ORDER OF THE MINISTER OF NATIONAL ECONOMY OF THE REPUBLIC OF KAZAKHSTAN

of December 22, 2014 No. 157

About some questions of planning and implementation of concessionary projects

According to Articles 155-2 and 230 of the Budget code of the Republic of Kazakhstan and with articles 9 and 20 of the Law of the Republic of Kazakhstan "About concessions" PRIKAZYVAYU:

1. Approve:

1) Rules of representation, consideration and selection of concessionary projects according to appendix 1 to this order;

2) Rules of carrying out tender (auction) at the choice of the concessionary according to appendix 2 to this order;

3) Rules of carrying out monitoring of agreements of concession, carrying out monitoring and assessment of implementation of concessionary projects according to appendix 3 to this order;

4) Rules of selection of projects of public-private partnership, including concessionary projects, for provision or increase in amount of guarantees of the state according to appendix 4 to this order;

5) Requirements to development or adjustment, and also conducting necessary examinations of the feasibility statement on the concessionary project according to appendix 5 to this order;

6) Requirements to examination of tender (auction) documentation, including in case of introduction in it of changes and amendments, the concessionary requests submitted by participants of tender when carrying out tender (auction) at the choice of the concessionary according to appendix 6 to this order;

7) Criteria to projects for determination of the best concessionary request according to appendix 7 to this order;

8) Criteria of reference of concessionary projects to category of concessionary projects of the special importance according to appendix 8 to this order;

9) Criteria of reference of concessionary projects to category socially important according to appendix 9 to this order.

2. Recognize invalid some regulatory legal acts of the Republic of Kazakhstan according to appendix 10 to this order.

3. To provide to department of budget investments and development of public-private partnership state registration of this order in the Ministry of Justice of the Republic of Kazakhstan, its official publication in information system of law of Ad_let and in official mass media.

4. To impose control of execution of this order on

the supervising vice-minister of national economy of the Republic of Kazakhstan Kusainov M. A.

5. This order becomes effective after ten calendar days after day of its first official publication.

It is approved Minister of Finance of the Republic of Kazakhstan December 19, 2014

B. Sultanov

Appendix 1

to the Order of the Minister of national economy of the Republic of Kazakhstan of December 22, 2014 No. 157

Rules of representation, consideration and selection of concessionary projects

Chapter 1. General provisions

1. These rules of representation, consideration and selection of concessionary projects (further – Rules) are developed according to subitem 7-6) of article 9 of the Law of the Republic of Kazakhstan "About concessions" (further – the Law) and the subitem 24) of article 8 of the Law of the Republic of Kazakhstan "About natural monopolies".

2. Rules determine procedure for the organization of representation, consideration and selection of concessionary projects.

3. In these rules the following concepts are used:

1) predesigns – calculations for profitable and account part of operating, investing and financial activities of the concessionary project with indication of assumptions. Predesigns are made in the Microsoft Office Excel format with the opening formulas, and it is represented on the paper and electronic medium;

2) the local project – the concessionary project realized on the objects (existing or assumed to construction), belonging to municipal property, and/or receivers of economic benefits from implementation of the concessionary project are subjects of one area, city of republican value, the capital and according to article 13 of the Law;

3) the republican project – the concessionary project realized on the objects (existing or assumed to construction), belonging to republican property, and/or receivers of economic benefits from implementation of the concessionary project are subjects of two and more areas, cities of republican value, the capital and according to article 12 of the Law.

4. The organizer of tender (auction) attracts legal entities on advisory support of concessionary projects to development of tender (auction) documentation, the draft agreement of concession, independent assessment of the submitted concessionary requests containing in the corresponding competitive (auction) request and also to participation in negotiations with potential concessionaries according to Item 1 of article 20 of the Law.

The central or local authorized body on state planning introduces the conclusion on rendering services in advisory support of concessionary projects for consideration of the relevant budget commission.

On the amounts of financing of services in advisory support of each concessionary project approved by the budget commissions, the authorized body on state planning creates the list of services in advisory support of concessionary projects which is performed at the expense of means of the appropriate distributed budget program of authorized body on state planning.

5. The list of the objects offered to transfer to concession (further – the list) is created by authorized body on state planning according to article 16 of the Law.

6. Local authorized bodies on state planning, in the cases established by subitem 3-2) of article 13 of the Law monthly to the 20th following the accounting period notify the central authorized body on state planning on information on planning of the local concessionary projects which received the positive decisions in form according to appendix to these rules.

Chapter 2. Procedure for representation, consideration and selection of concessionary projects

7. Process of representation, consideration and selection of concessionary projects consists of the following interconnected stages:

1) determination and approval of tender (auction) documentation by the first head of the state body developer, or person, replacing responsible for development of tender (auction) documentation, structural division of state body it.

The state body creates the Interdepartmental project team by involvement of the subordinated organizations, independent experts, project, engineering, consulting and other companies, and also the interested state bodies, National chamber of entrepreneurs of the Republic of Kazakhstan, subjects of entrepreneurship for project management quality assurance.

The purpose of activities of the Interdepartmental project team is development of tender (auction) documentation, with the proved need of implementation of the concessionary project for this or that industry / sphere / region.

The interdepartmental project team performs the following functions:

studies the arrived offers and initiatives of implementation of the concessionary project, selects, estimates, determines their priority, determines contract type, tender, the questions connected with allocation of the parcels of land, connection to engineering networks and other key parameters of the concessionary project;

accepts recommendations of feasibility or lack of feasibility of implementation of the concessionary project by signing of the protocol;

conducts marketing and other necessary researches on the planned concessionary project;

makes all necessary calculations, including development of predesigns of the concessionary project;

studies offers and initiatives of project implementation mechanisms;

creates offers for inclusion in tender (auction) documentation;

hears reports of persons involved in preparation of the concessionary project since stage of planning of the concessionary project to stage of the conclusion of the agreement of concession;

performs completion of tender (auction) documentation of the concessionary project during process of its coordination and examination in process of receipt of notes from the approving authorized bodies and the organizations. At the same time in the conclusions following the results of examination or coordination recommendations about project management for the Interdepartmental project team are in the presence specified;

traces adherence to deadlines and procedures of passing of consideration, coordination, examination and approval of tender (auction) documentation of the concessionary project.

2) the state body developer introduces in the central or local authorized body on state planning the request with appendix of the economic conclusion for the investment offer of the state investment project on feasibility of implementation of the concessionary project for further pronouncement at consideration of the relevant budget commission of question of development or adjustment, and also conducting necessary examinations of tender (auction) documentation of concessionary projects;

3) based on the request of the state body developer of tender (auction) documentation on republican projects the central authorized body on state planning creates the conclusion on development or adjustment, and also on conducting necessary examinations of competitive (auction) documentation of concessionary projects, including feasibility statements (further – the feasibility study), or on the projects having developed design estimates (further – the design and estimate documentation), and also being technically simple, implemented based on standard projects, prototype project solutions and projects of repeated application, on binding available the design and estimate documentation to the specific platform of subject to concession, and submits for consideration of the Republican budget commission;

based on the request of the state body developer of tender (auction) documentation on local projects the local authorized body on state planning creates the conclusion on development or adjustment, and also conducting necessary examinations of competitive (auction) documentation of concessionary projects, including feasibility study, or on the projects having developed by the design and estimate documentation, and also being technically simple, realized based on standard projects, prototype project solutions and projects of repeated application, on binding available the design and estimate documentation to the specific platform of subject to concession, and submits for consideration of the relevant budget commission;

4) development, adjustment, conducting necessary examinations and approval of tender (auction) documentation:

in cases of carrying out tender at the choice of the concessionary without use of two-stage procedures:

development by the organizer of tender of tender (auction) documentation, including feasibility study for the concessionary project.

On the projects having developed by the design and estimate documentation, and also being technically simple, realized based on standard projects, prototype project solutions and projects of repeated application, development of the feasibility statement is not required.

Development or adjustment of tender (auction) documentation is performed with the binding which is available the design and estimate documentation to the specific platform of subject to concession.

The binding to the specific platform of subject to concession which is available the design and estimate documentation is performed within allocated funds on development or adjustment, and also conducting necessary examinations of the tender documentation of concessionary projects, taking into account compliance to the legislation of the Republic of Kazakhstan on architectural, town-planning and construction activities;

submission of tender (auction) documentation, feasibility study for the concessionary project which previously passed the necessary examinations according to the current legislation of the Republic of Kazakhstan, with application of documents, confirming coordination of the central authorized body on budget implementation, concerning the objects relating to republican property and also, in case of belonging of the concessionary project to spheres of natural monopolies, the authorized state body performing management in spheres of natural monopolies, to the central authorized body on state planning or local authorized body on state planning in the case established by subitem 3-2) of article 13 of the Law on conducting the corresponding examinations and coordination;

the central and local authorized bodies on state planning based on the positive experimental testimony of tender (auction) documentation containing recommendations of possibility of joint financing of this project from the budget create the conclusions on concessionary projects and submit for consideration of the relevant budget commissions;

approval of tender (auction) documentation by the first head of the organizer of tender or replacement his face based on the decision of the relevant budget commissions;

in cases of carrying out tender at the choice of the concessionary with use of two-stage procedures:

forming by the organizer of tender of the specification, development and approval of tender (auction) documentation by the organizer of tender;

submission of tender (auction) documentation with application of documents, confirming coordination of the central authorized body on budget implementation, concerning the objects relating to republican property and also, in case of belonging of the concessionary project to spheres of natural monopolies, the authorized state body performing management in spheres of natural monopolies, to the central authorized body on state planning or local authorized body on state planning in the case established by subitem 3-2) of article 13 of the Law on conducting the corresponding examination and coordination;

the central and local authorized bodies on state planning based on the positive experimental testimony of tender (auction) documentation containing recommendations of possibility of joint financing of this project from the budget create the conclusions on concessionary projects and submit for consideration of the relevant budget commissions;

approval of tender (auction) documentation by the first head of the organizer of tender or person replacing it based on the decision of the relevant budget commissions;

5) pronouncement of relevant decisions of the budget commissions;

6) forming of the list according to Item 1 of article 16 of the Law the central authorized body on state planning if objects belong to republican property, or maslikhats of areas, cities of republican value and the capital if objects belong to municipal property according to the subitem 24) of article 1 of the Law.

Local authorized bodies on state planning notify the central authorized body on state planning on passing of the procedure specified in the subitem 5) of this Item within 30 (thirty) working days from the date of pronouncement of relevant decisions of the budget commissions.

8. The decision on implementation of the concessionary project is made based on documents of System of state planning, orders or acts of the President of the Republic of Kazakhstan, the Government of the Republic of Kazakhstan, and also taking into account priority and urgency of the concessionary project.

In case of determination of priority, urgency of the concessionary project authorized person:

takes into account to the recommendation of the Interdepartmental project team;

analyzes the arrived initiatives of subjects of entrepreneurship on compliance to documents of System of state planning, to orders or acts of the President of the Republic of Kazakhstan, the Government of the Republic of Kazakhstan (in case of receipt of these initiatives);

determines industry priority of the concessionary projects planned to realization taking into account investment potential, specifics and problems of development of the republic and regions;

uses prioritization of concessionary projects.

Within prioritization of concessionary projects degree of feasibility of implementation of the concessionary project is considered. First of all the projects providing basic requirements of the population are considered to realization.

If it is several priority concessionary projects, degree of urgency of implementation of such projects is determined.

At this stage are determined preliminary cost and social efficiency of the concessionary project.

Concessionary projects are guided by value creation for the population for the long-term period, on investment attraction by the concessionary, and also on operation of subject to concession by the concessionary for the term of at least 5 (five) years depending on features of the concessionary project.

9. The information leaf containing the description of the concessionary project, developed as a part of tender (auction) documentation corresponds to the following structure:

1) passport of the project;

2) introduction;

3) institutional Section;

4) marketing Section;

5) financial Section;

6) social and economic Section;

7) technical and technological Section;

8) distribution of risks;

9) conclusions on the project;

10) appendices.

10. In the passport general information about the project in tabular form is specified:

1) name of the concessionary project;

2) name of the state body developer;

3) purpose of the concessionary project;

4) the name of object of social infrastructure and life support, creation (reconstruction) and which operation is supposed under the agreement of concession;

5) reasons on inclusion of the concessionary project in the list of concessionary projects of the special importance;

6) period (term) of creation (reconstruction) of subject to concession, period (term) of operation;

7) expected resulting effect of the concessionary project (type and amount of goods, works, services);

8) expected net present value of profit of the concessionary and internal return rate of the concessionary;

9) sources of cost recovery and receipt of the income of the concessionary according to article 7 of the Law;

10) expected measures of the state support;

11) method of carrying out tender at the choice of the concessionary (with use of two-stage procedures or without use of two-stage procedures);

12) concession agreement type according to article 21-1 of the Law.

11. In the Section "Introduction" are specified:

1) the description of problem in industry (region) which are planned to solve by means of implementation of the concessionary project;

2) information on compliance of the concessionary project to strategic and program documents of the country;

3) industry (sphere) of economy, the region and the settlement within which implementation of the concessionary project is planned;

4) the name of object of social infrastructure and life support, creation (reconstruction) and which operation is supposed under the agreement of concession, and also its legal status (property, the asset holder, restrictions and encumbrances);

5) expected types of activity of the Concessionary within the concessionary project;

6) information on types of activity which are not planned to transfer to concession;

7) information on encumbrances and restrictions on the existing object transferred to concession (pledge, arrest, the right of limited target use of others real estate (servitude);

8) information on availability of interest in implementation of the concessionary project from potential concessionaries;

9) the planned algorithm of transfer of subject to concession by the parties each other, and also procedure and conditions of transfer of other property which is not part of subject to concession with indication of the right based on which this property is transferred;

10) international and/or Kazakhstan positive experience of implementation of similar concessionary projects in this industry (sphere) of economy;

11) reasons for the choice of method of carrying out tender at the choice of the concessionary (with use of two-stage procedures or without use of two-stage procedures);

12) reasons for the choice of agreement type of concession according to article 21-1 of the Law;

13) information on belonging of the concessionary project to spheres of natural monopolies in cases if the construction of new subject to concession and information on the acting subject of natural monopolies if upgrade or reconstruction of the operating objects, including, information on the property complex of the subject of natural monopolies transferred to concession, including information on revaluation of fixed assets, the realized investing programs for the last three calendar years, technical expertize of activities of the subject of natural monopolies, survey of technical condition of objects and other data is planned is planned;

14) the planned conditions about the rights of the concessionary to subject to concession, including about the rights on incomplete construction subject to concession in case of concession termination of the contract, and (or) the rights to implementation of certain type of activity, condition about property rights on the results of intellectual creative activities which arose in case of execution of terms of the contract of concession;

15) in case of reconstruction of object its retrospective is applied (date of commissioning of object, the carried-out works on reconstruction and other data connected with this object).

12. The institutional Section contains information on mechanisms of interaction of the parties, responsibility of each party of the concessionary project, including the third parties, namely the state companies and subjects of the quasi-public sector (with appendix of the scheme of interaction of the parties) in the investment and post-investment period.

13. The marketing Section contains results of marketing researches, including the analysis existing and predicted (for implementation of the concessionary project) demand environments on products (goods/service) and offers of the consumed production factors which are formed as a result of implementation of the concessionary project.

If the main consumer of products will be the state according to article 14 of the Law, it is necessary to provide supporting documents and the corresponding calculations for the planned consumption amounts.

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