Act of official clarification of a regulatory legal act of the Ministry of National Economy of the Republic of Kazakhstan
1) the name of the authorized body explaining the norm of a normative legal act - the Ministry of National Economy of the Republic of Kazakhstan;
2) the name of the act of official clarification - paragraphs 171-17,171-20 of the Rules for the planning and implementation of public-private partnership projects, including the planning of public-private partnership projects, the holding of tenders and direct negotiations to determine a private partner, monitoring of public-private partnership agreements, monitoring and evaluation of the implementation of public-private partnership projects, approved by order of the acting Minister of National Economy of the Republic of Kazakhstan dated November 25, 2015 No. 725 (hereinafter - the Rules);
3) the place of adoption of the act of official clarification: Republic of Kazakhstan, Nur-Sultan, pr. Mugilik El 8, House of Ministries, 7 entrance.
Date of adoption of the act of official clarification: May 08, 2020;
4) appeal of the Akimat of Turkestan region dated May 08, 2020 No. 27/4544.
Clarification requested on:
1) payment of compensation for termination (reimbursement of lost income) and other payments in case of early termination of the public-private partnership agreement (hereinafter - PPP) through the fault of the state partner;
2) on the issue of payment of compensation for termination (reimbursement of lost income) and other payments in case of early termination of the PPP contract due to force majeure circumstances.
In accordance with paragraph 3 of Article 60 of the Law of the Republic of Kazakhstan “On Legal Acts”, the Ministry of National Economy clarifies the following:
On item 1. Does the State partner have the right, when concluding a PPP contract, to provide for the right of the Private Partner to receive compensation for early termination of the contract (termination of the contract), the purpose of which is to compensate for the profit not received in connection with the termination of the contract (lost profit), for the entire planned term contract provided for at the signing of the contract?
In accordance with subparagraph 17-1) of paragraph 1 of Article 46 of the Law of the Republic of Kazakhstan “On Public-Private Partnership”, a PPP agreement must contain a procedure for reimbursing the expenses of the parties in case of early termination of the PPP agreement.
According to paragraph 171-17 of the Rules, in case of early termination of the PPP contract due to the fault of the state partner during the period specified in the PPP contract (but not more than 270 (two hundred seventy) calendar days from the date of termination of the contract), the state partner pays to the account for crediting investment compensation costs the amount equal to the total amount of incurred and proved capital expenditures associated with the construction / reconstruction / creation / modernization of the PPP facility, minus the payments that have already been paid udarstvennym partner. The early termination fee may also include other payments provided for in the PPP agreement.
Based on the foregoing, the Ministry of National Economy clarifies that the state partner has the right to stipulate in the draft PPP contract the right of the private partner to receive other payments (compensations) for the early termination of the PPP contract.
On item 2. Does the State partner have the right, when concluding a PPP agreement, to provide for the right of the Private Partner to receive compensation for early termination of the agreement (payment for termination of the contract), the purpose of which is to compensate for profits not received in connection with the termination of the contract (lost profit), in case of termination of the contract due to force majeure circumstances or other reasons that are not dependent on the actions of the parties to the contract?
According to paragraph 171-20 of the Rules in the event of termination of the PPP contract due to force majeure circumstances (natural disasters, military operations and), during the period specified in the PPP contract (but not more than 270 (two hundred seventy) calendar days from the date of termination), state partner pays to the account for crediting compensation of investment costs an amount equal to 100% of the total amount of all incurred and proved capital expenses associated with the construction / reconstruction / creation / modernization of the PPP facility, minus m of payments that have already been paid by the public partner. At the same time, the amount of payments should not exceed the amount of compensation for investment costs, originally provided for in the PPP agreement. The early termination fee may also include other payments provided for in the PPP agreement.
Based on the foregoing, the Ministry of National Economy clarifies that the state partner has the right to stipulate in the draft PPP contract the right of the private partner to receive other payments (compensations) for the early termination of the PPP contract in case of termination due to force majeure.
On question 3. Do the second and third sentences of paragraph 171-20 of the Rules mean that the total amount of payments (including other payments, in addition to compensation for investment costs) should not exceed the amount of compensation for investment costs originally provided for in the PPP agreement?
According to paragraph 171-20 of the Rules in the event of termination of the PPP contract due to force majeure circumstances (natural disasters, military operations and), during the period specified in the PPP contract (but not more than 270 (two hundred seventy) calendar days from the date of termination), state partner pays to the account for crediting compensation of investment costs an amount equal to 100% of the total amount of all incurred and proved capital expenses associated with the construction / reconstruction / creation / modernization of the PPP facility, minus m of payments that have already been paid by the public partner. At the same time, the amount of payments should not exceed the amount of compensation for investment costs, originally provided for in the PPP agreement. The early termination fee may also include other payments provided for in the PPP agreement.
Thus, the Ministry of National Economy clarifies that the amount of payments related to the construction / reconstruction / creation / modernization of the PPP facility, minus the payments that have already been paid by the state partner, should not exceed the amount of compensation for investment costs originally provided for in the PPP contract.
In the event that a fee for early termination of the PPP contract is stipulated, it is possible to compensate for the incurred and proved capital costs associated with the construction / reconstruction / creation / modernization of the PPP facility, the cost of which is determined according to the Methodology for determining the cost of creating and (or) reconstructing a PPP facility, the total cost of state support and sources of cost recovery for PPP entities. At the same time, the amount of payments should not exceed the amount of compensation for investment costs, originally provided for in the PPP agreement.
Based on the foregoing, the Ministry of National Economy clarifies that the state partner has the right to stipulate in the draft PPP contract the right of the private partner to receive other payments (compensations) for the early termination of the PPP contract in case of termination due to force majeure.
Minister R. Dalenov