"Far Eastern Concession": the private sector for the benefit of the country
In the fall of 2021, a decree of the Government of the Russian Federation was signed, launching the Far Eastern Concession program. Its meaning is that a private investor is engaged in the construction of social infrastructure, and the state returns the invested funds to him within no more than 15 years. Such a mechanism makes it possible to create a larger number of urgently needed facilities for the population of the regions of the Far East, while reducing budget costs.
It is worth noting that the concession agreement itself is a form of public-private partnership (PPP), which involves the active involvement of the private sector in the effective management of state property or in the provision of services, usually provided by the state, on a mutually beneficial basis. economic conditions. The key difference between the “Far Eastern Concession” and the classical model can be considered the fact that all projects that are implemented within the framework of this program are selected by a government commission, and the state provides the investor with compensation for the monetary costs incurred on infrastructure for 10-20 years after commissioning project objects. Thus, this allows the state to give priority to the development of the most necessary infrastructure, which is especially important given the certain socio-economic backwardness of the Far East compared to the European part of the Russian Federation. It is clarified that according to the consulting company InfraOne, for 2021 it was planned to finance no more than 36% of the total infrastructure needs in the regions of the Far Eastern Federal District; such a pace clearly cannot satisfy all the desires of residents of the macroregion. In addition, it is worth remembering that we are talking only about projects that will be implemented in the territory of eleven constituent entities of the Far Eastern Federal District.
At the beginning of 2023, Alexey Tokar, executive director for public-private partnership projects of the KRDV, emphasized that in 2022, applications from 5 regions of the Far East were approved to create 14 facilities with a total estimated cost of about 31 billion rubles. It is necessary to clarify that we are talking about socially oriented projects (construction of a coal boiler house in the Trans-Baikal Territory, the year-round family ski resort "Arsenyev" in the Primorsky Territory, the Far Eastern children's recreation center in the Khabarovsk Territory). In addition, Deputy Minister for Development of the Far East and Arctic Anatoly Bobrakov added that in 2023, thirty projects with a total investment of 200 billion rubles are expected to be implemented under the Far Eastern Concession. It is also necessary to pay attention to the fact that it was originally planned by this time to form an investment package in the amount of 300 to 500 billion rubles within the framework of this mechanism.
In the current geopolitical and geo-economic conditions, one more advantage of this financial instrument can be highlighted. Currently, there are practically no financially safe investment opportunities abroad; Russian companies can often lose their own funds just because they have some connection with our country. Investing within Russia on commercial terms is also quite risky, but within the framework of the public-private partnership mechanism, an institution of special economic relationships has already been formed at the legislative level. Therefore, private companies receive some kind of insurance against possible bankruptcy when implementing financially expensive projects.
Despite all the positive aspects, at the moment the mechanism of the Far Eastern Concession has not yet been fully established and needs to be adjusted in some areas. Thus, Deputy Minister of the Russian Federation for the Development of the Far East and Arctic Anatoly Bobrakov noted that this instrument periodically turns into a mechanism with the help of which they try to solve the operational problems of the region. In fact, objects simply began to appear that fell out of industry programs; this problem needs to be solved. In addition, the General Director of the ANO National PPP Center Pavel Seleznev added that the Far Eastern Concession is currently solving many issues and problems manually, and the key task of the authorities for the near future is to transform it into a full-fledged project implementation factory, which will function automatically.
Also, for the further development of this mechanism, it is necessary to simplify the regime for the implementation of projects implemented under the public-private partnership scheme in the macroregion, adapting the legislation to the geographical features of the Far East, where, in addition to reducing barriers to entry, it would be advisable to develop the possibility of using these territories as an experimental site for faster project implementation. Unfortunately, it currently takes years to discuss and correct gaps and shortcomings in the PPP legislation.
To summarize, I would like to add that the creation of public infrastructure, which the Far Eastern Concession is aimed at, is a necessary condition for improving the quality of life of the local population, developing vast and inaccessible territories and solving demographic problems in the Far East. People should have additional meaning to live and work in the territory, especially in regions with difficult climatic conditions, located far from large centers. The population should see opportunities for career and personal growth through participation in solving issues of development of the locality in which they live. It is through the involvement of third parties - local businesses, corporations, public organizations and residents - in joint public activities that “social capital” is developed. Its development allows us to count on further development of the territories. One of such mechanisms in the coming years should be the “Far Eastern Concession”.
- Author: Viktor Anufriev