Ekaterina SizovaPublished in:
Public-Private Partnership
– Volume 2, Number 4 (October-December, 2015)

JEL classification: I10, L32, L74

Keywords: construction, health care, infrastructure, medical services, public-private partnership, reconstruction


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Abstract:

The author developed a method of assessing the feasibility of application of PPP mechanisms for the creation or reconstruction of the health infrastructure object based on the use of qualitative criteria. This method allows to make the selection of the optimal form of the health infrastructure project creation to conduct a comparative analysis of a number of alternatives, including both PPP mechanisms and traditional public procurement. These criteria include: the interest of market participants in the project realization and their willingness to compete and to offer allocation of project risks, which is more advantageous for the state; the presence of the public partner's experience in implementing PPP projects; the possibility of using more innovative technologies for the implementation of the project by the private partner in a PPP framework in relation to government procurement; materiality of transaction costs associated with the need to conduct tender procedures on the project and the involvement of external consultants; payback of the project through the provision of paid medical services to consumers; sophistication of the legislation in the field of PPP and the lack of legal risks associated with the implementation of PPP project; sophistication of medical infrastructure and the availability of similar medical centers; the availability of funds in the budget to finance the project; the cost of mobilization of borrowing costs by the private investor.

Highlights:

► for the implementation of infrastructure projects, two alternatives are considered: PPP (including concessions and other forms of PPPs) and state (or municipal) procurement
►specificity of health projects is that projects in this area are often more innovative and are more complex technologically
► in the majority of developed countries of the world that use PPP were developed methods that are binding or non-legally binding guidelines for assessing, on the basis of which legal scheme a project must be implemented
► overly complex, integrated projects, as a rule, should not be implemented on PPP basics

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