Analysis of the advancement of public private partnership in Ukraine

A significant decrease in the level of real incomes of the Ukrainian population will require the implementation of such PPP projects on objects of social importance in individual settlements and territorial communities, which will make it possible to reduce the costs of communal services for citizens. To ensure corruption-free projects, civil society structures must be involved in all stages, from transparent partner selection to design and implementation.

One of the urgent directions of PPP in the post-war period is the construction sphere for the restoration of destroyed residential areas and construction of social housing (Batra, 2020).

The partnership of the state, local communities, and private business allows the implementation of a comprehensive approach in this area, that is, not only residential construction but also the restoration of engineering communications, transport routes, social facilities, etc. This will allow not only optimizing the expenditure of funds, but also ensuring the implementation of socio-economic tasks, while guaranteeing a financial benefit to the private partner.

The fact that most local budgets are subsidized significantly reduces the business interest in participating in local PPP projects.

Therefore, the effect of guarantees for PPP projects from local authorities, which rely on the funds of these budgets, may be terminated owing to the channeling of financial resources for urgent needs without compensation for losses to business partners.

In view of the above, it would also be appropriate to assume demand risks fully by state/local authorities in PPP agreements with a small amount of funding, first of all, in the field of PPP at the municipal and regional levels, under conditions of uncertainty. This contributes to the activation of PPPs in this area.

The National Council for Public-Private Partnerships in the United States has found that the form of PPP is primarily determined by the specific task it must accomplish in each case. For example, a package tender may be used to speed up the implementation of infrastructure projects, whereas management expert support may be utilized for large and complex projects to achieve operational efficiency (Cui et al, 2018). Other forms of PPPs may be used to attract innovative technologies or financial resources or to construct infrastructure facilities with the aim of acquiring ownership rights for the development of territories and public benefit, with the participation of business.

In the USA, there are two main groups of private businesses, which are determined by the form of participation in PPPs: those who have the right to vote when making management decisions on a project and those who do not have such a right. However, both groups have the right to introduce initiatives regarding the project and to control its implementation.

In view of the above, and because a strong incentive to control the implementation of the project is of financial interest, it is proposed to introduce an institution of small investors who can control the project but will not be able to influence the process of its management. Simultaneously, it is a tool for attracting additional private investments in the process of rebuilding the country (CMS Law-Now, 2023).

The long-term partnership in previous periods was due, in particular, to the fact that the instrument for reimbursement of the contribution to the private partner was to provide him with the opportunity to receive benefits or payments for services from the operation of the PPP facility.

Under the conditions of post-war reconstruction, it would be expedient to use contractually determined early reimbursement of costs to a private partner for the use of international aid or other financial resources. This will allow avoiding significant immediate costs from local, regional, or state budgets; speed up the start of project implementation; and facilitate the release of organizational and personnel resources of the business partner for other urgent projects.

The post-war reconstruction of Ukraine will require the concentration of efforts of all segments of the population to unite their efforts and utilize all available resources, including financial and organizational resources. Therefore, implementing PPP in projects aimed at achieving this goal is a suitable mechanism for socioeconomic interaction. A common definition of this mechanism as long-term partnership relations based on a contractual basis and under the sharing of risks between institutional structures that represent the interests of the state and business, under which the business, using the main assets belonging to the state and providing the necessary resources, implements projects for the mutual benefit of the parties and for the needs of post-war economic reconstruction, needs to be clarified. This clarification is due, in particular, to the fact that the aforementioned urgent need to rebuild what was destroyed by the war requires shortening the terms of project implementation.

The expediency of shortening the time of partnership relations for specific projects is also determined by the significant dynamism of threats, which in the case of long-term relations will require a constant revision of the contractual principles of PPP in order to redistribute risks between the parties.

In view of the above said and due to the great social significance of PPP projects for the post-war reconstruction of the country, it is proposed to define the specified partnership in war and post-war conditions as a complex of coordinated institutional and organizational measures, on the one hand, of state, regional, municipal structures and, on the other hand, private structures aimed at ensuring the interaction of all interested parties in the acquisition of socially significant social and economic results.

Prospective forms of PPP projects that can be quickly implemented and do not require significant financing are contracts for supply, management, and turnkey projects.

A possible financial instrument of this mechanism for the implementation, first of all, of relatively small-scale municipal or regional projects can be the attraction of citizens' resources using, in particular, insurance companies and credit unions that accumulate money of individuals. Implementation of the specified mechanism requires appropriate regulatory and legal support.

An indicator of the reality of such a step, according to the Sociological Group “Rating” (2022), is the readiness of 61% of the surveyed citizens to accept financial participation in the reconstruction of the country's infrastructure, and the willingness of another 33% of the surveyed citizens to accept financial participation if they have the financial opportunity for this. Attracting individuals' financial resources can also be carried out under the condition of paying them an annuity for a certain period and/or providing benefits for communal services.

In view of the above, it can be indicated that the need for the restoration of critical infrastructure in wartime and post-war reconstruction form the following peculiarities of PPP:

• considerable social significance of each of the projects and their synergy as a whole;

• the need for a high level of coordination of the actions of institutional structures regarding PPP implementation;

• the need to clearly delineate aspects of the goal and areas of responsibility for the parties in each of the projects, given that the main goal of private partners is to make a profit, and for institutional structures, the goal should be to ensure state and public interests;

• the need for systematic coordination of projects at the municipal, regional, and state levels, which will ensure effective reconstruction of the country;

• the need to help reduce the implementation time for a significant part of the projects;

• the need to introduce permanent public control of project implementation, especially for territorial entities;

• the distribution of benefits between PPP parties should be based not only on a transparent assessment of the financial and/or property contribution of the parties, but also on an assessment of risks, with a clear demarcation of them for each of the parties;

• termination of the practice of transferring a significant part of risks to the business, as this contradicts the principle of efficiency;

• departure from the type of practice of typical implementation of projects, an individual approach to the implementation of each of them;

• increased liability for non-compliance with the terms of the contract;

• taking into account the influence of each of the projects on the strategic innovative and technological development of the state.

The specified peculiarities of PPP allow intensifying the process of its implementation.

Conclusions

The current state of the implementation of PPP projects has been studied. There is a well- founded need to activate PPP in war and postwar times. The directions, peculiarities, and prerequisites for the activation of PPPs during martial law and the post-war period were determined. This indicates that the significant magnitude and uncertainty of wartime risk restrains the activity of private partners in concluding new PPP agreements. Measures to reduce risks and change the approaches to their distribution in PPP agreements have been proposed.

Negative trends for the implementation of PPP, which began to manifest themselves before full-scale invasion, are indicated. Thus, in 2021, only 16% of PPP agreements were implemented, 16.6% of deals were terminated, and 61.6% were not implemented. In 2023, there were 22 PPP projects under implementation. Non-implementation of the PPP of a socially significant agreement will harm society and even national security. Therefore, noncompliance with contractual obligations under PPP agreements during this period requires increased responsibility. Directions for their implementation are not urgent in wartime conditions.

To determine the priority areas of PPP activation, the stage of restoration of critical infrastructure and the stage of formation of sustainable strategic innovative development of the country and regions with priority development of export industries and industries necessary for import substitution were identified. It is noted that, at all stages, the construction industry needs constant attention, aimed primarily at the construction of capital (for the post-war period) and temporary (for the war period) housing for the country's population, and projects aimed at providing citizens with access to quality goods/services, providing basic social needs of the population. During wartime, the main goal of PPP at the state, regional, and municipal levels is to restore infrastructure to ensure the vital needs of citizens.

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