Academic journal article Asian Social Science

The Development of the Concession Project Management Mechanisms in Regions

Academic journal article Asian Social Science

The Development of the Concession Project Management Mechanisms in Regions

Article excerpt

Abstract

The article reviews the main issues and perspectives of the public-private partnerships in the Russian Federation. The aim of the work is to optimize the region concession project management system for the subject of the Russian federation on basis of the instantiation of concession procedure. The authors suggest the algorithm of concession organization in Perm Krai (region of Russia), taking into account the main components of the concession project management system such as: the objectives, the concept, the objects, the subjects, the factors and the toolset. The main attention is paid on the methodical recommendations on the integral efficiency of the concession project management in the conditions of the economic and social region development. The suggested approach to the region concession management mechanism can be used by the region government to work out the management strategies of concession projects and make out the normative methodical base.

Keywords: public-private partnership, the region, concession, management, project, principles, tools, efficiency

1. Introduction

The modem social economic development strategy of Russia involves the innovative development and rise of the national economic competitiveness. These goals can be realized only with the using of the new management mechanisms. This tool is public-private partnership (PPP), which is used as well as government contracts in the economic developed countries and in Russia (32; 35).

Public-private partnership involves a contract between a public sector authority and a private party, in which there is a realization of public projects in different branches of economy: transport, water and power sectors (7; 15), public utility, construction sector (36), health care (2; 37), education (11) and others. The infrastructure concessions have the largest dissemination (14; 23; 38). Public-private partnership is widely used in solving city's and large agglomeration's development problems (3; 8; 20; 27), urban infrastructure (18), urban regeneration (6; 12; 19; 21; 24), urban land-use and revitalization (5; 9; 22; 31), in making large innovative projects in large urban development projects (10; 13; 30) and others.

The main tool of public-private partnership is a concession, which is used, when the government is interested in a private company to carry out investments in property complexes, but at the same time supposes to keep the right of property. The state strategies and programmes, based on using only budgetary funds, cannot afford to realize the large-scale strategic projects. But the public-private partnership expose the concessionaire a potential risks over the long concession period and the concessionaire may not be able to recover the large initial investment and obtain a reasonable rate of return if significant difficulties occur in the concession period (4; 34). This very actually for Russia.

2. Background

The world statistics show that, in the period of 1990-2011 in EU more than 1500 public-private partnership projects, estimated at more than 280 billion Euros were realized. In 2011 more than 110 projects, estimated at more than 20 billion Euros were made, while education and health care amount to 30%. Contractual agreements between public agencies and private companies in the form of public-private partnerships have proven to be beneficial to both the public and private sectors (17). In Russia a concession is used in an infrastructure, urban regeneration, agriculture, public utility and in the sphere of economic security of territory (16; 25; 26; 28; 33). While the projects, connected with medicine do not take the main place, which is a feature of the developing countries at all. That is why the rise of the development of concession healthcare projects is being expected in the future in the experts' opinion (1). We assign the main development problems and perspectives of a concession in social sphere in the Russian regions and urban territory's by the example of the possibilities assessment of using the concession management mechanisms in the healthcare entities in Perm Krai (region). …

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