Minimising Investment Risks Through Optimising Public-Private Partnership: The Case of the Kaliningrad Region
This study undertakes a contextual analysis of economic and legal risks associated with investment in the Kaliningrad region. The authors emphasise the importance of public-private partnership (PPP) in minimising such risks in order to enhance the region’s attractiveness and to solve development problems. PPP has never been studied as a means to minimise regional investment risks in current conditions. This accounts for the scientific novelty of examining investment risks minimisation through proving the essentiality of developing PPP mechanisms on a unique Russian territory — the Kaliningrad region. The article analyses current investment risks, conditions, barriers, and avenues to enhance the investment climate in the Kaliningrad region. The authors utilise data on current investment in the region and consider the principles of the region’s investment policy. The study stresses the need to develop the regional economy’s ‘points of growth’ within PPP schemes. It is proposed that the region and its municipalities should participate in partner projects in a manner that, firstly, is transparent to national and international investors and concordant with best practices and, secondly, enables the executive authorities and businesses to collaborate in developing the most efficient legal framework for partnership. The article identifies the role of PPP in solving the problem of regional development and gives recommendations on overcoming barriers and implementing PPP projects in the region.
1. The plenary session of the St. Petersburg International Economic Forum, 2016, Official site of the Russian President, available at http://kremlin.ru/events/president/news/52178 (accessed 29.06.2016). (in Russ.)
2. Foreign direct investment in Russia collapsed by 92 % in 2015, 2016, Interfax, available at http://www.interfax. ru/business/490758 (accessed 29.03.2016). (in Russ.)
3. Baranovskaya, E. A. 2013, Creating a competitive investment climate in Russia as a basis for upgrading: some legal aspects, Vestnik Baltijskogo federal'nogo universiteta im. I. Kanta [Vestnik Immanuel Kant Baltic federal University], no. 3, p. 143—151. (in Russ.)
4. On the Special Economic Zone in the Kaliningrad Region and on Amendments to Certain Legislative Acts of the Russian Federation: Federal law 16-FZ, dated 10 Jan. 2006 (as amended on 11.03.2016.), available at: http://www.consultant.ru. (accessed 29.06.2016). (in Russ.)
5. About the state support of organizations that are making investments in the form of capital investment in the Kaliningrad region: law of the Kaliningrad region No. 171 dated 15 July 2002, available at http://www.garant.ru. (accessed 29.06.2016). (in Russ.)
6. The Government of the Kaliningrad region. Official portal, 2016, available at https://gov39.ru/ekonomy/investicii.php(accessed 20.04.2016). (in Russ.)
7. Invest in the Kaliningrad region, 2016, available at http://www.investinkaliningrad.ru/?page_id=77 (accessed 20.04.2016). (in Russ.)
8. The investment rating 3B1 region, 2016, Rating agency "Expert", available at http://www.raexpert.ru/database/regions/kalinin (accessed 15.04.2016). (in Russ.)
9. Klemeshev, A. P. 2009, Russian Exclave on the Baltic Sea: Evolution of Exclavity and Ways to Overcome It, Balt. Reg., Vol. 1, no. 2, p. 86—97. DOI: 10.5922/2079-8555-2009-2-11.
10. Klemeshev, A. P. 2007, Exclavity under globalization: Selected works, Kaliningrad, 211 p.
11. Aksenova-Sorokhtey, J. N., Baranovskaya, E. A. 2015, Institute of concession agreements and actual problems of its legal regulation in the Russian Federation, Nauchnaja perspektiva, no. 10, р. 37—38. (in Russ.)
12. Aksenova-Sorokhtey, J. N., Baranovskaya, E. A. 2015, Novels of the concession of the Russian Federation, Zakon i parvo, no.12, p. 56— 62. (in Russ.)
13. Rating of PPP regions, The National Center for Public-Private Partnerships, available at http://pppcenter.ru/assets/docs/raytingREG2016_B5_Block_04-04-2016.pdf. (accessed 05.07.2016). (in Russ.)
14. Aksenova-Sorokhtey, J. N., Baranovskaya, E. A., Serebryakova, A. A., Serova, O. A. 2016. Actual problems of legal regulation of public-private partnership in Russia, Uspekhi sovremennoj nauki i obrazovaniya, Vol. 2. no. 4, p. 147—152. (in Russ.)
15. Public-private partnerships, municipal-private partnership in the Russian Federation and the Introduction of Amendments to Certain Legislative Acts of the Russian Federation: Federal Law 224-FZ, dated 13 July, 2015 (as amended on 03.07.2016.), available at: http://www.consultant.ru. (accessed 20.04.2016). (in Russ.)
16. Aksenova-Sorokhtey, J. N., Baranovskaya, E. A., Rusanova, Y. K. 2016, Russian legislation on public-private partnership, Zhurnal nauchnyh i prikladnyh issledovanij, no. 4, p. 93—97. (in Russ.)
17. The State Duma adopted a law on PPP. Economy News, 2016, available at http://www.vestifinance.ru/articles/59538 (accessed 05.07.2016). (in Russ.)
18. Nikolaev, D. 2016, Public-private stagnation, Kommersant, available at http://www.kommersant.ru/doc/2950766(accessed 22.10.2016). (in Russ.)
19. PPP projects are going to increase, 2016, Kommersant, no. 179, 28.09.2016, p. 2. (in Russ.)
20. On concession agreements: Federal law of 21.07.2005 No 115-FZ (as amended on 03.07.2016), 2016, available at http://www.consultant.ru. (accessed 22.10.2016). (in Russ.)
21. Kaliningrad authorities have been asked 42 to 45 billion rubles of subsidies in 2017, 2016, News agency RBC, available at http://kaliningrad.rbc.ru/kaliningrad/freenews/57f77f0c9a7947adf96332fe?from=main (accessed 05.10.2016). (in Russ.)
22. Subsidies "the problem 2016" received only a third of the Kaliningrad companies, 2016, News agency RBC, available at http://kaliningrad.rbc.ru/kaliningrad/freenews/580621a79a794757bb76998e?from=main (accessed 20.10.2016). (in Russ.)
23. The bulk of the subsidies "to support the labour market" companies won't with the highest number of employees, 2016, Rugrad, available at http://rugrad.eu/news/906757 (accessed 20.10.2016). (in Russ.)
24. The government proposed to attract investors to build Parking lots in Amber], 2016, News agency RBC, available at http://kaliningrad.rbc.ru/kaliningrad/investigation/02/09/2016/57c94c109a79475207b1a963?from=main (accessed 24.07.2017). (in Russ.)
25. From concession to PPP, 2016, Law firm VEGAS LEX, available at http://www.vegaslex.ru/analytics/publications/from_concessions_to_ppp (accessed 20.10.2016). (in Russ.)
26. PPP-info. Federal portal "Infrastructure and public-private partnership in Russia", 2016, Infrastructure Projects Support Platfor, mavailable at http://www.pppi.ru. (accessed 25.11.2016). (in Russ.)
27. On territories of advancing socio-economic development in the Russian Federation: Federal law dated 29.12. 2014 No 473-FZ (as amended on 13.07.2015), 2015, available at http://www.consultant.ru. (in Russ.)
28. Sazonov, V. E. 2012, Gosudarstvenno-chastnoe partnerstvo: grazhdanskopravovye, administrativno-pravovye i finansovo-pravovye aspekty [Public-private partnership: civil law, administrative law and financial and legal aspects], Moscow, 492 p. (in Russ.)
29. Belitskaya, A. V. 2012, Pravovoe regulirovanie gosudarstvenno-chastnogo partnerstva [Legal regulation of public-private partnership], Moscow, 191p. (in Russ.)
30. Varnavskii, V. G. 2005, Partnerstvo gosudarstva i chastnogo sektora: formy, proekty, riski [The partnership of the state and the private sector: forms, projects, risks], Moscow, 315 p. (in Russ.)
31. Kabashkin, V. A. 2010. Gosudarstvenno-chastnoe partnerstvo: mezhdunarodnyj opyt i rossijskie perspektivy [Public-private partnerships: international experience and Russian prospects], Moscow, 576 p. (in Russ.)
32. Salikhov, Kh. M., Zverev, A. A. (ed.) 2011, Gosudarstvenno-chastnoe partnerstvo: Praktika. Problemy. Perspektivy [Public-private partnership: Practice. Problems. Prospects], Moscow, 398 p. (in Russ.)
33. Popondopulo, V. F., Shevelevaya, N. A. 2015, Publichno-chastnoe partnerstvo v Rossii i zarubezhnyh stranah: pravovye aspekty [Public-private partnership in Russia and foreign countries: legal aspects], Moscow, 528 p. (in Russ.)
34. Graeme, Н., Carsten, G. 2005, The Challenge of Public-Private Partnerships. Learning from international experience, Cheltenham UK, 368 р.
35. Yescombe, E. R. 2007, Public-private partnerships: principles of policy and finance. Burlington, USA, 368 p.
36. Link, A. N. 2006, Public/private partnerships: innovation strategies and policy alternatives, New York, 160 p.
37. Akitobi, B., Hemming, R., Schwartz, G. 2007, Public investment and public-private partnerships, Washington, International Monetary Fund, 23 p.
38. Marks, A. T., Silverman, E. F., Borisoff, A. K. 2010. Project Finance and Public-private Partnership in the United States. In: Delmon, J., Rigby Delmon, V., aan den Rijn, A. (eds.) International Project Finance and PPPs: A Legal Guide to Key Growth Markets, p. 7—70.
39. Klijn, E.-H., Teisman, G. R. 2000, Governing Public-Private Partnerships: Analyzing and Managing the Processes and Institutional Characteristics of Public-Private Partnerships. In: Osborne, S. P. (ed.) Public-Private Partnerships: Theory and Practice in International Perspective, London, p. 84—102.
40. Akintoye, A., Beck, M., Hardcastle, C. 2008, Public-Private Partnerships: Managing Risks and Opportunities, USA, 448 p.
41. Heinz, W. 2006. Public Private Partnerships: Principles, Opportunities and Risks, Lecture given in the course of AER Centurio Interreg III Conference of the Assembly of European Regions in Ponta Delgada, Azores, 6 May 2005, German Institute of Urban Affairs, Cologne, p. 8.
42. Fussell, H., Beresford Ch. 2009, Public-Private Partnerships: Understanding the Challenge, Vancouver, Centre For Civic Governance of the Columbia Institute, 119 p.
43. Quium, A., A guidebook on public-private partnership in infrastructure, 2011, Economic and social Commission for Asia and the Pacific, Bangkok, 76 p.