Rapid Public-Private Partnership Deployment in Kazakhstan: Enablers and Implications

Abstract

Abstract Public-private partnerships (PPPs) are a relatively new phenomenon in Kazakh-stan – their development began in 2005 in the transport and energy sectors. Initially sluggish growth transformed into rapid PPP deployment from 2016 to 2019 when hundreds of PPPs were launched in many industries (infrastructure, hospitals, schools), which was in sharp contrast to just a handful of PPPs formed prior to 2016. Rapid PPP deployment raised deep concerns whether the government’s supporting schemes and PPP launch procedures are appropriate and whether they may backfire for the government in the form of increasing debt. This paper aims to investigate the enablers and implications of accelerated PPP formation. The study is based on semi-structured in-depth interviews with a range of actors in the field, including PPP operators (railroad, energy company, kindergarten), regional and local governments, national and regional PPP centres, lawyers and private investors, which afforded an opportunity to mitigate bias in opinions. The study has identified three principal enablers: simplified procedures for a PPP launch, pressure exerted on regional governments, and extensive government financial support to PPPs. By making use of agency theory, property rights theory and the value-for-money concept, the paper offers a conceptualisation of rapid PPP growth in Kazakhstan in recent years and argues that growth was disproportionally fast and unintended. Policy implications include a need to re-establish the value-for-money approach to PPP formation, a significant increase in government liabilities to PPPs, and a misconception regarding the role of PPP collaborative governance.