LAW OF UKRAINE

of July 1, 2010 No. 2404-VI

About public-private partnership

This Law determines organization-legal bases of interaction of the state partners with private partners and the basic principles of public-private partnership on contractual basis.

Section I. General provisions

Article 1. Determinations of the main terms and signs of public-private partnership

1. In this Law the stated below terms are used in such value:

the public-private partnership - cooperation between the state of Ukraine, Autonomous Republic of Crimea, territorial communities on behalf of the relevant state bodies which according to the Law of Ukraine "About management of objects of state-owned property" exercise control of objects of state-owned property, local government bodies, National academy of Sciences of Ukraine, national industry academies of Sciences (the state partners) and legal entities, except the state and municipal companies, organizations, the organizations (private partners) which is performed on the basis of the agreement according to the procedure, established by this Law and other legal acts, and answers the signs of public-private partnership determined by this Law;

the agreement on financing - the contract between the private partner and the creditor (creditors) or their representatives signed with the purpose of financing of the project performed on the terms of public-private partnership;

the creditor - any financial organization, international financial institution which provided or intends to provide debt financing or issued guarantee to the private partner for accomplishment of agreement obligations by it imprisoned within public-private partnership;

payment for operational readiness - the caused agreement signed within public-private partnership, payments for benefit of the private partner which are paid after acceptance of object of public-private partnership to operation which size depends on achievement of the effectiveness by the private partner of indicators determined by the agreement signed within public-private partnership;

effectiveness indicators - quantitative and qualitative indexes on reliability and availability of object of public-private partnership which shall be reached as a result of project implementation, performed on the terms of public-private partnership, taking into account its purpose and tasks;

the direct agreement - the contract between the state partner, the private partner and the creditor (creditors) which determines procedure and conditions of change of the private partner and also can provide the obligations of agreement parties connected with change of the private partner, accomplishment of financial liabilities of the private partner before the creditor (creditors) and other provisions directed to non-admission of the agreement cancelation concluded within public-private partnership;

the adviser - physical person and/or legal entity which under the agreement undertakes obligations on provision of services in the course of preparation of the project performed on the terms of public-private partnership;

socially significant services - the services aimed at providing the public concerns and requirements provided to unrestricted circle of users (consumers) and/or provision of which it shall be provided with public authorities, local government bodies or the state, municipal companies, organizations, the organizations, economic societies, 50 and more percent of shares (shares) of which belong to the state, territorial community or the Autonomous Republic of Crimea.

2. On the party of the private partner in the agreement signed within public-private partnership several persons who according to this Law can be private partners can act. The relations between private partners and procedure for determination of the private partner for representation of interests of private partners in the relations with the state partner are determined by terms of the contract, concluded between private partners, or terms of the contract, concluded within public-private partnership. Such persons bear joint liability according to the obligations provided by the agreement signed within public-private partnership.

Except the winner (winners) of tender by determination of the private partner by the private partner the legal entity created for implementation of public-private partnership by the winner (winners) of tender by determination of the private partner can act if it is provided by conditions of the corresponding tender.

The winner (winners) of tender bears (bear) in full responsibility for obligation fulfillment under the agreement signed within public-private partnership.

According to the decision of the state partner on the party of the state partner the state, municipal company, organization, the organization, economic society which 100 percent of shares (shares) they belong to the state, territorial community or the Autonomous Republic of Crimea to whom execution of separate liabilities in the agreement signed within public-private partnership can be assigned can participate in the agreement signed within public-private partnership. The state partner bears subsidiary responsibility according to obligations of such company, organization, organization or economic society according to the agreement signed within public-private partnership.

As the state partner in the agreement signed within public-private partnership several public authorities and/or local government bodies, National academy of Sciences of Ukraine, industry academies of Sciences at the same time can act. The rights and obligations of specified persons concerning their joint participation in the agreement signed within public-private partnership are determined by the agreement signed between them.

Such agreement shall be signed until approval of the tender documentation and may contain information on the rights and obligations, in the agreement signed within public-private partnership including distribution of the rights to object of public-private partnership after its acceptance in operation and other conditions.

The copy of such agreement shall be attached to the agreement signed within public-private partnership.

3. Treat signs of public-private partnership:

1) creation and/or construction (new construction, reconstruction, restoration, capital repairs and technical retrofitting) of object of public-private partnership and/or management (use, operation, maintenance) of such object;

2) long term of the relations (from 5 to 50 years);

3) transfer to the private partner of part of risks in the course of implementation of public-private partnership;

4) introduction by the private partner of investments into object of public-private partnership.

All investment projects answering to signs of public-private partnership shall be realized only using requirements of this Law.

Article 2. Legal basis of public-private partnership

1. The legal basis of public-private partnership are the Constitution of Ukraine, the Civil code of Ukraine, the Economic code of Ukraine, this Law, other legal acts of Ukraine, and also the international agreements of Ukraine which consent to be bound is provided by the Verkhovna Rada of Ukraine.

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