New Law Regulating Public-Private Partnership Enters Into Force in Turkmenistan

The new Law of Turkmenistan regulating public-private partnership entered into force on Tuesday with its publication on state newspaper.

The Law of Turkmenistan on Public-Private Partnership defines the legal basis for public-private partnership, methods of its implementation and regulates relations arising in the process of preparing and implementing a public-private partnership project.

Public-private partnership is a mutually beneficial cooperation between public and private partners, legally formalized for a certain period, based on the pooling of their resources for the preparation and implementation of a public-private partnership project.

The state partner is Turkmenistan, on behalf of which the executive authorities act, as well as other bodies (organizations) authorized by the Cabinet of Ministers of Turkmenistan.

Private partner — a legal entity, a foreign organization, an individual engaged in entrepreneurial activity without forming a legal entity, who have entered into a public-private partnership agreement.

Approval of the concept of a public-private partnership project with a total cost within the established threshold amount, upon agreement with the authorized body, is carried out by the state partner independently. If the total cost exceeds the established threshold amount, then the approval of the concept is carried out by the Cabinet of Ministers of Turkmenistan.

The public partner enters into a public-private partnership agreement with a private partner, determined by the results of a tender or direct negotiations.

When participating in a tender for a declaration of interest in the implementation of a public-private partnership project, the applicant must meet the following criteria:

• have legal capacity;
• have financial and (or) material, technical and (or) qualified labor resources necessary to fulfill obligations under the public-private partnership agreement;
• have no grounds, the presence of which could lead to a conflict of interest.

The term of a public-private partnership agreement cannot be less than three years and must not exceed forty-five years. The parties to a public-private partnership agreement may agree to extend or shorten the term.

Within the framework of a public-private partnership agreement, the following types of financial support can be provided to private partners:

• subsidies, including those aimed at ensuring a guaranteed minimum income of a private partner from the implementation of a public-private partnership project;
• investments in the form of assets and property necessary for the implementation of a public-private partnership project;
• funds from the State Budget of Turkmenistan allocated to pay for the consumption or use of a certain amount or part of goods (works, services) produced or supplied in the process of implementing a public-private partnership project;
• provision of funds from the State budget of Turkmenistan in the form of budget loans, loans, grants.
• state guarantees of Turkmenistan;
• tax and other benefits;
• other types of financing, guarantees and (or) compensation.

The new Law does not apply to relations regulated by the Law of Turkmenistan on tenders for the supply of goods, performance of work, provision of services for state needs, oil works carried out in accordance with the Law of Turkmenistan on hydrocarbon resources, and specialized activities related to the provision of law and order, defense and security of the state.

Source: Law of Turkmenistan regulating public-private partnership