Initiation and Preparation of a PPP Project and Selection of a Private Partner

Public-Private Partnership (PPP) is a key mechanism for infrastructure modernization, attracting investment, and introducing innovative management solutions. The Law of the Republic of Uzbekistan “On Public-Private Partnership” No. ZRU-537 dated May 10, 2019, regulates the fundamentals of initiating, preparing, and implementing PPP projects, as well as procedures for selecting a private partner.

The purpose of this article is to disclose the theoretical and legal foundations of initiating and preparing PPP projects, as well as to analyze in detail the legal mechanisms of competitive and negotiated selection of private partners.

1. Initiation of a PPP Project

A PPP project may be initiated by:

• a public authority (public initiator);
• an individual entrepreneur or legal entity (private initiator).

The initiation process includes:

• Development of a PPP project concept.
• Submission of the concept to the authorized state body.
• Review and approval, rejection, or return for revision.
• Approval by the public partner or the Cabinet of Ministers (depending on project cost).
• Inclusion of the concept in the PPP Project Registry.

A distinctive feature of the legislation is the right of private initiators to propose innovative concepts. If no other applications are received within 45 days after publication, the project is implemented through direct negotiations with the initiator.

2. Preparation of a PPP Project

The public initiator develops the concept in line with priority areas of the economy and social sector. Preparation is accompanied by:

• Financial and economic calculations of efficiency;
• Determination of the composition and parameters of the PPP object;
• Calculation of investments and volumes of public co-financing;
• Public consultations to consider the interests of the population.

A private initiator has the right to submit the project directly to the public partner. Its concept must include an innovative approach and a balanced benefit for both parties. The decision is made within 30 days; if approved, the project is coordinated with the authorized body and published to collect applications from other contenders.

3. Selection of a Private Partner

The law provides for two main mechanisms:

Competitive Selection (Tender)

• Single-stage tender applies to projects up to USD 1 million. It includes publication of an announcement, submission of proposals, opening of bids, evaluation of applications, and signing of the agreement with the winner.
• Two-stage tender applies to projects over USD 1 million. First, a prequalification is conducted, then technical and financial proposals are evaluated.

Tender is conducted on the principles of competitiveness, transparency, and objectivity, and the tender criteria include:

• volume of investments;
• implementation deadlines;
• quality and innovativeness of the project;
• tariff and payment terms.

Direct Negotiations

Conclusion of an agreement without a tender is allowed in exceptional cases:

• ensuring security and defense capacity;
• the investor possesses exclusive rights;
• by decision of the President or the Cabinet of Ministers.

4. Comparative Analysis: Initiation and Selection

Stage	Public Initiator	Private Initiator	Selection of Private Partner
Initiation	Development of concept under state programs	Preparation of innovative project	Announcement of tender or negotiations
Preparation	Financial and economic calculations, public discussions	Coordination with state body, publication	Evaluation of applications according to criteria
Final Decision	Approval by Cabinet of Ministers/authorized body	Conclusion of agreement or tender	Determination of tender winner or signing based on negotiations

 

Stages of Initiation and Preparation of a PPP Project

№	Stage	Sub-stages	Timeframe	Responsible Bodies/Persons
1	Project initiation	• Development of project concept (public or private initiator) • Definition of goals, cost, sources of financing, profitability	No fixed term	Public authority (initiator) or private initiator
2	Submission of concept	• Transfer of concept to authorized body for evaluation	Up to 30 days for review	Public initiator / Private initiator → PPP Development Agency
3	Review of concept	• Assessment of technical and economic parameters • Approval, rejection, or return for revision	Up to 30 days	Authorized state body (PPP Development Agency)
4	Approval of concept	• Approval depending on cost: — up to USD 1M – by state body independently — USD 1–10M – with Agency approval — over USD 10M – by Cabinet of Ministers	After review	Relevant body / Cabinet of Ministers
5	Inclusion in Registry	• Entry of concept into PPP Project Registry	Immediately after approval	PPP Development Agency
6	Publication of information (for private initiator projects)	• Posting of concept on state body’s and Agency’s websites • Invitation to other applicants to express interest	45 calendar days	Public partner and PPP Development Agency
7	Public consultations	• Discussion of project with population, consumers, users of services	Parallel with preparation	Public initiator
8	Decision on private initiator	• If no applications from other contenders → direct negotiations • If applications exist → tender is held	45 days waiting + 60 days for negotiations	Public partner, PPP Development Agency
9	Preparation of tender (if competition exists)	• Development of tender documentation • Coordination of PPP agreement draft with Agency	Within 30 days from announcement	Public partner + PPP Development Agency
10	Tender procedure	• Single-stage (up to USD 1M) • Two-stage (over USD 1M)	30–45 days for submission of applications	Tender commission (state body, Ministry of Finance, PPP Agency)
11	Determination of private partner	• Evaluation of proposals • Selection of winner and reserve winner	By commission decision	Tender commission
12	Conclusion of PPP agreement	• Negotiations with winner or reserve winner • Signing of agreement	Up to 60 days after coordination	Public partner and private partner