The reporting of online conference "STATE-PRIVATE PARTNERSHIP 2020" WITH THE PARTICIPATION OF OLGA BATURA and Nafezhda Znamenskaya has been published
“Novy Prospekt” published a report from the online conference “Public-private partnership 2020”.
Olga Batura, head of real estate and PPP practice at Duvernoix Legal, spoke about the prospects for using PPP schemes in the healthcare sector. “The first two weeks of the pandemic showed an unusual revival in PPP projects in the field of medicine. The primary segment in this area — the construction of new medical facilities — is usually experiencing great problems with implementation. These are not super-profitable projects, they need the long-term support of a public partner, payment of a minimum guaranteed return. There are many issues with the right of the citizens to be registered with a particular clinic: if the clinic does not suit, the person has the right to choose another institution. And the concessor cannot restrict a person’s right in favor of guarantees to the investor, and the private partner often requires and waits for such guarantees. This tangle of problems has always played a restraining role. But then quarantine suddenly caused in a big revival, projects have been launched, the authorities gave a push, realizing that the optimization that had been carried out in the health sector since 2010, led to disastrous results, and we all felt it. And then, two weeks later, everything went back on track, and the projects continued at the same low pace to prepare for what they had been preparing before.”
Nadezhda Znamenskaya, senior lawyer at Duvernoix Legal, completed the discussion and told the audience about the use of force majeure mechanisms and special conditions in PPP projects. “Force majeure is difficult to apply, because there is usually no obvious break in work on the construction site. In the hotel industry and tourism, a ban on activities may be recognized as force majeure. Construction sites continue to work. But there are a lot of problems: the subcontracting chains are not working well, and some subcontractors stop their activities – especially if this refers not to installation work, but to the supply of some material. The labor market has suffered: there are serious problems with attracting foreign labor. But in practice, it is very difficult to prove the inevitability of events and their cause-and-effect relationship with the partner’s activity, because the subcontractors do not always have alternatives, and it is even more difficult with workers. On the other hand, the restrictions imposed are also de jure advisory in nature, so it is not easy to prove that they are mandatory, although Rospotrebnadzor is currently checking construction sites fairly strictly.” Nadezhda summed up, that in general there is little hope for force majeure, and it is necessary to solve complex issues in PPP through negotiations between public and private partners and the distribution of rights and obligations of the parties by fine-tuning at the stage of operation of the object.
Olga Batura, head of real estate and PPP practice at Duvernoix Legal, spoke about the prospects for using PPP schemes in the healthcare sector. “The first two weeks of the pandemic showed an unusual revival in PPP projects in the field of medicine. The primary segment in this area — the construction of new medical facilities — is usually experiencing great problems with implementation. These are not super-profitable projects, they need the long-term support of a public partner, payment of a minimum guaranteed return. There are many issues with the right of the citizens to be registered with a particular clinic: if the clinic does not suit, the person has the right to choose another institution. And the concessor cannot restrict a person’s right in favor of guarantees to the investor, and the private partner often requires and waits for such guarantees. This tangle of problems has always played a restraining role. But then quarantine suddenly caused in a big revival, projects have been launched, the authorities gave a push, realizing that the optimization that had been carried out in the health sector since 2010, led to disastrous results, and we all felt it. And then, two weeks later, everything went back on track, and the projects continued at the same low pace to prepare for what they had been preparing before.”
Nadezhda Znamenskaya, senior lawyer at Duvernoix Legal, completed the discussion and told the audience about the use of force majeure mechanisms and special conditions in PPP projects. “Force majeure is difficult to apply, because there is usually no obvious break in work on the construction site. In the hotel industry and tourism, a ban on activities may be recognized as force majeure. Construction sites continue to work. But there are a lot of problems: the subcontracting chains are not working well, and some subcontractors stop their activities – especially if this refers not to installation work, but to the supply of some material. The labor market has suffered: there are serious problems with attracting foreign labor. But in practice, it is very difficult to prove the inevitability of events and their cause-and-effect relationship with the partner’s activity, because the subcontractors do not always have alternatives, and it is even more difficult with workers. On the other hand, the restrictions imposed are also de jure advisory in nature, so it is not easy to prove that they are mandatory, although Rospotrebnadzor is currently checking construction sites fairly strictly.” Nadezhda summed up, that in general there is little hope for force majeure, and it is necessary to solve complex issues in PPP through negotiations between public and private partners and the distribution of rights and obligations of the parties by fine-tuning at the stage of operation of the object.