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LAW OF THE REPUBLIC OF ARMENIA

of July 16, 2019 No. ZR-113

About partnership state-part sector

Accepted by National Assembly of the Republic of Armenia on June 28, 2019

Chapter 1. General provisions

Article 1. Subject of regulation of the Law

1. This Law establishes legal circle of regulation of partnership the state-part sector (further - PGCh), including the rules and procedures connected with development and implementation of programs of partnership the state-part sector (further also - the PGCh programs), the institutional circle of management, applicable criteria and other questions connected with PGCh.

Article 2. The basic concepts used in the Law

1. In this Law the following basic concepts are used:

1) the payments based on result - the payments made by clients and (or) the public partner to the private partner for the goods sold by the private partner and the rendered services;

2) net present value (Net Present Value, NPV) - difference of present values of inflow and cash outflow in the course of implementation of the estimated program when which calculating the interest rate of discounting established by the PGCh procedures is used;

3) competent authority - The government, body of system of public administration which develops and performs policy in certain sphere of public administration, local government body of the Republic of Armenia;

4) authorized body - the body of system of public administration developing and performing policy of the Government in the sphere of management of public finances;

5) the applicant - the legal entity or consortium of legal entities participating in tender;

6) the public partner - the competent authority signing the contract PGCh with the participant declared as the winner in tender;

7) public infrastructure - the fixed asset which is of public interest or benefit (including buildings, structures, the equipment), and (or) the intangible asset used for the purpose of rendering public services (or in connection with them), operation and (or) construction and (or) improvement and (or) maintenance of which provides the private partner according to the agreement PGCh;

8) public service - the activities following from public concerns which are usually performed by state bodies and (or) on behalf of the last and (or) the main responsibility for which the state body, and also any service or activities in the regulated sphere of public services in sense of the Law "About Regulating Authority of Public Services" bears;

9) payments for access - the regular payments made by the public partner private the partners based on availability of the public infrastructure corresponding to the key performance indicators (Key Performance Indicators, KPI) established by the agreement PGCh;

10) the private partner - the private legal entity created and operating according to the legislation of the Republic of Armenia with which the public partner signed the agreement PGCh or which according to the procedure, the stipulated in Article 21 this Law, replaces the legal entity being the agreement party;

11) division of partnership the state-part sector or division of PGCh - the unit established by the Government, performing the powers assigned to it by this Law;

12) PGCh - partnership the state-part sector;

13) the PGCh program - the program including the collaborative relations between the public partner and the private partner based on the agreement PGCh, corresponding to criteria, the stipulated in Clause 4 presents of the Law;

14) the PGCh procedures - procedures and the rules applicable to implementation of the PGCh programs established by the decision of the Government;

15) the agreement PGCh - the agreement, including concessions signed with the procedure established by this Law between the public partner and the private partner for the purpose of implementation of the PGCh program;

16) admissible limit of obligations of PGCh - The general maximum limit of contingent obligations of the Republic of Armenia as regards the agreements PGCh signed after entry into force of this Law established by the Government. The methodology of calculation and assessment of contingent obligations of the Republic of Armenia is established by the Government;

17) consortium - the legal persons applicants participating in tender according to the procedure of joint activities;

18) the creditor - the private financial organization granting the loan to the private partner in connection with the agreement PGCh;

19) final consumers - any physical person or legal entity, including users, buyers, consumers to whom the private partner, according to terms of the contract of PGCh, renders public services or delivers goods which are of public interest or benefit;

20) internal rate of economic profitability (Economic Internal Rate of Return, EIRR) - the measurement used for economic planning for assessment of net benefit for society from potential investments. The internal rate of economic profitability is discount rate in case of which the net current value of all economic benefits and expenses of the estimated program is compared to zero;

21) internal rate of financial profitability (Financial Internal Rate of Return, FIRR) - the measurement used for capital budgeting for assessment of profitability of potential investments. The internal rate of financial profitability is discount rate in case of which the net current value of pure cash flows of financial incomes and expenses of the estimated program is compared to zero;

22) the direct agreement - the agreement signed between the public partner, the private partner and the creditor (creditors) who establishes conditions on the basis of which creditors can be competent to perform the rights on intervention;

23) value for money (value for money) or VfM - difference of the cost of the best similar program performed in general procedure, stipulated by the legislation the Republic of Armenia, providing similar or comparable public infrastructure or public service, and expenses on implementation of the estimated program which methodology of calculation is established by the PGCh procedures;

24) procedures of the choice of the private partner - the procedures applicable to the PGCh programs provided by the Law "About Purchases";

25) the body developing policy - the body of system of public administration developing policy of PGCh;

26) fiskalno available (fiscally affordable) - the PGCh program does not lead to excess of the maximum limit of the general contingent obligations established by the Government.

Article 3. Purposes of PGCh

1. The purposes of PGCh as public infrastructure and public service in providing and management include:

1) reducing necessary expenses of public infrastructures during the bioperiod and improvement of quality of their construction, improvement, construction, operation and content;

2) ensuring proper and timely maintenance of asset during the term of its operation;

3) increase in availability of public infrastructures and services;

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