PPP Demand Is Growing

The volume of Moscow PPP contracts has increased by almost RUB 124 bn for the year. Moscow has been using public-private partnership mechanisms since 2013. During this time, 250+ PPP contracts have been concluded, their volume has exceeded RUB 1 tn. The most popular are life cycle contracts, offset contracts as well as concessions and corporate forms of PPP.

LIFE CYCLE CONTRACTS

Life Cycle Contracts (LCC) involve the production and supply of goods with further maintenance and repair by the supplier throughout the entire life cycle. Since 2013, Moscow has been signing this kind of contracts in transportation, which made it possible to renew the metro rolling stock, tram and bus fleets. Tenders for procuring complex medical equipment and equipment for the housing and utilities sector have been conducted since 2019.

In 2020, 74 LLCs were concluded, two of them were for the supply of electric buses worth RUB 17 bn. The others were for the procurement of medical equipment worth RUB 57+ bn. World's leading manufacturers of high-tech medical equipment were among the tender winners. The total LLC volume of CJC is currently almost RUB 543 bn.

OFFSET CONTRACTS

Moscow continues to develop the practice of offset contracts, which involve the purchase of goods for state needs with counter investment obligations to localize production. The 4th offset contract was signed in the food industry last summer. The investor was Wimm-Bill-Dann. The contract subject is baby food for the city's infant feeding centers. The company will produce 38 types of products: milk, juices, fruit, vegetable, meat and meat-plant puree, porridges, cottage cheese, kefir, sour milk and dry mixes. The city will purchase food for eight years since 2022. Private investment in the project will amount to RUB 2.1 bn. The volume of baby food supply to the city will be RUB 30.6 bn.

The 5th offset contract was signed on February 15, 2021. The investor - Moscow Endocrine Plant - will localize the production of 20 drugs in Moscow within two years. The plant will produce anti-glaucoma, antibacterial, analgesic drugs, antidepressants and neuroleptics, which will be purchased by the Moscow Government under an offset contract worth RUB 1.1 bn over 8 years. The planned investments will amount to RUB 1 bn.

The total volume of the five Moscow offset contracts is RUB 72.7 bn, and the cumulative volume of private investment reaches RUB 12.9 bn.
2021 PLANS
The capital will continue to develop PPP mechanisms in 2021. It is planned to conclude new LCCs for the supply of endoscopic, X-ray, mammographic equipment, ultrasound and CT machines. Moreover, Moscow signed the first concession agreement in housing and utilities at the end of February. The Greentech company will invest RUB 27 bn in the construction of two state-of-the-art sludge recycling plants. It is also planned to sign an agreement on establishing a gerontological center - a residential home for the elderly - at the beginning of the year.
E-mail: pressprom@mos.ru
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