Tajikistan: Support Enabling Capacity Building for Public-Private Partnerships in Tajikistan

Sovereign Project | 47098-001

Summary

The S-CDTA, in an amount not exceeding the equivalent of $225,000, will enable CWRD to support the government in undertaking capacity development for public-private partnerships (PPP), reforms in the enabling environment, and PPP project development, which are three of four pillars of ADB's Public-Private Partnership Operational Framework. The S-CDTA is not included in the Country Operations Business Plan 2013-2014 for Tajikistan. It is a response to a government request made in October 2012 during consultations with Vice-President Zhao. The S-CDTA is based on findings of a mission fielded from 2 to 6 February 2013 to investigate the status of PPP policy reforms in Tajikistan.

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Project Name Support Enabling Capacity Building for Public-Private Partnerships in Tajikistan
Project Number 47098-001
Country Tajikistan
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8344-TAJ: Support Enabling Capacity Building for Public-Private Partnerships in Tajikistan
Technical Assistance Special Fund US$ 225,000.00
TA 8344-TAJ: Support Enabling Capacity Building for Public-Private Partnerships in Tajikistan (Supplementary)
Technical Assistance Special Fund US$ 275,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector Public sector management - Economic affairs management - Public expenditure and fiscal management
Gender Equity and Mainstreaming
Description

The S-CDTA, in an amount not exceeding the equivalent of $225,000, will enable CWRD to support the government in undertaking capacity development for public-private partnerships (PPP), reforms in the enabling environment, and PPP project development, which are three of four pillars of ADB's Public-Private Partnership Operational Framework. The S-CDTA is not included in the Country Operations Business Plan 2013-2014 for Tajikistan. It is a response to a government request made in October 2012 during consultations with Vice-President Zhao. The S-CDTA is based on findings of a mission fielded from 2 to 6 February 2013 to investigate the status of PPP policy reforms in Tajikistan.

The impact of the S-CDTA will be pilot PPP projects for the delivery of public infrastructure and social services. The outcome will be an improved enabling policy, legal, regulatory, and institutional environment for PPP. The S-CDTA will utilize international best practice and the experience of implementing a similar TA in the Kyrgyz Republic. The S-CDTA emphasizes institutional capacity building as a key factor that defines a country's success in developing and implementing a PPP program. It will deliver outputs in a phased manner in accordance with defined milestones and provide the basis for generating greater private sector participation over time. The development stage of PPP and specific institutional arrangements in Tajikistan will be fully taken into account. The S-CDTA will have three main outputs: (i) Project screening and analysis tools and shortlist of projects, (ii) draft by-laws and amendments to key laws, and (iii) increased capacity of relevant state bodies to undertake PPP policy reforms and identify and develop PPP projects.

Project Rationale and Linkage to Country/Regional Strategy

Economic and social infrastructure is one of the key drivers for economic growth and poverty reduction. Since independence, Tajikistan has encountered economic hardships and fiscal shortfalls, constraining the ability of the government to provide adequate financial support to maintain existing and constructing new infrastructure. In addition, weak capacity across line ministries and other state agencies undermines the efficiency of infrastructure facilities, which are still mainly managed by the government. Support from development partners is not sufficient to meet growing infrastructure needs, given tight limits even for concessional loans. Private sector participation is therefore needed to address infrastructure bottlenecks. These bottlenecks are imposing significant opportunity costs to Tajikistan's economy by reducing its competitiveness and ability to achieve higher growth, thereby reducing poverty and meeting other Millennium Development Goals. This is why the government is keen on creating an enabling environment for PPP in line with international good practice.

Tajikistan has had a few experiences with PPP projects under the concession law. These include an integrated energy generation, transmission, and distribution project implemented by Pamir Energy Company in Gorno-Badakhshan Autonomous Region and the maintenance of a highway from Dushanbe to Khujand by Innovative Road Solutions. Since 2010, the government has been promoting a broader PPP agenda. The State Committee on Investments and State Property Management (SCISPM), which is also responsible for business and investment climate reforms, has conducted roundtables and seminars discussing regulatory, institutional and capacity needs of PPP. Based on these consultations and with support from International Finance Corporation, it drafted a PPP Law that was approved by Parliament and enacted by President in December 2012. The law still needs to be implemented by harmonizing other laws with its provisions, drafting and adopting implementing regulations, establishing policies for PPP risk-sharing, and building capacity for PPP project development.

Under its Strategy 2020, ADB is expanding work with the private sector to generate higher economic growth. Since PPP is seen as an important modality to achieve this objective, Strategy 2020 emphasizes PPP promotion in all of ADB's core operations. ADB's Tajikistan Country Partnership Strategy 2010-2014 calls for increased use of PPP in infrastructure development and service delivery. During program consultations in July 2012, the Government requested ADB support for mainstreaming PPP. During a mission of VP01 to Tajikistan in October 2012, the government requested TA for developing a conducive enabling environment for PPP and building capacity for PPP in selected government agencies. The request was re-iterated during a subsequent mission of DG, CWRD, in October 2012 and discussed in detail during a CWPF consultation mission in February 2013.

Impact Pilot PPP projects contribute to the improved delivery of public infrastructure and social service
Project Outcome
Description of Outcome Improved enabling policy, legal, regulatory, and institutional environment for PPP
Progress Toward Outcome

Progress as of March 2015

PPP Unit director and one additional PPP Unit staff hired (by the government

TA extension request submitted to ADB management

Progress as of December 2014

- International sectoral expert hired

- Review Mission,with consultant team, fielded in November 2014

- Government comments on draft TA report discussed

- Signed Aide Memoire, with comments, received; government request for extension beyond March 31, 2015 noted

- Mission apprised EA and government of the need for adequate staff in the PPP Unit to ensure effective continuation of PPP development.

Overall TA progress as of December 2014

the bulk of activities for the initial implementation of the PPP Law have been substantially conducted; Several Development Partners have indicated interest to also support, in particular with the preparation of (pilot) PPP projects; the main focus is placed now on developing the pipeline of potential PPP projects and on supporting with the further preparation of a limited number of projects which demonstrate greatest potential to be successfully implemented as PPPs; work undertaken during the mission to identify and select a limited number of projects to support initial preparation work; the establishment of the Project Development Fund is being actively pursued to ensure that institutional support mechanisms to support project preparation are put in place; the Deputy Chairperson of the SCISPM (the EA) would like to conduct a substantial PPP Forum in Tajikistan during 2015 to present the governments PPP programme (Tajikistan now has substantive progress to demonstrate, and that such a forum is warranted and appropriate at this time)

Progress as of July 2014

-The PPP Centre and TA consultants have focused on supporting the government to understand and implement the PPP Law, together with process flows and regulations. An ongoing activity of the PPP Centre is identification of harmonization issues.

-has been developed and is being finalized by the PPP Centre. The policy incorporates institutional, procedural and other provisions already contained in the PPP Law and places these in a broader policy framework.

-As noted, pilot PPP projects have been identified in conjunction with several line ministries, local government and FEZ agencies.

On the Policy side, as the PPP Law already contains the main elements of a PPP policy, the development of a policy has not been prioritised at this point.

On the institutional side, the PPP Centre has been set up with two core full-time staff. The TA is focusing increasingly on supporting the PPP Unit staff in taking on principal responsibility for the PPP framework, support to line agencies and project development. A national legal specialist and national PPP specialist have been recruited to support the PPP Unit. The budget of the PPP Unit has been approved by the Ministry of Finance (MOF) based on the Business Plan developed by the PPP Unit staff and the TA. The TA is in the process of providing office equipment to enable better operation of the PPP Unit.Initial work has been conducted to develop a webpage on the SCISPM website for the PPP Unit and a more comprehensive website will be launched by August 2014.

The PPP Unit is preparing for the first formal meeting of the PPP Council (headed by the Deputy PM) at which various aspects of the PPP framework, including regulations, PPP procedures, pilot project process, will be tabled. An 'Awareness Building' event for government is being prepared.

The workings and need for a Project Development Fund (PDF) have been discussed with the PPP Unit staff. An Executive Briefing Memo on PDFs has been prepared for initial formal discussions within SCISPM and MOF.

On the legal and regulatory side, an inventory of codes and regulations impacted by the PPP Law has been prepared. Key implementing regulations have been drafted.The PPP Law has detailed procedures and processes already set out in the principal legislation as opposed to being placed in regulations. More detailed work has been conducted and a number of shortcomings have been identified in the Law. An international legal specialist is being recruited to provide support.

Implementation Progress
Description of Project Outputs

Draft by-laws and amendments to key laws

Draft amendments to PPP Law

PPP Center established

Draft National PPP policy

Set up scheme for facilitating financial instruments

Project screening and analysis tools and shortlist of projects

Increased capacity of relevant state bodies to undertake PPP policy reforms and identify and develop PPP projects

Status of Implementation Progress (Outputs, Activities, and Issues)

Progress as of December 2014

All outputs on track; main focus now on developing the pipeline of potential PPP projects and on supporting with the further preparation of a limited number of projects which demonstrate greatest potential to be successfully implemented as PPPs and to build PPP capacity through learning by doing on these pilot projects

Progress as of July 2014

- Initial regulations (by-laws) under the PPP Law on eligible sectors have been prepared and discussed by the PPP Council. Procedural flow-charts based on the procedures set out in the PPP Law have been prepared. As the PPP Law contains a high level of procedural detail, there is limited need for detailed procedural regulations.

-Limitations in the current PPP Law are being identified, together with issues regarding legal harmonization.

-The PPP Centre has been established in SCISPM in late 2013. A Business/ Operational Plan has been developed and approved, and budgetary resources allocated. Key staff have been appointed.

-A Draft National PPP Policy has been prepared by May 2014 and is being finalized by the PPP Centre.

-A comprehensive Memorandum on the rationale, setup and functioning of a PDF has been developed in late 2013. The PDF has been tabled at the PPP Council meeting, which has mandated the PPP Centre together with the Ministries of Finance, Justice, and Economic Development and Trade to further develop the PDF.

-Project screening criteria have been developed. As noted, 6 pilot projects are included in the current Action Plan of the PPP Centre and more are under investigation.

-Capacity building for undertaking PPP policy reforms and identifying projects has been taking place with state bodies. This includes formal identification of persons responsible for PPP in each state agency, a consultation/training workshop with these persons, and project specific discussions with several agencies.

Progress as of March 2014

Draft regulations to implement the PPP law have been drafted and undergone interministerial discussions; an inventory of codes and regulations impacted by the PPP Law has been prepared.

The PPP Centre has been set up in the State Committee for Investment and State Property Management (SCISPM, the EA), two core full-time staff appointed and budget approved by MOF.

Review of the PPP Law has shown that main elements of a PPP policy are contained in the Law. Hence, the development of a policy has not been prioritised at this point.

An Executive Briefing Memo on Project Development Funds has been prepared for initial formal discussions within SCISPM and MOF.

Coaching on project screening methodology, selection criteria and ranking has been provided and templates developed. A template for Initial Project Proposals (IPP) has also been developed and is being finalized.

Substantial work has been done to define the PPP process flow which has introduced the PPP Unit staff to the various steps in developing PPPs.Through this work, the TA is providing on-the-job' training to the PPP Unit and national experts.

- The PPP Action Plan, approved in June 2014, is being implemented. Terms of reference for the international legal and national website developer has been prepared.

Geographical Location National
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design During a mission of VP01 to Tajikistan in October 2012, the government requested TA for developing a conducive enabling environment for PPP and building capacity for PPP in selected government agencies. The request was re-iterated during a subsequent mission of DG, CWRD, in October 2012 and discussed in detail during a CWPF consultation mission in February 2013. The mission fielded in February 2013 undertook stakeholder consultantions. These consultations were prepared and followed-up by the PPP focal point in ADB's Tajikistan Resident Mission.
During Project Implementation

- Continuous and active consultation with EA, IAs, stakeholders in the public and private sector, including other development partners

- Inception Mission fielded in June 2013. The PPP focal point in ADB's Tajikistan Resident Mission and the international PPP consultant are undertaking consultations with relevant stakeholders in government and the private sector.

-Inception Report, discussed with the Dy Chairperson of the Investment Committee and the Chairman (also, Dy Chair PPP Council) briefed.

-Change of Scope to TA undertaken with EA, IA consultation

-Review Mission fielded in February 2014. Extensive discussions held with government and development partners.

Business Opportunities
Consulting Services

An International PPP Specialist has been recruited and commenced serviced on 3 June 2013. One national PPP specialist and one national legal specialist have also been recruited. An international legal specialist is will also be recruited. Consultants have been (and will be) recruited individually by ADB in accordance with the Guidelines on the Use of Consultants (2010, as amended from time to time). The national consultants will be guided by the international expert.

A national website developer will also be recruited to help the PPP Center in developing the PPP website.

Procurement No procurement of goods/services is envisaged throughout the implementation.
Responsible ADB Officer Priyanka Sood
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, CWRD
Executing Agencies
State Committee on Invstmnts & State Prprty MngmntMr. Shukhratzhon Rakhmatboev, First Deputy Chairmaninfo@gki.tj27, Shotemur Street Dushanbe Tajikistan
Timetable
Concept Clearance 26 Mar 2013
Fact Finding -
MRM -
Approval 26 Mar 2013
Last Review Mission -
Last PDS Update 25 Mar 2015

TA 8344-TAJ

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Mar 2013 - 26 Mar 2013 31 Mar 2014 30 Sep 2016 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
500,000.00 0.00 0.00 0.00 0.00 0.00 500,000.00 26 Mar 2013 263,166.69

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