Risks of concession projects

Risks of concession projects

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Concession is one of the most promising forms of public-private partnership in Russia. Mutually beneficial relations between the state and business consist in the use of private sector resources for the construction, operation, and maintenance of industrial and social infrastructure. Businesses receive, on preferential terms, the right to dispose of public property and guarantees from the state. The experience of foreign concessions shows the advisability of interaction between the state customer already at the initial stage of organizing a concession with special project companies (SPK), which are responsible for raising funds on the basis of limited repayable financing. As a result, SPC's borrowed funds significantly exceed their equity capital. This increases competitiveness through pricing, since the cost of raising funds is usually lower than the income attributable to own funds provided, as a rule, by the shareholders of the SPC.

FL/877125/R

Data sheet

Name of the Author
Александр Миллерман Самуилович
Олег Шахов Федорович
Language
Russian

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Risks of concession projects

Concession is one of the most promising forms of public-private partnership in Russia. Mutually beneficial relations between the state and business consist i...

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