Regional authorities have lost two out of three potential kindergarten investors

Two Moscow companies refused to participate in the competition for the right to conclude concession agreements for the construction of twelve kindergartens with a total value of 1.9 billion rubles. Despite the fact that the remaining participant is still ready to conclude an agreement on the terms of the regional authorities, the Ministry of Property does not consider it possible to hold a competition, allegedly due to the imperfections of federal legislation. According to officials, investors are deterred by the lack of a prescribed “mechanism for protecting investors in terms of reimbursement of all concession costs” in the law. Experts believe that in connection with the latest corruption scandals in the government, they simply decided to postpone the competition “until everything calms down.”

Photo: Vadim Kharlamov/Kommersant, Kommersant

Yesterday, the regional Ministry of Property announced its refusal to hold an open competition for the right to conclude concession agreements for the financing and construction of twelve kindergartens in the city and region. According to a message on the official website of the ministry, the reason was the withdrawal of applications by the Moscow-based Active Engineering CJSC and Alternativa LLC, which received access to participate in the competition back in January. “Due to the withdrawal of two out of three submitted applications, holding the competition has ceased to be an alternative. In addition, no changes were made to the federal law “On Concession Agreements”, which would reduce the risks of the parties during the construction of social facilities,” the website quotes First Deputy Regional Minister of Property Relations Viktor Sobolev. The cost of building 12 kindergartens for 2.4 thousand children was estimated at 1.9 billion rubles, funds were to be allocated from the regional and federal budgets.

In January, the Ministry of Property summed up the results of the first stage of the competition “for the right to conclude a concession agreement on the financing, design, construction, equipment and operation of buildings” intended to house kindergartens. Three companies were admitted: Active Engineering CJSC, Alternativa LLC and Yekaterinburg-based Infrastructure - Western Siberia. The concessionaires were offered twelve sites ranging from 0.4 to 1 hectare - five in the city and seven in the region. The commissioning date was set until the end of 2015. “Preference will be given to proposals that involve the least amount of cost compensation and a shorter construction period,” said the Minister of Property Relations Vadim Merenkov. For their part, the authorities promised to resolve issues with obtaining technical conditions, connecting communications to the sites and a preferential rental rate for the construction period. The authorities first proposed submitting competitive proposals by April 25, and later shifted the deadline to May 8.

It was not possible to contact representatives of Active Engineering CJSC and Alternative LLC yesterday. The Ministry of Property reported that the companies did not explain in writing the reasons for refusing to participate in the competition.

The ministry itself explains the decision of Moscow firms as risks arising from the imperfection of federal legislation on concessions of social facilities. “When we started our work on the competition, we hoped that the State Duma would adopt initiatives that would make the concession more friendly, but this did not happen. The mechanism for protecting investors in terms of reimbursement of all costs is not spelled out in the law and is therefore opaque. There are also certain risks for us,” said First Deputy Minister of Property Relations Viktor Sobolev. According to the official, the department will continue to work towards public-private partnerships for the construction of gardens, however, until the adoption of a regional law on such enterprises, competitions will not be held. “The governor has already assigned the Ministry of Economy the task of developing a law on public-private partnership. The timing of the commissioning of kindergartens at the selected sites remains the same,” said Mr. Sobolev.

The third applicant for participation in the open competition for the right to conclude a concession for kindergartens told Kommersant yesterday that he “insisted not to cancel the competition.” “We are still ready to build kindergartens on the terms proposed by the region. There are no risks there; throughout Russia, a lot of social projects have been implemented using this model. We are working with the largest federal bank, the project has passed all the examinations, and a decision was made on financing, which is still in force,” said Alexander Timofeev, director of Infrastructure - Western Siberia LLC. According to Mr. Timofeev, the reasons why the competition was canceled were “biased and, rather, political.”

Experts believe that they decided not to hold the competition because of “official games.” “In connection with the latest corruption scandals in the government, which also affected people involved in land issues, they decided to postpone the competition until everything calms down. Or companies, afraid of falling under this thresher, suddenly considered the conditions unfavorable,” State Duma deputy from the Communist Party of the Russian Federation Alexander Kravets told Kommersant yesterday. As Kommersant wrote, in March the investigative department of the Investigative Committee for the Omsk Region put on the federal wanted list the ex-Minister of Property Relations of the region, Vadim Merenkov, who resigned shortly before the events. On June 17, the Kuibyshevsky District Court of Omsk arrested the first vice-governor of the region, Yuri Hamburg, for two months. Both officials are accused of exceeding their authority when selling land.

Yulia Strelskaya

The concession did not reach the competition