four CARs in international conventions and regional agreements, as well as in international governmental and non-governmental organisa-tions and initiatives A catalogue of violations and recommendations for

remedial measures and reporting to the HLG/IGC TRACECA.

Commenced, to be completed - see progress report 1 – appendix

3 Practical handling and application of transport legislation

Extension of field research to Kazakhstan, Kyr-gyzstan and Uzbekistan and presentation of the re-sults in terms of Qualitative Transport User Percep-tion Profiles.

Commenced, to be completed.


Progress Report 1 5

Task TOR Deliverables Progress Identification of the main violations of the national legislation and regional treaties and agreements, and presentation to HLG/IGC TRACECA.


4 Assessment of manage-ment systems, qualifica-tions and personnel pre-requisite

Status report on management systems, qualifications and personnel issues to the HLG.

To be completed and finalised for the first HLG meeting (a respec-tive working paper is under prepa-ration)

5 Analysis of the results of the above mentioned steps of the fact-finding exercise resulting in sys-tematic benchmarking

Summary report to the HLG/IGC TRACECA of the benchmarking analysis in relation to best practices in the EU and TRACECA in the areas of compliance with international conventions and agreements, legal harmonisation and bureaucracy and corruption.

Report completed, (see progress report 1 – appendix) to be pre-sented to the first meeting of the HLG scheduled for February 2008.

6 Identification of strengths, weaknesses, opportunities and threats (SWOT)

The SWOT analysis covering four main domains: • regional transport development; • legislation and administration; • private sector enabling environment (including

PPPs); • the logistic network.

Partly completed, logistics net-work analysis to be carried out in the next period, (see progress report 1 – appendix)

A catalogue of existing national laws of relevance to road transport, international trade, customs, taxation, transport tariffs and the existing trade and transport agreements, multilateral, bilateral and international conventions and agreements.

Completed - see progress report 1 – appendix. Update will be necessary in the following peri-ods. Further work will be includ-ing verification that the interna-tional conventions have been properly transposed, and identifi-cation of bilateral transit agree-ments that are based on quotas to be converted to a quota free or non-permit basis.

Initial recommendations on the development of new laws, the modification of existing laws and the acces-sion to international conventions and agreements (see also under Task 2). The MLA will form the basis for legal harmonisation.

work to be continued- see pro-gress report 1 – appendix

Overview of investment protection and concession laws.


Concept for the creation and development of regional agreement (or new TA to the MLA) on integrated international customs transit.

To be developed.

Concept for a one-stop-shop customs check point (Kazak-Kyrgyz border) for further development.

To be followed-up, applying con-cept developed by TRACECA project on harmonisation of bor-der crossing procedures.

For the two above concepts, the project could pro-ceed to develop a methodology and draft a legal framework law if at least two of the beneficiary countries agree with them.

To be developed.

Identification of bilateral transit agreements that are based on quotas to be converted to a quota-free or non permit basis.


Creation of hierarchically structured legal data base by country, and presentation on the project website.

Under construction. Preliminary website and database functioning.

7 Collection of complete legislative package for the Central Asian Coun-tries related to road transportation.

Eventual submission of the results of the project work relevant to the MLA to the TRACECA MLA anniversary summit in 2008.

To be carried out.


Progress Report 1 6

Task TOR Deliverables Progress Two centralised regional seminars. One completed on PPPs (see an-

nex 2). One planned for logistics issues in the next period.

Quarterly steering committee (SC) meetings. Kick-off meeting held on 3 Au-gust, next meeting date to be agreed with Delegation

8 Presentation of findings from tasks 1-7, develop-ment of mutually ac-cepted guiding principles and a hierarchically clas-sified set of laws, aware-ness creation and know-how transfer measures

2 HLG meetings and EWGs as appropriate. Under preparation, first to be held in February 2008.

Short, medium and long-term action plans required for each of the countries (although the understanding of the need for reforms varies from country to coun-try).


9 Elaborate short, medium and long term action plans

Definition of well coordinated short, medium and long-term work packages and their assignment to EWGs by the first meeting of the HLG.

To be carried out at first HLG meeting planned for February 2008.

Reports and working papers on relevant topics to the HLG/IGC TRACECA.

Under preparation.

Centralised regional seminars and EWGs. One Centralised Regional Semi-nar on PPP financing carried out. EWGs to be established by the first HLG meeting.

People trained. Participation at the PPP Central-ised Regional Seminar.

10 Assist in the coordination of action plans among the involved beneficiaries and in implementing the action plans

Training materials. Distributed – see annex 2. 3 Summary of the project planning for the remainder of the project

The project planning outlined in this section covers the period from month 7 (November 2007) to month 19 (November 2008) of the project implementation. The summary is in compliance with the overall plan of operations (see form 1.4 below), overall output performance plan, work programme and the log frame matrix. The planning activity takes into account important provisions of the proposed contract addendum. Remaining tasks for the last reporting period are en-visaged as described below.

Activity 1.5 Training needs analysis

Activity 2.1 Review of present situationActivity 2.2 Convention/agreement membershipActivity 2.3 Application of legislationActivity 2.4 Management systems assessmentActivity 2.5 Analysis of results/benchmarkingActivity 2.6 SWOTActivity 2.7 Freight legislation package collection Activity 2.8 Presentation, guiding principlesActivity 2.9 Phase 2 HLG meeting (major milestone) (delayed)

Activity 2.10 Prepare Phase 2 Report

Activity 3.1 Elaborate action plansActivity 3.2 Logistics centres pre-feasibilty studyActivity 3.3 Prepare Progress Report IActivity 3.4 Regional road transport marketActivity 3.5 Phase 3 HLG meeting (major milestone) (to be confirmed)Activity 3.6 Prepare Phase 3 reportActivity 3.7 Coordinate action plansActivity 3.8 Prepare Progress Report IIActivity 3.9 Arrange study tourActivity 3.10 Publicity & website developmentActivity 3.11 Prepare Draft Final ReportActivity 3.12 Draft Final Report presentation (major milestone)Activity 3.13 Prepare Final ReportMeetings Coordination Meetings (four countries)

Legal Expert Working Group meetings 1 - 4 (four countries) Centralised Regional Seminars Legal & PPP Legal Freight/Logistics Safety LegalSteering Committee Meetings (delayed)

Physical goods, such as office equipment(computers, printers, fax machine, photocopy machine, furniture, stationery)

Human resources of the local direct support staff (project assistants, secretaries, drivers,accountant)Approved communication and travel costsInterpretation and translationWorkshops and seminars

To be determinedat HLG 1

1446,5

258010

60

541,5

6070

30

100250

151530304025251515

Personnel Equipment and Materials Other

EC Consultants(working days)

Counterpart(working days)

10

Project Objectives:1. Preparation of national transport policies and directions for related action plans2. Development of short, medium and long term policy3. Clear legislative framework4. Development of a regional road transport market in Central Asia, including feasibility study for the establishment/modernisation of logistic centres for road freight

Inputs

Project Title: Development of Co-ordinated National Transport Policies

Planning Period: August 2007 - November 2008

Total(based on an estimated input during inception phase of 220 working days)

Activities Phase 3 - Planning and implementation phase

Activity

Activities Phase 1 - Inception phase

Activities Phase 2 - Review and clarification phase

Oct Nov Feb March April

Form 1.4.: Overall Plan of Operations

Months

JanMay June July Aug Sept Dec May NovJune July Aug Sept Oct


Progress Report 1 8

Task 11

3.1 General comments

As limited information has been received on the various project issues from the Kyrgyz authorities, the review and ana-lytical work will have to be extended for this country into the remaining period. It is hoped that the successful recruit-ment of a Bishkek antenna legal expert will facilitate this work. As there are considerable overlaps between various projects operating in the region (as pointed out in table 3) there will be full cooperation between the present TRACECA project and these other projects. The action plans and specific ac-tivities proposed for implementation under the project will continue to be frequently discussed with the TRACECA national secretaries and the permanent secretariat of the IGC. In the area of the legal work to be carried under the project close cooperation will be sought particularly with: • the TRACECA project on “Development of Equipment Certification Centres for the Transportation of Perishable

goods in Central Asia in the frame of ATP agreement” from the work of which we expect useful input for our pro-ject;

• the BOMCA programme for its practical work, particularly in the field of legal and institutional reforms required for integrated border management, including interagency, cross-border and international cooperation.

• the recently finalised TRACECA project on “Freight forwarders training courses” which produced model laws on freight forwarding and multimodal transport which both might be relevant for the project’s further discussions.

The consultant shares the view of the BOMCA study “Evaluation of the trade facilitation impact of the BOMCA pro-gramme in Central Asia” that “EurAsEc1 is the most significant and most active regional arrangement involving Central Asian countries” and contact has already been established with the EurAsEc Secretariat which has been invited to par-ticipate in the High Level Group. On a positive note the consultant has been very much encouraged by the positive experience of the Centralised Regional Seminar on PPPs which led to an open and cooperative exchange of views between the national representatives present.

3.2 Remaining tasks

During the forthcoming period (planning and implementation phase) the remaining 4 tasks (as described in detail in the Inception Report in section 3.3.3) are scheduled to be carried out.

“The development of a regional road transport market consisting of the development of legislation, administrative practices and administrative structures to facilitate road transportation across Central Asia and thus contributing to the promotion of mutual trade and the reduction of road transport costs. Examples of similar policies inside the EU shall be used in an effort to approximate the existing legis-

lation in the various countries of Central Asia.” One important outcome of the work so far demonstrates that the regional road transport market is far from perfect: • In terms of the legal reform Kazakhstan is by far the most advanced country, and the project proposes to use the

draft Kazakh Transport Code published in September 2006 and the new law on concessions as first stage bench-marks against which to measure progress in the other Central Asian countries. In a further step, the benchmark of the EU transport acquis and the system of international conventions will be applied.

• Kazakhstan and Uzbekistan have recently developed national transport sector strategies, while Kyrgyzstan and Ta-jikistan are still in the process of doing so with support from ADB. In the absence of this, a clear reference base for legislative reforms is missing, thus limiting the value of the project effort.

1 “EurAsEc members have on several occasions committed to forming a customs union, but this goal is implausible; Russia is unlikely to bring down its tariffs to Kyrgyz levels, but Kyrgyz tariffs are bound by its WTO accession agreement. In 2000 EurAsEc’s members agreed to have a common external tariff by 2005, but only 6,156 out of 11,086 tariff lines had been harmonised by 2005 (probably the easiest ones, eg non-competing imports and zero tariffs). Currently much is being made of progress on customs harmonisation within EurAsEc. However, independent of EurAsEc, all Central Asian countries are signatories of the International Convention on the Simplification and Harmonisation of Border Procedures (the revised Kyoto Convention) of the World Customs Organisation. Because EurAsEc customs harmonisation is WCO-consistent one could just speak of harmonisation within the Revised Kyoto framework, or within CAREC because the four Central Asian Republics have agreed to this standard within the CAREC trade facilitation programme.” Quote from footnote 40 of the BOMCA study “Evaluation of the trade facilitation impact of the BOMCA Programme in Central Asia”.


Progress Report 1 9

• Besides these developments, there is still an urgent need to improve customs and border crossing and transit proce-dures along corridors in the Central Asian countries, so as to reduce unnecessary delays and discriminatory taxes/charges, which are constraining traffic and trade. It has been again confirmed by the BOMCA study2 that im-port/export procedures, red-tape and border delays remain a significant impediment to the development of interna-tional trade. The improvement of border and transit facilities will expedite the movement, release and clearance of goods in transit.

• Various studies over the last few years have pointed to the importance harmonising vehicle standards (notably weight limits). Considering the economic consequences of this lack of harmonisation, this project is also of the view that weigh limits should be standardised, although it is recognised that there is significant opposition in certain states.

• As clearly shown in the Inception Report the road safety situation is far from ideal. As amply demonstrated by the World Health Organisation, road deaths have a direct economic cost to the economy.

In table 2 it should be borne in mind that the EU average deaths per million inhabitants is around 100, despite signifi-cantly higher traffic density and car ownership. The table also underlines the economic value of having road safety pro-grammes and adequate, enforced legal provisions. In particular, also it demonstrates how much the countries under-estimate the magnitude of the problem (considering that, for example, Kyrgyzstan officially considers the cost to be around 1-2 % of GDP). Table 2: Road deaths in the CAR region

Country Deaths % GDP Deaths/million Kazakhstan 2217 1.37% 132

Kyrgyzstan 725 2.94% 148

Tajikistan 406 3.09% 59

Uzbekistan n/a Source: International Road Federation World Road Statistics 2006 based on government supplied data. Foreseeable trends point to a further aggravation of the situation. Fragmentary institutional and legal frameworks add to the safety problem. It has been recognised that the various governments are increasingly concerned about transport safety, and have started to work on safety laws and programmes (see appendix). For making available the experience and know how gathered in long years of safety work within the western world, the project intends to make technology transfer and training in the field of road safety integral part of its activities. Against above background, the consultant will follow-up trade facilitation recommendations and related legal proposals resulting from earlier EU projects and international donor assistance. In particular, the consultant will make recommen-dations how to improve the business environment for PPP, how to increase the use and acceptance of documents used under the TIR convention, and finally how to improve the road safety situation. As regards the TIR convention, the Consultant is not in favour of developing a specific TIR system for the Central Asia region as occasionally reconsid-ered, but supports the approach taken by CEMT, “that there could be nothing worse than the parallel development of regional systems to international agreements”. In full agreement with the ToR and the consultant’s technical offer, the project will prepare concrete legislative propos-als. It would be rather unrealistic in this respect to draft a complete new set of laws or to make complete proposals for amended legislation, bearing in mind the time-consuming mechanisms and administrative structures in the beneficiary countries and the limited time-frame for project implementation.

2 BOMCA study: “Evaluation of the trade facilitation impact of the BOMCA Programme in Central Asia”


Progress Report 1 10

Task 12

Task 13

Task 14

“The project will carry out a survey of the existing logistic freight centres and define where it is effi-cient to improve these or to create completely new ones. It will identify the desired locations of these new/existing centres in each country (including Uzbekistan) and prepare an overall feasibility study needed for the creation/modernisation of such centres allowing at a later stage IFIs and other (pri-

vate) financial institutions to finance the creation/modernisation of such centres.” The project’s work so far has led to the following conclusions: • The changing methods of transport and the further development of multimodal transport are continuing to impose

new demand for infrastructure, especially multimodal terminals, which internationally are leading to logistic centres incorporating all related functions of international transport and logistics.

• Some of the countries in Central Asia are more advanced than others in the planning of logistics centres or in up-grading existing rail/road terminals to logistics centres.

• These modernising trends indicate the need for progress in creating conducive environments for developing PPPs. The highly positive response to the seminar conducted in October in Dushanbe on this issue underlines the impor-tance given to this subject by at least three of the states. In the discussions it became clear that many of the officials dealing with project development lack knowledge of what is going on elsewhere in the area of PPPs.

• There was a feeling that that there is a need for an Expert Working Group to be set up within the High Level Group to advance knowledge in the PPP-related areas.

It is proposed that in the remaining period the project will carry out the following in this context: • to do a “needs assessment (preliminary screening) for logistics centres” in form of SWOT and multi-criteria as-

sessment, covering all the existing and planned facilities in the Central Asia region; • to establish a catalogue of good practice, based on international standards and experience, where and how to extend

existing facilities or create new ones; and • the results of the pre-feasibility scan should provide valuable input for both the further specification of national

transport strategies and investment projects (in particular for the TRACECA logistics network study shortly to be commenced).

The consultant shall organise a study tour, keeping in mind the following: (i) the participants shall visit the bodies involved in coordinating transport policies legislation, as well as in policy making; (ii) a study tour shall be organised to one TRACECA country, member of the multilateral agreement or one member state of the EU; (iii) three participants from each of the five beneficiary countries shall

take part in the study tour.” In line with the terms of reference, one study tour will be carried out covering both the proposed areas (a TRACECA country and a member of the EU). It is proposed to conduct a study tour of 10 days duration through Romania to Ger-many, including (if possible) three participants from each of the five beneficiary countries. Although the TOR includes the participation of Turkmenistan in this activity, this seems rather doubtful in the light of the weak involvement in this project so far. It is envisaged that the study tour will be organised around the issues of the road transport market, road concessions, and freight terminals. The planned date for the study tour is mid- to end- of April 2008. The consultant will formally submit a proposed programme for the study tour at the occasion of the high Level Group Meeting in February 2008.

“Information dissemination and awareness creation measures such as publishing leaflets, manuals or other means of communication shall be carried out in order to inform a broader public on the coordi-nation efforts and the results. A special website will be created in Russian where all deliverables of the project can be accessed by all interested parties free of charge.”

Apart from the press releases which will accompany the programmed events, the utmost attention is being paid to the development of a user-friendly website in English and Russian. The consultant has already registered the domain name centralasiatransport.com for the project website. The site should reflect the various activities performed and results achieved by the project, organised by country and regional issues, including a legal data base and with links to benefici-aries and strategic partners as far as feasible. For improved visibility and regional information flow, it could be consid-ered to issue regular project leaflets. The table below summarises how these tasks are to be achieved.



Table 3: Tasks to be achieved

Task TOR Deliverables To be achieved in cooperation with:

Identification of TIR violations and reporting to the HLG/IGC TRACECA.

IRU, national freight forward-ers’ and transporters’ associa-tions, MoTCs PS IGC TRACECA, UNECE

11 Development of a re-gional road transport market

Legislative concept papers, recommendation on changes to administrative practices and administra-tive structures, and draft legal amendments aimed at facilitating road transportation.

MoTCs

Preliminary qualitative scanning of existing freight centres.

MoTCs, transport and logistic companies, ADB.

Needs assessment for the creation and modernisation of the regional logistic centre network.

MoTCs, transport and logistic companies, ADB.

12 Survey of existing logis-tic freight cen-tres/overall feasibility

Catalogue of good practice in line with international experience and standards.

MoTCs, transport and logistic companies, FIATA.

13 Organisation of study tour

A study tour as specified in the TOR. GOPA-TRADEMCO backstop-ping services, Romanian and German partner organisations

Setting up of a bilingual (Russian and English) web-site with the domain name www.centralasiatransport.com with links to benefici-aries and associated partners.

GOPA-TRADEMCO backstop-ping services, MoTCs and asso-ciated partners

Press releases, leaflets and other promotional materi-als.

EU Press Service, GOPA

14 Information, dissemina-tion and awareness creation measures

Conference and seminar proceedings. GOPA 4 Project progress in the reporting period

4.1 Legal study and evaluation work

The GOPA-TRADEMCO consortium has invested its own funds to bring the legal work up-to-date following the delays experienced in the inception phase. The legal recovery action programme organised by the project has utilised the re-sources of various international and regional experts and the work is now being completed. The results of this legal analysis and detailed action plans are to be presented in the progress report 1 – appendix.

4.2 Settlement of antenna project office in Tashkent, Uzbekistan

Missions to Uzbekistan, Kyrgyz Republic and Tajikistan (see Mission Reports in annex 1 to this report) were success-ful in helping to settle finally the outstanding problem of antenna office establishments in Tashkent and Dushanbe. Of-fice space has been rented with the organisation “Avtotexkomplekt” at a reasonable rate. It has been also achieved to identify and recruit an appropriate local transport legal/economic expert as project representation and liaison (antenna) officer for Bishkek, Kyrgyz Republic. Nevertheless, an appropriate office location there remains to be found.

4.3 Identification and recruitment of regional senior legal experts

It has been a further purpose of the above mentioned missions to interview candidates for the new positions of regional legal expert (in response to vacancy announcements in the local press in the various countries). Altogether seven candi-dates have been interviewed by the project in Uzbekistan, and further seven candidates in the Kyrgyz Republic. A com-plete request for approval of these regional senior legal experts has been submitted to the EC Delegation. Contracting procedures are currently ongoing and it can be expected that the regional legal expert team is operational starting from January 2008.



4.4 Implementation of PPP centralised regional seminar

Transport sector financing and the attraction of private funds for new transport infrastructure in the form of PPPs is one important issue towards achieving the overall project objective of sustainable development and supporting the transition process of CARs to a market economy in transport. In order to achieve an enabling environment which will help to promote private infrastructure finance throughout the CARs, it is necessary to build up a harmonised legal framework at regional level addressing all legal issues that arise when initiating infrastructure projects financed under PPP or similar schemes in the transport sector. In this context, according to the terms of reference (TOR, Para 4.2), it is one of the ma-jor tasks of the present project “to review and analyse the state of development of the road transport legislation regard-ing investment policies including financing options for infrastructure investment (…PPP)”. Along these lines, the regional seminar organised on 25 October in Dushanbe was aimed at preparing the environment for tangible and decisive improvements of the legal base. This first centralised regional seminar was organised and con-ducted by project international experts Dr. Goetz (team leader), Mr. Dimitri Kostianis (financing and PPP expert) and Mr. Tony Pearce (senior advisor) with the support of the project antenna office. It was held in Dushanbe on 25 October immediately following the OSCE conference3 (see section 4.5 below). It was attended by government officials and pri-vate transport operators from Kazakhstan, Uzbekistan and Tajikistan. Unfortunately there was no participation from Kyrgyzstan. Detailed information on the seminar is provided in annex 2 of the present progress report. The project succeeded in having the participation/contribution of the World Bank (Mr. S. Haitov, operations officer on energy and infrastructure in Tajikistan). The lively discussion and keen interest of the participants confirmed the high importance in which this issue is held by the authorities of the participating countries. The issue of PPPs in the present project leads also to logis-tic centre development for which guidelines will be developed in the coming period.

4.5 Participation in OSCE conference

The main objective of this conference (see section 2.2) was to strengthen the political cooperation with regard to transit transportation issues across the region. To achieve this, the conference brought together senior representatives of the relevant ministries and government agencies (i.e. customs, transport and trade) from the landlocked developing coun-tries in Central Asia and South Caucasus, as well as elsewhere in the OSCE region. It has also involved representatives of landlocked and transit developing neighbors, in particular OSCE Asian Partners for cooperation, relevant UN system organisations, IFIs, development partners as well as other international, regional and sub-regional organisations. Second major objective of the conference was to promote increased cooperation between the public and private sectors in managing transit transport-related issues involving in parallel the academic community and civil society. Mr. Dimitri Kostianis was present for both days of the conference. There, the consultant was involved in the following activities: • participation in forum discussions on the subjects of:

− the Almaty programme of action (APA) and the progress made in relation to its 2008 midterm review on transit transport, and border and customs policies in the CARs;

− gaps and challenges in transport infrastructure development and maintenance; − trade, transit transport and border crossing facilitation issues in Central Asia; − Public-Private Partnerships for addressing the problems of OSCE landlocked developing countries;

• panel discussions on the subject of PPPs; • presenting the project within the conference international forum (OSCE, transport ministers of various Central

Asian countries, UNECE, UNESCAP, CAREC, IRU, EurAsEC, World Bank, EBRD, ADB, Islamic Development Bank etc) developing contacts with international organisations and institutions on project related issues.

3 OSCE conference on prospects for the development of trans-Asian and Eurasian transit transportation through Central Asia until the year 2015. The conference was held in Dushanbe /Tajikistan from 23-24 October 2007. The conference was organised in accordance with Minis-terial Council Decision No. 11/06 on the “Future Transport Dialogue in the OSCE”, by the OSCE Secretariat together with the United Na-tions Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and the Small Island Develop-ing States (UN-OHRLLS) and with the support of the Government of the Republic of Tajikistan and the OSCE Centre in Dushanbe.



4.6 Progress on High Level Group

The proposals for the High Level Group (presented in the inception report annex 10) have been developed further, and discussed with beneficiaries and others during project missions to the region (see annex 1). In particular beneficiaries have proposed that membership of the High Level Group should be set at ministerial or deputy ministerial level. Conse-quently, ministers, deputy ministers, and National Secretaries were invited to the first meeting to be held either in As-tana or in Almaty. As it was announced on 5 November that the annual meeting of TRACECA was to be postponed to the first half of December, it had been decided to hold the first meeting of the HLG in Almaty on 22 January 2008. Af-ter further consultation with the EC Delegation it has now been proposed to tentatively schedule the meeting on or around 20 February 2008. Ministers and national secretaries are currently being consulted and will be informed on the actual date of the meeting in due time.

4.7 Steering Committee organisation

The consultant has undertaken the planning and invitations to Steering Committee members for participation in the Steering Committee meeting initially scheduled for 26 November 2007 in Almaty. The meeting however was postponed and a new meeting date has not yet been agreed. The nominations of Steering Committee members of the beneficiary countries are as follows. Kyrgyzstan: Manas A. Sabirov, main specialist of transport development department of MoTC; Tadjikistan: Khudoyer Z. Khudoyerov, deputy minister, MoTC; Uzbekistan: Sherzod B. Alimdzhanov, senior expert of Uzbek Association of Transport and Transport Communications. The role of the chairman of the Steering Committee will be assumed by Mrs. Rakhimbekova Saltanat, director of department of transport policy and international coopera-tion, MoTC Kazakhstan. It needs to be underlined, that participation of the TRACECA NS would be very important.

Activity 1.1 Initial findingsActivity 1.2 Define EWG work packagesActivity 1.3 Kick-off meeting (major milestone)Activity 1.4 Schedule of meetings, working papers, seminars, visitsActivity 1.5 Training needs analysisActivity 1.6 Prepare Inception Report

Activity 2.1 Review of present situationActivity 2.2 Convention/agreement membershipActivity 2.3 Application of legislationActivity 2.4 Management systems assessmentActivity 2.5 Analysis of results/benchmarkingActivity 2.6 SWOTActivity 2.7 Freight legislation package collection Activity 2.8 Presentation, guiding principlesActivity 2.9 Phase 2 HLG meeting (major milestone)Activity 2.10 Prepare Phase 2 Report

Activity 3.1 Elaborate action plansActivity 3.2 Logistics centres pre-feasibilty studyActivity 3.3 Prepare Progress Report IActivity 3.4 Regional road transport marketActivity 3.5 Phase 3 HLG meeting (major milestone)Activity 3.6 Prepare Phase 3 reportActivity 3.7 Coordinate action plansActivity 3.8 Prepare Progress Report IIActivity 3.9 Arrange study tourActivity 3.10 Publicity & website developmentActivity 3.11 Prepare Draft Final ReportActivity 3.12 Draft Final Report presentation (major milestone)Activity 3.13 Prepare Final ReportMeetings Coordination Meetings (four countries)

Legal Expert Working Group meetings 1 - 4 (four countries) Centralised Regional SeminarsSteering Committee Meetings

*Subject to rvision, based on actual time sheets

Form 2.2.: Project Progress Report

12

1010

Planned Utilised Planned

1014

15

7

20

Total



Activities Phase 2 - Review and clarification phase

Planned Utilised

8

302020

15

8

Time Frame 2007

30

Month PersonnelEC Consultant*

Inputs

Nov

32

Oct

Equipment, MaterialPersonnelCounterpart

To be determined at the HLG meeting in February 2008

2525

1512

Human resources of support staff; approved communication and travel costs; interpretation and translation; workshops and seminars

8

45

331

15

Other

EC Consultant: Consortium GOPA - TRADEMCO

Project objectives:1. Principles for National Transport Policies coordinated on the regional level2. Short, medium and long term action programme for legislative action3. Legislative frameworking principles and proposals, reflecting Traceca MLA and Strategy as well as international/EU standards4. Legal harmonisation principles to establish a regional market for the road transport sector in Central Asia5. Preliminary qualitative scanning of existing logistic centres, needs assessment and catalogue of good practice, as a precursor for the 2006 Traceca project on “International Logistics Centres/Nodes Network in Central Asia"

UtilisedMay June July Aug Sept

No. Activities Implemented


Planning Period: 7 May 2007 - 7 November 2007

Project number: EuropeAid/122076/C/SER/Multi

Prepared on: November 2007

Countries: Republic of Kazakhstan, Republic of Tajikistan, Kyrgyz Republic, Republic of Uzbekistan, Republic of Turkmenistan

Page: 1

351510


Planned Utilised


10

1515232020151010

8

40

454

20

Human resources of support staff; approved communication and travel costs; interpretation and translation; workshops and seminars

2425

27

32

Form 2.3: Resource Utilisation Report


Project Number: Europeaid/122076/C/SER/Multi (re-launch)

Countries: Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Turkmenistan

Pages: 2

Planning Period: May 2007 - November 2007 Prepared in: November 2007 EC Consultant: GOPA-TRADEMCO Consortium Project Objectives: 1. Principles for National Transport Policies coordinated on the regional level 2. Short, medium and long term action programme for legislative action 3. Legislative frameworking principles and proposals, reflecting TRACECA MLA and Strategy as well as international/EU standards 4. Legal harmonisation principles to establish a regional market for the road transport sector in Central Asia 5. Preliminary qualitative scanning of existing logistic centres, needs assessment and catalogue of good practice, as a precursor for the 2006 TRACECA project on “International Logistics Centres/Nodes Network in Central Asia

Resources/Inputs Total planned (working days)

Period planned (working days)

Period realised* (working days)

Total realised (working days)

Available for remainder (working days)

Personnel

Key Expert 1: Transport Law Specialist (long term)1 171 126 66 66 105

Key Expert 2: Road Transport Economist/Team Leader (long term) 315 126 101 101 214

Senior Expert Freight/Logistics (Category I, short term) 42 10 9 9 33

Senior Expert Finance/PPP (Category I, short term) 32 20 22 22 10

Senior Expert Events Organisation (Category II, short term) 21 21 21 21 0

Senior Expert Transport Policy (Category II, short term) 21 21 21 21 0

Senior Expert Transport Commerce (Category II, short term) 21 10 0 0 21

Antenna Staff 1 (Kazakhstan) 120 30 33 33 87

Antenna Staff 2 (Uzbekistan) 120 30 18 18 102

Antenna Staff 3 (Kyrgyzstan) 120 30 0 0 120

Antenna Staff 4 (Tajikistan) 120 30 32 32 88

Regional Expert Transport Law 1 (short term) 63 0 0 0 63



1 Reduced from a total planned of 315 to a total planned of 171 working days, converting the remaining 144 working days into 343,5 working days for the Regional Experts Transport Law 1 - 6 (according to the proposed Contract Addendum No. 1)

Resources/Inputs Total planned (working days)

Period planned (working days)

Period realised* (working days)

Total realised (working days)

Available for remainder (working days)






Not yet allocated 49.5 0 0 0 49.5

Total 1446.5 454 331 331 1123.5

Equipment and material

Physical goods, such as office equipment (computers, printers, fax machine, photocopy machine, furniture, stationery)

Other inputs

Human resources of support staff; approved communication and travel costs; interpretation and translation; workshops and seminars.

* Subject to revision, based on actual time sheets. ** Financial reporting on the use of the incidental expenditures budget is currently under preparation.

Form 2.4: Output Performance Report


Project Number: Europeaid/122076/C/SER/Multi (re-launch)

Countries: Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Turkmenistan

Pages: 1

Planning Period: May 2007 - November 2007 Prepared in: November 2007 EC Consultant: Consortium GOPA-TRADEMCO Project Objectives: 1. Principles for National Transport Policies coordinated on the regional level 2. Short, medium and long term action programme for legislative action 3. Legislative frameworking principles and proposals, reflecting TRACECA MLA and Strategy as well as international/EU standards 4. Legal harmonisation principles to establish a regional market for the road transport sector in Central Asia 5. Preliminary qualitative scanning of existing logistic centres, needs assessment and catalogue of good practice

Output results Deviation original plan(+ or – in %)

Reason for deviation Comment on constraints and assumptions

1. In-depth review of the present situation -10% (on discussion of value-added)

Lack of data and cooperation Lack of data and participation of certain Beneficiaries.

2. Analysis of membership of 4 CARs in international conventions and regional agreements, and international governmental and non-governmental organisations and initiatives

0% n/a Good information quality from national sources and UNECE. No constraints.

3. Practical handling and application of transport legislation -20% (on field research) Reallocation of professional input within the legal field. Wide area coverage.

No constraints.

4. Assessment of management systems, qualifications and personnel prerequisite

-50% Lack of data and cooperation.

5. Analysis of the results of fact-finding exercise resulting in systematic benchmarking

0% n/a No constraints.

6. Identification of strengths, weaknesses, opportunities and threats (SWOT)

0% n/a No constraints.

7. Collection of complete legislative package for the CARs related to road transportation.

-50% (on new TA to MLA and legal drafting

work)

Reallocation of professional input within the legal field. Time and procedural requirements.

Lack of commitment (beneficiaries). Time constraints. Sufficient information via antenna.

8. Presentation of findings from tasks 1-7, development of mutually accepted guiding principles and a hierarchically classified set of laws, awareness creation and know-how transfer measures

0% n/a Unsatisfactory participation by certain beneficiaries.

9. Elaborate short, medium and long term action plans -10% Reallocation of professional input within the legal field. Time and procedural requirements.

Reporting on track (Inception, Progress 1 and SWOT and Legal Analysis Report), but necessary coordination and fine tuning with Beneficiaries delayed.

10. Assist in the coordination of action plans among the involved beneficiaries and in implementing the action plans

-15% Rescheduling of steering committee, legal working group and high level group meetings

Reporting on track (Inception, Progress 1 and SWOT and Legal Analysis Report), but necessary coordination and fine tuning with Beneficiaries delayed.



5 Project planning for the next reporting period

Form 1.6: Plan of operations for the next period (work programme)

Activity 2.8 Presentation, guiding principles

Activity 2.9 Phase 2 HLG meeting (major milestone)

Activity 2.10 Prepare Phase 2 Report

Activity 3.1 Elaborate action plans

Activity 3.2 Logistics centres pre-feasibilty study

Activity 3.3 Prepare Progress Report I

Activity 3.4 Regional road transport market

Activity 3.5 Phase 3 HLG meeting (major milestone)

Activity 3.6 Prepare Phase 3 report

Activity 3.7 Coordinate action plans

Activity 3.8 Prepare Progress Report II

Activity 3.9 Arrange study tour

Activity 3.10 Publicity & website development

Activity 3.11 Prepare Draft Final Report

Activity 3.12 Draft Final Report presentation (major milestone)

Activity 3.13 Prepare Final Report

Meetings Coordination Meetings (four countries)

Legal Expert Working Group meetings 1-4 (four countries)

Centralised Regional Seminars

Steering Committee Meetings

50

60

20

Human resources of the local direct support staff (project assistants, secretaries, drivers, accountant)Approved communication and travel costsInterpretation and translationWorkshops and seminars

850


0

80

0

0

60

0

80

To be determined at the HLG meeting in

February 2008

50

120

30

250

20

30

Activity


Mar Apr MayNov Dec

Form 1.6.: Plan of Operations for the Next Period (Work Programme)

Total


Countries: Republic of Kazakhstan, Republic of Tajikistan, Kyrgyz Republic, Republic of Uzbekistan, Republic of Turkmenistan

Page: 1

Project objectives:1. Principles for National Transport Policies coordinated on the regional level2. Short, medium and long term action programme for legislative action3. Legislative frameworking principles and proposals, reflecting Traceca MLA and Strategy as well as international/EU standards4. Legal harmonisation principles to establish a regional market for the road transport sector in Central Asia5. Preliminary qualitative scanning of existing logistic centres, needs assessment and catalogue of good practice, as a precursor for the 2006 Traceca project on “International Logistics Centres/Nodes Network in Central Asia"

EC Consultant: Consortium GOPA - TRADEMCO


Planning Period: November 2007 - April 2008

Project number: EuropeAid/122076/C/SER/Multi

Prepared on: November 2007

Personnel EC Consultants

Personnel Counterpart

Equipment andMaterials

Month Inputs

OtherJan Feb

Annex 1

Mission reports

Annex 1: Mission Reports 1. Mission to Astana/Kazakhstan on 26.09.2007 2. Mission to Tashkent/Uzbekistan from 27.09 to 02.10.2007 3. Mission to Astana/Kazakhstan on 17.10.2007 4. Mission to Bishkek/Kyrgyz Republic on 18./19.10.2007

1

Almaty, 25.10 2007

TRACECA 2004 Project: ‘Development of Co-ordinated National Transport Policies, Republic of Kazakhstan, Kyrgyz Republic, Republic of Tajikistan, Republic of Uzbekistan, Re-public of Turkmenistan’

Mission Report This fourth mission report of the TRACECA 2004 Project: ‘Development of Co-ordinated National Transport Policies, Republic of Kazakhstan, Kyrgyz Republic, Republic of Tajikistan, Republic of Uzbekistan, Republic of Turkmenistan’ (in the following “the project”) covers the visits of the project team to Astana, Tashkent and Bishkek during the months of September and October, 2007. 1. Mission to Astana/Kazakhstan on 26.09.2007 Mission members The mission to the beneficiary in Astana capital was attended by Dr. Franz Josef Goetz, Team Leader and Mr. Tony Pearce, Events organizer. It had been prepared by the project antenna office in Astana, Mrs. Yelizaveta Krupochkina. Purpose of Mission The main purpose of the mission was to (1) introduce team member Mr. Tony Pearce to the collaborators in the Ministry of Transport and Communications and its various departments; (2) to discuss the draft proposal for the establishment of the High Level Group with the MoTC; (3) to continue the work on reviewing and assessing the present transport sector situation and legal transport framework; (4) to attend the final seminar of the Freight Forwarders Training Courses project1, and finally (5) to meet the project monitoring team in the project antenna office in Astana. Activities and Persons met A detailed list is included in the annex to this report. 1.1. Meeting with MoTC The mission was warmly welcomed by Mrs. Saltanat Rakhimbekova, Director of the Transport Policy and International Cooperation Department of the Ministry. Mr. Tony Pearce discussed the Proposals for the HLG (as also presented in the Inception Report). On the same occasion he discussed the situation on the road transport market with Heads of both the Road Transport Division and Railway Committee. The information collected will be presented in the First Progress Report and its Annexes due in November 2007. 1.2. Meeting with project monitors. Mrs. Damira Bekturova and Mr. Pieter Melissen from the Tacis Monitoring Programme in Central Asia have been met in the project antenna office in Astana, in order to discuss the project progress and activities.

1 Project on Freight Forwarders Training Courses carried out for TRACECA by the NEA-TRADEMCO consortium with the participation of FIATA.


2

1.3. Participation in Final Seminar of the Freight Forwarders Training Courses project Dr. Goetz and Mr. Tony Pearce, before continuing for Tashkent, attended the morning session of the above mentioned final project meeting. The opportunity was used to deepen the contact with Team leader Mr. Renee Meeuws and to collect relevant project documentation. There was also opportunity to discuss with Mr. Rustan Jenalinov, General Secretary IGC TRACECA the HLG concept proposed and it has been agreed to schedule the first HLG meeting for 24th November 2007, to follow immediately the IGC annual meeting in Astana. Alto-gether, it was highly useful to attend the meeting which served as a good platform for information exchange. As one major outcome it has been envisaged by the present project to continue the dialogue on the “model laws on freight forwarding” drafted by the NEA project. 2. Mission to Tashkent/Uzbekistan from 27.09 to 02.10.2007 Mission members The mission to the beneficiary in Tashkent was attended by Dr. Franz Josef Goetz, Team Leader and Mr. Tony Pearce, Events organiser. It had been prepared by the project antenna office in Tashkent, Mrs. Marina Gulya-mova. Purpose of Mission The main purpose of the mission was to finally settle the outstanding problem of the setting up of the antenna office. This included identifying a suitable local transport legal/economic expert as project representation and liaison officer for Bishkek, to find appropriate antenna office premises. Furthermore, the visit was to (1) introduce team member Mr. Tony Pearce to the collaborators in the Ministry of Transport and Communications and its various departments; (2) to discuss the draft proposal for the establish-ment of the High Level Group with the MoTC and (3) to continue the work on reviewing and assessing the pre-sent transport sector situation and legal transport framework. Finally, to the opportunity was taken to interview candidates for the new position of regional legal expert who had responded to a vacancy announcement in the local press (see annex). Activities and People met A detailed list is included in the annex to this report. 2.1. Meeting with Association of Transport and Transport Communications. The project team met with Mr. Abdurashid Tagirov, Head of the Department of External Affairs. As already reported earlier, the Association cannot provide office premises free of charge as foreseen by the TOR. Since no concrete alternative proposals for office lease has been received from the Association till the end of the period of the visit, the antenna expert Mrs. Marina Gulyamova has been given the task to search for adequate opportuni-ties and to finally solve this problem in the near future. 2.2. Identification/ assessment of candidates for the vacancies “senior regional legal expert”. The mission was highly successful as regards the identification of qualified and suitable experts. Altogether, seven candidates have been interviewed. A detailed list of meetings and persons met and/ or interviewed during the mission is attached in the appendix for further consideration.


3

3. Mission to Astana/Kazakhstan on 17.10.2007 Mission members The mission to MoTC in Astana has been attended by Mr. Dimitri Kostianis, Expert on Financial and PPP Is-sues. It had been prepared by the project antenna office in Astana, Mrs. Yelizaveta Krupochkina. Purpose of Mission

The visit was to seek further information concerning on various issues of transport infrastructure financing and Public-Private Partnership potential. Meeting with MoTC and Railways: The discussion focused on (1) issues of transport project finance, especially the question of user based financing methods in application in Kazakhstan, and (2) progress and implementation mechanisms regarding specific road and rail infrastructure projects currently in the process of tendering through PPP procurement methods (BAKAD project, the construction of the rail line Manguishlak-Bautino, the construction of the rail line Eralievo – Kouryk, the electrification of the line Makat – Kandyhagash). This information should aid the preparation of the Central-ized Regional Seminar to be held in Dushanbe on PPP project finance. 4. Mission to Bishkek/Kyrgyz Republic on 18./19.10.2007 Mission members The mission to MoTC in Bishkek has been attended by Dr. Franz Josef Goetz, Team Leader and Mrs. Alexandra Subbotina, Project Assistant. Purpose of Mission The visit was to solve the outstanding issue of project antenna office establishment and staffing. It also served to interview candidates for the vacancy of regional legal senior expert. 4.1. Identification / assessment of antenna local legal expert and regional legal senior experts. For both vacancies announcements had been placed in the local press (see annex). The mission was highly suc-cessful as regards the identification of qualified and suitable experts. Altogether, eight candidates have been met and interviewed. A detailed list of meetings and persons met and/ or interviewed during the mission is at-tached in the appendix. 4.2 Meeting with Traceca National Secretary. Mr. Niyazbekov again confirmed that there is no possibility to find office space for the project antenna office in the premises of the Ministry. However, he assured his full support concerning the identification of office space for rent. Dr. Goetz informed Mr. Niyazbekov about the results of the interviews with the various candi-dates.

***


4

The Consultant would like to take this opportunity to thank all the persons contacted for their great support and fruitful co-operation. Follow-up meetings have been agreed on a regular basis with all the departments concerned. Team Leader Dr. Franz J. Goetz Almaty, 21 October 2007.

List of meetings, Astana 26 September, 2007

Name Position Project experts

Mrs. Saltanat Rakhimbekova MoTC Director of Transport Policy & International Cooperation Department

Dr. Franz Josef Goetz, Team Leader Mr. Anthony Pearce, Transport Expert; Yelizaveta Krupochkina, Representative in Astana

Mrs. Olga Fomenko MoTC Head of Transit and Transport Policy and International Co-operation Section


Mr Bolat Aldaberguenov MoTC Deputy Head, Road Transport Division


Mr Arslan Khaliev MoTC Head of Section, Road Transport Division


Mr Ruslan Moldagaypov MoTC Head of Section, Committee for Transport Infrastructure Development


Mrs. Dinara Temirova MoTC Head of Section, Railway Committee


Mr. Rene Meeuws Senior Advisor, NEA, Freight Forwarders Training Courses Project

Dr. Franz Josef Goetz, Team Leader Mr. Anthony Pearce, Transport Expert;

Mrs. Damira Bekturova National Monitor, TACIS&CARDS Monitoring Programme


Mr. Pieter Melissen Technical Expert, TACIS/ Monitoring Programme Central Asia


Mr. Rustan Jenalinov Secretary General, Intergovernmental Comission TRACECA Permanent Secretariat

Dr. Franz Josef Goetz, Team Leader Mr. Anthony Pearce, Transport Expert

Freight Forwarders Training Courses Project Conference

MTC and Freight Forwarders Training Courses for Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyz Republic, Moldova, Tajikistan, Turkmenistan, Ukraine, Uzbekistan


Name Position Project experts

Mr. Markus Schoeni FIATA Representative Dr. Franz Josef Goetz, Team Leader Mr. Anthony Pearce, Transport Expert

Mr. Imomali Zokirov Deputy Chairman, Forwarding association of the Republic of Tajikistan


Mr. Sabirzhan Dzhangozin Deputy Director, Department of Development and Logistics, “Accept Terminal” JSC


Mr. Ilia Segal Executif Director, Kazakhstan Freight Forwarders Association


Mr Zhanybek Kazakenov Head of Development Department, Minisrty ofTransport and Communications of Kirgyzstan

Dr. Franz Josef Goetz, Team Leader Mr. Anthony Pearce, Transport Expert

Mr.Sergey Bragin Chairman of Supervisory Council,Logistics Center, Kazakhstan


List of meetings in Bishkek from October 18-19, 2007 Full name Position Project experts T. Niyazbekov, E. Nalobina,

TRACECA National Secretary, Ministry of Transport and Communications Main Expert of Foreign Economic Relations Department

Dr. Franz Josef Goetz, Team Leader Alexandra Subbotina, Project Assistant

K. Zakirov Candidate for vacancy Dr. Franz Josef Goetz, Team Leader Alexandra Subbotina, Project Assistant

R. Kongurbaev Candidate for vacancy Dr. Franz Josef Goetz, Team Leader Alexandra Subbotina, Project Assistant

S. Zakirov Ex-National Secretary Traceca, Candidate for vacancy


N. Alymbaev Lawyer, Candidate for vacancy Dr. Franz Josef Goetz, Team Leader Alexandra Subbotina, Project Assistant

N. Chokubaev MNT Consulting, Head of Energy Transport and Infrastructure Development Department

V. Kustov Legal expert in transport sector, Candidate for vacancy


List of meetings in Bishkek from June 11-13, 2007 Full name Position Project experts T. Niyazbekov E. Nalobina Zh. Kasykenov,

Traceca National Secretary, MoTC Main Expert of Foreign Economic Relations Department, MoTC Head of Transport Development Department, MoTC

Dr. Franz Josef Goetz, Team Leader Olivier d’Auzon, Legal Expert Alexandra Subbotina, Project Assistant

V. Tian Project Implementation Officer, Kyrgyz Resident Mission , ADB Representative Office


N. Ryskulova Operations Analyst, Infrastructure and Energy Department, WB Kyrgyz Republic Country Office


K. Kartanbaev General Director, TOKTOM Informational Center


M. Serkebaev Deputy Head of Customs Control Management Department, State customs inspectorate under the Government of the Kyrgyz Republic

Olivier d’Auzon, Legal Expert

N. Chokubaev Head of Energy, Transport and Infrastructure Development Department, MNT Consulting

Dr. Franz Josef Goetz, Team Leader Olivier d’Auzon, Legal Expert Alexandra Subbotina, Project Assistant

Annex 1: Mission Reports Mission was undertaken by Mr. Dimitris Kostianis

1

Almaty, 25.10 2007 TRACECA 2004 Project: ‘Development of Co-ordinated National Transport Policies, Republic of Kazakhstan, Kyrgyz Republic, Republic of Tajikistan, Republic of Uzbekistan, Republic of Turkmenistan’

Mission Report

1. Mission Details

The mission was undertaken by Mr. Dimitris KOSTIANIS who is currently holding the position of the project key expert on “Transport Finance and PPP issues” in the project of DEVELOPMENT OF COORDINATED NATIONAL TRANSPORT POLICIES IN CARs (the Project). 1.1 Duration Mission has taken place in the period 14-27/10/2007. 1.2 Objectives & location There were three mission objectives: a. OBJECTIVE 1: To select complementary project diagnostic material on the subject of “Transport Finance

and PPP issues” in the Central Asian Republics (CARs). A one (1) day visit was organized to Astana (from Almaty), in order to participate in a specially organised meeting with the Minister of Transport of Kazakhstan.

b. OBJECTIVE 2: To participate in the OSCE Conference of Dushanbe on the “Prospects for the development of trans-asian and Eurasian transit transportation through Central Asia till the year 2015”. The Conference was held on the 23-24 October 2007

c. OBJECTIVE 3: To organize and implement on the 25th October 2007, on behalf of our project, a Centralized Regional Seminar in Dushanbe on “Preparing Public-Private Partnerships on transport in CARs”

2. Visit to the Ministry of Transport of Kazakhstan (Astana)

Date: 17 October 2007

Place: Astana, Kazakhstan

Duration: 90 minutes

Meeting participants: See table below

MoT participants Position Project participants Mrs. Olga Fomenko MoTC Head of Transit and Transport Policy and

International Co-operation Section Mr Bolat Aldaberguenov MoTC Deputy Head, Road Transport Division Meyerbekov Erken MoTC, Railway Committee

Head of section Mr Ruslan Moldagaypov MoTC Head of Section, Committee for Transport

Infrastructure Development Tazhieva Ayzhan MoTC Legal Department,

Head of section Ismaguilova Irina MoTC Road Transport Division, Main Expert Berdimbetova Balaussa MoTC Transit and Transport Policy and International

Co-operation section, Main Expert

Mr. Dimitris Kostianis, Transport Expert; Mrs Yelizaveta Krupochkina, Representative in Astana


2

Visit objective: To seek explanatory and complementary information on the answers provided by the MoT of Kazakhstan on the issues of Transport Infrastructure Financing and Public - Private Partnerships potential in the transport sector. These answers were directly associated to the 2nd Diagnostic Questionnaire which was specifically set up by Mr. D. Kostianis (Project key expert on “Transport Finance and PPP issues”) and was addressed to the MoTs of all four CARs. The discussion focused on the following issues: a. The use and extent of application of user based financing mechanisms like fuel taxes and car licensing for

road infrastructure (over and above government budgets (see Questions 1.4 and 1.5)). b. Administration mechanisms of road infrastructure development (see Question 1.4 ) c. Progress and implementation mechanisms regarding specific road and rail infrastructure projects currently

on the way to tendering through PPP procurement methods (BAKAD project, the construction of the rail line Manguishlak-Bautino, the construction of the rail line Eralievo – Kouryk, the electrification of the line Makat – Kandyhagash

3. Dushanbe 2007 OSCE Conference

General issues

Date: 23-24 October 2007

Place: Dushanbe, Tajikistan

Duration: 2 days

Conference objectives The Conference was organized in accordance with Ministerial Council Decision No. 11/06 on the “Future Transport Dialogue in the OSCE”, by the OSCE Secretariat together with the United Nations Office of the High Representative for the Least Developed Countries, Landlocked Developing Countriesand the Small Island Developing States (UN-OHRLLS) and with the support of the Government of the Republic of Tajikistan and the OSCE Centre in Dushanbe. Its objective was to discuss the prospects for the development of trans-Asian and Eurasian transit transportation through Central Asia till the year 2015, and to strengthen the political co-operation with regard to transit transportation issues across the region. To achieve this objective, the Conference brought together High Level representatives of the relevant Ministries and Government Agencies (i.e. customs, transport and trade) from landlocked developing countries in Central Asia and South Caucasus, as well as elsewhere in the OSCE region. It has also involved representatives of landlocked and transit developing neighbours, in particular OSCE Asian Partners for Cooperation, relevant UN system organizations, International Financial Institutions, development partners as well as other international, regional and sub-regional organizations. Second major Conference objective was to promote increased co-operation between the public and private sectors in managing transit transport related issues involving in parallel the academic community and civil society. Project related actions of Mr. D. KOSTIANIS within the OSCE Conference Mr. D. Kostianis was present in both two days of the above OSCE Conference. There, he was involved in the following actions: a. He has followed expert presentations and has participated in open discussions on the subjects of

i. The Almaty Programme of Action (APA) and the progress made in relation to its 2008 midterm review regarding transit transport, border and customs policies in CARs

ii. Gaps and Challenges regarding Transport Infrastructure Development and Maintenance


3

iii. Trade, Transit transport and Border Crossing Facilitation issues in Central Asia

iv. Public-Private Partnerships in addressing the problems of OSCE landlocked developing countries b. He was particularly involved in panel discussions on the subject of Public-Private Partnerships (2nd

Conference Day) c. He has contributed to the visibility of the Project within the Conference international Forum (OSCE,

Transport Ministers of various Central Asian countries, UNECE, UNESCAP, CAREC, IRU, EurAsEC, World Bank, EBRD, ADB, Islamic Bank etc) by v. Making a short intervention in order to present the Project and its objectives to all Conference

participants vi. Contacting international organisations and institutions on Project related issues. See for example 1. Mr. A. TOKHIROV, Executive Office of the President of Republic of Tajikistan 2. Mr. R. JENALINOV, Secretary General ICG TRACECA 3. Mr. D. YAGMUR, Undersecretariat of Foreign Trade of the Republic of Turkey 4. Mr. S. HAITOV, Operations Officer (Energy and Infrastructure) in Tajikistan, The World Bank 5. Mr. Jan TOMCZYK, USAID in CARs 6. Mr. Gumar KASSYMOV, Adviser, Deputy Head of Department for Market-oriented, Eurasian

Economic Community (EurAsEC) 7. Mr. Matthieu Le Blan, Country Director, EBRD vii. Managing to succeed the participation / contribution of the World Bank (Mr. S. HAITOV, Operations

Officer on Energy and Infrastructure in Tajikistan) in the PPP Seminar of our Project, which has taken place on the 25/10/2007 (just one day after the Conference has ended)

d. He was directly communicated the deliberations of Dushanbe Conference in the form of a Joint Statement. These deliberations recognize the importance of PPPs in the transport sector for landlocked and transit countries in Central Asia. These PPP related deliberations have as follows: viii. Review and revise country regulatory frameworks to allow greater participation in the private sector; ix. Introduce reform measures to make providers of transport services more responsive to user demands; x. Conduct permanent consultation with private industry on procedures and legislation, even before

adoption; xi. Support land transport links along the Silk Road, including pilot operations (truck caravans) by the

private industry; xii. Support established border waiting time observatory efforts (internet applications) by the private

industry xiii. Finance particular projects jointly by public and private sectors

4. Project Seminar on PPP Issues

General issues

Date: 25 October 2007

Place: Dushanbe, Tajikistan

Duration: 1 day

Seminar background Transport sector financing and the attraction of private funds for new transport infrastructure in the form of public-private partnerships (PPPs) is one important issue towards achieving the overall project objective of sustainable development and supporting the transition process of CARs to a market economy in transport. In order to achieve an enabling environment which will help to promote private infrastructure finance throughout CARs, it is necessary to build up a harmonized legal framework at regional level addressing all legal issues that arise when initiating infrastructure project financed under PPP or similar schemes in the transport sector.


4

In this context, according to the Terms of Reference (TOR, Para 4.2), it is one of the major tasks of the present project “to review and analyse the state of development of the road transport legislation regarding investment policies including financing options for infrastructure investment (…PPP)”. Along these lines, the regional seminar aims to cultivate the ground and prepare the environment for tangible and decisive improvements of the legal base. The timing of the project was on purpose selected to follow by one day the international conference organised by OSCE in Dushanbe on “the prospects for the development of trans-asian and Eurasian transit transporatation through Central Asia until the year 2015”, in the framework of which session on 24-10-2007 will be dedicated to the subject of PPPs in landlocked countries). Our seminar therefore is planned to capitalise on the previous conference discussions and further extend them towards practical advices for legal harmonisation and formulation of guidelines for an associated Action Plan focusing on the road sector and multi-modal freight centres development. Seminar objectives The objectives of the Seminar are: • To promote a common basis for consideration and discussion of the prerequisites of a favourable national

environment (enabling environment) for effective implementation of public-private partnerships on transport projects in the Central Asian Region ,

• To raise awareness among key officials on existing difficulties and lessons learnt from international experience,

• To provide a systematic overview of actions and tools for implementing PPPs in transport in a coherent and consistent manner,

• To prepare a critical group of executives per country in order to promote regional harmonisation of legislation, regulations, processes and procedures,

• To train respective trainers. Seminar contents In pursuing the above objectives, the Seminar was structured in two main phases: 1. PHASE 1: Analysed the true meaning of the ENABLING ENVIRONMENT for transport sector PPPs, by

looking closely at • the parameters formulating a suitable ENABLING ENVIRONMENT, such as

i. political environment & governance principles ii. country macroeconomic environment iii. concessions specific legal framework iv. general policy framework for PPP & political commitment v. level of legal integration vi. public sector capacity - regulatory structures vii. private sector capacity

• the actual current maturity for transport PPPs in CARs 2. PHASE 2: focused on the crucial IMPLEMENTATION ISSUES involved for actual PPP projects in the

transport sector and mainly in roads. Presentations and subsequent discussions have focused on viii. Key issues and difficulties (economic & financial viability, risk sharing etc) ix. Country examples and lessons learnt x. Specific project examples

The programme provided information to participants on the above mentioned subjects and has led them through a series of presentations, case studies and three (3) sessions of moderated discussions to develop a clear understanding of the issues involved and the necessary steps that the relevant government authorities need to stir through for successful results. Case studies, questions and answers, interventions, conclusion session were applied so as to promote understanding, development of knowledge and exchange of know-how.


5

Seminar participants

Seminar agenda The seminar agenda was finally formulated as follows:

09:00-9:15 Welcome / Opening Speech by Dr. Franz Josef Goetz, Team Leader GOPA - TRADEMCO Consortium on “Challenges& opportunities of regional transport policy coordination”

09:15-9:40 Seminar Outline by Mr. Dimitris Kostianis, Financing and PPP Expert, GOPA - TRADEMCO Consultants

09.40-10.20 Presentation by Dr. Franz Josef Goetz, Team Leader GOPA - TRADEMCO Consortium on “The right formula for network development”

10:20-10:40 Synopsis of the OSCE Conference findings and conclusions by Mr. Dimitris Kostianis, Financing and PPP Expert, GOPA - TRADEMCO Consultants

10:40-11:00 Presentation by Mr. Dimitris Kostianis, Financing and PPP Expert, GOPA - TRADEMCO Consultants on the “Enabling environment for Transport PPPs - Main steps to maturity”

11:00-11:30 Coffee Break


6

11:30-13:00 Structured group discussion on “Exploring the Enabling Environment maturity for transport PPPs in CARs per country”

13:00-13:30 Presentation by Mr. Dimitris Kostianis, Financing and PPP Expert, GOPA - TRADEMCO Consultants on “Main difficulties in transport PPP implementation - Lessons learnt form international experience”

13:30-15:00 Lunch

15:00-16:40 Structured group discussion on “Exploring transport projects in CARs with regional importance”


17:00-17:30 Presentation by Mr. Anthony Pearce, Senior Adviser GOPA - TRADEMCO Consortium on “International experience in road PPPs – The Indian example”

17:30-17:45 Presentation by Mr.Sardorbek Koshnazarov, UNDP Advisor and Representative of Chamber of Commerce and Industry, Uzbekistan on “Pre-conditions for PPP establishment in Uzbekistan”

17:45-18:00 Presentation by Mr. S. Haitov, Representative of World Bank on “PPP experience in Tajikistan”

18:00-18:40 Round Table Discussion “Conclusions - The way forward”

20:00 Dinner

Main seminar conclusions Main seminar conclusions: • Key steps for successful PPPs at national level

1. Consistency of objectives & policies 2. Transparency & predictability of policies 3. Coordination of IFI activities 4. Appropriate legislation (concessions, environment, procurement) 5. Clear role for state authorities 6. Identification and prioritisation of projects 7. Essential that the country be looked at as a whole, not a collection of state, regional and local priorities 8. Must involve users and private sector 9. Must have a strategic approach involving public and private sectors for all transport methods

• Key steps for successful PPPs at project level

1. Appropriate project preparation - (feasibility study & environmental impact assessment) 2. Proper procurement procedures 3. Properly evaluated financing plan 4. Suitable implementation procedures & proper monitoring 5. Provisions for the future project operation & maintenance

• Governments need to build the necessary CONFIDENCE in the national economy environment that will

ENABLE private investments to be attracted • The main maturity components of a suitable national Enabling Environment in attracting transport

infrastructure investment, are the following: 1. a STABLE POLITICAL ENVIRONMENT with STRONG POLITICAL COMMITMENT to fully

accept and support the successful implementation of Public Private Partnerships 2. a STABLE ECONOMIC ENVIRONMENT with healthy growth prospects and competition 3. a GENERAL POLICY FRAMEWORK FOR PSP with clear policy statements and guidelines as to how

private sector involvement is to be accepted. a capable Task Force (PPP unit) to build up capacity, stir and oversee the process of implementing PP Partnerships


7

4. a CONCESSIONS SPECIFIC LEGAL FRAMEWORK which means to have a Concessions Law

handling the key legal issues associated with the implementation of concessions 5. a general legal environment which ensures compatibility, LEGAL INTEGRATION, between all related

laws involved to successful PPP (property rights, procurement laws, foreign investment laws etc) 6. effective REGULATORY STRUCTURES in a position to protect the private interests from

unjustifiable government interventions (against contract closes) and public interest from private sector illegal profit hunting practices. Furthermore, there is a need of a capable Task Force (PPP unit) to build up capacity, stir and oversee the process of implementing PP Partnerships

7. previous PPP EXPERIENCE IN THE TRANSPORT SECTOR would be an important asset

• PPP IS NOT THE ONLY METHOD to deliver project financing and realisation. It does not provide a ‘miracle’ solution nor a quick fix and should only be used where appropriate and where it is able to deliver clear advantages and benefits

• A multitude of PPP structures exist and must be selected according to project type, needs and sector. THERE

IS NO SINGLE PERFECT MODEL • A successful tendering process should

1. Publicize openly PPP opportunities, in few recognized (standard) national and international media 2. Allow clear, detailed Requests for Tender, with full disclosure of all known risks 3. Provide opportunity for bidders to comment on Request for Tender 4. Allow clear and detailed tender evaluation procedures, known to all parties, under a level playing field 5. Clearly state project goals and objectives 6. Set realistic timetable

• Kazakhstan shows already a mature Enabling Environment for PPP reception in the Transport Sector,

providing a regional benchmark. The Almaty ring road is the first road project that government wishes to finance by PPP. Maturity studies are under way with tender expected to be out early 2008. Open tendering procedures are to be applied and discussions with private potential investors are already in progress. Market research has currently proved a positive acceptance of tolls by road users. Kazakh Railways have also started the procedures for the construction of three (3) rail lines financed by PPP. Open tendering is expected shortly. Twenty (20) public servants are currently dealing with PPP issues scattered within the Kazakh public administration, but no PPP Unit is set up by Government.

• According to the World Bank, Tajikistan shows a favourable environment for foreign investors with stability at political and economic level. A basic concession specific legal framework exists, favouring the attraction of PPPs. Four (4) important PPPs in the energy sector are already on the way. In the mean time, high investment needs exist in the sector of road construction and maintenance.

• In Uzbekistan currently, the economic and legislative environment do not favour the attraction of investors.

Preparation efforts for a legal framework are taking place (e.g. surveys for investment needs identification), but passed failures have contributed to very low investor confidence levels.

• The Indian experience on low traffic road development was successfully financed by 50:50 Joint Ventures

between Privates and the Public sector. Extended commercialization of the road use - fuel stations licenses, adverts etc - has contributed to significant additional revenues (up to 50% of total revenues) and subsequently to viable partnerships.

• The Hungarian experience on PPP implementation has proved that

1. Some form of government support is required to attract sustainable private finance 2. Toll roads are risky in a low traffic and untested policy environment 3. Availability payment schemes reduce traffic/revenue risk and increase access to private finance due to

security of cash flows and increased creditworthiness of concessionaire


8

Seminar evaluation All participants have expressed their deep appreciation regarding the seminar usefulness on the level of theoretical coverage and practical advice.

Annex 2

Centralised regional seminar in PPPs

Centralized Regional Seminar on

Preparing Private-Public Partnerships (PPPs) on transport in CARs

Thursday, 25th October 2007 Dushanbe/Tajikistan

In the framework of the EU funded Project ‘Development of Co-ordinated National Transport

Policies, Republic of Kazakhstan, Kyrgyz Republic, Republic of Tajikistan, Republic of Uzbekistan, Republic of Turkmenistan’

09:00-9:15 Welcome / Opening Speech by Dr. Franz Josef Goetz, Team Leader GOPA - TRADEMCO

Consortium on “Challenges& opportunities of regional transport policy coordination”

09:15-9:40 Seminar Outline by Mr. Dimitris Kostianis, Financing and PPP Expert, GOPA - TRADEMCO Consultants

09.40-10.20 Presentation by Dr. Franz Josef Goetz, Team Leader GOPA - TRADEMCO Consortium on

“The right formula for network development” 10:20-10:40 Synopsis of the OSCE Conference findings and conclusions by Mr. Dimitris Kostianis,

Financing and PPP Expert, GOPA - TRADEMCO Consultants 10:40-11:00 Presentation by Mr. Dimitris Kostianis, Financing and PPP Expert, GOPA - TRADEMCO

Consultants on the “Enabling environment for Transport PPPs - Main steps to maturity”

11:00-11:30 Coffee Break 11:30-13:00 Structured group discussion on “Exploring the Enabling Environment maturity for

transport PPPs in CARs per country”

13:00-13:30 Presentation by Mr. Dimitris Kostianis, Financing and PPP Expert, GOPA - TRADEMCO Consultants on “Main difficulties in transport PPP implementation - Lessons learnt form international experience”

13:30-15:00 Lunch

15:00-16:40 Structured group discussion on “Exploring transport projects in CARs with regional

importance”


17:00-17:30 Presentation by Mr. Anthony Pearce, Senior Adviser GOPA - TRADEMCO Consortium on “International experience in road PPPs – The Indian example”

17:30-17:45 Presentation by Mr.Sardorbek Koshnazarov, Representative of Chamber of Commerce and

Industry, Uzbekistan on “Pre-conditions for PPP establishment in Uzbekistan”

17:45-18:00 Presentation by IFIs representative (to be confirmed) on “International experience with PPP in transport”

18:00-18:40 Round Table Discussion “Conclusions -The way forward”

20:00 Dinner Venue: The Seminar is to be held at the Hotel “KAYON”, 7 Bokhtar str, Dushanbe, Tajikistan tel.: +79992 372 221 6229 Contact address: GOPA/Trademco , Office Almaty 158, Panfilov Street, Room 40,Tel./Fax +7(327) 2671578, e-mail: <[email protected]>, < [email protected]>

LIST OF PARTICIPANTS FOR THE CENTRALISED REGIONAL SEMINAR OF DUSHANBE on

“PREPARING PPPs ON TRANSPORT IN CARs” 25 October 2007

No. Full name of participant

Position

GOPA – TRADEMCO Project

1. Mr. Franz Goetz Team Leader GOPA/Trademco

2. Mr. Dimitris Kostianis

Financing and PPP Expert, GOPA/Trademco

3. Mr. Anthony Pearce Senior Adviser, GOPA/Trademco

4. Mrs. Marina Gulyamova Project antenna office,Tashkent/Uzbekistan

5. Mrs. Surayo Ravshanova Project antenna office, Dushanbe/Tajikistan

KAZAKHSTAN

6. Mr. Sergey Kondrashkin Deputy Chairman of Transport Infrastructure Development Department, MoTC

KYRGYZSTAN

TAJIKISTAN

7. Mr. Khudoyor Khudoyorov Deputy Minister of MoTC

8. Mr. Makhmadali Shokirov President of ABBAT Freight Forwarders Association

9. Mr. Solikh Muminov Traceca National Secretary

10. Mr. Boymurod Eshonov Chairman of ABBAT Freight Forwarders Association

11. Mr. Faridum Muhidninov Executive Body of the Government Shokhmansur District (former Transport Minister– to be confirmed

UZBEKISTAN

12. Mr. Olimjon Buranov TRACECA National Secretary

13. Mr. Mirpulat Mirkhamodov Head of “Temir Uillary” Railway Company

14. Mr. Sardorbek Koshnazarov Representative of Chamber of Commerce and Industry

OTHERS

15. OSCE Representative (to be confirmed)

16. Representative IFI (to be confirmed)

17. Mr. Kimo Karini Team Leader, KfW Project, Community funds for the promotion of Community Infrastructure

1

WHAT ARE WE DOING ?

Dr Franz-Josef Götz

Team Leader of EU TRACECA Project on the Development of Coordinated National Transport

Policies in Central Asia

The project

• Start-up: May 2007; project duration: 18 months• Financed from EU TACIS / TRACECA 2004

budget • Contractor: GOPA/ Trademco Consortium• Highly ambitiously designed • Wide area coverage; challenging objectives

Objectives and outputs• Principles for National transport policies

coordinated at regional level;• Short, medium and long term programs for

legislative action, resulting in • clear legislative framework principles and

proposals for regional transport in accordance with international standards;

• Legal harmonization principles to establish a regional road transport market;

• Preliminary qualitative scanning of existing logistics centres and needs assessment.

Rationale

• “First technical and administrative transport harmonisation, then economic integration.”

• “Think global, plan regional, act national.”

TRACECA network 15 years on…• Silk Road restoration efforts along the Europe –

Caucasus – Asia transport corridor (TRACECA) have long history

• 1992: China promotes “land bridge concept”

• EU -TRACECA launched in 1993

• EU –TRACECA: established political presence and good visibility

2

Advantages

• For Europe, the TRACECA network is a gateway.

• For Central Asia countries:• important for sustained economic growth• narrowing regional development disparities• exploiting advantages as natural transit area.

• At present, lack of appropriate infrastructure impedes transport modernisation and internationalisation

International corridor competition• To make Central Asia a major node of

international traffic - it needs– low transit costs, – regionally harmonised legal framework of

transport based on international standards– Attractive transit times

• The politically designed TRACECA axis matches only partly the reality of transport and transit requirements.

Transport user perception Economic boom• CIS international trade grows faster than world

trade, including CARs• China trade exploding since 2000:

– Trade with Kyrgyzstan grew by 180%– Kazakhstan exports to China doubled– Exports into Kazakhstan grew by five times– Container traffic on the rise

• Current lack of transport facilitation and modernisation incompatible with macro-economic regional trends

Dry-port requirements• 200 more facilities needed in ESCAP

region by 2015.

• Thereof, estimated 10 dry ports in Kazakhstan.

• Today, intermodality is in its infancy in the Central Asia region.

To all participants

Thank you

Благодарю Вас

1

Development of co-ordinated National Transport Policies in CARs Region

Dushanbe, October 25, 2007

S E M I N A R O U T L I N E –

P r e p a r i n g a P P P s e n v i r o n m e n t f o r t r a n s p o r t i n C A R s

Dimitris KOSTIANIS, Transport Finance & PPP Expert

OUTLINE CONTENTS


1. Seminar Background

2. Seminar Objectives

3. Seminar Contents

4. Seminar Outline

SEMINAR BACKGROUND


• Transport sector financing and the attraction of private funds for new transport infrastructure in the form of public-private partnerships (PPPs), is one important issue towards achieving the overall project objective in supporting the transition process of CARs to a market economy through transport

• Furthermore, in order to achieve an enabling environment which will promote transit transport infrastructure development throughout CARs, it is necessary to build up and harmonise suitable national legislations associated with effective attraction of private investors in the transport sector

• Along these lines, our seminar aims to cultivate the ground and prepare the environment for tangible and decisive improvements.

SEMINAR OBJECTIVES


• To promote a common basis for consideration and discussion of the prerequisites of a favourable national environment (enabling environment) for effective implementation of public-private partnerships on transport projects in the Central Asian Region

• To raise awareness among key officials on existing difficulties and lessons learnt from international experience

• To provide a systematic overview of actions and tools for implementing PPPs in transport in a coherent and consistent manner

• To prepare a critical group of executives per country in order to promote regional harmonisation of legislation, regulations, processes and procedures

• To train respective trainers

SEMINAR CONTENTS


TWO SEMINAR PHASES:

• PHASE 1 - analyse what truly is meant by ENABLING ENVIRONMENT for transport sector PPPs, by looking closely at

– parameters formulating a suitable ENABLING ENVIRONMENT

– actual current maturity for transport PPPs in CARs

• PHASE 2 - focus on the crucial IMPLEMENTATION ISSUES involved for actual PPP projects in the transport sector and mainly in roads. Presentations and subsequent discussions will concentrate on

– Key issues and difficulties (economic & financial viability, risk sharing etc)

– Country examples and lessons learnt– Specific project examples

SEMINAR OUTLINE


Day 1 Programme Speaker / Coordinator

09:00-9:15 Welcome / Opening Speach Dr. Franz Josef Goetz, Team Leader GOPA - TRADEMCO Consortium

09:15-9:40 Seminar Outline Mr. Dimitris Kostianis, Project International Expert on Transport Financing and PPP issues

09.40-10.20 PPP - The right formula for network development? (PRESENTATION) Dr. Franz Josef Goetz, Team Leader GOPA - TRADEMCO Consortium

10:20-10:40 Synopsis of the OSCE Conference findings and conlusions (PRESENTATION) Representative of OSCE (to be confirmed)

10:40-11:00 Enabling environment for Transport PPPs - Main steps to maturity (PRESENTATION)

Mr. Dimitris Kostianis, Project International Expert on Transport Financing and PPP issues

11:00-11:30

11:30-13:00 Exploring the Enabling Environment maturity for transport PPPs in CARs per country Structured group discussion

13:00-13:30Main difficulties in transport PPP implementation - Lessons learnt form international experience (PRESENTATION)

Mr. Dimitris Kostianis, Project International Expert on Transport Financing and PPP issues

13:30-15:00

15:00-16:40 Exploring transport projects (road / rail) in CARs with regional importance Structured Table Discussion

16:40-17:00

17:00-17:20 Privatisation and Regulation (PRESENTATION) Dr. Franz Josef Goetz, Team Leader GOPA - TRADEMCO Consortium

17:20-17:40 Kazakhstan's experience in road / rail PPPs - Lessons learnt - Future priorities (PRESENTATION) Mr. Antony Pearce,

17:40-18:00 International experience with PPP in transport (PRESENTATION) IFI representative (to be confirmed)

17:40-18:40 Conlusions -The way forward Round Table Discussion

20:00 Dinner

Coffee Break

Lunch

Coffee Break

REGIONAL SEMINAR ON: TRANSPORT PPPs IN CARs Dushanbe/Tajikistan

25. October 2007

Public Private Partnerships: The right Formula for Network Development?

By Dr. F.J. Goetz

Investing in roads, bridges, ports or in public utilities has been traditionally in most of Europe – and even more so in the socialist world - the sole responsibility of governments. In Germany, in my home country, the concept of privately financed and managed infrastructure has been even unthinkable still at the time of my studies. Today, transport investment is no longer solely a public domain: In 2003 alone, public-private partnerships (PPPs) for a total value of around 35 billion US Dollar were contracted in the “old” Europe alone. Although the PPP concept is relatively new, important initiatives have been launched in the countries of the “new” Europe. Reference is to the PPP financed motorway projects implemented in Hungary, Poland and Croatia. And, PPP became the formula also for Kazakhstan roads and railways development. Steadily growing infrastructure extension and modernisation needs on the one side, and tight national budgets on the other, have driven us to explore new ways of project finance. Slide 1: WHAT IS PPP? Public-Private-Partnership’s, in short: the pooling of funds and the grouping of multiple responsibility in a single contract, became an accepted formula for ensuring key infrastructure investments and public services. Nevertheless the major challenge still remains in most countries, namely “how to bring the PPP concept to the market?” Slide 2: WHAT ARE THE PRINICPAL ROLES OF PPP? The motives of national governments for drawing on private inputs for infrastructure and public utility development are manifold and reasonable:

• Firstly, the governments try to tap the creativeness and efficiency of the private sector with a view to eradicate inefficiency and improve transport sector performance;

• in fact, as evidenced by EIB experience1, cost overruns and delays in project implementation are much lower in PPP projects than compared to traditional infrastructure projects financed from sovereign lending.

• Secondly, as already pointed out, governments world-wide attempt to strengthen by means of private sector involvement their infrastructure investment ability.

• Thirdly, there is also an important side effect to PPP projects: Necessarily, joint private – public undertakings are to be based on detailed technical, economic and financial project evaluations and a competitive dialogue during the tender and award process. As such, they contribute to increased cost transparency and help to separate good from bad projects.

• Finally, PPPs create jobs and economic growth.

From a general transport policy point of view, the full or partial ”out-sourcing“ of non-core public services to the private sector by means of PPPs, can be considered an instrument of sustainable transport policy, as long as the projects are sustainable in themselves. International development agencies are therefore called up to play a pilot role in the support of projects which lend themselves to joint public-private undertaking. From an individual project point of view again, private involvement can be required - apart from most evident finance reasons – on technical and operational grounds.

Slide 3: WHAT ACTIVITIES CAN BE INCLUDED IN PPP? No doubt, the PPP formula certainly can be a valid choice for enhancing transport investments. However, the PPP formula is all but an easy or quick fix, as it shows throughout the project cycle, and – I regret to say – also from experienced PPP project failures. Hungary is an interesting example in this respect: It took several years of unsuccessful toll road projects (Motorways 3 and 5 projects) before arriving at the workable PPP formula for Motorway 6 project based on availability payments. To start with project identification: The complexity of PPPs already becomes evident in this early stage. PPP stands for “partial privatization and liberalization”. Project selection therefore requires at the very outset a political decision “what and to what extent” public goods and services should be opened up to commercialization and privatization. Obviously, to answer this question requires a sector specific approach and a “case by case” discussion, and the outcome might well differ from sector to sector and country to country. In short, it is rather difficult if not impossible to devise a “horizontally valid PPP scheme”.

1 Reportedly by some 50%. EIB ,International Conference on Perspectives for Ukraine on implementation of PPP infrastructure projects, co-organized by EBRD/MoTC Ukraine, Kiev, 21.03.2006

A standardized PPP model would indeed oversimplify the matter: The variety of PPP formats, reaching from contractual to institutional PPPs, and from tolling as possible repayment formula through shadow-tolling to availability payments, are too different from each other for being subject to the same rules. PPP equally stands for “public interest”. In a partly privatized transport market, there is the potential danger that the single concessionaire naturally acts as an independent profit centre with possibly limited interest in network efficiency, preventive maintenance and other pro-active safety or environmental expense. In order to avoid that privatization by means of PPP negatively affect network efficiency or transport coordination, transport safety or the environment, PPPs need to be developed against a clearly defined privatisation policy and approved national transport sector strategy. In the project tendering phase again, the complexity of PPP schemes again calls for flexibility and dialogue. Coming from past experience, it is recommended to opt for a staged procedure to the project tender and award process. The World Bank for instance recommends two-stage bidding, whereby only unpriced technical proposal are to be submitted in stage I of bidding process. Pre-qualified companies of stage I then participate with final technical and financial proposal in stage II. At European Community level, to quote another example, the Commission currently enhances the development of a workable legal framework for PPP tendering and project award. With the presentation of the “Green Paper on Public Private Partnerships”2 published in April 2004 the Commission initiated a public debate among interested parties on the applicability of the existing Community law on public contracts and concessions to the complex requirements and features of the different types of PPP. The Back Sea region countries are well advised to take into consideration the results of this public consultation process, and enhance their transposition into national concession law. Coming to the contractual phase, PPP stands for “effective project risk assessment and transfer to the concessionnaire”. In essence, for a PPP project to succeed, the different project risks need to be allocated to the party best able to manage risk control. In transport, certainly one of the major issues in this regard concerns the allocation of the traffic risk, a question which strongly relates to the subsequent issue what type of re-payment mechanism to apply (ranging from annual unitary payment or payment via toll collection).

2 European Commission, Green Paper on Public-Private Partnerships and Community Law on Public Contracts and Concessions COM(2004) 327 final; Report on the Public Consultation (SEC(2005) 629

PPP stands further for value for money: The rent-seeking interest of the private investor calls for a new quality of financial project evaluation, in the sense, that financial project evaluation necessarily needs to be based on highly conservative project assumptions regarding revenue estimates. Coming from past experience with transport investments, overoptimistic assumptions of main revenue generating or disturbing factors such as traffic volume, competition from alternative transport modes or user willingness to pay, have been often the essential reason for PPP failure. An illustrative example is the Dutch High Speed Rail PPP, that failed due to unexpected (or better: unconsidered) competition from aviation. Last but not least, PPP stands for “level-playing field” in both the project tendering as well as the project operation phase. It is generally agreed that the private partner expects a fair, transparent and predictable business environment. Whatever type of PPP, the legal provisions or concession laws developed and approved by the public partner, must give necessary flexibility, security and guarantees throughout the lengthy project life cycle. 85% of EIB infrastructure loans, for example, run over 20 years maturity. The already mentioned successful Hungarian Motorway 6 BOT Project foresees an even 35 year concession period. In summary, transport liberalisation needs a strong and reform-active state, able to create and ensure a suitable investment framework for private investors in the longer run. To this end it is deemed necessary to back up the privatization and deregulation process in transport with supplementary regulation which

- sufficiently addresses structural problems of the transport market, - regulates competition, and - safeguards the environment and transport safety.

Therefore, the focus of legal reforms needs to be on harmonizing PPP law with other relevant provisions such as the traffic law, penal law, investment promotion law or company law. For streamlining PPP project management, many argue in favour of the establishment of a permanent PPP task force at national level, or even at regional level, which might take the form of a “centre of intelligence”, a “documentation centre” and/or a “clearing house” for all PPP project related questions. For promoting instead the PPP formula itself, fiscal incentives or subsidies to the private sector can be an appropriate solution, in particular in cases where it appears difficult to start up the project commercially. To quote in this context the initiative taken by the European Commission: In the framework of its new Neighbourhood Policy the Commission currently discusses the possibility of granting interest rate subsidies for transport project loans, provided the individual project concerns a “considerable public utility” and does not have “ a large internal rate of return”.

1

Public-Private-PartnershipPPP

THE RIGHT FORMULA FOR TRANSPORT NETWORK DEVELOPMENT!

Dr Franz-Josef Goetz

Team Leader of EU TRACECA Project on the Development of Coordinated National Transport Policies in Central Asia

What is PPP?• “Public-Private-Partnership” (PPP) refer to contractual

agreements formed between a public agency and private sector entity that allow for greater private sector participation in the delivery of transportation projects.

• Expanding the private sector role allows the public agencies to tap private sector technical, management and financial recourses for supplementing in-house staff and getting access to specialized expertise or access to private capital.

• The private partner can expand its business opportunities in return for assuming the new or expanded responsibilities and risks.

WHAT ARE THE PRINCIPAL ROLES OF PPP.

1. to provide additional capital;2. to provide alternative management and

implementation skills;3. to provide value added to the customer and the

public at large;4. to provide better identification of needs and

optimal use of resources.

What activities can be included in transportation partnerships ?

Public-private partnerships can be applied to a large range of projects and functions across all modes. These include:

•Project design •Financial Planning and finance.•Constructions•Operation •Maintenance•Toll Collection

Important Elements: PPP Structure

• Procurement process:• Legislation needs to allow for procurement

procedures appropriate for award of concessions & long-term relationship between public & private sector

• These procedures should take priority over any sector-specific or regional legislation

What are the key benefits of PPPs?

The primary benefits of using PPPs to deliver transportation projects include:

• Expedited completion compared to conventional project delivery methods;

• Project cost saving;• Improved quality and system performance from the

use of innovative materials and management techniques;

• Substitution of private resources and personnel for constrained public resources; and,

• Access to new sources of project finance;

2

Typical arrangements are:

• Design-build for fixed fee on fixed time frame

• Project build-operate-transfer (BOT)• Design-build finance-operate-transfer

(BDFO); and,• Build-own-operate (BOO)

Important elements: PPP Structure

Tender process: key requirements

• Set realistic timetable: don’t issue tender documents till under development

• Establish fair and transparent competitive process • Prequalification: don’t allow inexperienced bidders

unless in consortium with an experienced one • Don’t change the rules• Threat bidders equally

WHAT ARE TYPICAL PPP-PARTNERS?

The public partner is typically a state department of transportation or a local or municipal public works department that is the owner and operator of highway and transit facilities.

The private partners are professional service companies, contractors, and financial entities pursuing business with private concessionnaires (private entities assuming ownerwhip-like responsibility).

1



E N A B L I N G E N V I R O N M E N T F O RT R A N S P O R T P P P s

–M A I N S T E P S T O M A T U R I T Y

Dimitris KOSTIANIS, PPP Expert

CONTENTS


1. Main steps to PPP implementation

2. Maturity components of a country’s ENABLING ENVIRONMENT

3. Evaluation of current enabling environment in CARs – Case of Kazakhstan

PREREQUISITE FOR SUCCESSFUL PPP PROCESS


Private-Public Partnerships (PPPs) demand by definition a relationship of trust in risk sharing between Government and interested Private Investors.

Therefore, there is a strong need for important

PREPARATIONS and REFORMS

of the Public Sector in order to create a

trustworthy investment environment (the ENABLING ENVIRONMENT)

MAIN STEPS TO PPP IMPLEMENTATION


World Bank Toolkit

MATURITY COMPONENTS OF ENABLING ENVIRONMENT


• STABLE POLITICAL ENVIRONMENT & GOOD GOVERNANCE PRINCIPLES

• HEALTHY ECONOMIC & FINANCIAL ENVIRONMENT

• CONCESSIONS SPECIFIC LEGAL FRAMEWORK

• GENERAL POLICY FRAMEWORK FOR PSP & STRONG POLITICAL COMMITMENT

• LEGAL INTEGRATION

• PUBLIC SECTOR CAPACITY - REGULATORY STRUCTURES

• PRIVATE SECTOR CAPACITY

• COMPETITIVE TENDERING PROCESS

POLITICAL ENVIRONMENT & GOVERNANCE PRACTICES


The political environment and the risk it implies (country risk), is one of the major parameters affecting the attractiveness of the country to foreign investors

Issues of interest:• Government and regime stability

• Good external relations and cooperation with neighboring countries (no external conflicts)

• Internal social peace – social homogeneity

• Consistency and objectivity of law enforcement

• General conditions of transparency

2

ECONOMIC & FINANCIAL ENVIRONMENT


HEALTHY MACROECONOMIC ENVIRONMENT

• Current GDP level

• Economy growth prospects (GDP expected growth rate)

• Economy liberalisation level (private sector level and development prospects, competition level) – particularly for transport and financial services (banking, insurances etc)

• Extent of public debt

POLICY FRAMEWORK & POLITICAL COMMITMENT


Implementation of PPPs requires

TOP LEVEL GOVERNMENT SUPPORT & HIGH POLITICAL COMMITMENT

due to the serious public sector reforms needed as a prerequisite(particularly for transition economies), implying

• significant political cost • top level coordination of reforms, needed horizontally across Public

Administration (Ministries)

Therefore,

• Prime Minister COORDINATION is a MUST (top government support)

• a CLEAR POLICY STATEMENT needed to denote high political commitment (binding statement) for the need to attract private fundsin the transport sector

GENERAL LEGAL FRAMEWORK


The legal framework needs to be CLEAR, CONSISTENT and NOT CONFLICTING, STABLE & FAIR

Usually it consists of

• the CONCESSION LAW

• COMPLEMENTARY DECREES and

• OTHER ASSOCIATED LAWS

composing an integrated investment environment for a private investor

CONCESSIONS SPECIFIC LAW


Concession Law - of key importance to establish an enabling environmentand to function as a marketing tool for investors ( first constituent of a sound legal basis)

Relatively simple and general with operational guidelines in decrees

Some main aspects:• Definition of concepts and terms• Transparent and competitive bidding• Allowing for bid evaluation on a net present value (NPV) basis • Provision for international arbitration • Concept of contract renegotiation and amendments

(clear mechanisms)• Allowing public disclosure of concession agreements• No differentiation in law treatment between national and foreign

investors• Exceptions to competitive bidding

LEGAL INTEGRATION (1/2)


A Concession Law needs to be compatible to a variety of other legal texts, which in total compose the country’s CLEAR and SOUND legal basis for an integrated investment environment

• Procurement law(s) - to allow for competitive bidding

• Dispute resolution law – international arbitration?

• Expropriation law – provisions for compensation?

• Foreign ownership legislation - foreign ownership restrictions on land or land rights, foreign equity limitations to domestic companies?

LEGAL INTEGRATION (2/2)


• Labour law – flexibility to hire and fire, wage and benefit levels?

• Foreign exchange law - restrictions on local currency convertibility?

• Tax system – tax incentives / exemptions are applied?

Additionally consistent and objective judicial enforcement has to be ensured

3

PUBLIC SECTOR CAPACITY BUILDING


PPP implementation generates a strong NEED FOR HIGHLY SPECIALISED and MULTIDISCIPLINED KNOW-HOW (legal, technical, financial, economic) in the Public Sector, mainly focusing on

• PPP policy development and PPP concept promotion

• facilitating government coordination

• environmental assessment

• contract negotiations, management and supervision (specialised legal know-how)

Consequently there is a need to set up and operate a PPP UNIT(centralised or decentralised) in the form of a focused, dedicated and experienced team

PRIVATE SECTOR CAPACITY BUILDING


Local private transport actors should be also assessed since someof them might be potential investors and furthermore their presencefacilitates the PPP process In particular, the following categories of actors should be assessed:

• Consulting firms for technical design, demand analysis, supervision

• Contractors for construction and maintenance

• Financial markets (banking system, capital markets)

• Potential operators (eg for toll roads as well as "free" roads)

• Insurance companies

• Potential investors

ENABLING ENVIRONMENT IN KAJAKHSTAN (1/3)Development of co-ordinated National Transport Policies in CARs Region

“Transport Strategy of the Republic of Kazakhstan up to 2015”, government clearly encourages and stresses the importance of PSP to the development of transport infrastructure. Clearly defined policies and target objectives: •‘’…Various PPP schemes will be used to attract private initiative for construction of new infrastructure facilities…’’•‘’…Basic (main) network of highways and railways as well as inland navigation infrastructure will remain in Government ownership. Terminals will be gradually handled over to the private sector…’’•‘’…Public-private partnership schemes may also include partial infrastructure financing by the state…’’•‘’…Government functions shall be limited to development of transport policy, supervision & financing… rendering transport services & infrastructure maintenance shall be transferred to private sector’’

GENERAL POLICY FRAMEWORK FOR PSP

• Very high growth levels - (9-10% GDP growth in last five years).• High transit transport growth potential due to the strategic position. • Private sector interest is potentially high in areas like toll roads, road maintenance, rail operations and logistics terminals.• EBRD country economy transition indicators at the high side (see graph)

ECONOMIC ENVIRONMENT

Relatively stable - corruption still highPOLITICAL ENVIRONMENT AND STABILITY

CURRENT EVALUATIONPARAMETER

ENABLING ENVIRONMENT IN KAJAKHSTAN (2/3)Development of co-ordinated National Transport Policies in CARs Region

Further clarified policy issues include:•Charging users the costs of maintenance and current repair of transport infrastructure to the maximum possible extent (covering also the cost of some capital investments)•Minimum transport services are to be guaranteed by state•Private Sector is expected to contribute the 70% of needed transport infrastructure investment funding

However, no coordinating Task Force (PPP unit) is currently present.

GENERAL POLICY FRAMEWORK FOR PSP

ENABLING ENVIRONMENT IN KAJAKHSTAN (3/3)


PPP concessions already implemented in the rail and the road sectors

PAST & ONGOING PPP COUNTRY EXPERIENCE

List of 18 projects (9 on roads, 7 on rail and 1 on aviation) to be tendered out during the period 2007-2009

LIST OF PRIORITIZED TRANSPORT PROJECTS

Open tendering procedures existTENDERING PROCEDURES

Regulatory structures existent but inexperienced. Not clear the degree of their independency from public interests.

REGULATORY STRUCTURES

Much to be done at the level of legal integration (compatibility) between concession law and the rest of the related legal framework (property rights, procurement laws, and laws governing foreign investment). Consistency and objectivity of judicial enforcement remains to be proved.

LEGAL INTEGRATION

New Concessions law introduced in 2006. Even before this, EBRD in 2005 had evaluated Kazakhstan as having a medium level of compliance with international concessions standards and principles.

CONCESSIONS SPECIFIC LEGAL FRAMEWORK

SITUATION IN OTHER CARs


Relative low traffic flows to support private sector involvement in the transport sector

TRAFFIC FLOWS

• Negative investment climate

• No clear government commitment and policy on PSP in transport

• Fragmented and inadequate legal framework. Although there is Concession Specific Legal Framework, in the EBRD’s Legal Indicator Survey of 2006 regarding the effectiveness of concession law to work in practice:

- Uzbekistan 13%- Tajikistan 13%- Kyrgyz Rep. 22%

ENABLING ENVIRONMENT

4

BASIC ECONOMIC FACTS OF CARs(Source: EBRD Country factsheet 2006)


UZBEKISTANKAZAKHSTAN

KIRGYZ REPTAJIKISTAN

ECONOMIC TRANSITION INDICATORS OF CARs(Source: EBRD Country factsheet 2006)


UZB

EKIS

TAN

KA

ZAK

HSTA

N

KIR

GYZ

REP

TAJIK

ISTAN

DEVELOPMENT OF REAL GDP OF CARs(Source: EBRD Country factsheet 2006)


UZB

EKIS

TAN

KA

ZAK

HST

AN

KIR

GYZ

REP

TAJI

KIS

TAN

1



MAIN DIFFICULTIES IN ROAD TRANSPORTP P P I M P L E M E N T A T I O N

–L E S S O N S L E A R N T F R O M I N T E R N A T I O N A L E X P E R I E N C E


Dimitris KOSTIANIS, Transport Finance & PPP Expert

CONTENTS


1. General context

2. Key issues and difficulties

3. Country examples and lessons learnt

4. Specific project examples

GENERAL CONTEXT


GENERAL ISSUES (1/5)


Main Characteristics of PPPsRisk-sharing between public and private sectors

Long-term relationship between parties

Public service and ultimate regulatory responsibility remain in public sector

Using private sector skills for public sector servicesContracts for services, not procurement of assets

Output, not input, specifications

Payments related to service delivery

Whole life approach to design, build and operation



• PPP arrangements are growing in use and acceptance as an alternative and effective method to mobilize additional financial resources and benefits from private sector efficiencies

• PPP IS NOT THE ONLY METHOD to deliver project financing and realisation. It does not provide a ‘miracle’ solution nor a quick fix and should only be used where appropriate and where it is able to deliver clear advantages and benefits

• A multitude of PPP structures exist and must be selected according to project type, needs and sector. THERE IS NO SINGLE PERFECT MODEL



CompetitionCompetition

RiskRiskallocationallocation

EconomicEconomic FundamentalsFundamentals

DeliveryDelivery

• Public sector’s capacity to manage its side of PPP and stable political commitment

• Competitiveness of bidding process

• Appropriateness of risk sharing – value for money

• Economic fundamentals –viability and affordability

PPP Programmes: Key success factors

2



• Each type of PPP has inherent strengths and weaknesses which need to be recognized and integrated into project design

• Each partner to a PPP has responsibilities. The Public sector must transform it’s role from a service provider to manager / monitor of private contractors

• Guaranteeing and enhancing public benefit from PPPs will depend to a large degree on effective management and monitoring systems

• Risk transfer lies at the heart of effective PPP design. If a good balance is not achieved it will result in increased costs and the inability of one or both parties to fully realize their potential



Design andconstruction

Traffic /revenue

Planning

Legal/FM/insurance

Private sector risk Public sector risk

Each project is different and needs individual risk allocation

KEY ISSUES & DIFFICULTIES


KEY ISSUES - POLITICAL & LEGAL ENVIRONMENT (1/2)


• Strong political will (committed and sustained political support)

• Appropriate and stable legal and regulatory framework

• Legislation needs to be clear and consistent, avoiding loopholes and conflict with other legal texts and regulations

• Legislative framework should also be predictable, stable and fair

KEY ISSUES - POLITICAL & LEGAL ENVIRONMENT (2/2)


However, POLITICAL COMMITMENT MUST NOT BE EXPRESSED TOO EARLY

Need first to

• establish FINANCIAL VIABILITY of the project (for a new road

minimum traffic 10,000 vpd / for road rehabilitation minimum of 6,000 vpd)

• demonstrate ECONOMIC VIABILITY and CLEAR BENEFITS (Value for Money) OVER TRADITIONAL METHODS of project realisation and financing (PUBLIC SECTOR COMPARATOR is a MUST)

KEY ISSUES – TENDERING PROCESS (1/2)


• Publicize openly PPP opportunities, in few recognized (standard)national and international media

• Clear, detailed Requests for Tender, with full disclosure of allknown risks

• Provide opportunity for bidders to comment on Request for Tender

• Allow clear and detailed tender evaluation procedures, known to all parties, under a level playing field

• Clearly state project goals and objectives

• Set realistic timetable

3

KEY ISSUES – TENDERING PROCESS (2/2)


• In the prequalification stage, do not allow inexperienced bidders to enter alone

• Clearly state performance standards for assessing project performance

• Allow participation of foreign-owned bidders

• Qualified tender evaluation board, with subject matter expertise and no conflicts of interest

• Proceed with objective, documented evaluation and negotiations fully in line with the published evaluation factors

• Publicize the results, with debriefing opportunity for unsuccessful bidders

KEY ISSUES – DEMAND / COST FORECASTS


A) UNDERTAKE EFFECTIVE and RIGOROUS DEMAND & COST FORECASTING (PUBLIC WILLINGNESS TO PAY) in order to avoid cash flow problemsStudy of 67 toll road cases by Standard & Poor’s (2002) found that actual traffic on average was 70% of the forecasted volume, with a spread 18% to 146%. For countries without previous tolling experience the average traffic was only 56% of the forecast, compared with 87% for those with previous experience

• Forecasting errors stem from inability to obtain good data or incorrect assumptions

– Price elasticity of traffic to tolls– Substitute services (non-tolls roads)

B) HAVE A DEGREE OF FLEXIBILITY IN THE PPP AGREEMENT, should demand forecast and revenue projections need to be revised (e.g. a revenue shortfall mechanism)

KEY ISSUES – ACCESS TO LOCAL CURRENCY


ACCESS TO LOCAL CURRENCY FUNDING is a critical success factor for infrastructure projects with LOCAL CURRENCY REVENUES - securing against exchange rate risk for cases of local currency depreciations

KEY ISSUES – PPP TASK FORCE


FOCUSED, DEDICATED AND EXPERIENCED PUBLIC SECTOR TEAM

– PPP TASK FORCE –

for PPP development and implementation, so as to effectively design and monitor the agreement and intervene as required

KEY ISSUES – NEED FOR CONSULTANTS (1/2)


Experienced international consultants may provide valuable assistance on the following issues:

• Developing independent traffic forecast

• Development of legal framework

• Project selection, cost-benefit analysis & public sector comparator

• Risk allocation between government and concessionaire according to international best practice

• Developing transparent tender process and evaluation criteria

KEY ISSUES – NEED FOR CONSULTANTS (2/2)


• Assisting in the evaluation of tenders and negotiation of concession agreement

• Monitoring compliance of concessionaire

4

COUNTRY EXPERIENCES


PORTUGAL


• Start with DBFO for the road sector in 1997– Mixture of real toll & shadow toll concessions

• Real tolls on existing roads/bridges• Shadow tolls paid by government during road construction,

changed to real tolls paid by user after completion

– Comprehensive regulatory and institutional approach • Standardized procedures and competitive bidding; appraisal

through Public Sector Comparator; PPP unit in MOF

• Lessons learned– Rapid infrastructure development (14 concessions/6 yrs)– Transparent procurement attracted large scale private

investment– Significant budgetary impact of shadow tolls

HUNGARY


• Concession Act approved in 1991– First motorways (M1/M15); 100% private toll road concession,

defaulted due to high toll rates and traffic/revenue shortfalls; state taken over

– M5 motorway; toll road concession with significant government contribution and lower toll rates than M1; financially sustainable, but re-negotiated as availability fee scheme due to public resistance against tolls

– M3 toll motorway built by state, lower toll rates than M5, public finance

– M6 motorway; availability fee concession• Lessons learned

– Some form of government support is required to attract sustainable private finance

– Toll roads are risky in a low traffic and untested policy environment– Availability payment schemes reduce traffic/revenue risk and

increase access to private finance due to security of cash flows and increased creditworthiness of concessionaire

POLANDDevelopment of co-ordinated National Transport Policies in CARs Region

• Toll Motorway Act and Agency for Motorway Construction and Operation established in 1994– First concession awarded for tolling and operation of A4

motorway; abandoned after 2 years of operation– Private finance for second BOT concession (A2

motorway) could not be raised without government support; subsequently, concessionaire obtained EIB loan with sovereign guarantee

– Negotiations for third concession (A1 motorway) stalled over legal disagreements

• Lessons learned– Access to private financing depends on reliable

government track record– A functioning legal system and dispute resolution

mechanism is key to a successful concession process

PPP PROJECT EXAMPLES FROM EUROPE


M1-M15 MOTORWAY, HUNGARY


5

M1-M15 MOTORWAY, HUNGARY (1/5)Development of co-ordinated National Transport Policies in CARs Region

Resource Book on PPP Case Studies, EC

M1- M15 MOTORWAY MAIN CHARACTERISTICS, HUNGARY (2/5)Development of co-ordinated National Transport Policies in CARs Region

• OBJECT: A 43 km of motorway from Gyor to the Austrian border (M1) and 14 km of motorway linking the M1 to Bratislava (M15) - Semi-open toll collecting system with one main toll plaza and five tolling stations on three interchanges - The parallel, un-tolled country road was to remain unimproved

• ECONOMIC RATIONAL: Time savings to be realised by users (estimated at 20 minutes per full journey)

• CONTRACT AGREEMENT: Project consisted of the design, financing, building, operation and transfer (DBFO) - concession duration 35 years

• GOVERNMENT’S ROLE AND PARTICIPATION: NO SUPPORT FROM THE STATE other than in initial planning and site acquisition, whose costs were to be reimbursed in the form of profit sharing

• TENDERING PROCESS: A two-part tender was launched in 1992 - 4 consortia pre-qualified in August 1992 - Best and final offers received from two preferred bidders in January 1993 - Concession Contract granted to a single preferred bidder in April 1993 - PRINCIPAL TENDER CRITERIA WAS THE LEVEL OF TARIFF REQUIRED BY THE CONCESSIONAIRE, subject to meeting technical commercial and financial criteria specified in the tender documentation

M1-M15 MOTORWAY FINANCING SCHEME, HUNGARY (3/5)



FINANCING•ELMKA Rt. (Special Purpose Company) – a private sector company was set up by the winning bidder (international contractors and toll-road operator)•19% equity funds, 81% debt (EBRD, Hungarian banks)

M1- M15 MOTORWAY ACTUAL EXPERIENCE, HUNGARY (4/5)Development of co-ordinated National Transport Policies in CARs Region

•TRAFFIC VOLUMES: 46% of original estimates (due to significant diversion by many commercial vehicles to the un-tolled alternative route -Additionally the overall passenger car volumes were much reduced in part due to the development of large shopping centres within Hungary, removing the need for cross-border travel. Furthermore, delays in border crossing formalities for some users of 8 to 10 hours or longer, reduced the apparent value of the time savings potentially generated by the Project)

•DEBT PAYMENT FAILURE: In two years time (1996) ELMKA started failing to pay its debt due to low revenues – Litigation proceedings were launched and lenders suspended loan disbursements

•The Concession was taken over by a special purpose public sectorcompany in 1999 and the Republic of Hungary assumed debt serviceobligations, from January 2003

M1- M15 MOTORWAY LESSONS LEARNT, HUNGARY (5/5)Development of co-ordinated National Transport Policies in CARs Region

• OVERESTIMATED TRAFFIC FORECASTS at the time the Concession was first negotiated and financed particularly

– for a green field problem like this– when alternatives modes of transport or corridors are available to users (non-

toll road)

Optimism in the traffic forecasts was exacerbated by the adoption of tender criteria which emphasised the lowest possible tariff, and the insistence on a stand-alone private sector investor

• NO TRAFFIC RISK MITIGATION MECHANISM or contingent support was ALLOWED as a safety net, in order to prevent from failure in a green-field case such as this, with very high revenue risk

• There is a wide variety of different commercial structures (availability charges, shadow tolls, etc.) for attracting PPP involvement in motorway and highway investments.

M5 TOLLED MOTORWAY, HUNGARY


6

M5 TOLLED MOTORWAY, HUNGARY (1/6)Development of co-ordinated National Transport Policies in CARs Region


M5 TOLLED MOTORWAY MAIN CHARACTERISTICS, HUNGARY (2/6)Development of co-ordinated National Transport Policies in CARs Region

• OBJECT: The 157-kilometre M5 forms part of the Pan-European Transport Corridor IV (Berlin-Prague- Bratislava-Budapest-Bucharest-Thessaloniki-Istanbul)

• ECONOMIC RATIONAL: Main link from Budapest to Hungary’s Southern region and an important extension of the western and central European motorway network towards Belgrade and Bucharest

• CONTRACT AGREEMENT: 35 year concession• GOVERNMENT’S ROLE AND PARTICIPATION:

– the Government to contribute at no cost the following: the preliminary design for the Project, building permits and environmental clearance, land acquisition and such roads and motorways that are already in existence and traffic calming measures on competing roads

– REVENUE SHORTFALL MECHANISM - The Government of Hungary is obliged for the first six and a half years’ of commercial operations (i.e. until 2006) to provide AKA with compensation in the form of a subordinated loan facility, repayable after discharge of Projectindebtedness to senior lenders, in the event that AKA’s actual revenues, for whatever reason, are below the levels in the Agreed Base Case

M5 TOLLED MOTORWAY MAIN CHARACTERISTICS, HUNGARY (3/6)Development of co-ordinated National Transport Policies in CARs Region

• TENDERING PROCESS: Pre-qualification documents released to private sector bidders in April 1992 - Selection of three pre-qualified bidders in September 1992 - Tender launched in 1993, leading to the selection of two preferred bidders in February 1994 – Financial close December 1995 (lending banks imposed a fresh traffic study)

M5 TOLLED MOTORWAY FINANCING SCHEME, HUNGARY (4/6)



FINANCING•A Special Purpose Company (SPV) formed by a French-Austrian-Hungarian consortium, Alflold Koncesszios Autopalya Rt. (AKA)•18% equity funds, 82% debt (EBRD, Hungarian banks)

M5 TOLLED MOTORWAY ACTUAL EXPERIENCE, HUNGARY (5/6)Development of co-ordinated National Transport Policies in CARs Region

• CONSTRUCTION: achieved on schedule, or for some sections, ahead of schedule and within budget

• TRAFFIC VOLUMES: – In 1997, the first year of operations, the average daily traffic volumes

at 7,700, were SIGNIFICANTLY BELOW FORECAST LEVELS and AKA was obliged to draw on the stand-by facility (cash deficiency / revenue shortfall fund) agreed with the Government

– Following a PROACTIVE MARKETING CAMPAIGN BY AKA AND TRAFFIC CALMING MEASURES, IMPLEMENTED BY THE GOVERNMENT ON COMPETING ROUTES, the requirement to draw on the Stand-by Facility in 1998 and in subsequent years was significantly REDUCED

– AKA was able to resist pressures to reduce the agreed toll rates on the M5 (in contrast to a similar situation prevailing on the M1 Motorway) but did agree to a programme of more substantial discounts for frequent and local users

– Some users brought legal cases against AKA concerning toll rates in force but the Courts rejected these complaints

M5 TOLLED MOTORWAY LESSONS LEARNT, HUNGARY (6/6)


• APPROPRIATE ALLOCATION OF RISKS BETWEEN THE PUBLIC AND PRIVATE sectors and the critical requirement for avoiding the transfer of unmitigated traffic risk to private sector investors and their lenders

• Given the inherent uncertainty of traffic forecasts in such situations, government support mechanisms such as the REVENUE DEFICIENCY FACILITY, are critical in ensuring the financial existence and viability of the Project (safety net) and in avoiding the risk premia

• EXPERIENCED TECHNICAL, TRAFFIC, FINANCIAL AND LEGAL ADVISERS were important to both the Government and privates in order to achieve a satisfactory allocation of risk and an appropriate revenue support mechanism

• A PRAGMATIC AND PROACTIVE RESPONSE TO PUBLIC PROTEST (substantial discounts for frequent and local users)

7

BEIRAS LITORAL & ALTA SHADOW TOLL ROAD, PORTUGAL


BEIRAS LITORAL & ALTA SHADOW TOLL ROAD, PORTUGAL (1/5)





• OBJECT: widening and upgrading of 167 kilometres of the existing two-lane (2x1) IP5 highway between Aveiro, in the Coastal West, and the Spanish border at Vilar Formoso (East), via the cities of Viseuand Guarda. The existing road goes across hilly terrain with gradients of up to 8% - Vehicles per day range between 9 000 and 12 000, varying with location and season. Trucks account for as much as one third of total traffic flow

• ECONOMIC RATIONAL: Construction of a highway to improve safety levels and travel times between Portugal and Spain, in the context of constrained public budget



• CONTRACT AGREEMENT: Despite the heavy traffic, the absence of non-tolled alternative routes, induced the government to adopt a shadow toll regime for the concession, then with expected construction costs under 250m. The concessionaire thus receives tariff payments directly from the grantor, which are calculated according to the number of vehicle kilometres of usage and determined with reference to a banding system

• TENDERING PROCESS: Start in 1998 - Preliminary screening process, two preferred bidders, and their respective Best and Final Offers were submitted in October 2000 - In February 2001, a consortium was awarded the concession for a 30- year period, including 5 years for the construction with phased opening




FINANCING•A Special Purpose Company (SPV) formed, LISOSCUT CONSORTIUM•9% equity funds



ADVANTAGES OF SHADOW TOLL REGIME• reduces uncertainty attached to traffic forecasts• no deterrence to use alternative non-tolled routes • savings in operational (toll collection) costs and in land investment

costs (construction and equipping of toll plazas)DISADVANTAGES OF SHADOW TOLL REGIME• transfer of costs from users to the public budget and ultimately to

the taxpayer – Public Sector Comparator always needed to justify• guarantees are provided to concessionaires, in order to reduce the

traffic risk or to create additional sources of profit, which are very difficult to satisfy in the long term (the Portuguese government agreed contractually to freeze the Road Plan as it was in 2000, in the vicinity of road concessions, for 30 years)

• The shadow toll payments may become unsustainable for public accounts (in this case, the expected amount of shadow tolls in 2007 was higher than the current highways agency budget for construction and maintenance of national roads in the whole country)

1

International experience of PPPs

Anthony PearceFormer Director General

International Road Federation

Agenda

The maintenance challenge

Indian National Highways Development Programme

Low traffic roads

Conclusion

Agenda



Low traffic roads

Conclusion

The challenge

Throughout the world, road owners are facing increasing pressure to do more with ageing road assets.

The challenge The challenge

2

The challengeBy 2020 road crashes will be:#3 cause of disease or

injury and #6 cause of death

Global economic cost US$ 500 billion per year

The challenge

The challenge

Road authorities are experiencing increased demands on the network, yet seeing real financial investment static or declining:

Italy – moratorium on road maintenance 2003-5UK – road users pay £28 bn, but only £4 bn is spent

The challenge

Italy – moratorium on road maintenance 2003-5

The challenge

Italy – moratorium on road maintenance 2003-5Road markings dissappear in summer

Global trend

Global trend towards payment for roads based on road usage.

3

Contractors involvementApplying PPPs to urban roadsPortsmouth Portsmouth Highway Highway Management Management contract contract Signed in August Signed in August 2004 between 2004 between Portsmouth City Portsmouth City Council and Council and Ensign Highways Ensign Highways (Colas Group)(Colas Group)

Portsmouth Highway Management Contract

25 yearsFixed monthly fee (total contract ~ £400 million)

480 km of streets and roads19 000 street lighting units84 structuresincluding street cleansing, winter maintenance and emergencies

Agenda


• Indian National Highways Development Programme

• Low traffic roads

• Conclusion

National Highways Development Project - India

€ 40 bn PPPs by end of 2015Currently € 20 billion, → 18,000 km of highwaysSize of projects increasingSignificant “negative grants”

Agenda



• Low traffic roads

• Conclusion

Tamil Nadu

4

Tamil Nadu Road Development Company Ltd

InvestmentsIn commercially viable/marginally viable projects

Fee Based ActivitiesManaging partner in commercially infeasible but economically and/or socially desirable projectsOperations and maintenance partnerAdvisory services

Tamil Nadu Road Development Company Ltd

East Coast Road Project

East Coast Road Project

East Coast Road commissioned in 1998, by improving small roads connecting Chennai with CuddalorePavement distress observed within two years of commissioningFinancial constraints hampered maintenanceRoad characterised by high accidents due to poor layoutPoor levels of signage and absence of road markings

ECR prior to improvement

Pavement and

Shoulder Distress

ECR project details

Widening/improving East Coast Road over 115 km to two lane paved/hard shoulder.Cost of project : € 122 millionMeans of financing

Equity share capital : € 20 millionSub-ordinate debt : € 20 millionSenior debt : € 82 million

O&M and capital servicing met from tollsIntegrated improvement-cum-maintenance contract (IIM)

ECR improved road

Paved Shoulder of 1.75m used by two wheelers and slow moving vehicles

(Chennai to Mahabalipuram)

Paving block shoulders where widening not possible due to environmental restrictions

(Mahabalipuram to Palar)

5

ECR improved road

• cats eyes

• delineators

• extensive signage

• retro-reflective road markings

Value added services on ECR

Aesthetic Bus Shelters

Help-line Booths

Round-the-clock Patrolling

24-hour Ambulance Service

Advertising potential

Sponsored advertising at toll plaza and view point

Telecom service providers advertising at emergency telephones

Income from film shoots, corporate sponsorship for toll tickets etc

Lessons from ECR ProjectProject leverages limited State resources by several times - initial equity of € 10 million by State led to an incremental investment of €122 millionGovernment relieved of annual and periodic maintenanceProject surplus, if any, to be reinvested in road sector in the StateAs TNRDC is 50:50 JV, profits to be shared equally between Government and private sectorECR framework highly replicable

Rajasthan Mega Highways Project

Upgrading of 1,053 km of key state roads to two lane carriageway with paved shoulderIdentified roads to complement National Highway stretches and provide better connectivity in north-south direction

Project Philosophy

Single largest road project under PPP framework in India Clubbing of different road corridors in a single project enables cross-subsidisation of marginally/un-viable corridors Project structure provides focused attention to project development and implementation

6

Project Roads•Project Roads

•Phalodi to Ramji-Ki-Gol (292 km)•Hanumangarh to Kishangarh (407 km)•Alwar to Sikandra (81 km)•Lalsot to Kota (195 km) and •Baran to Jhalawar (78 km)

•Aggregate length : 1,053 km

•Project Period : 32 years

•Implementation Period : Up to 24 months

•O&M Period : 30 years thereafter

•Estimated Project Cost : € 3 billion

Main advantages of TNRDC model

Unbundling of risks (construction, maintenance, traffic/revenue and financing risks at different stages and appropriate times)

With BOT all risks are clubbed -> increase in bid prices

Returnable up-front capital supportIn BOT models, up-front capital grant not returnable by operator, even if project does very well

Project surpluses to be reinvested in Project Roads/State Roads since returns on equity are capped

In BOT models, surpluses are retained by BOT operator

No government guarantee and hence no burden on government debtTNRDC model enables governments to participate in the management of the companyGovernment’s contribution leveraged many times even in low trafficked state roads for spurring economic development - TNRDC 7.35 times

Other advantages to governments Summary of TRNDC model

50:50 JV arrangement, as in TNRDC is an effective PPP model for road sector developmentTNRDC experience demonstrates scalability and replicabilityArrangement provides equitable and balanced treatment between Government and private sector

Agenda



Low traffic roads

• Conclusion

PPPs – value for money

• Complexity and transaction costs

• Financing costs

• Optimal risk allocation

• Cost/time discipline

• Competition• Innovation

• Optimal lifecycle costs

• Output based service related

payment system

7

PPPs in relation to public investmentValue of PPP contracts (stock) to public investment - av 1995-2003 (%)

Source: ProjectWare, HM Treasury, OECD

PPPs by sector - UKSigned value of PPP contracts, 1987-2004

Source:HM Treasury

PPPs by sector - non-UKSigned value of PPP contracts, 1995-2003

Source:ProjectWare

Size Distribution of PPPsNumber of projects by size (€ m)

Source: ProjectWare, HM Treasury

Key steps at national level

Consistency of objectives & policies

Transparency & predictability of policies

Coordination of IFI activities

Appropriate legislation (concessions, environment, procurement)

Clear role for state authorities

Key steps at national level

Identification and prioritisation of projectsEssential that the country be looked at as a whole, not a collection of state, regional and local prioritiesMust involve users and private sectorMust have a strategic approach involving public and private sectors for all transport methods

8

Key steps at project level

Appropriate project preparation -(feasibility study & environmental impact assessment)

Proper procurement procedures (Romanian experience)

Properly evaluated financing plan

Key steps at project level

Suitable implementation procedures & proper monitoringProvisions for the future project operation & maintenance

“Musts” for successful PPPs

Above all:

Don’t give the private sector the tough projects and keep the good ones for the public sector

Easy projects and gradual private sector involvement will build success

“Musts” for successful PPPs

Public sector political commitmentFocused, dedicated and experienced public sector team – PPP task forceClear legal and institutional frameworkTransparent & competitive procurementRealistic risk sharing

Благодарю Вас

Thank you

International experience of PPPs

Anthony Pearce

In this presentation I will consider four issues:

• The maintenance challenge • Indian National Highways Development Programme • Low traffic roads • Conclusions

Throughout the world, road owners are facing increasing pressure to do more with ageing road assets. The picture shows the main motorway from Tehran to Tabriz part of the E40. Iranians are used to road tolling and the road fund covered the cost of maintenance. A few years ago the Government removed the main toll plazas at the exit from Tehran because of excessive delays at the toll plazas, and three-quarters of the funding disappeared.

In Africa, particularly, the main challenge for road maintenance is the weather. This is the main highway in Kenya from the Tanzanian border to Nairobi. Bad maintenance produces bad and dangerous driving. This video shows the effects of bad maintenance on road traffic in Delhi, India.

Governments frequently forget that bad maintenance is economically unwise. In Europe we price each road death at € 1 million because it mainly happens to young people with the whole of their productive life ahead of them. In the rest of the world the figure used by the World Health Organisation is US $ 400,000 per death, and the Organisation forecasts that by 2020 road crashes will be the third largest cause of disease or injury and the sixth largest cause of death. The global economic cost of road crashes in US $ 500 billion every year.

So, bad maintenance is a bad investment. Good but inadequate roads also cause problems and bad driving. See if you can count the number of traffic violations on this clip from the Modares Expressway in Tehran. Road authorities are experiencing increased demands on the network, yet seeing real financial investment static or declining:

• Italy – moratorium on road maintenance 2003-5 • UK – road users pay £28 bn, but only £4 bn is spent

Let’s not forget decent road signage. In this picture major road signs in blue and mixed up with directions to the local beauty parlour, and they stick a lamp-post in front of the whole lot. Bad road markings produce reckless driving. Road markings in Italy tend to disappear in the summer (not to mention the Italian habit of ignoring them and driving across them). This led to a major campaign by the Italian road safety organisations to bring the moratorium to an end because it was simply bad economically – deaths cost the economy € 6.7 billion per year.

There is a global trend towards payment for roads by the amount they are used. These pictures, clockwise from top left, are taken in India, France, Viet Nam and a free-flow tolled motorway south of Santiago in Chile. PPPs can also be used for urban roads. In 2004 a contract was signed between the UK local authority Portsmouth City Council and Ensign Highways (Colas Group) to maintain the highways for 25 years. The fixed monthly fee (total contract ~ £400 million) provides for:

• 480 km of streets and roads • 19 000 street lighting units • 84 structures • including street cleansing, winter maintenance and emergencies.

One of the most amazing involvements of contractors is in India with the National Highways development programme which is carrying out a major upgrading from 2 lanes to 4 lanes across the country. The projects, entailing a total investment of over € 20 billion, are likely to result in construction of over 18,000 km of highways and expressways. This is part of the Indian Government’s plan for investing €40 billion in highway

projects by the end of March 2015. The majority of projects will be implemented on the basis of public-private partnerships (PPPs. To attract the investment required for the project NHAI also plans to change the size of the individual BOT projects from 50-60 km currently to an average of 200-300 km. The average construction cost of highways in India is € 1-3 million per kilometre.

The National Highways Authority of India (NHAI) is keen to attract foreign companies because there is a pool of less than twenty domestic firms competing for various projects. The authority also feels that Indian firms do not have enough financial and operational expertise to manage such large BOT projects on their own. The equity investment required is estimated at around € 6 billion in total. The Government announces a tender and asks PPP contractors to say how much subsidy they need to operate the road. The PPP programme has been so successful that they get “negative grants” - that is the Government is receiving money to grant a contract.

These PPP principles can also be applied to low traffic roads. In the south of India the Tamil Nadu Road Development Company Ltd (TNRDC) undertakes two types of activities:

• Investments in commercially viable/marginally viable projects, and • Fee based activities such as

o Managing partner in commercially infeasible but economically and/or socially desirable projects

o Operation and maintenance partner o Advisory services

One such project is the East Coast Road (ECR) project in Tamil Nadu which was commissioned in 1998, with the aim of improving small roads connecting Chennai with Cuddalore. The road was suffering pavement distress observed within two years of being commissioned. Financial constraints hampered maintenance and the road has high accidents due to poor layout and poor levels of signage and absence of road markings. The TNRDC project widened and improved the East Coast Road over 115 km to two lane paved/hard shoulder and a cost of € 122 million. This was financed by:

• Equity share capital : € 20 million • Sub-ordinate debt : € 20 million • Senior debt : € 82 million

Operation and maintenance and capital servicing is financed from tolls and there is an integrated improvement-cum-maintenance contract (IIM) with TNRDC. The road has been improved with hard shoulders, cats eyes, delineators, extensive signage, and retro-reflective road markings. Value added services include 24-hour patrolling and ambulance service, and road-side emergency telephones.

The improved road provides advertising potential including sponsored advertising at toll plaza and view points, telecom service providers advertising at emergency telephones, and income from film shoots, and corporate sponsorship for toll tickets etc.

The project leverages limited state resources by several times - initial equity of € 10 million by the State of Tamil Nadu led to an incremental investment of €122 million. The government is relieved of annual and periodic maintenance costs, and the project surplus, if any, is to be reinvested in road sector in the state. As TNRDC is 50:50 JV, profits to be shared equally between state and private sector.

This ECR framework is highly replicable. The Rajasthan Mega Highways Project involves the upgrading of 1,053 km of key roads in the northern Indian state of Rajasthan to two lane carriageway with paved shoulder. The project has identified state roads to complement National Highway stretches and provide better connectivity in a north-south direction. This is the single largest road project under PPP framework in India. It combines different road corridors in a single project that enables cross-subsidisation of marginally/un-viable corridors. Project structure provides focused attention to project development and implementation.

The main advantages to the government are:

• Unbundling of risks (construction, maintenance, traffic/revenue and financing risks at different stages and appropriate times) - with BOT all risks are bundled together with increases the bid prices;

• Returnable up-front capital support - in BOT models, up-front capital grant is not returnable by operator, even if project does very well;

• Project surpluses are reinvested in project state roads since returns on equity are capped - in BOT models, surpluses are retained by BOT operator;

• There is no government guarantee and hence no burden on government debt; • The TNRDC model enables governments to participate in the management of the company; • Government’s contribution is leveraged many times even in low trafficked state roads for spurring

economic development – TNRDC 7.35 times.

In summary this TRNDC model:

• 50:50 JV arrangement, as in TNRDC is an effective PPP model for road sector development; • TNRDC experience demonstrates scalability and replicability; • Arrangement provides equitable and balanced treatment between Government and private sector.

In conclusion the lessons to be learnt from the international experience on PPPs are that successful projects are a balance between complexity, transaction costs and financing costs on the one hand, and on the other, optimal risk allocation, cost/time discipline, competition, innovation, optimal lifecycle costs and output-based service related payment system.

Key steps for success at a national level are:

• Consistency of objectives & policies • Transparency & predictability of policies • Coordination of IFI activities • Appropriate legislation (concessions, environment, procurement) • Clear role for state authorities • Identification and prioritisation of projects • Essential that the country be looked at as a whole, not a collection of state, regional and local

priorities • Must involve users and private sector • Must have a strategic approach involving public and private sectors for all transport methods

At a project level the key steps are:

• Appropriate project preparation - (feasibility study & environmental impact assessment) • Proper procurement procedures • Properly evaluated financing plan • Suitable implementation procedures & proper monitoring • Provisions for the future project operation & maintenance

Absolute “musts” for successful PPPs are:

• Don’t give the private sector the tough projects and keep the good ones for the public sector • Easy projects and gradual private sector involvement will build success • Public sector political commitment • Focused, dedicated and experienced public sector team – PPP task force • Clear legal and institutional framework • Transparent & competitive procurement • Realistic risk sharing

1

Public & Private Partnership in Uzbekistan: Background and Outlooks


Sardor KoshnazarovEconomist, UNDP/CCI ProjectBusiness Forum of Uzbekistan

Public & Private Partnership in Transport Sector

In October 2007 there a Report on “PPP in Uzbekistan: problems, opportunities and implementation options” was drafted under the initiative of UNPD and Chamber of Commerce and Industry project. The Report contains:

- Analysis of the current state of affairs of infrastructure and its financing, particular in the sphere of transport and housing-and-communal services

- Analysis of PPP enabling experience in Uzbekistan, legislative and institutional principles stand for actual PPPs implementation

- Political recommendations on PPPs enabling promotion in Uzbekistan (focused on housing-and-communal services)

Review of PPPs in Uzbekistan

PPPs Background in UzbekistanAccording to the data base of Public-Private Infrastructure Advisory Facility – PPIAF there were 8 projects (with private funding participation) initiated in Uzbekistan within 1990-2005, total value of which makes USD 794 million (mainly, in the spheres of telecommunication and water supply)

Inter alia, there are major current PPP projects as following:- Pilot project in the sphere of electric energy sales - Development of urban passenger transport in 5 major cities of

Uzbekistan- Water supply in Bukhara and Samarkand - Production sharing agreements concluded with oil-and-gas

companies from Russia, China and Malaysia - Optional pilot project on de-centralisation of natural gas to be

provided to the population is under development

Sustainable economic growth (in general, 7% annually) and development of non-governmental sector (78.8% of GDP), as well as enabling market situation lead to development of the existing infrastructure operation accordingly

Higher demands towards the infrastructure development are reinforced by welfare growth strategy, though which there a wider access of the private sector to the infrastructure is foreseen.

Just according to the information provided by the implemented projects (in the field of air and railway transport): in the nearest future amount of investments required will reach over USD 100 million)

State of Infrastructure

Investment volume into the fixed capital of transport sphere in 2006 made UZS 636.2 billion (equal to USD 500 million)Enterprises inputs made 74.3%

Infrastructure Investments Situation

Investment Share in the Transport Sector in 2006 by financial sources (in % of the

total)

2.9

74.3

1.2

14.50.7 6.0 0.0

State budget Local budget Enterprises Foreign investments Non-budget funds Bank loansForeign loans

Railway Transport infrastructure requires large-scaled investments aimed at rolling stock replacement, as well as construction of new and capacity building/electrification of the existing railway lines.

Physical and moral depreciation of freight locomotives and wagons is considerable (around 74% of locomotives and over70% of freight wagons were produced more than 20-30 years ago)

Lack of state and Railway company’s budget financial capacities does not enable to enhance the current state of infrastructure:According to the Investment Program the investment stock to be attracted in 2007 makes UZS 190.8 billion, including a self-investing of the Railway company of 78.5 UZS billion (USD 61.2 million) and foreign loans under the Government guarantee of UZS 112.3 billion (USD 87.5 million)

Transport Infrastructure Deficits in Uzbekistan

2

Transport Infrastructure Deficits in Uzbekistan

According to the Investment Program of 2007, it is planned to allocate non-budget funds of the Republican Road Fund at UZS107.5 billion (or around USD 84 million) in favour of the automobile road sphere development, including reconstruction of those, which have international transport corridors status with the budget of UZS 60 billion (or overUSD 45 million).

As per the Conception of Public Roads Development for 2007-2010, it is foreseen to :

- Upgrade the international highway at Е-40 section on the route from Samarkand to Bukhara via Navoiy through transferring in into I-category from II-category with 4 lane carriageway

Basic PPP Implementation Directions in Uzbekistan

Development and implementation of 2-3 pilot micro projects in PPP

Pilot projects

Amendments in terms of state regulation, particularly focusing on pricing formation aspect related to natural monopolies activities

Natural Monopolies Law

- elimination of restrictions towards the domestic investors - identification of concrete concession projects - increasing of concession terms from 15 up to 50 years

Concession Law

Legislative Basis

Necessary Measures ToolkitDirections

Basic PPP Implementation Directions in Uzbekistan

- organization of appropriate training and seminars on a regular base - in-depth reviews and awareness development in mass media

Institutions establishment

Capacity Building

-Drafting of typical contracts-Establishment of data base-Provision of flexibility in terms of project transfer to worthy private companies in the cases of contract terms breaching

Revision of Order and Regulative provisions in terms of Private Companies Selection

Contract Liabilities

- Provision of macroeconomic stability - Development of financial markets- Provision of investment attractiveness of the projects

Improving of legislative basis, enabling of its proper application, and institutional reforming

Investment Environment

Liabilities separation between public and private sectors

In-depth analysis of state property management

Institutional Basis

PPP Field Priorities in short-term and mid-term perspective in Uzbekistan

Housing-and-communal economy

Transport and transport communications

Telecommunications

Power engineering

Set of Measures aimed at PPP promotion

Pilot projectsLegislative reformToolkit development Expert capacity building (trainings)Experts involvement (researches)Stakeholders dialogue

RECOMMENDATIONS

Synchronization of PPP project implementation provided with relevant enabling environment (at the transition period the preference should be stressed on less complicated PPP models)

Active interaction between operators, central and local authorities, international financial institutions and public sphere representatives

Support to stakeholders dialogue on PPP issues with participation of executive and regulative authorities in the centre and in places on one hand and private sector on the other (including international investors), social circles and donor organization delegates

3

THANK YOU

UNDP Office in Uzbekistan Tashkent, Shevchenko St.,4.tel: (+998 71) 120 3450 www.undp.uz

Chamber of Commerce and Industry of UzbekistanTashkent, Bukhara St., 6tel: (+998 71) 133 7749 www.chamber.uz, www.bfu.uz

Annex 3

Photo gallery

Annex 3: Photo gallery

Annex 4

Regional adverts

Annex 4: Regional adverts

Vacancy, Regional Legal Expert launched in Bishkek, September 2007

Vacancy, Regional Legal Expert launched in Bishkek, September 2007

Vacancy Regional Legal Expert launched in Astana, September 2007

Vacancy Regional Legal Expert launched in Tashkent, September 2007

Documents

Development of Co-ordinated National Transport Policies › fileadmin › fm-dam › TAREP › 47lh › 47lh3.pdf · Development of Co-ordinated National Transport Policies Progress